The structure VCs require — built in a day

A C Corporation is a separate legal entity taxed under Subchapter C of the IRC. Unlike an LLC, it can issue multiple classes of stock (common + preferred), has no limit on shareholders, allows foreign nationals and entities to invest, and qualifies for QSBS exclusions under IRC §1202. An LLC is simpler and pass-through by default, but incompatible with institutional venture capital.

Double taxation occurs when corporate profits are taxed at the 21% flat corporate rate, and then dividends paid to shareholders are taxed again on personal returns. Most VC-backed startups avoid this for years by reinvesting profits rather than distributing dividends. Founders can also take reasonable compensation as salary (deductible at the corporate level), and QSBS protects early investors from capital gains on exit.

Institutional investors need preferred stock with special rights: liquidation preferences, anti-dilution provisions, pro-rata participation rights, and board seats. These are only possible in a C Corp. S Corps can't have preferred stock or foreign shareholders. LLCs issue units, not stock, and can't grant ISOs. If you want to raise from a VC, you need a C Corp — typically Delaware.

Delaware is the standard for VC-backed startups: investor familiarity, the specialized Court of Chancery with no jury trials and highly predictable outcomes, the flexible Delaware General Corporation Law, and a deep body of precedent. Most Y Combinator and Sequoia-backed companies are Delaware C Corps. If you don't need VC and want simplicity, Wyoming is a good alternative with lower franchise taxes.

Under IRC §1202, for QSBS acquired after July 4, 2025, shareholders of a qualified C Corp may exclude up to $15 million (or 10× their cost basis, whichever is greater) in capital gains, with a tiered holding period — 50% excluded after 3 years, 75% after 4 years, and 100% after 5 years. The company must be a C Corp at time of issuance, have aggregate gross assets at or under $75M, and be in a qualifying trade or business. (Stock acquired on or before July 4, 2025 keeps the prior $10M cap, $50M gross-asset limit, and 5-year hold for 100% exclusion.) This is one of the most powerful tax benefits available to startup founders and early investors — and it's only available in a C Corp.

C Corps can grant ISOs to employees under IRC §422. At grant: no tax. At exercise: no regular income tax (though AMT may apply). At qualifying sale (held >2 years from grant, >1 year from exercise): gains taxed at long-term capital gains rates rather than ordinary income. ISOs cannot be granted by LLCs or S Corps in the same way, making C Corp the gold standard for equity compensation.

Yes. The most common path is a statutory conversion (available in most states) or forming a new Delaware C Corp and merging the LLC into it. This is a standard process when startups raise their first institutional round. Important: file 83(b) elections within 30 days of receiving restricted stock — missing this window is costly and irreversible.

In Delaware, standard filing is 1 business day. Expedited processing (available for a fee paid to the state) can be a few hours. In other states it varies from same-day to 2–3 weeks. We confirm exact timelines before you pay. Most founders choose Delaware for speed, legal infrastructure, and investor expectations.

Delaware C Corps must pay an annual franchise tax (minimum $175 under the Authorized Shares method, or $400 under the Assumed Par Value Capital method) and file an annual report by March 1 (the report fee for non-exempt domestic corporations is $50). You must also hold annual shareholder and director meetings, maintain corporate minutes, keep the cap table updated, and file federal and state tax returns. We provide compliance alerts and can handle annual report filing for you.

Under FinCEN's March 2025 interim final rule, BOI reporting no longer applies to domestic US companies. Entities created in the United States (previously "domestic reporting companies") and their beneficial owners are exempt from filing a Beneficial Ownership Information report with FinCEN. Only companies formed under foreign law and registered to do business in a US state must file (within 30 days of effective registration). A US C Corporation you form today is not required to file a BOI report. Kicker tracks any future changes to these rules as part of your compliance alerts.

Yes. We offer a 30-day money-back guarantee on our service fees. If you're not satisfied for any reason, contact us within 30 days for a full refund of our fees. State filing fees are paid directly to the state and are non-refundable, but we're transparent about those costs upfront.