• February 2019
    M T W T F S S
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Does a startup need to be incorporated to have a terms of service agreement – this is for a user content driven website?

The answer is no but, as the other posters have already suggested, you really SHOULD incorporate because you could lose everything you worked so hard to create.

Incorporating your startup at the early stages is conventional wisdom at this point. A company (among other things) incorporates in order to limit personal liability; failing to do so puts your personal assets at risk if you’re ever sued.

Although you mentioned in your post that you are “not looking for funding and … not expecting to spend a lot of money in the near term” you also mentioned that your site is not yet live. This is a red flag to me. As a creator of two startups myself, I can tell you it’s really hard to predict your website’s future. What seems like a hobby or side job can turn into something big and if you’re not prepared for that then imitators can step in and reap the rewards of your endeavors. Don’t let that happen!

If you choose to incorporate, you should learn the differences among the most common business entities for startups. Take a look at a former answer of mine where I draw out comparisons between the major 3: Should a tech startup incorporate as an LLC, a C-Corp, or an S-Corp? If so, why?

LawTrades is a legal platform for startups to hire top lawyers for their various legal needs. Startups are wary of lawyers’ high hourly billing – and rightfully so. That’s why we offer flat-fee packages for companies to incorporate and create agreements like Terms of Service and Privacy Policies at the same time. Feel free to check it out.

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