I know you’re not a lawyer/accountant, but what kinds of implications does signing up for this have on someone who doesn’t live in the US? I’m concerned about all of the secondary and tertiary effects (like FATCA?) of having a business in the US and living in NZ.
I'd say: a) if you are a US citizen, then FATCA and FBAR already apply to you, and you pay your personal income taxes on your worldwide income anyway, b) if you are not a US citizen, then I'd rather carefully consider the legal implications: your company can now easily be sued in the US, where a single lawsuit can bankrupt you.
I think (b) in particular is not considered by many who look at Stripe Atlas. I consider it a tremendous risk.
Is there a way for businesses that are already registered corporations not using Atlas to get some of the other benefits like tax help, issuing stock, the expert help, etc?
We do not at present have this available, but we’re quite aware of many people wanting to do that, and we want to support it if we can figure out a way to do it fantastically.
I appreciate the advice you've given through your blog and podcast. Thanks for taking the time to create those things. They've been inspiring.
I'm wonder if a US LLC would be better for me? I'm a mISV in Canada. I use Stripe & PayPal and make almost enough to live on. I have a US bank account but Canadian everything else (sole proprietorship, business license, tax id, citizenship, etc.). I don't plan on ever being funded, selling the business, taking on partners or making more than a 150k/yr.
A Canadian sole proprietorship is about as simple as it gets, since you can file taxes on your T1 and business income just passes through to you. Stripe can also transfer USD straight to a USD account at a Canadian bank.
Any kind of corporation (US or Canadian) is much more effort, both from legal and accounting perspectives. It's worth it if you need legal protections a corporation gives you or care for some of the tax advantages. But it comes at the cost of extra effort in managing the complexities if a corporation.
US LLC has... interesting interactions with Canadian tax law and the US-Canada tax treaty. Even if it is formed in the US, if management and control are in Canada, it may be considered a Canadian corporation. Canadian-controlled private corporation is an advantageous tax status you'd miss out on with a US entity. Bottom line, see a Canadian tax accountant.
Hi patio11, this is really great. It would be awesome to have some resources for EU citizens, mainly how it is with taxes and where I tax what and how.
Would it be possible to use Stripe Atlas to create the LLC, bank account etc and use Stripe normally for handling the payments side for the subscriptions.
However, if a marketplace came with the application. To use a 3rd party for all that comes with it. IOW, not wanting to use Stripe Connect for various reasons that make sense to the business.
You're welcome to have your company do business with anyone you wish it to do business with. We do not obligate you to use any Stripe product; we feel like we should always have to earn your business.
(We in fact go further than that; Atlas actively goes out of our way to help our companies take payments outside of Stripe, for example getting paperwork together to e.g. publish apps on the App Store.)
Wow, this is great! I want to jump in but need to know more about the tax/expense and legal consequences of forming an LLC in Delaware versus my home state for my mISV (for anyone reading this who doesn't read Patrick's blog, micro-independent software vendor). What do we have to look out for?
I am considering starting an LLC but I live and work in Japan. Do you know somebody who might be able to help me understand what my options are in terms of tax implications (the interaction of having income in both places)? This will be a sole proprietorship.
There's a great and very common use case for LLC to C corp, so we prioritized building that. I'd love to hear what your use case is for the other way around; if it is something which creates a lot of value for a lot of founders, we'll certainly consider supporting it in the future.
Speaking broadly: You can always work with lawyers/accountants to see about the feasibility of converting your C corp into an LLC. We just haven't worked to specifically enable it in the fashion that we attempted to smooth out LLC-to-C-corp.
My use case is that I used Atlas to incorporate quickly -- which was lovely -- but the business is turning out to be a solo venture and the C Corp is overkill.
The real user need is a way to reduce business operations time and cost for a small biz.
You can absolutely apply to Atlas if you already have a Stripe account, and (without interrupting use of that account) can use your new Atlas company as the owner of the account and take payouts from it into your own bank account.
(It's under Business Details in your Stripe Dashboard; same process as usual.)
This is in no way a criticism of anything and isn't directed at Stripe or any employee, just an honest question to the general HN community: How does Azlo make money?
If I'm going to trust my accounts anywhere, I like to know at least something about their business operations. Azlo is completely fee-free according to their FAQ. They also say they require zero minimum balance and have no ATM fees at 55,000 partner ATMs nationwide. That raises some serious red flags to me. Either they make money from fees or they make money on the interest of your minimum balance, but somehow they have to make money. Of course they're low overhead with no branches and no owned ATMs, but they're not cost-less.
What's the catch? Are they going out of business when the VC/Partner money dries up, or are they aiming to get you hooked and then jack up fees afterwards or what's the deal?
They don't make money on the interest on the minimum balance, they make money on the total balance. True, for some customers this will be very low or zero. But as long as some of the companies they work with have money in their accounts (not an unlikely state of affairs), they can make their money from those accounts.
As long as they've set up their underlying tech stack such that the marginal cost of an extra account is nearly zero, then offering accounts with no fees or minimum balances is useful way of attracting customers, many of whom will grow into good sources of revenue.
Hi @freehunter, as a fellow skeptic, I can appreciate your question as to how Azlo makes money if there are no fees. As an executive of Azlo, I can tell you that there are many ways Azlo can and will make money without having to charge fees. Some have been mentioned here (interchange and deposits) and some are coming down the pipe (lending, international payments, etc). Many accounts will be lost leaders in that their deposits and their activity do not give us any substantial revenue. But having LLCs and C-Corps (who tend to have larger balances and do more transactions) will make it very worthwhile. Rest assured that the banking fees you are used to with other banks are not and will not be there with Azlo.
Also, we are a banking platform built for developers. Tech-savvy customers will have access to their accounts through our recently announced API portal https://www.azlo.com/tech/ (scroll down to 'Coming soon')
Hope you give us a shot and provide feedback for our API beta!
Perfect, thanks! I don't mean to criticize, I just want to make sure that my bank will be able to survive and won't unexpectedly shut down. Thanks for the clarification!
We didn't take it as a criticism at all! I love that people other than us, think about these sorts of things. It was a perfectly valid question and one that everyone should know the answer to so that doubt and/or fear are not part of your decision to join our community.
If you are in the market, I hope you check us out. If you aren't, tell your friends!
I’d always thought that a bank’s primary revenue source was from loans. Banks are able to actually write more loans (and charge interest) than cash in the bank [0]. Profit ensues.
That's something I forgot to stick in there: it looks like Azlo doesn't do loans either. There is literally no way for them to make any sort of money being fee-free, not offering loans or credit cards, and not having minimum balances. It's all the good will of BBVA, which we know how far the good will of a major bank gets you.
It appears that azlo is just a front-end reseller of banking services provided by "BBVA Compass."
They probably make a lot of money on transaction fees (charging merchants when you use your debit card) and loaning your money to other customers at interest.
Azlo.com looks nice. I got fed up with Silicon Valley Bank (awful) a few years back and switched to Capital One Spark Business[1] which is great. However they have "temporary" halted new signups which makes me a bit nervous about their long-term plans.
