Got that billion dollar idea ? And ready to incorporate it into a company ?
Wait.. You might be heading for trouble and unnecessary tension if you don't do it at correct time. Too early and you end up paying money for things you don't need at time you are strapped for cash.
Too late and you might not be starving yourself from all the benefits that being an incorporated legal entity brings. Yes.. Being able to raise debt / equity allows one to grow faster and capitalise on opportunities which you might not be able to without being a incorporated entity.
So you have to time it right. So when exactly is a correct time for converting your idea into a legally incorporated business ?
Here are few checkpoints which will help you in deciding the correct time for incorporation.
- Have you released your product ? If not publically, then atleast to a small group of beta users ?
- Do you have any revenues ? And are your revenues predictive and substantial to cover the legal fees ?
- Do you have any outside investor willing to put in money into your venture ?
- Do you deal with corporate clients who expect a certain professional image from you ?
- Do you need to hire full time employees and you have outgrown one man multiple hats stage ?
If answer to majority of these questions is a big YES... Then probably it is a time for you to go ahead with company registration else it might be too soon for you.