Why incorporating my startup was my worst mistake - <AUTHOR> http://heyhamza.com/why-incorporating-my-startup-was-my-worst-mis <comment><USER2> Corporations are not particularly hard or expensive to start, maintain, or dissolve - _but_ you need to be at a stage of life where a thousand dollars here or there is not a major burden. If you are not yet at that stage, that is a different story and there is no doubt that forming or dissolving an entity such as this will normally set you back a thousand or two on either side. In that case, you should tread cautiously unless you can raise some funds (even if it friends-and-family money) to be able to handle such costs without too much pain.

As a lawyer, I would have to say that you should do it by the book and dissolve the entity. I have, however, had a variety of clients over the years who left a Delaware corporation to die without dissolving it and they have not had trailing personal liabilities as a result of the accrued corporate franchise taxes (of course, it is a different matter if the corporation earned a net profit and has an obligation to file income taxes - in that case, failure to file can cause serious problems for the corporation and for its management).

The $89K tax bill is typical of any Delaware corporation that has large numbers of authorized shares, even with a low par value. This often proves a shock to unsuspecting founders who file a do-it-yourself entity without understanding the issues. However, in almost all cases involving an early stage startup, you can deal with this easily by using the alternative valuation method tied to value of assets in the company. Use of the alternative method usually reduces the franchise tax to a very low level. It is easy to find out how to use the alternative method (forms and instructions are available online through the Delaware Secretary of State).

It seems that you needed to set up the entity in order to try to manage the issues with your co-founder and so the choice to set up a corporation was not really a mistake. The choice to set it up in Delaware for a simple situation can be a mistake, in my judgment, but I am probably in the minority among startup lawyers on this issue in believing that a home-state incorporation in the interests of keeping things simple can be and often is the best choice for founders (see <http://grellas.com/faq_business_startup_002.html>). It is no disgrace for a Silicon Valley startup to incorporate in California, even for a public company (no less than Apple itself is a California corporation). Had you done a home-state incorporation, you would have avoided the hassles with the $89K tax bill, as most states besides Delaware states have a fixed, low amount that you pay every year as a minimum franchise tax (in California, $800).

Incorporation is definitely not for everyone. When and if to incorporate can be tricky questions. I also have outlined a few of the factors to guide that decision as well (<http://grellas.com/faq_business_startup_007.html>).

There are a good number of early-stage startups that really can't easily afford professional fees and so the answer is not to use a lawyer in all cases to incorporate. But, even if you can't afford a lawyer, it is always worth consulting with one for strategic advice on incorporating before you do so. Such a first consultation is dirt cheap in most cases, and sometimes free. The modest amount paid is well worth it just to be alerted to the main issues and pitfalls involved in setting up an entity. Thus, while it was probably not a mistake in itself to set up your corporation, it likely was a big mistake to do so without some guidance of this type (I had made this comment in connection with your original piece as well - <http://news.ycombinator.com/item?id=1924719>).

Sorry to hear about the business failure. I know the HN community often stresses what a valuable learning experience this can be but there is no denying that it is a very painful affair by any measure.

<comment><USER3> Another good example of a big, high revenue/high profit corporation that isn't a Delaware corporation is Microsoft. They are incorporated in Washington.

I believe that at least at one time (early '90s, when I got this information from my corporations professor in law school--maybe it is different now), Delaware was basically a rocket docket for complex corporation cases, such as shareholder lawsuits against large public companies. That was one of the attractions of them for large public companies, which might be worth adding to your FAQ. Who wants their cool merger delayed by many years over a suit from grumpy shareholders?

<comment><USER4> Microsoft does avoid paying taxes, but by using the Irish tax haven:

[http://techrights.org/2009/05/02/microsoft-evading-tax- irela...](http://techrights.org/2009/05/02/microsoft-evading-tax-ireland/)

(I couldn't find the original, less biased account, but it's been well documented)

</comment></comment></comment><comment><USER5> Oh, come on guys, if you think these are troubles related to incorporating a business, you should really try to do it in Croatia.

For starters, all companies need to be registered at the Court of Commerce, and each new company needs to have a name approved by a judge. Second, you're legally bound to have a name either in Croatian, Latin or Ancient Greek (or presumably another "dead" language, if you can prove it); and even if you do, a judge has to OK it (a friend of mine has recently been through about 30 names and still hasn't been approved; the whole process of approving a name can take days).

Then you have to physically go (yourself, or your lawyer) to 3 or 4 offices to file various registration papers; all in all it can take a better part of the month to incorporate. And to top it all, even if your company does nothing, has no income or expenses, it has some monthly dues to the state from day one, simply because it exists.

<comment><USER6> Why don't you open in Bosnia or Montenegro? Both are very liberal and have western banks. I have used businesses + accounts in both as offshore vehicles.

You can get a business registration, bank account and merchant account with gateway in Montenegro for a few hundred dollars and in a couple of days.

Heck, with a few thousand dollars you can register your own bank in Montenegro.

<comment><USER5> Nik, if the solution is to open a company in another country, I'd rather do it in the UK, which is even more sophisticated than the ones you mention, and is only a couple hours' flight away. Actually, I did it already. ;)

</comment></comment></comment><comment><USER7> It sounds like Franchise Tax associated with annual returns is payable by the corporation, not you personally.

From 8 Delaware Code §503: "All corporations accepting the provisions of the Constitution of this State and coming under Chapter 1 of this title, and all corporations which have heretofore filed or may hereafter file a certificate of incorporation under said chapter, shall pay ...". <http://delcode.delaware.gov/title8/c005/index.shtml>

It is 8 Delaware Code §277 (<http://delcode.delaware.gov/title8/c001/sc10/index.shtml>) which says that Franchise taxes have to be paid _by the corporation_ before the Corporation can be dissolved.

It sounds like the corporation is behind on franchise tax, and so is therefore insolvent - it has liabilities exceeding the assets.

If the corporation simply doesn't pay the franchise taxes for a year, the charter will be repealed (see 8 Del C. § 511, <http://delcode.delaware.gov/title8/c005/index.shtml>). Expect to lose all assets owned by the corporation, including any code.

