---
name: launch-legal
description: Minimum viable legal setup for business launches without expensive lawyers.
---

# 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

1. **Client/Service Agreement**
   - Scope of work
   - Payment terms
   - Liability limits
   - Termination clause

2. **Terms of Service** (if web-based)
   - User responsibilities
   - Your disclaimers
   - Dispute resolution

3. **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:
1. File Articles of Organization
2. Create Operating Agreement (template is fine for single-member)
3. Get EIN from IRS
4. Register for state taxes
5. Open business bank account

**Cheapest states:** Wyoming, Delaware, Nevada (but register where you operate)