> With regard to legal documents and accounting and all that, we have an LLC right now, with Quickbooks and a boilerplate operating agreement that I found in a

> With regard to legal documents and accounting and all that, we have an LLC right now, with Quickbooks and a boilerplate operating agreement that I found in a book at Barnes and Nobles. I definitely agree that it is incredibly important to be on top of the legal side of things, but we honestly don't even have the money for that right now. The main benefit of having shareholders and operating agreements is not in having a piece of paper, but having discussed and agreed on the principles with your co-founders. A boilerplate agreement is entirely useless, unless you all have thoroughly read and understood, and agreed with it. Instead, I would recommend sitting down with everyone one evening, and coming to a mutual understanding about questions such as: * How is ownership currently split between co-founders? * How much do you pay yourselves salary? How should this change in the future depending on revenue or investments? * Under which conditions would each of you consider selling the business, versus keeping on growing it? * Who is allowed to purchase stuff with the company account, and when do they have to confirm it with the others? * If one of the co-founders decides to quit (fantastic job offer, just tired of the startup, etc), what happens to their ownership? Do they keep all of it, lose all of it, or keep and lose some parts depending on time with the startup? * If one of the co-founders doesn't quit, but just takes a side job, starts ignoring you, or becomes an asshole, are the others allowed to fire them? What are the share ownership outcomes of that? * Are the owners allowed to sell their shares to outsiders? * What happens if one of the co-founders dies or becomes disabled and incapable of working? Do their relatives inherit their ownership (this is probably the default!)? One of the main causes of startup implosion are co-founder fights, and these in turn arise from not having discussed these issues beforehand. It's best to do it before the problems arise, and before there is serious money on the line. If you have actually debated these questions, you are already ahead of many startup teams. You can also just write them down in plain English on a single sheet of paper with everyone's signatures - that will count as solid evidence if it ever goes to court. And if you have plenty of cash later on, you can take that sheet to a lawyer to get a "proper" agreement. After all, a lawyer cannot and will not tell you the answers to these questions - they just write up what you have decided in more detail based on local laws.