Starting a coaster company
UPDATE: Some of the stuff in this post is wrong, I’ve written a follow up post called Starting a coaster company, again. Go check it out.
About a month ago Tom announced the start of Coastermatic. Coastermatic is a service that allows Instagram users to print their photos on to stone coasters. We’ve been working on it rather intensely for the last 5 weeks and are getting pretty close to launch.
After talking about the concept and logistics with a few people who are part of the growing ecosystem of Instagram products, Tom and I decided to make Coastermatic an LLC. LLC stands for ‘Limited Liability Company’, which basically means the finances for the company are separate from our personal accounts. We’re hoping it’ll be smooth sailing for Coastermatic, but its better to be safe than sorry.
What did it take to get our coasterican ship in the water? A crash course in governmental + banking bureaucracy. I’ve spent far too much time online and on hold trying to figure this all out, so I’ve decided to detail the process here. Hopefully this post will save a people in a similar situation some time and frustration.
1. Register in Delaware
We’re based in NYC, and the process for setting up an LLC in New York is a little arduous. Namely, you need to publish a notice of the formation of your company for 6 weeks in 2 newspapers. This takes a lot of time, and money, two things that we don’t have.
2. Use Legalzoom.com and order:
- Their basic LLC package with a Tax ID ~$325
- A rush upgrade, so it takes 10 days instead of 35, ~$150
- Certificate of Good Standing for Delaware. ~$180
Legalzoom was recommended to us in our Entrepreneurial Design class. They were fine to work with, and have helpful staff. Note that the Certificate of Good Standing is really important. We missed this part, and are now stuck waiting for it.
3. Authority to do business in NY
Before you can open a bank account in NY, you need a Certificate Under Seal in NY state. This is confusingly also referred to as a Certificate of Good Standing or Certificate of Existence. This certificate means you’ve told NY and the IRS that you intend to do business here, so they can tax you for it.
This costs around $250, and to get it you’ll need:
- Certificate of Good Standing from the home state of your LLC, Delaware for us
- Application for Authority - Form 1361
- Credit/Debit Card Payment - Form 1515
Fax it all through to the Department of State, Division of Corporations. Their uninformative page on the topic is here and includes the fax number.
4. Opening a bank account
Once your business shows up in the Corporation and Business Entity Database you’re good to go. Find a bank where you can speak to someone in person. I tried to set up an account online, then via phone + email. Both attempts were completely useless. Do this one IRL and it’s much easier.
5. Hook up your accounts and launch!
We’re set back a bit since we didn’t do everything in this order, but we should be ready to roll in a week or so. We’re using Stripe for our online orders, integrating with them has been a dream. It’s so nice to be able to style out our own payment form.
Be on the look out this week for Episode 1 of Coastervision, a video series about the possibilities of coasters. Also, join our signup list, where we’ll be sending a special treat along with our launch announcement.
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