My dilemma started when my co-founder and I had to split and the startup we were working on pretty much died out. About a month ago, I decided to finally close the corporation. But I quickly realized that closing a c-corp was not as easy as opening one.
“So in total, you owe about $89,000 to the State of Delaware”
Unlike what the title of the post suggests ("Why incorporating my startup was my worst mistake"), the correct lesson to take from this experience is that registering a company is a responsibility. It's not something you do without knowing what regulations will apply to you.
Earlier in January, I advised people to register a business today as a new year resolution. This admonition deserves a follow-up.
Most governments treat businesses as "responsible" entity. They give you very little slack when it comes to following the laws and regulations of business, because they consider business owners to be capable of following a few simple rules. For example, in the UK, if you fail to file your accounts on time, you will get fined. If you file your accounts wrongly, it's your fault, too (not your accountant's, interestingly). Nobody cares that your dog ate the accounts - it's your responsibility as a business to keep records, keep copies of the records, prepare the right pieces of paper and file them at the right times.
Those regulations are, at least in the UK, nowhere near as complicated as they might sound on the surface. Any reasonably diligent and intelligent person (and someone who can learn and apply multiple programming languages definitely qualifies) is capable of learning everything they need to know over a few hours. And the government gives plenty of reminders, too. But you do need to go into this type of venture with your eyes open.
Registering a business is for grown-ups.
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