As startup lawyers, we often receive inquiries from passionate entrepreneurs and founders seeking guidance on when they should consider taking their side projects to the next step by forming a legal entity. Forming a company is a “crossing the Rubicon” moment for any startup. It's an essential step that provides numerous benefits, such as protecting the founders' interests, enabling smooth operations, and facilitating future growth. But it also adds administrative burdens and costs.  

While the safest answer is “you should form a legal entity as soon as possible,” the complex reality of managing and paying for the costs of a startup means the process is delayed until it becomes a necessity. In this blog post, we will explore three common scenarios in which founders should seriously consider forming a legal entity. Note that many of these scenarios exist simultaneously. 

Read the full blog post here on StartupPercolator.