Thanks Rich and all the others who replied on and off the list about incorporation options. I've heard slightly different numbers from different sources about initial and annual state fees comparing S corp and LLC. Here's what I've compiled for state fees; please confirm all numbers for yourself! S Corp has an initial state fee of $284; plus an annual corporate excise tax of $456 via state tax form 355S. LLC has an initial state fee of $520, repeated annually (the secretary of state site lists this as a $500 annual fee) and generally is not liable for other excise taxes if it has a simple structure. S corp must maintain more formal paperwork and corporate functions. For either, you need a registered agent, which the online corporate firms can provide for about $100 per year. Some people here offered good reasons for consulting with a lawyer and accountant prior to incorporating. Others have used online service agencies such as http://www.legalzoom.com . My reading of the Sec of State's instructions for filing as an LLC is that it could be done by someone who has some experience with legal forms and patience & time to read through the instructions. Caveat, though: if you ever really need the INC status, you'd better have filed and maintained your records correctly. My conclusion is that over time, an LLC probably costs a bit less and has a bit less paperwork to maintain for a simple software contracting firm. Your mileage may vary! Charlie Heath Blue Herring Consulting http://www.blueherring.net -----Original Message----- From: Rich [mailto:rich at on-the-net.com] Sent: Wednesday, January 31, 2007 3:26 PM To: Charlie Heath Cc: Hidden-discuss at lists.hidden-tech.net Subject: Re: [Hidden-tech] LLC questions In the software company discussion I think you mentioned a fairly high expected cost to create an LLC -- you should be able to create a LLC (or Sub S) using an online service within a day (maybe 2) for $200-500 plus State fees. The time to confirming from the state (Mass anyway) is within 24 hours. We did a sole member LLC to start - can't sell stock but didn't need to initially. ...