As I mentioned last week, my buddy Chris and I are working on a new project, Abroad Care. I’m hoping that, with a little extra income I can start to free myself up for bigger and better things.
The idea: to market gift baskets/care packages to students studying abroad.
We still have several kinks to work out, but Abroad Care has officially begun. Chris and I had talked several weeks ago about publicizing our experiences, and we concluded that getting our readers involved would ultimately bring our practices to a higher standard. So, welcome to our project! If, at any point you feel like chiming in, please let us know your thoughts in the comments below.
Abroad Care is an experiment in bootstrapping–starting a business without external capital. One of the first things we discussed was how to legalize the idea. You know, get our papers in order. Per the suggestion of Alex King (a veteran entrepreneur and close friend), we incorporated an LLC in Delaware.
Why Delaware, you ask? A good question. Did you know that more than half of Fortune 500 companies are incorporated in Delaware? Here are a few reasons why:
It’s Cheap. Delaware is one of the cheapest states in the country to incorporate a business. Only eight states have cheaper incorporation fees.
You don’t need to live in Delaware. In other states, you have to operate the business within the state to incorporate.
One person can hold all officer positions and serve as sole director. Many states require you to list separate people as officers and directors. This is an advantage for those running businesses alone.
You can read about some other advantages here.
For the record, here were the incorporation costs for Abroad Care:
$120/year: obtaining a registered agent.
$90: submitting a Certificate of Formation.
$250/year: Delaware state franchise fee.
So, $140 for the first year, then $370/year after that.
In my next update I’ll talk about some of the initial decisions we made, some of our very first mistakes, and how we’re moving forward.
14 thoughts on “Abroad Care, Stage 1: Forming an LLC”
VERY interesting. I’m glad that you’ll be doing updates on this. What a great idea too.
.-= Nate´s last blog ..holy crap it’s been a while =-.
@Nate: Thanks, Nate! Hope this pans out better than PhotoBunga. So many things to learn…
Hey! Keep up the great work! Like Nate above, I’m very interested in progress of your business. I’m in the process of launching my own business (2 weeks away!) and know what it’s like to have to try to figure out all the kinks. It’s a very slow and frustrating process, but soooo rewarding!
That header is bloody ugly but other than that it looks like a nice site, what is he using as his ecommerce platform?
.-= Dan´s last blog ..Renting A Motorbike In Thailand =-.
Just wanted to say thanks — could not have been a more timely post. I just realized I needed to incorporate today and up pops this post on my Google Reader.
.-= Jason´s last blog ..Building A Web App – UnAnchor.com =-.
I hear that all the time – Delaware or Nevada. But don’t you also have to create a linked corporation in the ACTUAL state you are running the business from?
@Richard: Thanks Richard. Drop me a line sometime and let me know how things are going for you.
@Dan: We’re using Shopify as our e-commerce platform. They offer a 30-day free trial and make setting up a store super easy. Not sure how long we’ll stick with it though.
@Jason: Your welcome, Jason! Hope this information helps.
@Paul: As far as I’m aware, you do not. If I’m mistaken please let me know!
I’ll definitely make sure to let you know how everything’s going! Thanks for your interest.
Interesting concept Alan…and my hat off to you for being willing to share the mistakes made along the way!
.-= Earl´s last blog ..Tales Of A Bollywood Actor =-.
Hey there. Congrats on starting a company mate. You said you would this year and now you are doing it. Way to follow through. Looking forward to watching it grow. (btw – this would have been wicked when i lived in australia, 3000 miles away from home.)
.-= Olgs´s last blog ..olgaLG: @marcuswhitney Found you! Looking forward to meeting while I am here in Nashville 🙂 =-.
I’m new here and your site looks pretty interesting. I’ll have to dig deeper into the archives here. Setting up an LLC must have been quite an interesting venture. God, I hope to do the same. Soon.
.-= Moon Hussain´s last blog ..Are You Embarrassed Of Saying “Passive Income” Out Loud? =-.
Having set up several corporations over the years, I personally have found that setting up in your own state is often the easiest way to go. Not always the cheapest but I’m not opposed to paying taxes in the state I live in since I am using their resources.
Hope the business is going well!