Payments company Stripe is today taking another step to expand its operations into a wider set of business services, targeting the startups that form its core base of customers.
Today, the company is announcing that Atlas, the all-in-one service Stripe started two years ago to help founders incorporate in Delaware, can now be used to set up Delaware-based limited liability companies.
As with the C-Corp set-up, Atlas for LLCs costs $500, which includes forming new entity, getting a tax ID, getting a U.S. business bank account and Stripe account, access to expert tax and legal advice, tools for handling taxes, and credits with a number of services; as well as access to the Stripe Atlas Community for networking and extra resources.
Stripe is running a waiting list now for the beta, which should start in the next couple of weeks.
Alongside C-Corps, LLCs are another primary business format that technology founders use when building their companies. They are often the route that a company takes if it’s initially thinking that it will not raise money from outside investors or start small, or just doesn’t want to take the leap initially into a future scenario for the company where a C-Corp structure might be needed.
As Patrick McKenzie, who works on Atlas for Stripe, notes, the benefits for those who know they might not be raising externally right away is that founders have limited liability, there are less tax filings and other housekeeping needs. LLCs are used for holding companies, and small business like restaurants.
The idea here is that the LLC has now been optimised by Stripe specifically for the smaller tech company. This includes the ability to assign IP to the company, to be able to add team members after formation, and crucially to be able to convert the company to a C-Corp if and when you need to. (You can also use Stripe for this, and the cost again is kept low, starting at $500.)
“Startups are continuous creation machines, running experiments and rearchitecting themselves on the fly. Legal choices often force startups to predict the future: is this a side project or the next Google?” said McKenzie. “We think that some founders stop because they aren’t certain yet. So we sought to give founders more options to just get started.”
Stripe first launched Atlas two years ago as a toolkit for startups — initially those from outside the US, and then including US startups too — to set themselves up quickly as Delaware corporations, an essential first step before they can start to raise money. It eventually added more nuanced tools, such as the ability to issue shares.
Stripe does not release exact user numbers but estimates that 20 percent of technology companies that currently incorporate as C Corporations in Delaware are using Stripe Atlas to do so, underscoring how the company’s push into services adjacent to payments — an important way for Stripe to increase its margins and improve its loyalty with users — is coming good.
Stripe was valued at over $9 billion when it last raised money, a $150 million round 2016.
