
Ask HN: Do I need a TOS&PP, Accountant, Incorporation, Trademark before launch? - faizshah
Hi guys, I just had a really unhelpful business advice session and wanted to solicit some here about launching a weekend project as a business.<p>If I&#x27;m on a very low budget, how much of the formal legal stuff like incorporation, drafting a terms of service and privacy policy, seeing an accountant, filing a trademark etc. is necessary to have done for me before launching a subscription based (using stripe) web app (side project, weekend project etc.) on the public internet?<p>I&#x27;m sure a lot of you have experience so this is probably the best place to ask :)
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davismwfl
My 2 cents. Depends on the potential liability of your service. If your
service is in a high risk market or has high potential to cause damage then
most all those things are really necessary. If it is a small side project
where you are sending some emails or doing things that are not mission
critical to a businesses revenue then you are generally pretty safe (IMO) to
launch prior to all these.

Reasons on both sides: Taxes get more complex when you have a company, but at
the same time, if you do things outside a company and then need to transfer
revenue and assets into a newly formed company it can be interesting to do it
right. Not setting up a company correctly can leave you vulnerable to
liability, almost as badly as just running the business in your personal name
so doing it right is important. Get an accountant after you have enough
revenue to worry about, sorry but adding an extra 10-50k of income isn't worth
worrying about getting an accountant immediately over, your normal tax
accounting can take care of that.

I would however, always at least have a basic TOS & PP. You can use one of the
free online generators as they will at least get you all the basic clauses and
then if/when things grow you can have it reviewed by an attorney and revised.
But this will help insulate and protect you quite a bit.

Generally, I have launched marketing, signups, limited trials etc all without
having anything other then the TOS&PP. Then if I see it actually has legs I
get the corporation and banking setup and grow some more, then get an
accountant, legal etc involved a little more down the road. Basically don't
needlessly spend money just to say you are a business.

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faizshah
Ok, so in general you would say that when releasing a product and trying to
get traction you should only worry about creating a basic TOS&PP before
launch? Then if you start getting revenue >10k you should form an
LLC/incorporate and get a lawyer to look over the TOS&PP?

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davismwfl
Yep, in general. The revenue is a bit arbitrary based upon personal risk, but
I use roughly the $10k figure or a steady pattern of growth to indicate I
should make things more formal.

If you have never setup a company before, you can expect it to cost you about
$1-3k depending on where in the country you are and what type of attorney you
use. I have done it a few times, so I now have template documents to work from
that we just adjust for specific circumstances. So sometimes I can get away
with no more than a few hundred dollars plus filing fees etc.

Remember, when you incorporate, you need to get things like liability
insurance, E&O insurance and a bunch of other things. Again, some of it can
wait, other parts are more important to do early on.

But always get a little traction and validation before spending a bunch of
money, at least IMO.

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faizshah
Thanks, I appreciate the advice!

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Amir6
I would say the only thing that you need is sales. Everything else can come
later on. I'm not sure about the priority of each item you mentioned but once
you have sales you can reinvest the profits to do the legal and paper work.

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faizshah
Yeah, I was just wondering if I start selling without all that stuff will it
come back to bite me?

Or is it not a big deal and I can just do it later?

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Amir6
I guess it very much depends on the type of work you do and service you
provide. May be you can look into some similar businesses and see whether they
are a registered corporate (should be able to check online on government
databases), have a good TOS or have trademarks and other stuff. If they dont
maybe it can be postponed for some time.

