# Incorporation Decision Matrix > SKILL 70: Incorporation Decision Matrix - Skill: `nickgallick/incorporation-decision-matrix` (Agent Skill) - Install (CLI): `npx skillmds@latest add nickgallick/incorporation-decision-matrix` - Raw SKILL.md: https://api.skillmd.com/api/skills/nickgallick/incorporation-decision-matrix/raw - Safety review: pending (external: skill-scanner PASS, skillspector PASS) - Works with: Claude Code, Claude.ai, OpenAI Codex - Category: Coding & Dev Tools - Author: nickgallick (https://skillmd.com/u/nickgallick) - Updated: 2026-09-21 - Page: https://skillmd.com/skills/nickgallick/incorporation-decision-matrix --- # SKILL 70: Incorporation Decision Matrix ## Purpose Know exactly where to incorporate, what entity type to use, and why — for every type of product Nick builds. ## Decision Tree ### Question 1: Will you raise VC/institutional investment? - **YES** → Delaware C-Corp (virtually all VC firms require this) - **NO** (bootstrapped) → proceed to Question 2 ### Question 2: Do you want pass-through taxation? - **YES** → LLC (taxed as partnership by default, or elect S-Corp) - **NO** (planning to reinvest profits, fine with corporate tax) → C-Corp ### Question 3: Where to form? ## Entity Options ### Delaware C-Corp — Default for Fundable Startups - **Why**: most developed corporate law, Court of Chancery (specialized business court with no jury), VC-standard equity structure, universally understood governance - **Cost**: $89 filing + $300/year franchise tax minimum + $50–150/year registered agent - **Iowa operation**: must also register as foreign entity in Iowa ($100) where Nick operates - **When to use**: any product you might raise money for, sell, or take public; Agent Sparta if raising within 12 months - **Downside**: franchise tax (minimum $300/year, can be much higher based on authorized shares); must qualify in Iowa ### Iowa LLC — Default for Bootstrapped Operations - **Why**: cheapest, simplest, pass-through taxation, no franchise tax, Nick's home state - **Cost**: $50 filing + $60/year annual report - **Iowa corporate tax**: 5.5% flat rate (C-Corp) OR pass-through to individual (LLC) - **Iowa individual income tax**: 3.8% flat rate - **When to use**: initial testing entities, side projects, UberKiwi-style bootstrapped products - **Limitation**: VCs will not invest in Iowa LLC; requires conversion to Delaware C-Corp before raising ### Wyoming LLC — Specific Purposes - **Why**: DAO LLC recognition (first state to recognize DAOs), no state income tax, strongest asset protection (charging order is exclusive remedy) - **Cost**: $100 filing + $60/year - **Note**: Nick still pays Iowa individual income tax as Iowa resident regardless - **When to use**: DAO wrapper for decentralized protocol, asset protection for crypto holdings ### Delaware LLC — Holding Company - **Series LLC**: available (Iowa doesn't have this) — multiple series with separate liability - **Cost**: $90 filing + $300/year - **When to use**: holding company structure with multiple product subsidiaries ### Cayman Islands Foundation - **Why**: protocol governance, non-profit structure for DAO, no beneficial owner (ideal for decentralized protocol) - **Cost**: $10–25K setup + $5–10K/year maintenance - **When to use**: global protocol governance for prediction market (Phase 3); NOT for tax avoidance (Nick is a US person — CFC rules apply) ### Singapore Pte. Ltd. - **Why**: Asia-Pacific operations, 17% corporate tax, well-regulated crypto jurisdiction (MAS) - **Cost**: $5–10K setup - **When to use**: serving Singapore/SEA users, MAS DPT license application ### BVI Business Company - **Why**: simplest offshore structure, 0% local corporate tax, privacy - **Cost**: $5–15K setup - **Note**: Nick is a US person — still pays US tax on controlled foreign corporations (CFC rules, Subpart F income) - **When to use**: holding non-US IP, non-US operational entity for global users ## Nick's Recommended Structures by Product ### Agent Sparta (Skill-Based AI Competition) - **Bootstrapping → raising later**: Iowa LLC now → convert to Delaware C-Corp when raising (costs $5–15K in legal fees) - **Planning to raise within 12 months**: Delaware C-Corp from day one, register as foreign entity in Iowa - **Rationale**: Iowa LLC avoids unnecessary cost if raise is uncertain; Delaware C-Corp eliminates conversion friction if raise is imminent ### AI Prediction Market - **Phase 1 (free-to-play, US only)**: sub-entity under Agent Sparta's entity — no separate entity needed - **Phase 2 (paid, US)**: Delaware C-Corp subsidiary or separate Delaware entity for liability isolation - **Phase 3 (global, decentralized)**: Cayman Foundation for protocol governance + US Delaware C-Corp for US frontend/services + offshore entity for non-US users ### AI Agent Token - **US-accessible tokens**: Delaware C-Corp issues token warrants alongside equity SAFEs - **Non-US token launch**: Cayman Foundation controls protocol; offshore entity handles token distribution to non-US persons; US entity handles US operations only ### Perlantir Holdings Structure ``` Perlantir Holdings LLC (Delaware) — IP holding, intercompany licensing │ ├── Agent Sparta Inc. (Delaware C-Corp) — skill competition platform │ ├── [Prediction Market] Inc. (Delaware C-Corp) — US prediction market operations │ └── [Protocol] Foundation (Cayman) — global protocol governance, token ``` - Each product is a separate subsidiary → liability isolation between products - Holdings LLC owns IP → licenses to operating subsidiaries → centralizes IP ownership - Separation protects: if one product has a regulatory problem, it doesn't take down the others ## Conversion Paths - **Iowa LLC → Delaware C-Corp**: form Delaware C-Corp, merge Iowa LLC into it (or asset transfer). Legal cost: $5–15K. - **Single entity → multi-entity**: form subsidiaries as needed. Transfer assets via inter-company agreements with arm's-length pricing. - **LLC → C-Corp for VC**: standard conversion, your attorney handles the paperwork. VCs expect this. --- *This is legal research and intelligence, not legal advice. Consult qualified legal counsel before taking action.*