Why your startup should be a Delaware C-Corp, not an LLC
Gust spends no time talking about what happens when you try and sell a C Corp. If it&#x27;s a stock sale great... if it&#x27;s an asset sale, incredibly not great... you will have double taxation.<p>This matters. $10M paid to the company for an asset, turns into $6.5M after 35% corp taxes (using general numbers) and then $6.5M than distributed to shareholders, assume 30%+  (20% + state taxes + AMT (for now)) so $6.5M is now $4.55 after taxes aka 55% paid in taxes.<p>Given that info just do a stock sale right? Not so easy - not all acquirers want to buy an entire company, that comes with all the liability when sometimes it&#x27;s just an asset they want with no liability. Often times purchase price is lower for a stock purchase with implied liability, also amortization for the acquisition works differently and an asset purchase again can be more favorable for an acquirer (and sometimes a higher purchase price).