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The Longevity and Success of Remote-First Companies by Structure

By: Jack Nicholaisen author image
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In recent years, the remote-first business model has gained significant traction, with more companies embracing the flexibility and cost savings associated with remote work.

As entrepreneurs and business owners consider adopting this model, understanding the factors that contribute to the longevity and success of remote-first businesses is crucial.

This article presents a statistical review of remote-first businesses across various structures, such as Limited Liability Companies (LLCs) and corporations, and reveals industry-specific trends that could help you make informed decisions for your own business.

Recent research suggests that remote-first businesses are not just a passing trend but are here to stay.

A study from FlexJobs found that 48% of employers are maintaining some form of remote work for their workforce.

Another study conducted by Owl Labs in 2022 revealed that the number of workers choosing to work remotely increased by 24% between 2021 and 2022.

Their research also showed remote workers have higher job satisfaction and were more likely to stay with their current employer for the next five years.

However, not all remote-first businesses are created equal – the success of these ventures can be heavily influenced by their structure.

Let’s take a closer look at the performance of remote-first LLCs and corporations.

Remote-First LLCs: Pros and Cons

LLCs have become a popular choice for remote-first businesses due to their flexibility and tax advantages.

According to a study by Harvard Business School, the number of businesses structured as LLCs increased from 24% in 1995 to 69% in 2014.

Advantages of remote-first LLCs include:

1. Simplified tax structure: LLCs avoid double taxation that many corporations face, as profits and losses are passed through to members’ personal tax returns.

2. Limited liability protection: LLC members are protected from personal liability for business debts and obligations.

3. Flexibility in management: LLCs have fewer regulations and administrative requirements compared to corporations.

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4. Pass-through taxation: LLCs offer tax flexibility, allowing members to choose how they are taxed - as a partnership or corporation.

5. Fewer formalities: Unlike corporations, LLCs are not required to hold annual meetings or maintain detailed records of their proceedings, making them easier to manage and operate.

However, remote-first LLCs do face some challenges…

The disadvantages of remote first LLCs include:

1. Difficulty raising capital: Investors may be hesitant to invest in LLCs due to their less formal structure and potentially lower valuations.

2. Limited growth potential: As LLCs grow, they may need to transition to a corporation structure to support their expansion and attract investors.

3. Limited life: Unlike corporations, LLCs have a limited lifespan and may dissolve if a member leaves or dies.

4. Lack of uniformity in state laws: The laws governing LLCs vary from state to state, making it difficult for businesses operating in multiple states to comply with regulations uniformly.

Remote-First Corporations: Pros and Cons

Remote-first corporations have also seen significant growth in recent years.

According to a report by Statista, the number of remote workers in the United States increased from 3.9 million in 2015 to 4.7 million in 2020, and this trend is expected to continue.

In addition, a study from FlexJobs and Global Workplace Analytics found that remote workers are 35-40% more productive than in-office employees.

Let’s take a closer look at the pros and cons of remote-first corporations compared to LLCs.

Corporations, particularly C-corporations, offer potential advantages for remote-first businesses.

Some benefits include:

1. Easier access to capital: Corporations can issue stock to attract investors, which can be particularly helpful for remote-first businesses that require significant upfront investment.

2. Perpetual existence: Corporations continue to exist even if the original founders leave, ensuring stability and longevity.

3. Limited liability protection: Shareholders are protected from personal liability for business debts and obligations.

4. Access to specialized talent: Corporations can offer competitive salaries and benefits packages, making it easier to attract top-tier talent.

5. Formal structure: Corporations have a more formal structure than LLCs, which can help maintain accountability and decision-making processes as the company grows.

Disadvantages of Remote-First Corporations

Despite these advantages, remote-first corporations do face some challenges:

1. Double taxation: Unlike LLCs, corporations are subject to double taxation, meaning that profits are taxed both at the corporate level and again when distributed as dividends to shareholders.

2. Increased regulations: Corporations face more regulations and administrative requirements compared to LLCs, which can make them more difficult to manage and operate.

3. Time zone differences: With remote teams spread across different time zones, scheduling meetings and ensuring timely communication can be challenging. This can result in delays and miscommunications that may impact productivity.

4. Lack of face-to-face interaction: Remote work can lead to a lack of personal connection and social interaction among team members, which can impact morale and team cohesion. Finding ways to build relationships and foster communication is essential for remote-first corporations.

When considering whether to adopt a remote-first business model, entrepreneurs and business owners should carefully weigh the pros and cons of each structure.

While both LLCs and corporations offer unique advantages for remote-first businesses, choosing the right structure can be crucial for long-term success.

The success of remote-first businesses also varies across different industries.

For instance, technology and software companies have seen significant success with remote work due to the nature of their work.

According to a report from FlexJobs, the top 5 industries for remote work include:

  1. Therapy

  2. Underwriting

  3. Mortgage & Real Estate

  4. Banking

  5. Gaming

These industries have been more successful in adopting remote-first models due to their reliance on digital tools and the ease with which their work can be done remotely.

In Summary…

The choice of business structure and industry can significantly impact the longevity and success of remote-first businesses.

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As an entrepreneur or business owner considering a remote-first model, it’s essential to weigh the pros and cons of each business structure and closely examine industry-specific trends.

By making informed decisions, you can increase your chances of success in the remote-first business world.

Don’t wait any longer – take action now and set your remote-first venture up for success!


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About the Author

jack nicholaisen
Jack Nicholaisen

Jack Nicholaisen is the founder of After acheiving the rank of Eagle Scout and studying Civil Engineering at Milwaukee School of Engineering (MSOE), he has spent the last 4 years disecting the mess of informaiton online about LLCs in order to help aspiring entrepreneurs and established business owners better understand everything there is to know about starting, running, and growing Limited Liability Companies and other business entities.