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What are the common mistakes to setting up a corporation?
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I would not advise setting up a coporation without the help of a lawyer. There are cheap ways to do it, but in the end, they may cost more than the savings.
Unless you are planning a public offering or plan to do business and need financing in multiple states, I advise setting up as a corporation in the state where you live. Many companies set up in Delaware which charges its own tax and provides no visible service for the trouble. Further they get annoyed when you don't pay the tax on time.
A lawyer will point you to the best structure for your corporation considering your tax issues and desire to avoid personal liability. If you have partners or other investors with you, a legal agreement should be used to set out the responsibilities and rights of the stockholders. If you need a stock option plan, a lawyer experienced with plans should help you. You will also need pointers on how to add money to the capital of the company or whether you can lend capital or borrow capital from others.
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