I wrote this (and the linked guide). Feel free to ask me if you have any questions or comments, in particular about things you'd like to see us cover in the future. If you'd rather do it over email, my address is my HN username @stripe.com
Concerning the blog post here: As you surely know in Germany credit cards are still not common (by SEPA direct debit mandate and there exists an IMHO far better option; this option exists in the whole EU, though it is particularly popular in German). This is IMHO an important limitation of Stripe (and Stripe Atlas) for German customers (I would even call it a road block for this market) not to offer SEPA direct debit. Are there any plans to add this option in near future?
Hi @wolfgke! I work at Stripe. You're right about the importance to cover other relevant payment methods locally. Happy to chat more about our SEPA debits plans, feel free to get in touch: I'm just gabriel at stripe dot com.
This is an excellent guide and one I wish I had when I first started my business.
One particularly tricky topic that I'd love to see covered is paying foreign employees. Paying members of a distributed team is straightforward when they perform as contractors. As we've grown and they've continued working with us, the relationship has become one of employer-employee in the eyes of U.S. law. This puts them in a nebulous situation where they are de facto employed by a U.S. company, but are non-U.S. persons deriving their income from a non-U.S. source.
It's likely other Atlas users could find themselves in a similar situation.
Acknowledged on the topic; this is something that I hope we can cover in more detail in the future, but not something that I can opine about semi-officially without it getting vetted by lawyers first.
I second this request for discussion. Over the past 7 years we've accumulated contractors working regularly from 10+ countries. The complexities of sending/receiving payment with contractor status (and other employment ambiguities) are significant.
This guide looks amazing so far, thanks for putting it together.
@patio11 or anyone: since Stripe Atlas is still in the early stages and not accepting everyone, what's the quickest/cheapest/easiest way to move a company from a Sole Prop to an LLC/S-Corp?
My CPA recommended a tax attorney but that seems old school and expensive. At the same time, companies like LegalZoom or MyCorporation charge $$ for BS things like "obtaining an EIN" which takes a few minutes, so I don't trust those services either.
Unfortunately the devil will be in the details. If the sole prop has nothing and no obligations, you might be able to just incorporate. But if you have any contracts in place, or customers, or contractors etc, that requires some work - not difficult, but doing the right thing (eg. contract reassignment) is situation specific.
Personally I'd look for a solo small-business attorney, they should be able to do this for cheap. Definitely not a brand name startup law firm :)
Well done. I appreciate you took the time to mention LLC, since the "fund raising startup" is always advised to go DE C-corp and that (I believe) is what Stripe Atlas is currently doing. One note on the LLC, it says they are cheaper to "incorporate", that depends on the State.
Disclosure: I'm was a corporate transactions attorney and I applied to Stripe Atlas, it was actually pretty cool, they asked what products/service I would create for Stripe Atlas and I built it here: www.generalcounselcloud.com
The primary purpose is Registered Agent, which is always over looked and I don't think a startup has tackled. For example, I didn't see anything in the initial write up on Registered Agent (what it is, who they are, the price) but every business organization must have one. My startup also does annual reports, your write up mentions they are easy (which they are) and most business owners do it themselves or pay a CPA ~$100, personally I find a lot of business owners willing to pay for the convenience and peace of mind. If appropriate I'd ask your thoughts since these are services are complementary not competitive with Stripe Atlas.
Paying for a registered agent is the biggest scam going. You're literally paying $100/year to use someone else's contact information instead of your own. It's essentially like paying $100/year for WhoIs privacy.
>You're literally paying $100/year to use someone else's contact information instead of your own.
Yes people may be their own registered agent FREE. However, almost no one can act as their own DE registered agent because the Registered Agent must have a DE physical address, and very few DE companies are physically present in DE.
Additionally, for the non-DE businesses, whether you are big or small business you likely don't want process servers coming to your place of business (or your home) and serving lawsuits in front of your employees/family.
Edit: Still your point remains that not many people see the benefit of paying for an Registered Agent (even when they can't be their own) which is why I have bundled 3 additional services (annual report/franchise tax notification; annual report preparation/filing; unlimited legal advice). Annual Reports are easy and can be done by business owners too, but based on the number of people who file late and pay late fees greater than the filing fee, its still a service businesses need.
If you act as your own registered agent, you must have someone present at all times during ordinary business hours to accept legal service.
You're not just renting someone else's address. You're also renting an employee that will take papers from a sheriff's deputy on behalf of your business.
But a registered agent business is not the only type of business that can provide such services. Attorney's offices can do it. A self-storage business can do it. A private mailbox business can do it. A crazy cat-person that never leaves the house can do it.
Those options may be cheaper than the specialist business, but most RA businesses will provide additional services that make the higher fees worthwhile. For instance, they will not only inform you in a timely fashion when your business has been sued, but may also e-mail you a scanned copy of the complaint and summons within minutes of receiving it.
Also, registered agent businesses are likely to have offices in place in multiple states, so they can better compete on price if your business operates in more than just one state.
That said, don't buy RA services from Corporation Service Company, because they buy up tech businesses and then indiscriminately fire all the software pros.
Still making my way through it, but this caught my eye:
> What “material size” means to you is a great question to run by your accountant, but as a guideline, in the United States, many businesses with revenue above $100,000 choose to incorporate.
Does this mean I made a very sub-optimal play by choosing to incorporate before revenue? We have revenue now, but not very much, and the Stripe fee, lawyer fee, and soon-to-be-accountant fees definitely put us in the red.
This is an excellent guide, thank you for writing it! Could you talk about where DBA and DUNS numbers fit into the business/incorporated spectrum? If you distribute apps through Apple as a business you have to have a DUNS number.
If you haven't received an invitation yet, send me an email, I will fix that. (Offer available to HNers generally -- you can never waste my time emailing me.)
If one had hypothetically used the invitation to apply for Atlas, you get a Stripe account instantaneously, should know whether we can support you within 2 business days, and should have a bank account opened in about a week.
We are, naturally, working on making things faster. More news on that front when it is ready.
I think Atlas' answer is "Use Atlas." One reason the product exists is to solve this problem in a fairly predictable fashion.
We hope to write more about banking specifically at some point, including (if I have my druthers) about KYC, which you've previously mentioned has been a pain point for you in attempting to get an account opened from overseas. KYC is not an absolute blocker; particular strategies for accomplishing it are something I'll have to write about another day.
Do you need a real bank account or just a routing number?
If you are a freelancer/contractor and just want to receive payments, a routing number may be enough. I have a Payoneer pre-paid card, it gives me an account number US customers can use in order to send me wire transfers.
My affiliate link is bellow - you get $25 more first time you receive 100 bucks using it (I get another 25).
Payoneer is not really a solution for a serious international business selling into the USA.
1. They use First Century Bank for the routing which does not have the greatest reputation.
2. You can only get paid out in your local currency (at least for Australia where my business is based) and the exchange rate is terrible. This is a really killer.
3. The fees are very high.
4. They seem rather prone to cutting people off and having very poor customer service in regards resolving issues. They don’t appear to be worse than paypay in this regards, but I would not be keen to have hundred of thousands of dollars in transit with either company.
