I’ve seen founders spend six months picking fonts and three minutes on their legal setup. That ratio is backwards. Nobody has ever been shut down for bad typography. Plenty of businesses have been shut down — or sued, or fined — for missing the legal basics.
I’m not a lawyer, and nothing in this article is legal advice. What I can offer is a practical overview of what you need to have in place before your first sale, based on 20+ years of building businesses and advising startups through the Startup Burgenland accelerator. Think of this as a checklist that tells you where to start, not where to stop. For anything complex, get a real lawyer.
But here’s the good news: the legal minimum for launching is smaller than you think. You don’t need to spend thousands on legal counsel before your first sale. You need to cover a few essentials and then refine as you grow. If you are still deciding whether Austria is the right place to launch, I covered the full picture in should you start a business in Austria.
The Business Entity Question
Before you sell anything, you need to decide what legal structure your business operates under. This varies dramatically by country, so I’ll speak to general principles and European/Austrian specifics.
Sole proprietor / Einzelunternehmen. The simplest and cheapest option. No formation costs, minimal paperwork. You and the business are legally the same entity, which means personal liability for business debts. This is fine for testing and early-stage validation.
Limited liability company (GmbH in Austria, Ltd elsewhere). Separates your personal assets from business liabilities. More expensive to set up and maintain, with minimum capital requirements (EUR 10,000 for a GmbH in Austria, though you only need to deposit half initially). Worth it once you have real revenue or real risk.
My recommendation for people just starting: Begin as a sole proprietor. The overhead is minimal, and it lets you start selling this week instead of spending weeks on formation paperwork. For a detailed comparison of entity types, see my guide on GmbH vs. Einzelunternehmen. Transition to a limited liability structure when revenue or risk warrants it — usually when you’re earning enough that the tax and liability benefits justify the administration.
One important caveat: if you’re building something with significant liability exposure (medical products, financial advice, physical products that could cause injury), get proper legal advice on structure before your first sale, not after.
The Legal Pages You Need
If you’re selling online — which most of you are — there are specific pages your website or sales presence needs to have. Missing them isn’t just unprofessional; in the EU, it can result in fines.
Impressum (Legal Notice)
Required by law in Austria, Germany, and most EU countries. This page identifies who is legally responsible for the website. At minimum, it includes:
- Your full legal name (or company name)
- Your physical address
- Contact information (email and phone)
- Your business registration number (if applicable)
- Your VAT number (if applicable)
This isn’t optional. If you’re selling to customers in the EU and you don’t have an Impressum, you’re violating the law. The good news: it takes 15 minutes to write.
Privacy Policy
Required under GDPR if you collect any personal data from EU residents. And you almost certainly collect personal data — email addresses, payment information, analytics data, IP addresses through cookies.
Your privacy policy needs to explain:
- What data you collect
- Why you collect it
- How you store and protect it
- How long you keep it
- Who you share it with (payment processors, email providers, analytics tools)
- How users can access, modify, or delete their data
You can use a privacy policy generator (several good ones are free) as a starting point, but customize it for your actual data practices. A generic policy that doesn’t match what you actually do is worse than no policy.
Terms and Conditions / Terms of Service
This governs the relationship between you and your customers. For most early-stage businesses, the key elements are:
- What you deliver and what you don’t (scope of service)
- Payment terms and refund policy
- Limitation of liability
- Intellectual property rights (who owns what)
- Termination conditions (for subscriptions)
- Dispute resolution process
For your first version, keep it simple and honest. You can expand it as your business grows. What matters is that the basic agreement exists and is accessible before the customer pays.
Cookie Consent
If your website uses cookies (analytics, marketing tools, etc.), you need a cookie consent banner that lets users opt in or out. This is a GDPR requirement in the EU and increasingly expected globally.
Use a cookie consent tool (Cookiebot, CookieYes, or the free GDPR cookie consent plugins available for most website builders). Set it up once and forget about it.
