Today I got an email from Deepak, asking about how to register (British for "incorporate") a company, what would be the cost and when should he issue non-disclosure agreements and so on.
My basic answer is "Wait until the last minute before you spend the time and money to incorporate."
Here are some reasons:
- You can do a bplan without being incorporated. The bplan may tell you that your idea is weak and should be abandoned.
- You should not be using NDAs before you are on solid ground with your idea and are ready to incorporate. Keep as much as possible secret until you are ready to go get the money.
- You can incorporate after you get your money. You do not need to be incorporating to start raising it.
- If you decide to start work on a small scale before getting serious, do a prototype or experiment a bit, then you are likely to find you still do not need to incorporate. You can still deduct business expenses on your tax return in many countries, including the U.S. without being incorporated.
How much does it cost to incorporate? Ask a couple of different lawyers. That meeting will be at no charge. A good lawyer can save you a lot of money and headaches.
BOTTOM LINE: Wait before running out and incorporating. It is often too early and frequently not needed at that time. Find a couple of lawyers to work with, now and in the future. That will save you time and money and trouble.