IANAL, but I suggest you get advice from a lawyer or accountant about this.

<comment><USER8> _Expect to lose all assets owned by the corporation, including any code._

How does this process work?

</comment></comment><comment><USER9> You really should update your original "How I Incorporated My Startup" article <http://heyhamza.com/33994010> to admit you got in over your head. It really changes the whole lesson of the first article. I see you've added disclaimers, but you need to also link back to the potential $89,000 mistake.

</comment><comment><USER10> Incorrect: Your worst mistake was not talking to a lawyer and an account before doing your incorporation. The value of these professionals isn't their ability to file paperwork but to give you advice that's customized to your situation. Too many geeks think they can reverse engineer what goes into passing the bar or getting a CPA, but the reality is that the smart ones really know enough to know what they don't know...

<comment><USER11> Consulting a lawyer/accountant would have set someone back even before they started. I asked for the price to consult a lawyer before and it cost around $2500 just to have a chat regardless of the outcome. There is an unwritten guideline "do first, ask for forgiveness later" among people trying to blaze new trails. (NOTE: felons need not apply =) ).

<comment><USER10> "do first, ask for forgiveness later" applies to software design, but it doesn't apply to the IRS. Firstly you could have spoken to a personal accountant for next to nothing, and there is such a glut of lawyers out there that it's easy to get one for much less. As with any other pros pick these helpers via recommendation from other that have had good results.

PS I say this as someone who did a DIY incorporation and had to un-do it at a later date when it didn't make sense...

<comment><USER11> I think "do first, ask for forgiveness later" may apply generally to any institution/community where the authority are people who wants the institution to function in the spirit it was setup rather than based solely on the rules that were implemented to govern it. If the IRS was run in that spirit, then such abnormal cases can be dealt with by 'taxing' the person for IRS wasting resources to deal with it but not the rather astronomical figure of tens of thousands of dollars.

</comment></comment></comment></comment><comment><USER12> It's a shame these things aren't more straightforward. This is a somewhat detached and subjective view of the US but it _seems to me_ that US regulations are designed to nickel and dime you at every turn. If you incorporate here in the UK, don't trade, and dissolve, you owe diddly squat and any taxes you do pay are reasonably simple and well known.

I'm far from a defender of the UK in most cases - especially tax _rates_ \- but as a business person in the UK, I at least don't feel like the government or regulations are out to trick me and that I need an expert or a lawyer by my side for every decision I make.

<comment><USER13> It's mostly due to delware (other states are very different). The state of Delaware uses its lenient coporation laws as a way to make a ton of revenues for the state. These laws attract most corporations (for foreigners some of these laws are very useful) in the US and franchise taxes for a state the size of Delaware are incredibly important.

Like I said other states have very different laws but most people will tell you that with all the bad delaware is still not decent choice to incorporate.

<comment><USER14> In fact, Delaware makes so much from these taxes that it doesn't even have a sales tax. Other taxes for Delaware residents are also very low compared to its neighboring states.

</comment></comment></comment><comment><USER15> I'm going through this exact same issue right now. I created a C-Corp in DE naively thinking that thats what everyone did and I expected to pay no more than the minimum ($75 or so) in franchise taxes at the beginning. Apparently, since the state needed more revenue, they passed a law that dramatically increased the minimum to $400. I was shocked when i realized this and called the state repeatedly to make sure that there wasn't a mistake. I paid $400 back in Feb and I'll pay another $400 soon so that I can dissolve the C-corp. I now have an LLC in Texas (my home state) which more than satisfies my needs, for now.

Talk about an expensive mistake.

<comment><USER16> Can I ask why you created a C-Corp in the first place?

<comment><USER17> Can't speak for CoachRufus87, but I did because my business partner was not a US citizen and we planned on taking on funding.

</comment></comment></comment><comment><USER18> I don't think incorporation was the mistake here, but rather incorporating with no help and without knowing what you're really doing is. I recently incorporated using harvard business services, for $300 I had everything taken care of for me and had all the paperwork in 2 days, well worth the money.

<comment><USER19> Totally agree. It would be unfortunate if anyone takes away from this that incorporating is a bad idea. What is a bad idea is incorporating with no idea of what you're doing. I disagree that this is a story of dissolution. It is a story of having incorporated with no understanding of the consequences, and finding out too late that he should have sought legal advice to begin with.

There is a lot of talk online about Delaware being the best state for incorporation. This is true if you are seeking outside financing, and most angels/VC's want to see a Delaware C Corp prior to investing. However, if you are going to raise investment, you need to have a lawyer anyway. So at the point you take investment, your lawyer can handle doing an incorporation in Delaware. No one should be filing for C-corporation status by themselves, with no background in the legal requirements.

In the meantime, if you are a startup who wants to put out a product for public use, or need to bring aboard paying customers of any kind, you should probably have an LLC. These are relatively cheap to create (and dissolve) and you can generally find law firms who will do pro bono work for startups in filing the appropriate paperwork (I have found several). Even LLCs require operating agreements and other paperwork before they are considered true legal entities. Any decent law firm does this all the time, and has the appropriate documents on file. Doing this yourself is again asking for trouble. For example, if you do business on behalf of your LLC as the "CEO", "President", or "General Manager", and have not specified that title in an operating agreement, you may be at risk of having the veil pierced (<http://en.wikipedia.org/wiki/Piercing_the_corporate_veil>), because you are transacting business on behalf of the company in a role that does not legally exist.

In most states, if you have an owner run LLC, your official title is "Member". However, most people don't want to represent their company as "Member", as this sounds weird, and is not a commonly used term. So in practice, you call yourself something else, like General Manager. If your operating agreement says that you can run the company under the title of "General Manager", or anything else you want to call yourself, then you are totally cool. If not, then you will be in trouble if a customer ever takes you to court.

<comment><USER20> Can you post some cases or background regarding piercing the corporate veil for an LLC based on "transacting business on behalf of the company in a role that does not legally exist"? Who is to say what does or doesn't exit? Based on this logic, a large LLC or LLP would be required to have its whole hierarchy listed in the operating agreement.

<comment><USER21> Bad news: there aren't any landmark cases. The area is so new that most states haven't even had this issue come up in court yet.

