The Essential Legal Checklist for Startups in 2024
From incorporation to your first hire — every legal step your startup needs to take, in order.
Starting a company is exhilarating. The legal side? Not so much. But getting it right early saves you from catastrophic problems later.
Phase 1: Formation (Week 1-2)
Choose Your Entity Type
For most venture-backed startups, a Delaware C-Corporation is the standard. Why? Investors expect it, the legal precedent is deep, and the corporate law is well-established.
Key decisions:
- Delaware C-Corp for venture-backed startups
- LLC for bootstrapped or lifestyle businesses
- Consider your fundraising plans before deciding
Execute Founder Agreements
Never skip this. Even if your co-founder is your best friend. A proper founder agreement covers:
- Equity splits and vesting schedules (4-year vesting with 1-year cliff is standard)
- Role definitions and decision-making authority
- IP assignment to the company
- Departure scenarios
Phase 2: Protection (Week 2-4)
Intellectual Property
- File provisional patents if applicable
- Register trademarks for your brand
- Ensure all code/IP is assigned to the company
- Establish trade secret policies
Standard Agreements
- NDA template for conversations with potential partners
- Employee/contractor IP assignment agreements
- Terms of Service and Privacy Policy for your product
Phase 3: Operations (Month 2-3)
Compliance
- EIN and state registrations
- Set up proper books and accounting
- Implement data privacy compliance (GDPR/CCPA if applicable)
- Employee classification (contractor vs. employee)
Contracts
- Customer agreements / Terms of Service
- Vendor agreements
- Advisory agreements with equity provisions
The Cost of Getting It Wrong
Startups that skip legal foundations face real consequences:
- 40% of seed-stage deals encounter legal issues during due diligence
- IP disputes can cost 10-100x what proper protection costs
- Founder disputes are the #1 cause of early-stage startup failure
How Lexium Helps
At Lexium, we've distilled this entire process into our framework: Assess → Structure → Execute → Adapt. We work with startups from their earliest days to ensure every legal foundation is solid before it needs to bear weight.
Starting at approximately $100/month, our flexible model means you get real legal infrastructure without the traditional law firm price tag.