Business strategy

Startup legal setup: what Yorby's founders learned

Andrew Meng and Thomas Kim discuss company costs, co-founder ownership and fundraising decisions from their experience building Yorby in the US.

12 October 20262 min read6 min listen

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Editor's note

Why this matters now

Andrew Meng handled Yorby's legal paperwork. Thomas Kim jokes about paying someone else to deal with it. Their conversation starts with a familiar founder decision: which company costs are you taking on, and why?

The episode connects those costs with co-founder ownership and accepting investment. Those are separate decisions with consequences beyond the filing itself.

Their experience is rooted in the US. Listen for questions to take to an adviser who knows your location and business. A founder's profit target is a personal rule of thumb, with no authority to set your legal obligations.

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What it says

Distilled from the original. The notes above and below are the editor's own.

The costs behind a company filing

Andrew Meng and Thomas Kim discuss the administrative side of building Yorby. Meng handled their filings, and the conversation draws on their experience with US company structures.

They worry about recurring costs taking money from a young business. One example is California's LLC tax. The California Franchise Tax Board currently describes an $800 annual tax for LLCs organized or doing business in the state, subject to its rules.

That is an annual tax, with filing and other obligations considered separately.

Ownership and investment changed the decision

The founders discuss how working with a co-founder creates questions about who owns the business and how decisions are made.

They also describe changing their company structure when they needed to accept outside investment. Their account shows why a business's plans matter alongside the cost of setting it up.

An agreement with a co-founder, a company filing and an investment transaction each address different responsibilities. Their conversation is a starting point for questions about those responsibilities.

Keep tax claims precise

The episode discusses the taxation of corporations. The IRS explains that corporate profits can be taxed at the company level and again when distributed as dividends to shareholders.

Their profit target is a personal rule

Meng offers a profit level he uses when thinking about the cost of formalizing a business. It comes from his own experience.

A founder's preferred timing does not determine registration duties, tax deadlines or liability. Those depend on the location, activity, ownership and other circumstances of the business.

Questions worth bringing to an adviser

Use the episode to prepare questions about:

Who owns the business and its work.
Which registrations, taxes and continuing costs apply.
What happens if the business causes a loss or faces a claim.
What an investor will require before providing money.

The answers need to fit your business and jurisdiction. The founders' experience provides an example of decisions changing as a startup grows.

Editor's note

What to do with this

Make a short list of the decisions your business needs answered: ownership, liability, taxes, customer contracts and any plans to raise money. Bring that list to a qualified local adviser.

The founders' account is useful for understanding how the paperwork changed as their company changed. Pair it with their validation discussion to think about commercial demand and company responsibilities together.

Find more from the show in our startup-growth playlist.

The original

Legal lessons we learned scaling our startup to $100k ARR

How Does This Get Big? · 22 September 2026