Starting a U.S. Company

When forming a U.S. company, the first decision is whether to choose an Inc. or an LLC: An Inc. is suitable for companies with multiple rounds of investment and a traditional stock structure, while an LLC offers greater flexibility in profit distribution and taxation without the formalities of a corporation. Then there’s the choice of state: Delaware offers a well-established, predictable corporate law framework, but it isn’t automatically the right choice for every venture—companies operating in another state often have no choice but to obtain foreign qualification there.

We guide you through the entire incorporation process—from choosing the legal structure and location to setting up the day-to-day operations of the company: We handle everything from a single source, including drafting the bylaws or operating agreement, establishing the shareholder structure, and aligning it with your German structure. The result is a U.S. company that fits your business model right from the start.

The acquisition or issuance of shares in a U.S. company requires a shareholder agreement that governs voting rights, information rights, and cooperation among shareholders. In the case of capital increases or new rounds of investment, anti-dilution provisions determine how your stake will be affected by future financing—an issue that should be clarified before signing, not after. In the case of joint ventures, there is also the issue of how decision-making rights and profits are divided among the partners, which often differs from German shareholder arrangements.

Equally important are clear exit rules: preemptive rights, co-sale rights, and the valuation of shares in the event of a separation determine how a future exit will proceed. We draft investment and joint venture agreements that address these issues from the outset and align them with your German corporate structure.

The purchase or sale of a U.S. company begins with a letter of intent that sets out the key terms of the transaction before the actual due diligence process begins. During this review phase, legal, financial, and operational risks are identified—the findings are directly incorporated into the purchase agreement and the reps and warranties agreed upon therein, which allocate liability between the parties after closing.

We support transactions from due diligence through contract negotiations to the closing process: purchase price adjustments, conditions precedent, and the transfer of shares or assets. In doing so, we keep the unique characteristics of the U.S. market in mind without losing sight of the connection to your German structure.

In early funding rounds, SAFE or convertible note agreements are often used, which initially leave the company’s valuation open and are converted into equity only in the next round. Starting with Series A, U.S. investors typically follow the NVCA standard—a package consisting of a term sheet, investment agreement, and shareholders’ agreements that is widely recognized in the U.S. and speeds up negotiations because both sides are familiar with the structure.

We guide both startup teams and investors through these funding rounds and negotiate valuation, control rights, and liquidation preferences from both perspectives. This results in a structure that remains sustainable for the next round and equally reflects the interests of both founders and investors.