Question
We are a startup about to soft launch our app within the next month on iOS. We are currently bootstrapped and will launch very quietly for a few months as a public beta. Eventually we would need to incorporate, but who knows when.
Do I need to form at least an LLC since we will be public? There will be posting from external sites onto our app, and we want to limit liability from that. Also, the app is focused on interaction between strangers and we want to limit liability from any issues that can arise with that. But once again, our initial goal is to launch very quietly and try to get to just a hundred engaged users.
Answer
You should definitely have some sort of incorporation with a corporate book so that you are protected from liability should anything go wrong. The reasons you incorporate are for 1. liability purposes 2. tax purposes 3. it holds you out as a business much more professionally and will change how you treat the business as well.
If you are looking to fundraise at some point I might suggest a corporation. you are looking at about $2,000 for incorporation, corporate book and veil protection which would include all of your by-laws, minutes, stock issuance, IRS docs, etc. Also prepare yourself to pay an annual LLC or Corp. fee of $800.