However, I can tell you that the general consensus is that LLCs borrow from corporate law where piercing the veil is concerned.

Veil-piercing isn't about "transacting business on behalf of the company in a role that doesn't legally exist." That's an indemnity issue (the LLC is trying to shuffle blame from itself to an employee). Veil-piercing is about going after the _owners_ of a company on the grounds that the company is really just an extension of the owners' will and bank accounts.

Key factors for veil-piercing (for an LLC): \- Owners use the LLC funds for personal expenses without reimbursing the LLC. \- Zero/below-market loans from the LLC to the owners. \- LLC business decisions made to benefit the owners rather than the business. \- Undercapitalization (LLC not have enough money to pay its bills/expenses/liabilities without the owners covering some of these expenses).

There are more, but those are the big ones. The piggy-bank, low-interest-loan, and undercapitalization factors are usually the most important.

<comment><USER19> "Veil-piercing isn't about "transacting business on behalf of the company in a role that doesn't legally exist." That's an indemnity issue (the LLC is trying to shuffle blame from itself to an employee)."

No... you are confusing the issue.

By way of example, let's say that I am running a member (owner) managed LLC. My official title under state law is "Member". But I sign all my documents with customers and suppliers as "CEO". Then, the company goes broke, and owes money to its suppliers. The suppliers could argue that I did not represent the company in good faith, because I was not the CEO of the company. That position doesn't exist. So they might want to come after me personally instead. Depending on the laws of your state, the court may agree that you did not represent the company in good faith, and allow your suppliers to pierce the veil and come after your personal assets.

The only way to shift blame to an employee would be in cases of fraud or gross negligence, and even then, your company would probably still be liable. What I am discussing is only really relevant in cases where the owner and manager are one and the same (as in the case of the original poster's situation). This doesn't apply to employees who may sign on behalf of the company for routine transactions, but don't have any controlling interest in the company. However, as a manager, it is best to make sure that anyone with signatory authority in your company is given such authority in the operating agreement. However, there is no such thing as piercing the veil with regards to an employee of a company who does not have a substantial ownership stake. They will always come after the owners of the company if it seems that the company is a sham to protect personal assets. The more loosely you operate your company without specific legal agreements (ie operating agreement), the more likely someone will be able to prove that the company is a sham.

</comment></comment></comment></comment></comment><comment><USER22> I made a similar mistake myself, forming an LLC in Massachusetts. I did IT consulting for the SoHo and home market. It was around $550/year to keep the LLC in business ($500 plus filing fees), ~$50 to register with the town you're based for four years, and something like $250 to dissolve the LLC with the state. Every state has different fees; some are quite high, and others very low, pending on the type of business created.

I did it mainly to limit liability, among other reasons. However a little while after forming, I spoke to a lawyer and he said that it basically doesn't limit you from being sued personally. You "can" attempt to deflect personal lawsuits with the LCC (easiest if you keep its finances/files/bank-account separated from your personal stuff, which I did), but it's no guarantee.

He basically advised me that forming the LLC was a waist of money in my situation, and I would have been better off simply as a sole-proprietor (e.g. DBA - doing-business-as). From the IRS's perspective, I was treated as a sole- proprietor for tax purposes (they don't recognize LLC's for single individuals). Of course by then, it was too late to easily dissolve the LLC and "switch" it to a DBA, so it was money wasted.

What annoyed me the most is the same problem Hamza had in the article. You have to pay money to dissolve a business! Really? REALLY?!? Obviously the business failed, or is being abandoned, because it didn't make enough money. Charging a "death tax" on a business seems pretty harsh. I understand if there's a filing fee of $20 or $30, but anything higher than that is ridiculous. Delaware wanting $1,600 from Hamza is downright insane. Perhaps there's more work involved dissolving a C-Corp than an LLC, but still, $1,600 is ridiculous.

Charging a business death-tax reduces seed capital needed to form a new business. Second, it reflects badly on the state, reducing the likelihood of incorporating in it again. Lastly, why not ignore paying the fee altogether, declare bankruptcy, and waste the time/money of the court system dealing with it all? I'm not sure about the legal implementations of that, but it might be a valid option if the C-Corp has no assets left. AFAIK you cannot ask shareholders to pay for it since they're legally shielded from the debts of a C-Corp.

<comment><USER21> What your lawyer meant was that its very easy to "pierce the veil" of the business entity (your LLC) to go after the owner when the business is owned and operated by a single person. In such instances, it is very difficult to show that the business has a separate identity from the owner. This is especially true for consulting, where the consultant _is_ the business.

On the other hand, it is very difficult to pierce the veil of a business entity with more than one owner (unless the second owner is a spouse or family member of the first).

<comment><USER23> The ease with which one can "pierce the veil" varies dramatically from state to state. Another reason to be careful about your choice of location for corporate headquarters, employment, "significant contacts," and so forth.

In the meantime, how about IRS code that allows an inventor who owns his invention personally to take capital gains treatment on the sale of that invention contrasted with ownership by an LLC (even single person LLC) or other entity which subjects the owner at sale to normal income taxes at (usually) a much greater rate? I can imagine many convincing reasons for the entity to own the code. But why do that unless you have to? I would tend to want to own the code personally. More flexibility.

</comment></comment></comment><comment><USER24> Someone never learned what "limited liability" means.

The whole point of a corporation is that you aren't personally liable for its debts! You just paid $400 for no reason!

</comment><comment><USER6> the company is bankrupt and can't pay its taxes. File ch11. I don't know why you think you have to pay this, it isn't money you owe (the whole point of setting up the business, isn't it?)

<comment><USER25> This is a good object lesson in why you shouldn't take legal advice from someone posting on the web. The dude was wrong once, and perhaps twice if you are correct. Not to argue with your point, I just want to avoid playing armchair lawyer.

<comment><USER6> I had a Delaware C corp go bust and my advice from a highly-paid startup lawyer was to file bankruptcy and let it go.

It was eventually struck off the registry and I never heard anything again, and have even registered other corps since.

The only time you wouldn't is if you have taken an investment and want to provide a tax writeoff to investors, or if there are assets to divide. Then it needs to be disolved properly.

