Hey all,
I'm beginning to spin up a part-time, self-funded search. I understand that an LLC is fairly typical - but is there any advice on whether it's that helpful for a part-time search? If so, is this something that's important to start right away?
I'm planning to keep expenses fairly low to start. Also, there seems to be mixed advice on starting an LLC in DE or your home state - I'm based in NY in case that makes a difference.
Thanks all!
Whether / when to form an LLC for a part-time search
by a searcher from Harvard University - Harvard Business School
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It depends on your risk tolerance - an LLC will protect you from liability. While not necessary when entering into NDA's and LOI's, it is highly recommended to have an entity enter into those documents to protect you from risk in the event of claims made by the other party (which may be made whether they are rightfully or wrongfully). The vast majority of the M&A industry has an entity for this purpose because the cost is minimal and the downside of not having one if an issue were to occur is significant. In addition, you will need an entity at some point, so having one from the outset utilizes that investment to the greatest extent possible to achieve the greatest ROI.
We have worked with dozens of searchers in various aspects of their search, and I have a guide on the different entity types and pros and cons on my website. We would discuss the right entity type for your needs and goals and form the entity for you or, if you would prefer, we have DIY cost effective solution to help searchers form an LLC on their own. I'd be happy to discuss this further.