The Weekend Founder's Legal Checklist: LLC, ToS, and Privacy Policy in One Afternoon
A startup legal checklist for indie founders: when you need an LLC, cheap formation options, and free terms of service and privacy policy templates for launch.
The "I'll Deal With It Later" Trap
You shipped a working app this weekend. Nice. Now you're staring at a launch button, and a small voice asks: should this be a real business first?
Most builders wave that voice away. "I'll sort out the legal stuff once I have paying customers." That's how you end up six months in, collecting money through your personal Venmo, with no idea whether you're personally on the hook if something goes wrong.
Good news: legal setup for a weekend-scale project takes an afternoon, not a law degree. This startup legal checklist runs in a few focused hours — no lawyer required for most of it.
One honest note before we start: this is not legal advice. It's a practical starting point written for solo builders shipping small products. If you're taking on investors, handling sensitive data (health, financial, kids), or operating outside the US, talk to an actual attorney before you scale past "side project."
Ready to build something worth protecting? Browse validated startup ideas before you spend the afternoon on paperwork for an idea that might not stick.
1. Decide: Sole Proprietorship or LLC
What to do: Figure out whether you actually need an LLC right now, or whether a sole proprietorship is fine for the next few months.
Why it matters: As a sole proprietor, there's no legal separation between you and the business — if it gets sued or racks up debt, your personal assets (car, savings, house) are exposed. An LLC builds a wall between the business and your personal finances.
The honest answer: a low-risk project (an internal tool, a free utility, nothing with real financial or physical stakes for users) is fine as a sole proprietorship. Client work, a paid product, or storing user data — form the LLC before you take your first dollar.
Time / cost: Free to decide. Zero paperwork if you stay a sole proprietor for now.
2. Form the LLC (If You Need One)
What to do: Pick a formation path and file. You have three realistic options:
- Stripe Atlas — the most bundled option: Delaware filing, EIN, and a Stripe account together, typically ready within one to three weeks. Priciest route, least hands-on.
- LegalZoom or similar services — plans start around $0 plus state filing fees for the basic tier, with paid tiers adding faster processing. Basic-tier processing can take up to 30 days.
- Direct state filing — file the Articles of Organization yourself through your state's Secretary of State website. Cheapest route: state filing fees alone run roughly $40 to $500 depending on the state, averaging around $123. Some states process this in days.
Why it matters: This is the document that actually creates your liability shield. Skipping it means everything downstream (bank account, contracts, terms of service) is still just you, personally.
Time / cost: A few hours of your afternoon to file; anywhere from a few days to a few weeks for state processing, depending on the path you pick. Budget somewhere between the state fee alone and roughly $500 if you use a bundled service.
3. Get Your EIN
What to do: Apply for an Employer Identification Number directly through the IRS website. Skip any third-party site that charges for this — it's free and usually issued instantly online once your LLC is filed.
Why it matters: Your EIN is the business equivalent of a Social Security number. Banks require it to open a business account, and you'll need it for tax filings and most payment processors.
Time / cost: Free. Usually a same-day turnaround once your LLC paperwork is filed.
4. Open a Business Bank Account
What to do: Take your EIN and formation documents (Articles of Organization, and an operating agreement if your bank asks for one) to open a dedicated business checking account.
Why it matters: Mixing personal and business money is one of the fastest ways to lose the liability protection your LLC is supposed to give you — courts can decide you never really treated the business as separate, and "pierce" your protection. A clean business account also makes tax season dramatically less painful.
Time / cost: Usually free to open, sometimes with a minimum deposit. Thirty minutes online or in person once you have your EIN and formation docs in hand.
5. Write Your Terms of Service
What to do: Use a free generator to produce a baseline Terms of Service — the document that sets the rules for using your product, limits your liability, and covers things like account termination and payment terms. Termly and TermsFeed both offer a genuinely free tier with no card required, and host the document at a permanent link you can point to from your footer.
Why it matters: Without a ToS, you have no documented rules for your own product. If a user abuses your service, refuses to pay, or does something that damages your business, you have nothing to point to.