(Edit: to add here, if you have been negligent or criminal the creditors will usually be granted a court order to chase up debt with the directors personally. This is rare. In this case you have franchise fees that were run up in the course of doing business. The one thing to learn here that should have been in the original article is that Delaware's main source of revenue is franchise tax, which is calculated on the number of shares issues, so keep that number very low (ie. 3 founders = 3 shares). That is a pretty big thing to miss, IMO.)

</comment></comment></comment><comment><USER26> This is the poster child for using <http://foundrs.com> : virtually incorporate with your co-founders, see how far it goes, when it gets serious convert into a real corporation.

Benefits: no corporate taxes, no accountant to pay. Vesting is automatic (4 years, monthly, just like founder stocks in a Silicon Valley startup). And it's legally binding (thank you copyright law, for once you were useful).

<comment><USER21> Stock is treated as _taxable compensation_ once/as it vests, whether or not the entity is incorporated. Even worse, because the entity is not incorporated, the IRS could treat the stock as a partnership interest. Partnership tax accounting is a goddamn nightmare.

You could find yourself on the hook for thousands of back taxes plus fines if your "virtual corporation" is successful. And that doesn't even include potential state tax liabilities or self-employment taxes.

</comment></comment><comment><USER27> Has anyone stopped to consider what the real risk of being sued (and losing) is for your average startup website?

Is incorporation premature optimization?

<comment><USER28> Simple incorporation is really quite low cost, and very quick. CA is the worst I know of, with its $800 minimum franchise tax.

I just (re) incorporated in Oregon. I think it cost $150 (was $50 until 2009), and took about two days. IMO it's well worth it for legal protection from losing personal assets.

<comment><USER27> What are you paying your accountant each year? Is there a minimum corporate tax in Oregon? In MA I think it is 400 minimum a year.

<comment><USER28> I don't have an accountant. I'll get one once I'm making money so consistently that it's not worth my time to do it myself. :-)

The minimum corporate tax in OR is $150. In 2009, they raised it from $50, and (I think) increased the tax rates across the board. The biggest change is that they now tax on _gross receipts_ which means you can't deduct expenses.

</comment></comment></comment></comment><comment><USER29> IANAL and this is probably bad advice, but...

You can let the company fall into bad standing.

I have heard of the various risks with doing that, and I've never understood how those risks go away with dissolution.

If the company is shutdown and not making money, then failure to file annual reports and tax returns is irrelevant because you will have no income to be taxed or fined against. You would have annual state filing fees that would go unpaid, but you would never be personally liable for them. And I can't imagine how you would be personally liable for the actions or inactions of a corporation that conducted no business.

<comment><AUTHOR> I've thought about this and asked around. I was told that if I did not pay my tax returns and annual reports, the State of Delaware can go after me personally. I'd rather not risk that, and there is a monthly fee that gathers up if I don't pay the annual reports on time; which is what happened this time around.

<comment><USER30> Have you spoken to an attorney about this? They may be the best people who can advise you in this situation. Look around your area some lawyers offer free consults.

</comment></comment></comment><comment><USER31> It cost me about $1000 recently to dissolve a Delaware Corporation.

</comment><comment><USER32> This article should be entitled, "Why failing to hire an attorney was my worst mistake." It's easy to think that some googling and reading statutes will get you where you need to be, but there are very real pitfalls and tax traps out there that attorneys are far better equipped to help you avoid.

If you're not serious enough about your new business to pay for professional advice - you're not serious enough to start it.

<comment><USER33> It is odd that you have conflated seriousness with access to capital.

</comment></comment><comment><USER13> I don't think incorporating was a mistake, I incorporated a c-corp last year and read that getting 5K shares was the maximum while remaining at a minimum franchise tax. From my understanding, the initial amount of shares is not a big deal as this can be changed later (emitting new shares, blah blah blah).

I created the corp as an experiment and will see how it goes.

<comment><USER34> Consider it cost of learning. OTOH, you could have went to a lawyer who _may have or may have not_ already known of the franchise increase. You would have paid an amount in the same ballpark as your c-corp taxes for this consultation.

</comment></comment><comment><USER35> Wow. Incorporating in Australia is a breeze by comparison. AFAIK, a four page form and ~$400. With an annual fee of $212.

</comment><comment><USER36> 1) This is why we tell our clients, right on our online order form that increasing shares will increase the cost. If they still insist on increasing the # of shares, we'll call and explain to them that you can file a low # of shares now and file "Articles of Amendment" to change it to a higher # later when you are better capitalized. Besides, most VC's are going to amend your original articles of incorporation _anyway_ to create multiple classes of stock, etc. so it's really not worth it to authorize too many shares.

Finally, I've posted this link to our site before: <http://www.mynewcompany.com/annual-report.htm>

Bookmark it, and then you can check a) when and if you have an annual fee due for your company/state and b) what the filing fee is.

</comment><comment><USER37> I've been here with several things in life. While winging it has been the source of some "winning" in my life, it has also been the source of many losses.

I'm more of a creative mind/sales guy. I'm an okay web designer, with very minimal programming skills. I tried to develop a tech driven start up and handle everything on my own including the programming. I worked so long & hard trying to take care of things I wasn't skilled enough to do that I was too exhausted to maximize on my talents.

So, I would say focusing on your strengths is a key to success. Marcus Buckingham has nice insights on strengths. Check him out.

-Cheers

</comment><comment><USER38> I'm surprised that nobody is horrified by how deceiving this is. Its definitly a way for delaware to make money. May be it's just the way law is, you can't use your own judgement on if something is fair or not.

Bringing it back to a computer metaphor would be : Of course you should have done backup, everybody knows that ! You now need to pay 89000$ whether or not you need your data on that drive. You should have consulted an enginineer before buying a computer of course !

See... small mistake, disproportionous response.

At least think that you did nothing wrong, it's just that the law is unfair.

</comment><comment><USER39> Regarding the amount owed, from my lawyer when I did this two years ago: Please note that there are two methods to determine the tax – the authorized share method and the assumed par value capital method (both methods are detailed on the website). DO NOT sure the authorized share method as this will calculate a tax balance of over $75,000.00. Do use the assumed par value capital method as this will calculate the balance at roughly the $75.00-125.00 range.

