majiayu000 Launch Legal Shortcuts
Legal compliance frameworks for bootstrapped founders.
Day 1 Essentials
Business Structure Selection
| Structure | Best For | Cost | Protection |
|---|---|---|---|
| Sole Prop | Testing ideas, no liability | Free-$50 | None |
| LLC | Side projects, low revenue | $50-500 | Personal assets |
| S-Corp | $40K+ profit, tax optimization | $200-800 | Personal + tax |
| C-Corp | Raising VC, issuing equity | $300-1000 | Maximum |
Default recommendation: LLC for most bootstrapped businesses.
Registration Checklist
[ ] Choose business name (check availability)
[ ] Register with state (Secretary of State)
[ ] Get EIN from IRS (free, instant online)
[ ] Open business bank account
[ ] Set up basic accounting (Wave, free)
Minimum Compliance
| Requirement | When Needed | DIY Cost |
|---|---|---|
| Business license | Most cities | $50-200 |
| DBA/Trade name | If different from LLC | $25-100 |
| Sales tax permit | If selling goods | Free-$50 |
| Home occupation permit | If home-based | $0-100 |
DIY Legal Resources
Contract Templates
| Source | Cost | Quality |
|---|---|---|
| LegalZoom templates | Free-$99 | Good for basics |
| Rocket Lawyer | $40/mo | Good coverage |
| Docracy | Free | Varies |
| GitHub contracts | Free | Tech-focused |
Essential Contracts
Client/Service Agreement
- Scope of work
- Payment terms
- Liability limits
- Termination clause
Terms of Service (if web-based)
- User responsibilities
- Your disclaimers
- Dispute resolution
Privacy Policy (required by law)
- Data you collect
- How you use it
- User rights
When to Hire a Lawyer
DIY Is Fine
- Standard service agreements
- Basic LLC formation
- Simple contractor agreements
- Website terms/privacy
Get a Lawyer
- Investor agreements (SAFE, equity)
- Partnership agreements
- Employee equity/options
- IP assignments
- Regulated industries
- Custom contracts over $50K
Cost-saving tip: Use templates for 80%, lawyer for 20% review.
Industry-Specific Requirements
Consulting/Services
- Professional liability insurance ($300-1000/yr)
- Client contracts with scope limits
- NDA template for sensitive work
E-commerce
- Sales tax registration (use Avalara or TaxJar)
- Return policy (state-specific requirements)
- Product liability considerations
SaaS/Software
- Terms of service
- Data processing agreements (for B2B)
- Security certifications (SOC 2 if enterprise)
Local Services
- Local business license
- Industry permits (contractors, food, etc.)
- General liability insurance ($400-800/yr)
Insurance Minimum
| Type | When Needed | Cost |
|---|---|---|
| General Liability | Always | $400-800/yr |
| Professional Liability | Services/consulting | $500-1500/yr |
| Product Liability | Physical products | $500-2000/yr |
| Cyber Insurance | Digital products | $500-1000/yr |
Affordable providers: Hiscox, Next Insurance, Thimble (by-project)
Formation Checklist by State
For LLC:
- File Articles of Organization
- Create Operating Agreement (template is fine for single-member)
- Get EIN from IRS
- Register for state taxes
- Open business bank account
Cheapest states: Wyoming, Delaware, Nevada (but register where you operate)