legal, business-registrationI asked in a previous question when to incorporate. See https://startups.stackexchange.com/questions/11915/when-to-incorporate/11947#11947
I told my co-partner the responses that I got. He counter claimed that despite everyone’s suggestion to incorporate before we get funds it’s still too early to incorporate because it costs too much (we will incorporate out of the U.S. which costs $2000) and neither of us want to pay for it we’re planning to do a fixed funding campaign very soon so it’ll help us incorporate when/if we raise money.
You guys know how things work. Am I a fool if I agree? We’d be agreeing to start the campaign with a cofounders agreement (looked over by a lawyer) but hold off registering as a corporation until people pre-order the product?
In the meanwhile my cofounder suggests to have the paypal account and credit card account linked to another startup that he’s the manager at so we have a place to put the money. (No, I won’t have access to the funds, only he would)
I would have to trust him that he is honest (I only met him once in person and FYI I found him on angelist.co. I have no reason to think he is a fraud but I don’t want to be sued in case he is) so I am thinking that as long as I am legally protected and can’t be sued in case he runs off with the money or squanders it, I might be willing to trust him with keeping the funds in his other start up and see what happens. If he is legit, after the campaign we’ll move the funds into a newly registered corporation and go forward to make a prototype. If not, it was a good experience.
Would you take the risk if you owned assets that one can sue and collect against?
I would appreciate all knowledgeable advice.
He is waiting for an answer if I intend to continue or not so I need your helpful replies soon.
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