</comment><comment><USER40> When someone sues you, you'll better understand why having a corp, LLC, etc. is important.

</comment><comment><USER41> Unless he signed and recorded something saying otherwise he is not personally responsible for the debt of anyone else, including the Corp, and the state is trying to levy a tax on ignorance.

</comment><comment><USER42> for a corp with no assets, i would've refused to pay and not bothered with the annual reports. after a number of years that stuff just goes off the books.

you might get some nasty letters. yawn.

</comment><comment><USER43> I hope you filed Form 1120 also

</comment><comment><USER44> Why did he have to pay?

<comment><USER15> state law

<comment><USER44> Nice law.

</comment></comment></comment><comment><USER28> To anyone thinking about incorporating: unless you have a _very good_ reason for doing so -- by which I mean solid legal and accounting advice, and money to pay associated costs -- do not bother incorporating outside your home state.

As others have said, DE has a great, business-optimized court system. But if you don't live in DE, you're instantly at a huge legal disadvantage if anything comes up. Meanwhile, you'll be stuck paying:

* annual corporate filing fees (WY), minimum franchise taxes (DE), licensing fees (NV), income taxes (many states), etc. in the state in which you've incorporated.

* foreign corporation fees/taxes and income taxes in your state of residence.

* foreign corporation fees/taxes and income taxes in any other state where you do conduct significant business beyond sales.

* registered agent fees in the state in which you've incorporated.

* possibly mail forwarding fees, depending on what you're trying to do.

(I incorporated in Wyoming last year, then realized how dumb that was, dissolved the corporation, and re-incorporated in my home state this year)</comment>


City scanning all traffic for stolen cars - <AUTHOR> http://www.chron.com/news/houston-texas/article/Freeport-installs-tracking-capable-cameras-to-4657054.php?cmpid=hpts

<comment><USER2> Its all good as long as no one gets a ticket. Is it possible to travel without being monitored anymore? I'm sure there was some sort of anti-terrorism argument for the original grant. I guess TIA never died, it was just napping for a bit</comment>


Ask HN: Recommendations for choosing a serverless framework - <AUTHOR> Starting a new hobby project. It would be a HTTP API service with 10-15 endpoints. Would get a few 1000 hits for about 14-16 hours a day. Language preference is Golang or Javascript followed by Python (Flask).
Want it to be as less maintainable as possible in addition to low-cost, autoscaling. To be honest, not bothered about vendor lock-in, to reduce dev hours & cost. This is also an opportunity to learn about serverless architecture of development and so not doing it as a monolith.
Few reqmts: 1) Need to interact with a database, which could also be serverless (say aurora or firestoredb). Should have a reliable workflow for database migrations. 2) Should have an excellent offline, local development workflow. Should not expect me to talk to cloud for local development. 3) Should be easy to integrate with gitlab/github to do continous deployment 4) Should have support for multiple deployment environments (Production, Staging, Demo) 5) Should have well defined ways for .env files, ENV variables for reading sensitive info (API Keys)
Some contenders that I see (with first opinions on shallow googling) are: 1) serverless - Seem to be the oldest. Seems trusted by AWS 2) openfaas - Seems good. No vendor lockin. But not supported by either AWS or GCP officially. Not too keen on vmware cloud. 3) KNative - Still seems immature. By the lethargic pace in which GCP is moving (especially related to Golang support) I am not too keen on this. Not 1.0 yet I believe. 4) AWS Fargate - Seems like the best solution. No need to break every HTTP handler into an unit of deployment. Integrates with AWS ecosystem (cloud watch, vpc ...)
Bonus points for frameworks that support: 1) automatic code structure gen, given a swagger YAML(openapi 3.0) 2) Integrations for logging, tracing etc. with standard tools (like elasticsearch, cloudwatch, stackdriver, prometheus, etc).
So, Here I am seeking the opinions/experiences/comments of HN crowd about serverless frameworks / tools you used. Thanks. <comment><USER2> Check out Kubeless, it can do most of what you ask. Will need to Kubectl patch ... for secrets mounting.

GKE is an easy way to get a k8s cluster, use the nginx ingress, so you don't have to pay for a GCloud load balancer (will need to disable them)</comment>


Scientist who fought Ebola and HIV reflects on facing death from Covid-19 - <AUTHOR> https://www.sciencemag.org/news/2020/05/finally-virus-got-me-scientist-who-fought-ebola-and-hiv-reflects-facing-death-covid-19 <comment><USER2> Dupe. Extensive discussion here: [https://news.ycombinator.com/item?id=23127167](https://news.ycombinator.com/item?id=23127167)</comment>


What Is Ultimately Possible in Physics? - <AUTHOR> http://www.stephenwolfram.com/publications/recent/fqxi09/ <comment><USER2> Some of the other essays in the competition are worth a look.

<http://www.fqxi.org/community/forum/category/31416>

<comment><USER3> Hey thanks for the link. I actually read one other article about the _ultimate velocity_ and whether or not it exists. <http://www.fqxi.org/community/forum/topic/548>

I left a comment (by Chris C.) about his interpretation of time, but having never finished a class on relativity (yet), I'm hoping some physicist can examine my comment because I seriously did pull most of my conjectures out of my butt while I was writing it. But it makes sense based on what I knew.

</comment></comment><comment><USER4> Wolfram seems to reference himself a lot.

<comment><USER5> Oy, he's writing an essay on some of the ideas in his book, NKS. _Of course_ , he'll refer the interested reader to the relevant chapters.

I thought it was well written; it delves deep on the "universe as a giant Turing Machine" perspective.

</comment></comment><comment><USER6> Corrolary 1: We can never prove that we are not in the Matrix.

<comment><USER7> We lack sufficient evidence to prove that we reside in a Matrix-like construct. Pending evidence, we shall continue believing that we do not live in such a construct.... though the line between physical reality and virtual reality become blurrier every day.

<comment><USER8> > We lack sufficient evidence to prove that we reside in a Matrix-like > construct.

