QSBS
Exit Eligibility
Incorporation is more than a legal formality. It is a tax event. The entity you choose (C-Corp, S-Corp, Partnership, LLC) locks in a tax characterization that shapes your cost of capital for years. Choose wrong early and the cost compounds, through double taxation or a missed exit break.
We do more than file papers. We plan your entity choice and cap table so the company is ready for institutional fundraising and can qualify for tax-free gains under Section 1202 from the first board resolution, not scrambling to fix the structure when a buyer or investor shows up.
How we deliver this service.
A rigorous, phase-driven process ensures nothing is missed and every position is defensible.
Entity Selection Audit
We model your current income, growth plans, and exit goals to pick the right legal and tax classification (S-Corp vs. C-Corp).
Jurisdictional Analysis
We compare tax and legal nexus considerations across all 50 states (e.g., DE, WY, NV) to find the best home state for your company.
Structural Formation Support
We coordinate the filing of Articles of Incorporation/Organization and internal documents with your legal team or our formation partners.
Tax Classification Elections
We prepare and file the IRS elections that matter, including Form 2553 (S-election), Form 8832 (Classification), and Section 83(b) for founders.
Initial Governance Set-up
We help you get your Federal EIN, state tax registrations, and the initial board-level tax resolutions a new company needs.
Ongoing Structural Monitoring
As the business grows, we watch your asset levels and shareholder count so you stay within the limits of your chosen classification.
Corporate Architecture
Protecting Section 1202 QSBS from day one.
Qualified Small Business Stock (QSBS) is the single biggest tax break available to venture-backed founders. Under IRC § 1202, shareholders of qualifying C-corporations can exclude up to 100% of their capital gains on exit. But eligibility depends on strict asset and active-business tests that apply from the moment of formation.
We structure your incorporation and cap table to protect that eligibility. For founders and early investors, the difference on exit can run to millions.
Focus areas: Delaware C-Corp vs. LLC tax modeling, S-Corp conversion studies, and Section 83(b) election coordination.
Tailored for every client profile.
Ready to incorporate?
Filing the papers is the easy part. Get the structure right for growth, fundraising, and a clean exit.
Specific deliverables, precisely documented.
“Your corporate structure is a choice you make once and live with for years. We help you make it investor-ready from day one.”
Technical clarifications.
Answers to the most frequently asked questions about how this service works in practice.
There is no default answer. C-Corps are required for VC funding and QSBS eligibility, but they carry double taxation. S-Corps avoid double taxation but have strict ownership limits. We model both paths against your 5-year exit goal.
Delaware is the standard choice for venture-backed startups and institutional investors. For a smaller closely-held business, though, staying in your home state is often cheaper on tax. We run the numbers to help you decide.
It is an election founders make to pay tax on the fair market value of their stock at the grant date rather than the vesting date. If the stock grows in value, the savings can be substantial.
Generally when the liability risk grows, or when self-employment tax (15.3%) starts to exceed the cost of maintaining an S-Corporation, which usually happens around $40k-$50k in profit.
Related services.
Two Tax Systems, One Team
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