Skip to main content

GospeLib — Legal Entity & Structure Checklist

Version: 1.0
Purpose: Decision framework for legal setup. Not legal advice — consult an attorney before making final decisions.

⚠️ Disclaimer​

This document is a decision framework, not legal advice. Laws vary by state and change over time. Before filing anything or signing anything, consult a business attorney familiar with startup formation in Colorado or Delaware. Many offer free 30-minute consultations. LegalZoom and Clerky are acceptable for simple formations but cannot replace legal advice for IP assignment, investor agreements, or licensing.

See also: BUSINESS-FORMATION-GUIDE.md for detailed state comparison (Colorado vs. Delaware vs. Wyoming), step-by-step Colorado LLC formation instructions, and federal trademark filing guide.

Part 1: Entity Type Decision​

The Short Answer​

Form an LLC now. Convert to a Delaware C-Corp before taking any outside investment.

Here's why:

LLCS-CorpC-Corp (Delaware)
Formation costLow ($50–$100)ModerateModerate ($50 + registered agent)
Tax treatmentPass-through (you pay)Pass-through (you pay)Corporate tax (company pays)
Investor-ready?NoNoYes — required by most VCs
Grant-eligible?YesYesYes (most)
Self-employment taxFullCan minimize via salaryN/A
ComplexityLowMediumHigh
Equity/optionsDifficultLimitedStandard (ISOs, NSOs)

Phase 1 (now → first dollar of investment): Colorado LLC
Phase 2 (before seed round or accelerator): Convert to Delaware C-Corp

Why Not Delaware C-Corp Now?​

You'd pay Delaware franchise taxes ($400+/year minimum), registered agent fees ($100–$300/year), and more accounting complexity — all before you have revenue. Unless you're actively fundraising in the next 90 days, the LLC is correct. See BUSINESS-FORMATION-GUIDE.md for a detailed state-by-state cost comparison.

Why Not S-Corp?​

S-Corps cannot have more than 100 shareholders, cannot have non-US shareholders or entity shareholders (VCs are entities), and have other restrictions that make them incompatible with institutional investment. If GospeLib ever takes outside money, S-Corp has to convert anyway.

Part 2: Formation Checklist (Colorado LLC)​

Detailed step-by-step instructions: See BUSINESS-FORMATION-GUIDE.md

Step 1: Name Registration​

  • Search Colorado business name availability: sos.state.co.us/biz/BusinessEntityCriteriaExt.do
  • Search federal trademark database: tmsearch.uspto.gov — search "GospeLib" and related terms (completed prior to filing, no conflicts found)
  • Check domain availability (gospelib.io, gospelib.com, gospelib.app)
  • Check App Store and Google Play name availability
  • Reserve the name by filing Articles of Organization (see Step 2)

Name risk note: "Book of Mormon," "The Church of Jesus Christ of Latter-day Saints," and related terms are registered trademarks of Intellectual Reserve, Inc. Do not use these in the company name or app name in a way that implies Church endorsement or affiliation.

Step 2: File Articles of Organization (Colorado LLC)​

  • File online at coloradosos.gov/biz/FileDoc.do — $50 filing fee
  • Member-managed vs. manager-managed: choose member-managed for a solo founder
  • Registered agent: yourself is fine at your Colorado address (or use Northwest Registered Agent ~$100/year for privacy)
  • Processing time: Typically same-day for online filings (expedited $150 additional)

Step 3: Get an EIN (Federal Tax ID)​

  • Apply free at irs.gov/EIN — takes 15 minutes
  • Required for: bank accounts, Stripe, Apple Developer, employees, taxes
  • Do this immediately after Articles are filed

Step 4: Operating Agreement​

  • Draft an Operating Agreement — even as a solo founder, this is essential
  • Key provisions to include:
    • Your ownership percentage (100% as sole member)
    • IP assignment clause (see Part 3)
    • Decision-making authority
    • What happens if you bring on a co-founder (how equity is added)
    • Buy-sell provisions (what happens to the company if you die or are incapacitated)
  • LegalZoom or Clerky can generate a basic template (~$100); a startup attorney can draft a proper one ($500–$1,500)

