“It wasn’t about two kids in a dorm room anymore.” –Ben Mezrich, The Accidental Billionaires, Ch. 25. When an entrepreneur launches a new business, like Harvard sophomore Mark Zuckerberg did when he created “thefacebook” in the spring of 2004, he or she must also decide what type of legal entity to create, such as a sole proprietorship, a partnership (like Mark and Eduardo’s initial 70/30 partnership agreement), a limited liability company or LLC, or a private or public corporation. Why did Mark’s original business partner, fellow student Eduardo Saverin, register their new business (thefacebook) as an LLC in April 2004, and why did Facebook then incorporate as a Delaware corporation later that summer?
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