Is an experienced accountant necessary for an s-corp formation?
I need to form an s-corp in Delaware. The corporation will be taking on angel funding as soon as it is formed.
I have retained an attorney experienced in the formation & funding processes. The attorney has advised retaining an accountant but I am not sure how much work is actually involved here.
My personal accountant works with small businesses - is it safe to trust him with this process?
Funding Incorporation Accounting Seed Funding
3 Answers
The type of business, the complexity of the transactions, complexity of adding funds, number of investors and types of assets all go into if you need or don't need an accountant. Also of course your own ability to do accounting. A cash recognized business with no employees, no complex debt or equity funding and that has simple assets (not land) can be done at least at the beginning on your own. If the nature of the business is more complex than that, then get an accountant and get to the experience level based on the complexity of your planned buisness.
If you are taking funding/investor I think you'll need a C corp unless the angel is very trusting or you are giving away A LOT of the company. Specifically it is common for investors to want preferred shares and some voting rights not held by common shareholders.
You don't need an accountant. It is simple to form a business online. Having an attorney and an accountant to help you manage/give you advice is a good idea. Forming the company is typically straightforward and painless though. You will want the accountant for tax preparation and to give you some framework for managing the cashflow.
It is not a requirement, but if you decide you do need an accountant, I'd always suggest going for "experienced" as opposed to "inexperienced". :)
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Of course, that makes sense, but there is a huge difference in price. I would like to keep costs down if the work involved does not require someone who specializes in the formation process. – Alex 14 years ago
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It may still be cheaper than fixing "costly" mistakes later. You can save on attorney if all you want to do if you form an s-corp in DE. You are required to have an agent if you're out of state, but you can get that for $50/yr, but registering any type of LLC or Corp in DE could be done onle for close to nothing. – Usabilitest 14 years ago
