Startup Legal Checklist by Jurisdiction
Purpose
This recipe produces a jurisdiction-specific legal formation checklist for a new startup, covering entity type selection, formation filing, tax registrations, licenses, permits, and ongoing compliance obligations. The output is a step-by-step checklist with filing links, costs, deadlines, and required documents tailored to the chosen jurisdiction.
Prerequisites
- Business description — what the startup does, target market, planned operations
- Founder information — names, addresses, identification numbers
- Operating jurisdictions — headquarters and customer locations
- Fundraising intent — determines entity type (VC = Delaware C-Corp; bootstrap = LLC)
- $100-$1,500 budget — filing fees, registered agent, legal documents
Constraints
- Requirements differ substantially by jurisdiction. Always verify with Secretary of State or Companies House. [src1]
- Foreign qualification required when operating in states beyond incorporation state. Delaware C-Corp in California must register in both. [src5]
- BOI reporting under Corporate Transparency Act: within 90 days for 2024+ formations. [src6]
- Tax registration deadlines: 30-90 days post-formation in most US states. [src4]
- Most US VCs require Delaware C-Corp. LLCs require conversion before institutional fundraising. [src3]
Tool Selection Decision
| Path | Entity | Filing Cost | Timeline | Best For |
|---|---|---|---|---|
| A: Delaware C-Corp | Corporation | $89 + $500 (Atlas) | 1-3 days | VC fundraising |
| B: Wyoming LLC | LLC | $100 + $39 (agent) | 1-2 days | Bootstrapped US startups |
| C: US for non-US | C-Corp or LLC | $500 (Atlas all-in) | 3-5 days | Non-US founders |
| D: UK Ltd | Private Limited | GBP 12 | 24 hours | UK-based startups |
Execution Flow
Step 1: Select Entity Type and Jurisdiction
Duration: 30 minutes. VC fundraising = Delaware C-Corp. Bootstrapping US = home-state or Wyoming LLC. UK = Ltd via Companies House. Non-US needing US entity = Stripe Atlas. Delaware: $89 filing + $300/yr franchise tax. Wyoming: $100 filing + $60/yr. UK: GBP 12 online.
Verify: Entity type aligns with fundraising plan and operational needs.
Step 2: File Formation Documents
Duration: 30-60 minutes filing + 1-5 days processing. File Certificate of Incorporation (C-Corp) or Articles of Organization (LLC) with state. Appoint registered agent. Adopt bylaws or draft Operating Agreement. For C-Corp: issue founder stock, file 83(b) election within 30 days.
Verify: Certificate received. Entity appears in state/national registry.
Step 3: Obtain Tax Identification Numbers
Duration: 15 minutes (online) to 4-6 weeks (mail). Apply for EIN at irs.gov (free, instant online with SSN). Register with state tax authority. Obtain sales tax permit if selling taxable goods. UK: register with HMRC for Corporation Tax within 3 months.
Verify: EIN confirmation received. State tax registration complete.
Step 4: Obtain Business Licenses and Permits
Duration: 1-3 hours research + 1-4 weeks processing. Use SBA Permit Me tool. Check federal (usually none), state (professional/seller's permits), and local (business license, zoning) requirements. File before conducting business.
Verify: All required licenses identified and applications submitted.
Step 5: Complete Post-Formation Requirements
Duration: 1-2 hours. Open business bank account. File BOI report with FinCEN (within 90 days). Set up bookkeeping. Obtain business insurance. File 83(b) election (C-Corp, within 30 days). Set compliance calendar for annual filings.
Verify: Bank account open. BOI filed. Insurance active. Calendar set.
Quality Benchmarks
| Quality Metric | Minimum | Good | Excellent |
|---|---|---|---|
| Checklist completeness | > 80% | > 90% | 100% |
| Deadline accuracy | Major deadlines captured | State-specific variations | Calendar alerts set |
| Cost accuracy | Within 50% | Within 20% | Exact filing fees |
| Filing link currency | Links functional | Verified current month | Verified with office |
Error Handling
| Error | Cause | Recovery |
|---|---|---|
| Entity name rejected | Name in use or restricted | Search state database, choose alternative or DBA |
| EIN application rejected | SSN mismatch or duplicate | Verify info, call IRS 800-829-4933 |
| Foreign qualification missed | Operating in other state | File immediately — penalties accrue daily |
| 83(b) election missed | Not filed within 30 days | Cannot be corrected — consult tax attorney |
| BOI report missed | Not filed within 90 days | File immediately — $500/day penalty |
Cost Breakdown
| Component | DIY | Legal Service | Attorney |
|---|---|---|---|
| State filing fees | $50-$300 | $50-$300 | $50-$300 |
| Registered agent | $39-$150/yr | Included | $150-$300/yr |
| Formation service fee | $0 | $149-$799 | $1,000-$3,000 |
| Operating agreement/bylaws | Template ($0) | Included | $500-$2,000 |
| Total | $89-$450 | $300-$1,100 | $1,700-$5,600 |
Anti-Patterns
Wrong: Incorporating in Delaware for a bootstrapped local business
Adds unnecessary complexity and cost ($300+/yr franchise tax, dual-state filing) without fundraising benefit. [src3]
Correct: Match entity type to business model
Bootstrapped = home-state LLC. VC-track = Delaware C-Corp. Wyoming LLC for maximum cost savings and privacy.
Wrong: Skipping foreign qualification when operating across states
No access to state courts, back taxes, and penalties. California charges $800/yr minimum regardless. [src5]
Correct: Register in every state where you have nexus
Physical presence, employees, significant sales, or property creates nexus requiring registration.
When This Matters
Use as the first legal step for any new startup. Entity formation is prerequisite for bank accounts, contracts, hiring, and raising capital.