Corporate Governance · Startup formation
Startup formation in Georgia: entity, equity, and IP.
Published
For founders of technology startups in Atlanta and across Georgia who want the company set up once, correctly, before investor money or more code changes hands.
Charlotte Corporate Counsel forms startups so the paperwork survives investor diligence. Charlotte Lynn Luu, a Georgia-licensed attorney, sets up the entity (a Delaware C corp if you plan to raise venture capital, often a Georgia LLC if you don't), founder vesting, the co-founder agreement, the equity split, and IP assignment, at a fixed scope quoted before work begins.
- Georgia-licensed attorney
- Finance-trained approach
- Fixed-scope pricing
By Charlotte Lynn Luu, Esq. ·
Delaware C corp or Georgia LLC: pick by how you plan to fund the company.
The entity choice turns on one fact: whether you plan to sell equity to outside investors. If you do, form a Delaware C corp. Most venture investors expect one, because preferred stock, option pools, and their own fund documents are built around it. If you plan to grow on revenue and pay profits out to the owners, a Georgia LLC is simpler and taxes those profits once, at the owner level.
A Delaware C corp that operates in Georgia also registers with the Georgia Secretary of State as a foreign corporation, so you keep filings in two states. That is a small, known cost. Converting an LLC to a C corp the month before a round is a larger one: new ownership documents, new equity grants, and a tax review, all on the investor's timeline.
I map the choice against your funding plan in the first call. The fixed-scope proposal names the entity and every document that comes with it before any work begins.
Entity comparison
Delaware C corp vs. Georgia LLC, side by side.
Charlotte Corporate Counsel lines up the two entity types Georgia founders choose between most often, on the five points that decide the choice for a technology startup.
| What matters | Delaware C corp | Georgia LLC |
|---|---|---|
| Best fit | Startups planning to raise venture capital or grant stock options to a growing team | Bootstrapped companies, services businesses, and owners who want to take profits out |
| Ownership | Shares of stock, with room for preferred stock and an option pool | Membership units, set out in an operating agreement |
| Tax on profits | Taxed at the company level, then again when paid out as dividends | Passed through to the owners by default and taxed once |
| Investor expectations | The structure most venture funds expect | Many venture funds ask for a conversion to a C corp before they invest |
| Filings for a Georgia company | Delaware formation plus Georgia foreign registration | One Georgia formation filing |
You expect to raise a priced round or issue options within the next few years. Forming it now avoids a conversion later.
You will fund the company from revenue, want profits taxed once, and have no plan to sell equity to venture investors.
02 · Vesting
Founder vesting protects the founders who stay.
Founder vesting means each founder earns their shares over time, so a co-founder who leaves in month six does not walk away with a quarter of the company. The common structure is four years with a one-year cliff: nothing vests in the first twelve months, then a quarter vests at once and the rest vests monthly. Investors look for it in diligence, and a cap table without it gives them a reason to ask for changes before closing.
When founders buy stock subject to vesting, each one files an 83(b) election with the IRS within 30 days of the grant. Miss that window and each vesting date can become a taxable event, valued at whatever the stock is worth that day. I put the 83(b) deadline and the filing instructions in the closing checklist the day the stock is issued.
A departed co-founder with fully owned equity, no way for the company to buy it back, and a cap table investors ask you to fix before they wire.
A co-founder agreement settles the split before it becomes a fight.
A co-founder agreement puts in writing who owns what, who decides what, and what happens when someone leaves. Founders who sign it at formation negotiate as partners. Founders who wait negotiate after the first disagreement, when every term carries history, and often three weeks before a closing.
What the agreement covers
Charlotte Corporate Counsel drafts four parts into every co-founder agreement, each tied to how your company actually runs.
- Roles & Decision RightsWho runs product, sales, and finance, and which decisions need every founder's sign-off.
- Departure & RepurchaseWhat the company can buy back when a founder leaves, at what price, and on what timeline.
- DeadlockHow an even split breaks a tie, so one disagreement cannot freeze the company.
- Confidentiality & Non-SolicitationWhat a departing founder must return, and whether they can call your customers or hire your team.
How to set the equity split
Split equity on what each founder will contribute from here: time, capital, code, customers, and the salary they are giving up. An even split is common and fair when contributions match. When they don't, vesting carries part of the load, because a larger stake that vests over four years costs the company nothing if that founder leaves early. I read the split the way a CFO reads a deal, and show each founder what their percentage looks like once an option pool is set aside.
04 · IP assignment
Assign the IP written before the company existed.
Code, designs, and brand work created before formation belong to whoever created them until a written assignment moves them to the company. That includes the prototype a founder built on weekends and the backend a contractor wrote on a handshake. When an investor or a buyer asks who owns the product, the answer has to be a signed document.