Contracts and Agreements
For Service Businesses
If you’re selling services, you need a basic service agreement that covers:
- Scope of work (what you’ll do)
- Timeline (when you’ll do it)
- Payment terms (how much and when they pay)
- Revisions/changes (how scope changes are handled)
- Intellectual property (who owns the deliverables)
- Cancellation terms
You don’t need a 20-page contract. A clear, one-page agreement that both parties sign is sufficient for early-stage service businesses.
For Digital Products
If you’re selling digital products (courses, templates, software), your terms of service should cover:
- License terms (what the buyer can and can’t do with the product)
- Refund policy
- Delivery method
- Support terms (what help you provide and for how long)
For Physical Products
If you’re selling physical products, add:
- Shipping terms and costs
- Return policy (required by EU consumer protection law for B2C sales: minimum 14-day right of withdrawal)
- Product liability disclaimer
Taxes and Registration
Tax Registration
In Austria (and most EU countries), you need to register for tax purposes before you start earning revenue. This typically means:
- Registering your business with the local tax authority (Finanzamt in Austria)
- Applying for a tax number
- Determining whether you need VAT registration (in Austria, mandatory above EUR 35,000 annual revenue; optional below)
If you’re below the small business threshold (Kleinunternehmerregelung), you’re exempt from charging VAT, which simplifies your invoicing significantly. Most early-stage businesses qualify.
Invoicing Requirements
Your invoices need to include specific information mandated by law:
- Your name and address
- Customer’s name and address
- Invoice number (sequential)
- Invoice date
- Description of goods/services
- Amount and tax treatment
- Your tax number or VAT number
Use an invoicing tool from day one. Even a simple one. Manual invoicing leads to inconsistencies and missed requirements.
Insurance
Many founders skip insurance entirely. For some businesses, that’s acceptable risk. For others, it’s negligent.
At minimum, consider:
Professional liability insurance (Berufshaftpflicht). If your advice, services, or products could cause financial harm to a client, this protects you. Cost is typically EUR 200-500/year for small businesses.
Product liability insurance. If you sell physical products, this is essential. Required by EU law for manufactured goods.
Cyber insurance. If you handle customer data digitally (which is almost everyone), this covers data breach costs. Increasingly important and increasingly affordable.
The “Legal Enough to Launch” Checklist
Here’s the minimum viable legal setup, in order of priority:
- Business registration with your local authority
- Tax registration with the tax authority
- Impressum on your website
- Privacy policy on your website
- Terms of service covering your specific offering
- Cookie consent if you use cookies
- Basic service/product agreement for each sale
- Insurance appropriate to your risk level
You can complete items 1-6 in a weekend. Items 7-8 might take a few more days.
This checklist isn’t comprehensive. As your business grows, you’ll need to address employment law, intellectual property protection, international compliance, and more. But for your first sale? This is enough.
Don’t let legal become another form of procrastination. The goal isn’t perfection. It’s compliance at the minimum level that protects you and your customers. Get the basics in place, start selling, and refine as you go.
When to Hire a Lawyer
Specific situations where professional legal advice is worth the cost:
- You’re forming a company with co-founders (you need a shareholder agreement)
- You’re handling sensitive personal data beyond the basics
- You’re entering a regulated industry (healthcare, finance, food)
- You’re signing a contract worth more than EUR 10,000
- You’re hiring your first employee
- You’re raising investment
For everything else in the early stages, a combination of research, templates, and common sense will serve you well enough.
Takeaways
- Don’t skip the legal basics, but don’t let them delay your launch. Impressum, privacy policy, terms, and tax registration can be completed in a weekend.
- Start as a sole proprietor. Transition to an LLC/GmbH when revenue or risk warrants the additional structure and cost.
- Impressum and privacy policy are legally required in the EU. Not optional, not “nice to have.” Required.
- Use the small business threshold. If you’re below the VAT registration threshold, take advantage of the simplified tax treatment.
- Hire a lawyer for co-founder agreements, regulated industries, and large contracts. For everything else early on, templates and research are sufficient.
