Final VC objection to LLC's gone

Published March 21st, 2006 edit replace rm!

Great news for people wishing to startup in an agile way and possibly seek funding later.

Feld Thoughts has discovered new Delaware legislation making it easy to convert an out of state LLC to a Delaware Inc. Delaware Inc’s are the prefered corporate structure of VC’s and wall street alike.

The second innovation allows for the one-step conversion of non-Delaware limited liability companies into Delaware corporations. These conversions/reincorporations have historically required 2 steps – for instance, an Ohio LLC would be merged into a newly-formed Delaware LLC, and then that Delaware LLC would be converted into a Delaware corporation. Now you can go from an Ohio LLC to a Delaware corporation in one step. This eliminates one of my main objections to LLC’s that I wrote about in S-Corp’s vs. LLC’s. (via Jeff Clavier )

I have written many times about the serious benefits in starting up with LLC’s and converting to an Inc. later if necessary. So this makes it all the easier to do this.

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