I'm not sure we even have sufficient evidence to suggest it, let alone prove it.

<comment><USER9> Have a look at the Simulation Argument <http://www.simulation-argument.com/>.

Crude synopsis: if it is possible to create such an simulation then the probability that we in one is the number of possible simulated universes (v. large) vs the number of real universes (1) ie high probability that we are within a simulation.

<comment><USER10> I've always heard that expressed as the Simulation Paradox: either full- fidelity simulations, a la The Matrix, are impossible, or we're already in one.

<comment><USER11> How is that paradoxical?

</comment></comment></comment></comment></comment></comment><comment><USER7> What is possible? Everything. It just depends on what level we are able to effectively manipulate the universe. Suppose for a moment that the universe is comprised of 'bits' at the very smallest possible scales. We do not currently have direct (root) access to these bits, so we must manipulate them from within the system. Because our universe is NP-complete, given enough control over these universal bits, anything that is thinkable is possible. Will we ever be able to control these bits? It remains to be seen, but I should think so eventually.

<comment><USER12> You should actually read the article.

And, please look up NP-complete, because I don't think you know what it means (as opposed to just NP).

<comment><USER13> If the universe is NP-complete, then P = NP.

Proof: universe = 42 (Adams 1978). 42 can be computed in O(1) time. Therefore, universe is in P. If one problem in the set of NP-complete problems is in P, they are all in P. Therefore, P = NP.</comment></comment></comment>


Intel Tock-Ticks Chipsets Back to 22nm - <AUTHOR> https://www.tomshardware.com/news/intel-14nm-shortage-h310c,37819.html <comment><USER2> The long term issue is they are still two years away from a 10nm server chip while TSMC are already shipping 7nm parts (roughly equivalent to Intel 10nm). Further, a return to 22nm chipset production indicates a large disruption in their product plans, as evidenced by Intel outsourcing production of some of their 14nm products to TSMC!

Intel certainly gave away a two year process lead that is slipping to two years behind their competitors, which will certainly put an end to their lovely fat profit margins.

Intel aren't doomed, but they gave away and will have given away all of their competitive advantage by sleeping at the wheel.

Further, AMD have abandoned production of their high end server parts at Global Foundaries, so they will no longer be constrained in process capability or supply as they were in the past.

It seems that no one in upper management have read the book, "Only the Paranoid Survive." Maybe it should have been required reading.

<comment><USER3> Its also interesting that this happens right at a time where the switch from one node to another takes increasingly longer and viewer people adopt it.

And anybody can now make chips in the most advanced nodes. There are startups now who are already working on TSMC7nm.

<comment><USER4> Really!? What startup can afford those mask costs?

<comment><USER3> Esperanto Technologies

They are basically doing a AI chip with 8-16 general cores and 4000 floating point vector cores (probably with Tensor Type support on the Vectors). All in RISC-V.

</comment></comment></comment></comment><comment><USER5> It's amazing to see the implications lay out first hand of a single manufacturing defect. Intel was the undisputed king until 10nm and now they are gasping for breath in the competitive environment. The stockholders must be extremely discounted that a single process change could remove such a massive competitive moat around their business

<comment><AUTHOR> It looks like the 10nm process problems caught Intel very unprepared, which suggests bad news were not traveling as quickly and as far as they should. This is an issue with companies above a certain size.

<comment><USER6> Nobody wants to be frank with the people above them.

<comment><USER7> Alternatively, people get to the top in part because they where lucky, which makes them more optimistic than they should be.

</comment></comment></comment></comment><comment><USER8> From stockholders point of view, this is still just a big glitch that is possible to fix and recover.

Intel total revenue grew 14.9% in 20182Q, competition grew 18.08% in the same quarter, so Intel is slowly losing ground and there is potential for trouble. The real competitive moat is Intel's profit margin relative to the competition. Intel has been undisputed king in the profit margins and still continues to be. 60% Gross margin (20% above TSMC).

Intel has been beaten technologically before. AMD did it years ago. Intel responded by lowering prices, and removing profits from AMD's technological triumph. When AMD was financially in the ropes, Intel increased its profit margins again.

As long as Intel maintains 10-15% margin over competition it can cut into margins and compete with low price. Only after Intel loses the margins it will become just another chip maker.

<comment><USER9> > Intel has been beaten technologically before. AMD did it years ago. Intel > responded by lowering prices, and removing profits from AMD's technological > triumph.

And, you know, with illegal anti-competitive practices ( [https://www.extremetech.com/computing/184323-intel-stuck- wit...](https://www.extremetech.com/computing/184323-intel-stuck- with-1-45-billion-fine-in-europe-for-unfair-and-damaging-practices-against- amd) in the EU and [https://www.nytimes.com/2010/08/05/technology/05chip.html](https://www.nytimes.com/2010/08/05/technology/05chip.html) in the US)

So assuming they don't try that stunt again they're going to be in a tougher spot competitively than they were last time.

<comment><USER8> You are mixing two things Intel does with low prices. One is legal and one is not. Intel used both Against AMD during the Opteron and the Athlon 64 era.

Intel is absolutely allowed to compete with low prices and cutting into profit margins.

Intel is not allowed to to pay rebates in exchange of being single supplier, or attempting to restrict access from the competitors.

The difference is between "aggressive competition" and "antitrust abuse" as the source you provide clarifies.

Intel has the margins that allow it to compete aggressively and legally.

<comment><USER10> Actually, low prices can be illegal, too. It's illegal to lowball prices to cost or below (dumping) either - and the rebates are part of what determines cost, not just a possible offense themselves.

<comment><USER11> Do you have more information on that claim? It seems difficult to believe given the plethora of VC-funded companies selling products below cost in order to grow market share.

<comment><USER12> Private companies have much more freedom to do as they wish with regards to price dumping in their local markets, as compared to public companies.

<comment><USER11> Can you point to a specific law here? Thanks.

</comment></comment></comment></comment></comment></comment></comment><comment><USER13> Wow, Ryzen has been cruising along at 14nm for a little while now. Sucks for Intel... never thought I'd see the day when AMD chips are made with a smaller process than Intel

<comment><USER14> This is the chipset, not the cpu, which is brought from 14nm back up to 22nm to make room for more cpu production at 14nm.