Step 5: Business Bank Account​

  • Open a separate business checking account — never comingle personal and business funds
  • Recommended: Mercury (startup-friendly, free, no minimum balance, great API) or Chase Business
  • Fund with your initial working capital contribution
  • Document the contribution (e.g., "Founder contribution of $X,XXX on [date]")

Step 6: Accounting Setup​

  • Set up bookkeeping software: QuickBooks Self-Employed ($15/month) or Wave (free)
  • Track every expense from day one — software, subscriptions, contractor payments, equipment
  • File quarterly estimated taxes (as pass-through entity, you pay self-employment tax on LLC income)
  • Find a CPA who works with startups before your first tax year ends

Part 3: Intellectual Property — Critical​

IP is the most important legal work you'll do. Get this right before writing a line of code.

3.1 IP Assignment (What You Build = Company Owns)​

As a solo founder, everything you build must be assigned to the LLC — not owned by you personally. This sounds counterintuitive, but investors require it, and it protects you.

  • Include an IP Assignment clause in your Operating Agreement (or execute a separate IP Assignment Agreement): "Member assigns to the Company all intellectual property created in connection with the Company's business, including but not limited to software, databases, content, designs, and trade secrets."
  • This applies to: the GospeLib codebase, the knowledge graph schema and data, the design system, all documentation, and any content you create

3.2 Work-for-Hire (What Contractors Build = Company Owns)​

  • Every contractor or freelancer must sign a Contractor Agreement before starting any work
  • The agreement must include a Work-for-Hire and IP Assignment clause: "All work product created under this agreement is work made for hire and all IP is assigned to the Company."
  • This applies to: contract engineers, designers, content creators, anyone you pay to build anything
  • Failure to do this means contractors may own portions of your codebase. This is a common, expensive mistake.
  • Template: Clerky's "Independent Contractor Agreement" (~$30) is acceptable for simple engagements

3.3 Trademark​

  • Federal trademark filed for "GospeLib" — USPTO Serial Number 99715386
    • Mark: GospeLib (standard character format)
    • Owner: GospeLib, LLC
    • Filing date: 2026-03-20
    • Filing basis: Intent-to-Use (Section 1(b))
    • Status: Awaiting Examination
    • Classes filed (3):
      • Class 9: Downloadable software in the nature of a mobile application for searching and studying religious texts with original-language reference tools and AI-powered analysis of scriptural passages
      • Class 41: Providing online non-downloadable publications in the nature of educational course materials in the field of religious scripture study; Providing religious instruction in the field of Christianity
      • Class 42: Software as a service (SAAS) services featuring software for searching and studying religious texts with original-language reference tools and AI-powered analysis of scriptural passages
    • Cost: $350/class × 3 = $1,050
  • Trademark registration takes 8–12 months but rights begin at filing date (2026-03-20)
  • Filed before launch
  • Statement of Use must be filed after the mark is approved but before registration (Intent-to-Use requirement) — set calendar reminder when Notice of Allowance is received

Note on "Gospel" in the name: The USPTO regularly rejects marks containing common religious terms. "GospeLib" as a single coined term is more defensible than something like "GospelStudy." Your attorney can assess the risk.

  • The GospeLib source code, database schema, and original content (study aids, commentary) are automatically copyrighted when created — no registration required
  • Optional: Register key software copyrights with the Copyright Office ($65 per registration) if you anticipate infringement disputes
  • Do NOT register copyright in public domain texts you're incorporating (KJV, Book of Mormon pre-1923, Clarke) — you don't own them and don't need to claim them

3.5 Trade Secrets​

  • The knowledge graph schema, edge weighting system, and AI prompt architecture are trade secrets
  • Protect them by: keeping them confidential, limiting access to people who've signed NDAs, and documenting that they are proprietary
  • Do not publish these in open-source repositories

Part 4: Licensing Agreements Needed​

Before launch, you need clarity on the legal status of every text and dataset in the app.

