Resources for insight and
inspiration
Guides
Insights
Memorandums of Understanding (MOUs): Clarity Without Commitment
In early startup partnerships or exploratory projects, you might not be ready for a full contract - but you still need alignment. A Memorandum of Understanding (MOU) provides a way to set expectations without creating binding obligations.
Letters of Intent (LOIs): What Founders Need to Know Before the Deal
Startups often move fast - but when you're courting investors, buyers, or major customers, you need to slow down just long enough to sign a Letter of Intent (LOI). It’s not a binding contract (usually), but it lays the groundwork for one - and sets the tone for the entire deal.
SaaS Agreements Demystified: Legal Must-Knows for Software Startups
If your startup delivers software in the cloud, your SaaS Agreement isn’t just legal fine print - it’s the foundation of your customer relationships. The terms you set now will define your revenue model, limit your risks, and help you scale into larger deals.
FAQs
Open allHow are taxes filed for a Multi-Member LLC?
Multi-Member LLCs must file IRS Form 1065 (partnership tax return) and provide Schedule K-1 forms to each member. Each member then reports profits or losses on their personal tax return.
Do I need an operating agreement for a Multi-Member LLC?
Yes. Even if your state does not legally require it, a written operating agreement is essential for outlining ownership, voting rights, profit distribution, and dispute resolution.
What is the difference between a Single-Member LLC and a Multi-Member LLC?
A Single-Member LLC has only one owner and is taxed as a disregarded entity by default, while a Multi-Member LLC has two or more owners and is taxed as a partnership unless corporate tax treatment is elected.
Can a Single Member LLC be converted to an S Corp?
Yes. You can elect S Corporation status for tax purposes by filing Form 2553 with the IRS.
Can I pay myself a salary from my Single Member LLC?
As an SMLLC taxed as a disregarded entity, you generally take owner’s draws instead of a salary. If you elect corporate tax treatment, you can pay yourself a salary.
Do I need an Operating Agreement for a Single Member LLC?
It’s not always required, but it’s strongly recommended to show business formalities and strengthen liability protection.
Is a Single Member LLC the same as a sole proprietorship?
No. While both are owned by one person, an SMLLC offers limited liability protection, unlike a sole proprietorship.
What is the difference between a PBC and a traditional C-Corp?
A PBC operates like a C-Corp but has a legal obligation to consider social and environmental impact alongside shareholder returns.
Can I convert my LLC to a C-Corp later?
Yes. Many startups begin as LLCs for simplicity and later convert to C-Corps to raise capital. However, conversions carry legal and tax implications. It’s usually easier and cheaper to start as a C-Corp if you know you’ll need it, but conversion is always an option.
What is the most flexible business structure for a small startup?
An LLC is often the most flexible option for early-stage businesses, offering pass-through taxation and fewer compliance requirements.
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