Delaware C-corporation for investor-backed startups. LLC for most other businesses. The entity type determines how equity is structured, how investors can participate, and how the company is taxed. Changing entity type after formation is expensive.

Delaware for most venture-backed startups — its General Corporation Law is the most developed in the US and is expected by institutional investors. The state where you operate for bootstrapped businesses — avoids the Delaware franchise tax and registered agent fees.

The equity split agreed verbally during a founding meeting has no legal force. It must be documented in the founder agreement before any work begins. Day one is the only moment when all founders have equal negotiating leverage.

The founding document filed with the Secretary of State that creates the legal entity. For a Delaware C-corp, this is the Certificate of Incorporation. For an LLC, it is the Certificate of Formation. Required before any other company document has legal force.

Corporate bylaws (for corporations) or operating agreement (for LLCs) govern internal operations: how the board functions, how officers are appointed, how decisions are made. These are not filed publicly but bind the company and its owners.

Federal Employer Identification Number from the IRS. Required for banking, hiring, and tax filing. Apply free at IRS.gov. Takes minutes online. Without an EIN, the company cannot open a bank account or issue W-2s or 1099s.

If founders receive restricted stock subject to a vesting schedule, an 83(b) election filed with the IRS within 30 days of the stock grant allows the founder to pay income tax on the stock’s current value (near zero at founding) rather than on the higher value at vesting. Missing the 30-day window permanently forecloses this option.

Covers equity allocation, four-year vesting with one-year cliff, IP assignment for prior and future work, roles and decision authority, non-compete and non-solicitation (omit non-compete in California under BPC 16600), departure mechanics, and dispute resolution. Without this document, a departing co-founder keeps all their equity regardless of contribution.

Transfers all relevant intellectual property — including work created before the company incorporated — from each founder personally to the company. Under 17 USC 101, co-founders own the work they create by default. Without this document, pre-incorporation code belongs to the founder who wrote it. Investors will ask for this at due diligence.

Governs transfer restrictions (right of first refusal), buyout mechanics, voting and protective provisions, drag-along and tag-along rights, anti-dilution protections, and deadlock resolution. Particularly critical for any company with a 50-50 ownership split, where deadlock is a governance risk from day one.

State-specific. Covers position, compensation with applicable wage disclosures (New York Wage Theft Prevention Act; California Labor Code Section 2810.5), explicit at-will employment statement, contingency conditions, and expiration date. Without tested at-will language, certain phrases have created binding implied contracts in US courts.

Employment agreement for W-2 employees covering IP assignment, confidentiality, non-compete (state-specific enforceability — void in California), and any equity compensation terms. Independent contractor agreement for 1099 workers covering IP ownership (contractors own their work by default under US copyright law), scope of work, classification compliance (California AB5 ABC test), and payment terms.

Every employee and contractor who contributes to the company’s technology, content, or business processes must sign an IP assignment. This is not optional. Investors conducting due diligence will ask for signed IP assignments from every significant contributor. A missing signature from a departed contractor has blocked acquisitions.

SAFE for US-based investors familiar with the YC template — no maturity date, no interest, post-money valuation cap. Convertible note for investors who prefer debt structure or are outside the US ecosystem — carries maturity date, interest rate (must comply with applicable state usury ceiling), and balance sheet liability. Both instruments convert at the qualifying financing.

A current, accurate cap table showing all outstanding shares, options, warrants, SAFEs, and convertible notes on a fully diluted basis. Investors will ask for this before committing. An inaccurate cap table at fundraising creates due diligence delays and, if the inaccuracy is material, can give investors grounds to renegotiate or withdraw.

Most institutional investors will not sign NDAs before initial conversations. However, NDAs are appropriate for early conversations involving specific technical details, product specifications, or customer information that the company cannot risk exposing without protection. The NDA should be mutual and time-limited.

Every vendor agreement should be reviewed for unfair indemnification clauses (unilateral, uncapped, or extending to the vendor’s own negligence), liability cap adequacy, renewal auto-renewal windows and cancellation notice requirements, and data processing compliance gaps before signing.

Required before the product launches publicly. California CCPA applies to businesses handling personal data of California residents regardless of where the business is incorporated. The privacy policy must disclose data collection, use, sharing, and consumer rights. Terms of service govern the relationship between the company and its users.

Required before sharing any personal data with a SaaS vendor operating as a data processor. CCPA compliance for California-resident data requires DPAs with all service providers that process personal information on the company’s behalf. GDPR requires DPAs for any processing involving EU-resident data.