Startup Legal Essentials
Protect your venture with the right legal foundation
What you can generate with StartupVision
AI-assisted outlines, checklists, and question lists to speed up legal prep—always review with a licensed attorney before using.
Formation & Governance
Entity selection prompts, founder agreement outline, cap table considerations, and 83(b) reminders.
Customer & Vendor Basics
Contract clause checklists, data protection questions, and red flag lists for SaaS, services, and marketplace models.
Fundraising Readiness
SAFE/convertible note overviews, diligence prep checklists, and board/observer rights question lists.
Informational only—this is not legal advice, does not create an attorney-client relationship, and should be reviewed with qualified counsel licensed in your jurisdiction.
Business Formation
Choose the right entity structure for your startup
| Feature | LLC | C-Corp | S-Corp |
|---|---|---|---|
| Best For | Small teams, lifestyle businesses | VC-backed, high-growth startups | Profitable SMBs, tax optimization |
| Taxation | Pass-through (no double tax) | Double taxation (corp + personal) | Pass-through (with restrictions) |
| VC Fundable | Rarely | Yes - Preferred | No |
| Stock Options | Complex (units instead) | Easy - ISOs, NSOs | Limited (100 shareholders) |
| Formation Cost | $100-$500 | $500-$2,000 | $500-$2,000 |
| Annual Compliance | Minimal | Board meetings, minutes, filings | Moderate + shareholder limits |
Delaware vs Wyoming
"Where to incorporate"
- Delaware: VCs prefer, established case law
- Wyoming: No state income tax, cheaper
- Delaware franchise tax: $400+/year
- Planning to raise VC? Choose Delaware
Operating Agreements
"Your company's rulebook"
- LLCs: Operating Agreement
- Corps: Bylaws + Articles
- Define voting, distributions, exits
- Banks require for accounts
Registered Agent
"Required in every state"
- Receives legal documents for you
- Must have physical address
- Cost: $50-$300/year
- Services: CSC, Registered Agents Inc
EIN & Banking
"Next steps after formation"
- Get EIN from IRS (free, online)
- Open business bank account
- Never mix personal/business funds
- Mercury, Brex popular for startups
Founder Agreements
Critical documents that protect all co-founders
Co-Founder Agreement
"The startup prenup"
- Equity split and rationale
- Roles and responsibilities
- Decision-making processes
- Exit and buyout provisions
Vesting Schedules
"Standard: 4-year with 1-year cliff"
- 1-year cliff: 25% vests at year 1
- Then monthly over remaining 3 years
- Protects against early departures
- VCs require this - no exceptions
83(b) Election
"30-DAY DEADLINE - No extensions"
- File within 30 days of grant
- Pay tax on current value (near $0)
- Future gains = capital gains rate
- Miss it = ordinary income tax later
IP Assignment
"Company owns everything"
- Transfer all prior work to company
- Include code, designs, ideas
- VCs require clean IP ownership
- All founders must sign
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Important Legal Disclaimer
This guide is for educational and informational purposes only and does not constitute legal advice. Every startup's situation is unique, and laws vary by jurisdiction. The information provided may not reflect the most current legal developments. Always consult with a qualified attorney licensed in your jurisdiction before making legal decisions for your startup. StartupVision is not a law firm and does not provide legal services.