By: Brandon Shelton. Esq.

Starting a new company is exciting—but it also involves a number of critical legal decisions that can shape the future of your business. At Strategy Law, we regularly counsel startups and small businesses on choosing the right structure and getting off on the right legal foot. Here’s a quick guide to some of the most important early decisions every founder must make.

Choosing a Type of Company

The type of company you form depends heavily on your goals and business model:

• VC-Backed Startups: If you plan to raise venture capital, you’ll almost always want to incorporate in Delaware as a C-corporation. This structure is favored by investors and offers legal protections ideal for high-growth startups.
• Consulting, Retail, and Bootstrapped Companies: If you’re launching a consulting business, brick-and-mortar shop, or self-funded venture, a local LLC (Limited Liability Company) offers the right balance of flexibility and protection.
• Professional Services: Professions like doctors, lawyers, and accountants are required to operate as California professional corporations, subject to unique rules and regulations.

Choosing a Company Name

Naming your company involves more than creativity—it requires due diligence:

• Corporate Identifier: You may need to include a suffix like “Inc.” or “LLC” depending on your structure.
• Trademark Conflicts: Just because a name sounds unique doesn’t mean it’s safe. The legal test is whether your name could cause confusion with an existing mark. A thorough search is essential, especially when minor differences won’t offer protection.
• DBAs (Doing Business As): Filing a Fictitious Business Name Statement allows you to operate under names different from your legal name, which is useful for branding or offering different services under one legal entity.

Choosing an Address

Your business address can impact everything from mail delivery to privacy. Here’s what to consider:

• Brick-and-Mortar Businesses: If you have a physical storefront, using this address is straightforward and ideal for both business operations and customer trust.
• Tech Startups or Home-Based Businesses: You can typically use your home address, but consider the potential impact on privacy. You might want to separate personal and professional spaces to avoid exposing your home address publicly.
• Avoid UPS Boxes or PMBs: While convenient, these options do not meet IRS or corporate compliance standards for official business addresses and can raise red flags during audits or legal matters.
• Virtual Office Options: Virtual offices with coworking spaces are available for $50–$100/month, offering legitimacy and helping with compliance. However, be cautious with anything priced too low, as it could indicate a lack of professionalism or legal standing.

 

Choosing a Registered Agent

Every company needs a Registered Agent—someone officially designated to receive legal documents on behalf of the business.

• In California: You can save costs by designating yourself or someone within your company as the Registered Agent, using your company address.
• In Delaware: While there are affordable third-party options, be cautious of unnecessary upsells. Some services charge hundreds for basic filings, such as the $25 Statement of Information. Your lawyer or CPA can typically handle these filings at a more affordable rate.

 

Authorizing Stock

Understanding your stock structure is crucial for attracting investors and maintaining control:

• Authorized vs. Issued Stock: Authorizing 10 million shares doesn’t mean you own them all. Only the issued and outstanding shares represent ownership in the company.
• Par Value: This is the minimum price at which stock can be sold. For early-stage startups, it’s often set as low as $0.00001 or $0.0001, enabling founders to issue shares at minimal cost when the company has few or no assets.

 

Start Your Business Right with Strategy Law

From choosing your entity type to understanding stock and naming rules, every early decision matters. At Strategy Law, we specialize in helping startups navigate these foundational steps with confidence. Whether you need help forming a Delaware corporation or understanding stock issuance, our experienced startup lawyers in San Jose are here to guide you every step of the way.

Ready to start your business the right way?
Contact Strategy Law LLP today to schedule a consultation.

This blog is written as of July, 2025.  Recommendations and legal requirements are changing rapidly, so please continue to review our legal updates or review postings on relevant government websites.

All blogs on this site are for educational purposes only, do not constitute legal advice or opinion, and should not be applied to your situation, or any specific situation, without consultation with counsel. Strategy Law, LLP does not provide any legal advice concerning any matter discussed in a blog except upon formal engagement including, without limitation, execution of Strategy Law, LLP’s formal legal services agreement, and with respect to specific factual situations.  No blog constitutes a guaranty, warranty, or prediction regarding the result of any legal matter discussed in the blog or any representation