The Idea

A number of months back, a group of us had the idea to create a software co-operative. There were several tenets that we decided to follow:

• The company wouldn't have any employees -- everybody involved would be have 1099 status and would be an independent contractor
• The company would be formed as an Limited Liability Company - we chose the state of Delaware
• The company would seek to have a $0 cash and asset value at the end of each year
• The company would be virtual to keep costs low
• We would focus on working with open sourced projects like Drupal

The Setup

We set the company up using Instacorp. The benefit was the speed at which we could set up the company with an automatic legal presence in Delaware. The people at Instacorp made the process incredibly simple, asking a few questions. Within days the legal documents were delivered. That, in itself, really didn't make the company real.

After receiving the legal documents, it was necessary to obtain an FEIN for tax purposes. This is a simple process on the IRS site - it just takes a few minutes and you get the documentation electronically.

read more