Disciplined Entrepreneurship Startup Tactics

TACTIC 11Legal: Incorporation and Legal Documents for Your Startup

When the time is right, incorporating your business is a box that you must check to operate legally. Unlike other tactics, you should consult an attorney (because I am not one). This is how I preface all meetings where I advise entrepreneurs when a legal topic arises. The views below represent my own personal experience but not legal advice.

In This Tactic, You Will:

• Determine when it is the right time for you to incorporate your venture.
• Explore the considerations for entity structuring.
• Align on the equity split with your co-founders.
• Learn many of the legal terms that you will encounter in the first few years of your venture.

When to Incorporate

There is a time and place to incorporate and it isn't necessarily day 0. Entrepreneurs must be aware of the indicators that it is time to incorporate to protect themselves and their businesses.

It can be too early to incorporate your new venture, but you can also wait too long. If you did miss the ideal window for incorporation, for first-time entrepreneurs this becomes obvious when problems arise.

Determining how early to incorporate requires an understanding of balance. In my personal experience, it can hurt you to incorporate too early. Incorporating too early introduces significant expense and time better spent elsewhere building the business. So when ...