4.1 What You Can Use Freely (Public Domain)​

TextPublic Domain StatusAction Required
KJV BibleYes — 17th centuryNone
Book of Mormon textYes — confirmed by IRINone
Doctrine & Covenants textYesNone
Pearl of Great Price textYesNone
Adam Clarke's CommentaryYes — 1810–1826None
R.H. Charles OT Pseudepigrapha (1913)YesNone
Richard Laurence 1 Enoch (1821)YesNone
Strong's Exhaustive Concordance (1890)YesNone

4.2 What Requires Licensing (Do Not Use Without Permission)​

TextRights HolderContactPriority
LDS Topical Guide, footnotes, chapter headingsIntellectual Reserve, Inc.permissions.ChurchofJesusChrist.orgPhase 2
LDS Bible DictionaryIntellectual Reserve, Inc.SamePhase 2
JST footnotesIntellectual Reserve, Inc.SamePhase 2
BYU New Testament CommentaryBYU Studies801-422-6691Phase 2
Milik "Books of Enoch" (1976)Oxford University Presspermissions@oup.comPhase 2
Charlesworth OT PseudepigraphaHendrickson Publishersrights@hendricksonrose.comPhase 2

For MVP: Use only public domain texts. Build original study aids rather than reproducing copyrighted ones. Contact Intellectual Reserve early to understand the licensing process, even if you don't need their content at launch.

4.3 Contact Timeline for Licensing​

  • Month 1: Send initial inquiry to permissions.ChurchofJesusChrist.org — describe the product and ask what licensing options exist. Expect 45–90 day response.
  • Month 3: Follow up on IRI. Contact BYU Studies re: NTC.
  • Month 6: Contact Oxford UP and Hendrickson Publishers for Phase 2 scholarly texts.
  • Do not include any copyrighted text in the app or its data until written permission is received.

Both Apple and Google require specific legal documents before you can publish a paid app.

5.1 Apple Developer Program​

  • Enroll: developer.apple.com — $99/year
  • Required entity type: Individual or Organization. Use the LLC (Organization) — requires EIN
  • Required for app publication: Privacy Policy URL, Terms of Service URL
  • Apple's payment processing (StoreKit) is required for in-app subscriptions — Apple takes 15–30%
  • Familiarize yourself with App Store Review Guidelines §3 (payments) before building subscription logic

5.2 RevenueCat (Subscription Management)​

  • RevenueCat is the standard third-party layer for managing subscriptions across iOS/Android
  • Free up to $2,500 MRR, then 1% of revenue — acceptable
  • Handles: subscription status, trial management, webhook notifications, cross-platform sync
  • Sign up and review their terms before integrating

5.3 Privacy Policy Requirements​

A Privacy Policy is required by:

  • Apple App Store (mandatory)
  • Google Play (mandatory)
  • COPPA (if any users might be under 13)
  • GDPR (if any EU users — even unintentional)
  • California CCPA (if any California users — assume yes)
  • Utah Consumer Privacy Act (effective December 31, 2023)

The Privacy Policy must disclose:

  • What data you collect (account info, reading history, annotations, analytics)
  • How you use it (to provide the service, improve the product)
  • Who you share it with (Apple/Google for payments; hosting providers; analytics tools)
  • How users can delete their data
  • Contact information for privacy requests

Minimum viable approach: Use a reputable generator (Termly.io, ~$10–$30/month) for MVP. Replace with attorney-drafted policy before Series A or 10,000+ users.

5.4 Terms of Service Requirements​

Terms of Service govern the user's relationship with the product. Required provisions:

  • Subscription terms (what users are paying for, renewal, cancellation)
  • Refund policy (Apple governs most refunds, but your policy must be stated)
  • Acceptable use (what users cannot do with the app)
  • Content ownership (users own their annotations; GospeLib owns the platform)
  • Limitation of liability
  • Governing law (Colorado)
  • Dispute resolution (arbitration clause optional but common)

Part 6: Co-Founder & Early Team Considerations​

If you bring on a co-founder or early equity employees, these documents are required. Do not offer equity without them.

