saas-legal-business-formation_skill

Overview

This skill helps solo SaaS founders form the right business entity, draft essential legal documents, and meet basic compliance requirements without overspending on attorneys. It focuses on choosing between LLC, S-Corp (via LLC), and C-Corp, and produces ready-to-publish first drafts of Terms of Service and Privacy Policy templates. Always have a licensed attorney review before publishing.

How this skill works

I guide founders through a decision flow for entity selection based on fundraising plans and revenue, then provide a formation checklist and practical drafting templates for Terms of Service, Privacy Policy, and minimal cookie language. For each document I mark bracketed fields you must fill, add a plain-English summary of each major section, and flag jurisdictional items like governing law, sales tax, and GDPR/CCPA obligations. The output is a near-complete first draft designed so a lawyer only needs a quick review.

When to use it

• You’re starting a solo-founded SaaS and need an entity and core legal docs at launch.
• You need to decide LLC vs C-Corp before raising capital or applying to accelerators.
• You need ready-to-publish Terms of Service and Privacy Policy templates with plain-English summaries.
• You want to limit early legal spend while protecting your personal assets.
• You need a step-by-step formation checklist and sales tax starter guidance.

Best practices

• Form an LLC for early-stage, bootstrapped SaaS unless you plan to raise VC (use Delaware C-Corp if you will).
• Get an EIN and open a business bank account before accepting payments; use Stripe/processor under the business entity.
• Launch with three documents only: Terms of Service, Privacy Policy, and a basic operating agreement/bylaws; defer SOC 2/DPA until customers require them.
• Track state sales tax nexus and use Stripe Tax/TaxJar when you approach $100K in sales or enter new states.
• Write user-facing legal language plainly; include short summaries and bracketed fields for specifics so a lawyer can review quickly.

Example use cases

• A solo founder bootstrapping a SaaS chooses an LLC, files Articles of Organization, gets an EIN, and launches with ToS and Privacy Policy templates.
• A founder planning to raise VC uses the decision flow and opts to form a Delaware C-Corp before applying to accelerators.
• A founder earning consistent profit evaluates S-Corp election via an LLC to save self-employment tax and follows the formation checklist.
• A founder serving EU users uses the Privacy Policy template, flags GDPR items, and prepares export/deletion processes.