Not sure what to build a ToS for yet? Start with a proven concept from our library of startup ideas instead of guessing.
Time / cost: Free on the generators' basic tiers. Twenty to forty minutes to fill in the template with your product's actual details.
6. Write Your Privacy Policy (and Know Your GDPR/CCPA Basics)
What to do: Generate a Privacy Policy covering what data you collect, how you use it, and how users can request deletion. Same generators as above (Termly, TermsFeed, GetTerms) handle this for free.
Why it matters: Two things trip up small SaaS founders here.
First, GDPR has no revenue or headcount minimum — if anyone in the EU or UK can sign up for your product, or you run analytics that track their behavior, GDPR applies to you even as a two-person, pre-revenue project.
Second, CCPA (California's privacy law) is threshold-based, not activity-based: it generally kicks in only at real scale, such as annual gross revenue above roughly $25 million or personal data for 100,000-plus California residents a year. Most weekend projects won't hit that bar early on — but GDPR's lack of a threshold means small isn't automatically exempt.
Time / cost: Free on the generators' basic tiers. Twenty to forty minutes, plus a few minutes to think honestly about what data you actually collect (analytics, email addresses, payment info).
7. Know When to Call an Actual Lawyer
What to do: Set a mental trigger for when generated templates stop being enough: raising outside money, signing a contract with a business partner, handling healthcare or financial data, hiring your first employee, or getting a cease-and-desist. At that point, a one-time consult with a startup-focused attorney is worth the few hundred dollars.
Why it matters: Templates cover the common cases. They don't cover your specific edge cases, your specific state's quirks, or a dispute that's already turned adversarial. Knowing when you've outgrown the free tier of legal protection is itself a skill.
Time / cost: Free to set the trigger now. A consult typically runs a few hundred dollars when you actually need one.
Once the paperwork's handled, the fun part is picking what to build next — explore startup ideas validated with real research instead of vibes.
The Weekend Legal Checklist, All Together
If you're starting from zero and do need an LLC, here's the afternoon at a glance:
- Decide sole prop vs. LLC — 15 minutes
- File the LLC (direct state filing is cheapest) — 1-2 hours to file, days to weeks to process
- Apply for your EIN — 15 minutes, instant
- Open a business bank account — 30 minutes
- Generate your Terms of Service — 30 minutes
- Generate your Privacy Policy — 30 minutes
- Note your "call a lawyer" triggers — 5 minutes
Staying a sole proprietor for now? Skip to steps 5 and 6 — under an hour, done.
FAQ
Do I need an LLC for my side project?
Not necessarily, not immediately. A sole proprietorship is fine while you're low-risk and pre-revenue. Once you take payments, work with clients, or store user data, form the LLC before that first dollar comes in.
What's the cheapest way to form an LLC?
Direct state filing through your Secretary of State's website — you only pay the state's filing fee, which averages around $123 nationally but ranges from about $40 to $500 depending on the state.
Are free terms of service and privacy policy generators actually legit?
For a baseline document covering the common cases, yes — Termly and TermsFeed both offer genuinely free tiers with a permanent hosted link. Treat them as a strong starting point, not the final answer for a business handling sensitive data.
Does GDPR apply to my tiny US-based project?
Possibly, yes. GDPR has no size or revenue threshold — if EU or UK users can access your product, or you track their behavior with analytics, it applies regardless of how small you are.
TL;DR
- Sole proprietorship is fine for low-risk, no-money-yet projects; form an LLC once you take payments or handle user data.
- Direct state filing is the cheapest way to form an LLC; Stripe Atlas is the fastest bundled option.
- Get your EIN free from the IRS, then open a dedicated business bank account — never mix personal and business funds.
- Generate a free Terms of Service and Privacy Policy from Termly or TermsFeed before you launch.
- GDPR applies with no size threshold; CCPA generally only kicks in at real scale.
- This isn't legal advice — get a real attorney once you're raising money, hiring, or handling sensitive data.