6.1 Co-Founder Equity​

  • Equity split must be documented in the Operating Agreement or a Co-Founder Agreement
  • Vesting is non-negotiable. Standard: 4-year vest, 1-year cliff. This means:
    • A co-founder earns 0% in their first year if they leave (the cliff)
    • After 1 year, they've earned 25%, then 1/48th per month thereafter
    • Without vesting, a co-founder who leaves after 6 months keeps all their equity forever
  • Include an IP assignment from each co-founder covering prior work related to GospeLib

6.2 Contractor Agreements​

Before any contractor writes a line of code or creates any design:

  • Signed Contractor Agreement with Work-for-Hire + IP Assignment clause
  • Scope of work clearly defined (prevents "I built more than you paid for" disputes)
  • Payment terms clear (milestone-based is better than hourly for predictability)
  • NDA included if contractor will see proprietary data (graph schema, AI prompts)

6.3 Advisors​

  • Advisor agreements should grant 0.1–0.5% equity (depending on value/involvement) on a 2-year monthly vesting schedule
  • Advisors sign an NDA and an Advisor Agreement — not a Contractor Agreement
  • Do not give equity to advisors who only have a vague "be available to chat" commitment

Part 7: Delaware C-Corp Conversion Checklist (Pre-Investment)​

When you're ready to raise a seed round or apply to a major accelerator (Praxis, YC, etc.), convert from Colorado LLC to Delaware C-Corp. This is a standard process, typically costing $1,500–$3,000 with a startup attorney. See BUSINESS-FORMATION-GUIDE.md for the full phased approach.

Pre-Conversion Checklist​

  • All IP is properly assigned to the LLC (verified by attorney)
  • All contractor agreements are signed and filed
  • Cap table is clean (all equity holders documented, no verbal agreements)
  • No outstanding equity disputes
  • Bank accounts, contracts, and licenses ready to transfer to new entity

Conversion Steps​

  1. Form new Delaware C-Corp (Articles of Incorporation, ~$90 filing fee)
  2. Assign all LLC assets (IP, contracts, bank accounts) to the C-Corp
  3. Issue founder stock (typically 8–10 million shares at $0.00001/share — the "83(b) election" is critical here)
  4. File 83(b) election with the IRS within 30 days of stock issuance — this is time-sensitive and missing it is expensive
  5. Dissolve the Colorado LLC ($10 filing fee) or keep it dormant
  6. Set up Delaware registered agent ($100–$300/year)
  7. File for Delaware franchise tax (due March 1 each year, minimum $400)

The 83(b) Election​

When you receive founder stock with vesting, file an 83(b) election with the IRS within 30 days. This tells the IRS you want to be taxed on the value of the stock now (when it's worth almost nothing) rather than as it vests (when it may be worth much more). Missing this window is a common, costly mistake. Your attorney will handle this, but make sure you ask about it explicitly.

Part 8: Insurance​

Not urgent at pre-launch, but required before onboarding institutional partners or investors.

Insurance TypeWhen NeededApproximate Cost
General LiabilityBefore BYU partnership or any public events$500–$1,500/year
Professional Liability (E&O)Before institutional/B2B sales$1,000–$3,000/year
Cyber LiabilityBefore collecting payment data at scale$500–$2,000/year
D&O (Directors & Officers)Before any investment (investors require it)$2,000–$5,000/year

For MVP/pre-investment: General Liability is sufficient. Get a quote from Hiscox or Next Insurance — both have online quotes for tech startups.

Priority Action List​

These are the items to complete this month, in order:

  • 1. Search Colorado business name availability + trademark search
  • 2. File Colorado LLC Articles of Organization ($50)
  • 3. Get EIN from IRS (free, 15 minutes)
  • 4. Open Mercury business bank account
  • 5. Draft Operating Agreement with IP Assignment clause
  • 6. File Colorado state trademark ($30)
  • 7. File federal trademark application for "GospeLib" — DONE (Serial No. 99715386, 3 classes, $1,050, filed 2026-03-20)
  • 8. Enroll in Apple Developer Program ($99)
  • 9. Send initial inquiry to Intellectual Reserve permissions
  • 10. Find a CPA who works with Colorado tech startups
  • 11. Schedule a 30-minute consult with a startup attorney (many offer free first calls)

Document sources: Colorado Secretary of State (sos.state.co.us), Delaware Division of Corporations (corp.delaware.gov), IRS.gov, USPTO, Apple Developer Program, Intellectual Reserve IP policies. See BUSINESS-FORMATION-GUIDE.md for detailed state comparison and trademark guide. Consult a licensed attorney before making final decisions.