Dave on the deficit: "Some of the accounting details that I see being discussed are incorrect, but to my mind, rf_capital seems to have a good grasp on what the accumulated deficit is and what it means. The accumulated deficit is an accounting number to offset the funds raised and offsets part of the capital of the company." Dave on LLC or consulting issue: "I noticed that there is some debate over the LLC or consulting issue again. I noticed you raised my name in this discussion. I should clarify that from my perspective. In the US, and Canada, employees have statutory rights. These include certain benefits which are typically jointly paid for by the company and employee through withholdings. Benefits such as holidays, termination notice, unemployment insurance, workers compensation, etc. as well as specified pay periods are all regulated by the government. Contractors as individuals or LLC’s waive these rights and can be compensated by higher fees and consequently, have no withholdings. The companies have lower costs for the same service. There are costs/benefits for either options, however experience has shown that companies are typically better off with no employees. It has been shown that companies do better paying for a service only. Legal fees for example, are almost always supplied through a law firm and not a lawyer employed by the company. Some positions in the company may be filled by that same lawyer, such as that of Corporate Secretary. In most small companies, all board positions and that of the corporate secretary are UNPAID. Compensation is typically by way of options which are always granted at or above market. The president and CFO are always paid positions (sometimes not too well) and may be to a person or to a consultant. For example, if a person was paid $10,000 per month as an employee, then there might be withholdings of $3,000 for income taxes, $1,000 for WCB, and EI. Take home somewhere around $6,000 per month. The company would have to gross this up with direct payments to the government for EI and WCB. If any payment was missed to the government or the employee, then the government’s Labour Relations branch could chase the company for payments as a super creditor (in priority of all others), going after the directors of the company for compensation. If that same person was paid $10,000 per month as a LLC, then there are no withholdings, and no gross up to the government. There would be no recourse for the LLC except to the courts for missed payments or non-performance of the contract. The directors are insulated from any action. I hope you see that the company (and directors) benefits if there are no employees, and this will always be their preferred structure. Employees / contractors have to decide what they want. Employees have taxes withheld, and so would unlikely have any surprises at the end of the year, and contractors must plan the taxes carefully or potentially have a nasty surprise come tax time. In Canada, small businesses (something like