Ask HN: When to Incorporate for a SaSs Business?

7 pointsblader_johny6y ago4 comments

I have set up Stripe to collect payments for my web app using my personal account. Taxes aside, when should I go set up my company and a corporate bank account?

4 comments

saluki6y ago

You should probably setup a business checking account to deposit your stripe payments in and pay expenses out of.

If you are in the US running your SaaS as a sole proprietorship (get an EIN number from IRS) is ok till your idea is proven and you have a consistent MRR showing continued growth.

Then it's probably time for an LLC consult with an accountant and attorney though before setting anything up.

I wouldn't waste time/effort and expense by setting anything up too early.

blahneverdies6y ago

I'm always curious about this, too. For anyone who's gone this route (as described in saluki's response), how long have you been able to put off business formation?

The concern I've always had is, what happens if you get some corporate customers, and they ask "Who is Johnny Blades, and why is he billing us $99 a month?"

For those who've encountered this situation (and aren't just speculating), were there any problems?

saluki6y ago

Stripe lets you put your .com or business name in your cc bill description that customers see on their bill, even if you aren't an llc or inc. You want to put whatever the customer knows you as, to reduce them not recognizing the charge.

blahneverdies6y ago

Interesting, I didn't know they permitted that. Thanks!

j / k navigate · click thread line to collapse

4 comments

saluki6y ago

You should probably setup a business checking account to deposit your stripe payments in and pay expenses out of.

If you are in the US running your SaaS as a sole proprietorship (get an EIN number from IRS) is ok till your idea is proven and you have a consistent MRR showing continued growth.

Then it's probably time for an LLC consult with an accountant and attorney though before setting anything up.

I wouldn't waste time/effort and expense by setting anything up too early.

blahneverdies6y ago

I'm always curious about this, too. For anyone who's gone this route (as described in saluki's response), how long have you been able to put off business formation?

The concern I've always had is, what happens if you get some corporate customers, and they ask "Who is Johnny Blades, and why is he billing us $99 a month?"

For those who've encountered this situation (and aren't just speculating), were there any problems?

saluki6y ago

blahneverdies6y ago

Interesting, I didn't know they permitted that. Thanks!

j / k navigate · click thread line to collapse