Disclaimer 1: Below are not legal advice
Disclaimer 2: Below are not financial advice
So you are ready to start a business and change the world? First step, start a business.
If you are luck to have lawyer friends, or you don’t mind splurge, a decen law firm could do it for you for a few thousand dollars. if you are neither, there are Internet service that does that for you, just open LegalZoom or Incfile and follow along,
In the US, an LLC(limited liability company) is a great form of create a business, and it is easier than I actually has expected. it will cost you a few hundred dollars(last time it was ~$400 for me).
To start an LLC in the US, you have to be a citizen or permanent resident of the US. Once that is satified, you can start an LLC with as few as one person(yourself), and because of the “tax passing through” benefit of LLCs(Google it), it is IMO a good fit for one person’s side project that incurs costs(such as AWS spendings) and bring in revenues.
However, if you aimed high and wanted to raise VC funding and/or you have foreign co-founder(s), your best option would be a C-Corp, it certainly a bit more complicated that an LLC but your venture capital investors likely will only invest you if you have a C-Corp since they don’t want to chase you down every year for Schedule K-1 forms just to file their own taxes.
In turns of cost, it might be slightly higher, but not by much, although for a C-Corp, there is certainly a higher maintenance cost.
Also, Stripe Atlas is another service pretty popular among tech startups planning to get VC funding, their service baked in a few best practices for you so that you don’t have to chose, e.g, by default it will create a Delaware C-Corp and even help you create a equity plan with consideration for you talent equity pool. And the ~$500 incoporation cost is pretty reasonable.
In the end, I used Incfile simply because its comprehensive dashboard and no hassel onboarding process, I couldn’t say that others does not provide that but somehow I saw the Incfile’s dashboard from some random YouTuber’s video.