Legal basics (US)

First things first

This lesson gives general pointers, not legal or tax advice. Rules change often and depend on your state and situation. Always check with an accountant (CPA) or a lawyer before you decide.

Pick a simple business structure

To sell a SaaS, you need a legal setup. In the US, the common starting points are:

• sole proprietorship: the default if you just start selling on your own. Simple, but there's no legal separation between you and the business;
• LLC: a popular choice for small software businesses. It can separate business liability from your personal assets, with relatively light paperwork. Fees and rules vary by state;
• corporation (C corp or S corp election): more formalities, often considered if you plan to raise money from investors or as profits grow.

The right choice depends on your income, your state, your liability concerns, and your plans. Get advice before you file.