From what I can tell AMD's chipsets are at 55nm, so intel is still at a smaller process node for chipsets.

</comment></comment><comment><USER15> Just hypothetically, to better understand chip fab:

If Intel wanted to fab a CPU using TSMC, what would be involved?

<comment><USER4> A major redesign. TSMC will have different IP available, particularly IO and RAM cells. Also different packaging options: they may not support the same die and/or interposer sizes. The test methodology and tooling may also be very different to what they are used to working with. Switching fab is a huge deal, the time cost would be big. They can of course gobble up the financial costs no problem. However, it does assume TSMC would even have sufficient capacity for Intel.

</comment></comment><comment><USER16> Won't the move to TSMC give China the exact leverage it needs to steal Intel technology like the DuPont discussion we had the other day?

<comment><USER17> TSMC is Taiwanese, not Chinese.</comment></comment>


AWS EC2: Increased Error Rates - <AUTHOR> http://status.aws.amazon.com/rss/ec2-us-east-1.rss <comment> what-no-tests This is getting ridiculous. AWS has been going bonkers all week.</comment>


Will Facebook become one of the most profitable companies in the world?  - <AUTHOR> http://namesake.com/conversation/9b3fe6d6-54ae-11e0-ae74-12313f014066

<comment><USER2> I highly doubt they can get near the top 10. They'd first have to battle their way past the heavy weight technology companies, then the banking giants, then Wal-Mart and finally the the ridiculously lucrative oil companies (source: [http://money.cnn.com/magazines/fortune/global500/2010/perfor...](http://money.cnn.com/magazines/fortune/global500/2010/performers/companies/profits)).

They have to figure out how to monetize a lot more $ per user to be very profitable in the long term.

</comment><comment><USER3> Shorm-term, may be. Mid-term, may be. Long-term, I hope not.

</comment><comment><USER4> Yes -- when a single organization owns the connections, interests and geographical data of 600 million people -- it's inevitable.

No other entity has amassed this amount of data before.

<comment><USER2> Why is it inevitable? They already run an ad network and their revenue's are nowhere near, for example, Google's. How else can they monetize this data?

<comment><USER4> They've barely scratched the surface. And it's not just an ad network...

\- virtual currency \- daily deals \- search integrated directly into the experience

and that's just off the top of my head

<comment><USER2> Even with those three products, I still find it hard to believe they'd be one of the most profitable companies in the world. If you look at the top 50, it's filled with mainly oil companies, banks, and hardware producers (Microsoft being an exception). Google crept in at 47 due to AdSense, which I think Facebook could overtake.

I'm not saying Facebook cannot be wildly profitable, I just don't think it'll come close to the top 10 (what I'd consider to be "the most profitable companies in the world").

</comment></comment></comment></comment><comment><USER5> No.

</comment><comment><USER6> It is unlikely they will ever get close to energy (oil) companies. and by the way they need to IPO so that we can know what their revenue and expenses are.

</comment><comment><USER7> One of the most profitable, perhaps...but I predict that if Dropbox stays independent - it will easily become the most profitable.

<comment><USER8> Dropbox adds little value to my life. Unless the company or technology evolves in ways I can't foresee, I would never pay for it.

Predicting it will be the most profitable company in the world sounds absurd to me. But that's just me.

<comment><USER9> Dropbox is a killer application if you have multiple computers or don't want to care about keeping backups. It's completely removed my need for flash drives, caring about which computer I have documents on, and so forth. I wouldn't underestimate that; I recall hearing that they've hit $100M/year in profits[1], and I expect that they've got quite a ways to grow. However, saying that they'll be the most profitable company in the world doesn't make sense to me - that would just take too much growth to be realistic.

For some context, the most profitable company in the world in 2010 was Gazprom[1], the largest exporter of natural gas in the world, with 24,555.7 million.

EDIT: Gazprom was the most profitable in 2009, not 2010, as pointed out below.

[1] <http://www.businessinsider.com/dropbox-revenue-2011-3>

[2] [http://money.cnn.com/magazines/fortune/global500/2010/perfor...](http://money.cnn.com/magazines/fortune/global500/2010/performers/companies/profits/)

<comment><USER7> This is not something that will happen over night. You meant to say that Gazprom was the most profitable in 2009.

Exxon did $30B profit in 2010. - [http://www.google.com/finance?q=NYSE:XOM&fstype=ii](http://www.google.com/finance?q=NYSE:XOM&fstype=ii)

Exxon did $30B profit on $375B revenues. Net profit margins of less than 10%.

Of course we won't know until Dropbox releases their financials, but I strongly believe that they will be a bombshell when they are released. Nothing like anything we have ever witnessed.

I would not be surprised if their Net Profit margins are 30% - 50%.

At those rates, all it takes is for them to be doing revenues of $100B to exceed Exxon's profit take in 2010.

I know it seems a bit far fetched now, but so did every other technology giant when they were in the budding phases.

I think it would be foolhardy to bet against them.

<comment><USER9> Hmm. There are about 2 billion internet users, and Dropbox's cheapest paying plan is $99/year. Assuming 50% profit or so, and that no one buys the more expensive plan, it would take a billion paying customers to hit $100B/year, 50% of everyone with internet access. It would definitely be a gradual progression, but probably doable, especially if they branch out into other areas - though I can't think of anything obvious, other than licensing the technology to big businesses for internal stuff. Of course, they can certainly afford to experiment.

<comment><USER7> Well there are 2 billion internet users - i.e. individuals. But each individual has multiple functions.

E.g. I have a dropbox account at home, and had one for work. So did my boss, and some other coworkers.

So while there are 2 billion internet users, there are many organiztions - profit, non-profit, ngo, etc - which makes the pie even bigger.