At formation I paper three things: a technology assignment from each founder covering pre-formation work, an IP assignment and confidentiality agreement for every contractor, and the same terms in each new hire's agreement. Contractors who already built part of the product sign a confirmatory assignment now, while they are still easy to reach.
Diligence asks who owns the codebase, and the person who can answer has moved on. Getting an assignment from a former contractor after the fact is slower, costs more, and sometimes does not happen at all.
- Founder Technology AssignmentEach founder's pre-formation code, designs, and brand work
- Contractor IP AssignmentWith confidentiality, for every contractor, including past ones
- Employee Agreement TermsThe same assignment in each new hire's paperwork
Why not LegalZoom?
Filing the entity is the easy part.
LegalZoom files an entity quickly and at a low price, and for a solo founder with no outside money, that can be enough. A startup with two or more founders, or plans to raise, needs the documents a template formation leaves out: a founder vesting schedule, an IP assignment from each founder and contractor, and a co-founder agreement. Those are the documents investors read first in diligence.
A template formation
Fast and inexpensive. Built for a generic company.
- The entity filed with the state
- Standard bylaws or operating agreement
- No founder vesting schedule or 83(b) checklist
- No IP assignment from founders or contractors
- No co-founder agreement
Formation with Charlotte Corporate Counsel
One fixed scope. Built for the round you are planning.
- Entity chosen for your funding plan
- Founder vesting, with the 83(b) deadline on the checklist
- IP assignments for founders and contractors
- A co-founder agreement and a documented equity split
- A price in writing before any work begins
You are one founder, you are not raising, no contractor is writing code, and you want an LLC on file this week. File it yourself, and call a lawyer when a co-founder, an investor, or a contractor arrives.
Charlotte Lynn Luu, Esq.
Georgia-licensed attorney for startups and growth-stage technology companies
Five questions to ask a lawyer before you form a startup in Georgia.
A good formation lawyer answers these five plainly, in the first call, before you sign anything. Bring them to any attorney you speak with, including Charlotte Corporate Counsel.
- Which entity fits my funding plan, and why?The answer should start with whether you plan to raise, then name the entity and what changing it later would cost.
- What exactly is included, and what does it cost?Ask for the document list and the price in writing. With me, that is the fixed-scope proposal you get before any work begins.
- How will you handle vesting and the 83(b) deadline?Listen for the schedule, the cliff, what happens when a founder leaves, and who tracks the 30-day filing window.
- How do you get pre-formation IP into the company?Founders and contractors should each sign an assignment. If the answer is a clause in the bylaws, keep asking.
- Who does the work, and how fast do you answer?Big firms often route startup work to junior associates. At Charlotte Corporate Counsel, you work with Charlotte directly, with a typical response within one business day.
Questions
Questions founders ask about startup formation.
Charlotte Corporate Counsel answers the formation questions Georgia founders bring to the first call.
Should I form a Delaware C corp or a Georgia LLC for my startup?
Form a Delaware C corp if you plan to raise venture capital or grant stock options broadly, because most venture investors expect one. Form a Georgia LLC if you plan to grow on revenue and take profits out, since profits pass through and are taxed once. Charlotte Corporate Counsel maps the choice to your funding plan before any work begins.
Can a startup attorney clean up founder agreements and cap table paperwork before a seed round?
Yes. Charlotte Corporate Counsel reviews founder agreements, equity grants, vesting, and IP assignments, then papers what is missing so the records match the cap table before investor diligence starts. Starting before the term sheet arrives costs less than fixing it on the investor's clock.
Is LegalZoom enough to form a startup?
For a single founder with no outside investors and no contractors writing code, a LegalZoom filing can be enough. A startup with co-founders or plans to raise needs a founder vesting schedule, IP assignments, and a co-founder agreement, which a template formation does not set up for your company.
When do founders need to file an 83(b) election?
Within 30 days of receiving restricted stock that is subject to vesting. Missing the deadline can turn each vesting date into a taxable event. Charlotte Corporate Counsel puts the deadline and filing instructions in the closing checklist.
How much does startup formation cost with Charlotte Corporate Counsel?
Every formation engagement is fixed-scope: you get a written proposal listing the documents included and the price before any work begins. The price depends on the entity, the number of founders, and how much pre-formation IP needs to be assigned.
Who does Charlotte Corporate Counsel work with?
Startups and growth-stage technology companies, with Charlotte Lynn Luu, a Georgia-licensed attorney, doing the work herself. After formation, the same counsel handles Technology & Commercial Contracts, Contractor & Workforce, IP & Brand Protection, and Corporate Governance.
Start here
Form it once. Form it clean.
Book a short, no-pressure call. Tell me about the founders, the funding plan, and what has been built so far, and you will get a fixed-scope proposal in writing before any work begins.
Book a consultationNo charge, no obligation. Typical response within one business day.