Early startups as an S-Corp?
I am just getting the courage to start an internet company that will be a combination of retailer/social network. I plan on bootstrapping this company for as long as I can, but figure that I will eventually need VC funding. I am trying to figure out if I should start out as an LLC or an S-Corp. I have read plenty and have concluded that an S-Corp is the right longer term strategy. However, I have read that I must pay myself a “reasonable” salary if an S-Corp. I have no plans of drawing a salary for up to the first year and will potentially bring on people who will also work for a stake in the company, but no salary. Based on this, should I just do LLC and end up switching later to an S-Corp, once revenue/profits are at a point that we can draw a salary and at the point we start to seek outside funding?
Thanks for your thoughts.
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