</comment></comment></comment></comment></comment></comment><comment><USER10> if their ARPU has as much potential for growth as mentioned in the first comment of the conversation, they could easily surpass Google.</comment>


On Becoming an American Writer - <AUTHOR> https://www.theparisreview.org/blog/2018/04/19/on-becoming-an-american-writer/ <comment><USER2> This essay is getting plenty of votes so maybe I am an uncultured yokel, but to me this essay smacks of an inflated sense of self-importance. Lines like "My generation of writers—and yours, if you are reading this—lives in the shadow of Auden's famous attack on the relevance of writing to life, when he wrote that 'poetry makes nothing happen'" and "Only in America do we ask our writers to believe they don't matter as a condition of writing" and "I know I'll have a shorter career for being American in this current age, and a shorter life also. And that is by my country's design. It is the intention." It comes off as one of those essays that is trying to use a veneer of profundity to mask unsupported hyperbole.

Maybe I am being too harsh here...this is just a person who has written something they feel passionate about and that reflects their personal experience. The stories were touching, but what is the takeaway here? Raising awareness that writers and their craft are under attack? Helping writers to feel better about their self-worth? I'm curious to know what about this piece resonated with other readers.

<comment><USER3> > what is the takeaway here?

You didn't seem to have the endurance to make it to the closing paragraph, so I've reproduced it here:

> I have new lessons in not stopping, after the election. If you are reading > this, and you're a writer, and you, like me, are gripped with despair, when > you think you might stop: Speak to your dead. Write for your dead. Tell them > a story. What are you doing with this life? Let them hold you accountable. > Let them make you bolder or more modest or louder or more loving, whatever > it is, but ask them in, listen, and then write. And when war comes—and make > no mistake, it is already here—be sure you write for the living too. The > ones you love and the ones who are coming for your life. What will you give > them when they get there?

The author believes that writing, and especially writing in America, is devalued to such an extent that he personally feels a sense of loss and fear. His advice to himself and others is that writing and self-expression has real value outside of whatever the people around you ascribe to it.

Let me know if you want me to break it down any more.

<comment><USER4> > The author believes that writing, and especially writing in America, is > devalued to such an extent that he personally feels a sense of loss and > fear. His advice to himself and others is that writing and self-expression > has real value outside of whatever the people around you ascribe to it.

I don't see why he would feel loss and fear. Do you think you could break it down for me? I mean, American culture is particularly toxic and anyways, one should not be influenced by it but rather think for himself. I would expect as a writer he would be aware that writing in itself is for the writer, first and foremost, then for anyone else. With that said, why would it matter if a particular culture devalues writing? A writer knows inwardly that words and words alone are beyond powerful. It just seems he is already aware of the falseness of American culture, so why feel loss and fear in regard to what it devalues? It's all gravy, just write.

<comment><USER5> That is not how feeling works and author talks about feelings. Breaking feelings down is exercise in rationalization usually. Feeling is effectively chemical reaction in your brain after all.

Why would you expect writer to feel the same feelings then you?

People are influenced by culture around them, that is just how we are wired and that is what allowed us to build civilizations. The one "should not be influenced by culture" is not fully achievable goal. The the extend it is achievable, you start by realizing how it is influencing you, by thinking about it and that is what article is doing.

</comment></comment></comment></comment><comment><USER6> meh, as usual my opinion is the opposite here.

step one, don't become wrapped up in the ideal of being "a writer". find something useful to say, then say it forcefully. or just churn out garbage to pay the bills. nobody else is looking at your work with the same perspective as you do.

step two, don't lament that readers might not read what you wrote. if you build it, they will come, so long as your marketing team does their job right.

step three, open palm slam any notions of "profundity" into the ground, immediately. profound things come in concise packages, and we call them data. i guess if you're interested in making some kind of flowery Literature, you might think that you could get a free pass out of this step, but no, you can't. you can make things sound pretty and contain real information without falling into the forced affectation of "Literature". it doesn't matter if you're telling a story about fantastical characters or telling a story about how there are four nitrogenous bases in DNA. don't aim for profound, aim for communication of insight.

step four, if you're concerned that you're not impacting the world as a writer, you're writing about the wrong stuff, or to the wrong people. the author complains that swords beat pens. but that's a cop out. swords are merely the continuation of the work of pens by other means. (shout out to clausewitz, a guy who understood this principle very well)

finally -- and this is really something that cannot be said enough -- history is a story of those who lived with both their feet on the ground and whose focus was on putting one foot in front of the other. the more you fixate on "living in the shadow of X" or "if only america valued Y, I'd Z" or "They don't understand Us because We're Enlightened" or "Our Generation Of Writers" the more you get lost in a fantasy world of thoughts which are disconnected from the physical reality of your fingers smashing the keys of your keyboard, which is the primary mode of productivity for writers. does any of the above stuff prevent you from smashing those keys? no, if you are sitting here and reading this, it does not.

think about stuff all the time, yeah. but don't talk yourself in circles when it comes to things that you can't relate back to the physical world at the moment. mental walls become real, but that doesn't mean that they bear any weight. live in the here and now, and manipulate information which you can prove or at least correlate to a physical phenomenon.

</comment><comment><USER7> Well that was a beautiful and inspiring piece. Wasn't expecting that from hackernews today.</comment>


Show HN: How to build a simple crypto exchange using AWS - <AUTHOR> https://coderecipe.ai/architectures/95580531 <comment><AUTHOR> This is a basic crypto exchange, super simple version of Coinbase, for buying and selling cryptocurrencies such as Ethereum. I use AWS serverless to host the application code and handle blockchain transactions using web3.js, and storing transaction records in AWS Aurora Serverless with their new Data API. Any feedback would be greatly appreciated!!

</comment><comment><USER2> I'm not sure that a crypto exchange should be simple.

<comment><AUTHOR> Thanks for your feedback, in this post I made the assumption that the price of the cryptocurrency doesn't fluctuate automatically based on transaction volume, also I assume that AWS Aurora Serverless takes care of scaling problems such as max conns, etc. Therefore it can be achieve with such simple design. May I ask which part do you think I should dive deeper (overly simplify)? I will definitely improve it. Thank you for your time!</comment></comment>


Apple Gives Users More Time to Buy AppleCare After Sales Slow - <AUTHOR> https://www.bloomberg.com/news/articles/2020-08-17/apple-gives-users-more-time-to-buy-applecare-after-sales-slow <comment><USER2> Does applecare cover scratches on apple watch?</comment>