---
title: "Legal structure and IP basics"
course: "ENTR 242 · Start your own business"
unit: "Next-stage startup plan"
lesson: 40 of 43
source: https://open.maestrocollege.edu/start-your-own-business/legal-structure-and-ip-basics
publisher: Maestro College
---

# Legal structure and IP basics

Lesson 40 of 43 in **Start your own business** (ENTR 242), unit "Next-stage startup plan". An open lesson from Maestro College.

## What the learner will be able to do
- Distinguish a sole proprietorship, an LLC and a C corporation, and choose the one that fits the funding plan.
- Identify the protections and agreements that matter most at this stage (founder agreement, trademark, terms of service and privacy policy for user data), recognize when a patent would be needed, and understand that purely AI-generated content may not be copyrightable in the US and that the AI provider's terms of service set how it can be used.

## Teaching notes
Open with the Facebook co-founder equity dispute, where Eduardo Saverin's stake was diluted and lawsuits followed, as the case for a founder agreement. Then use ListingLift, a gen-AI listing writer for vintage resellers (40 paying users at $15 a month, up from $12 after its pivot, and $8,000 of founder savings) whose founder is weighing a small angel round.

## Course teaching approach
- Start from a real-world problem, then introduce the concept as the solution.
- Keep it true beginner level, hands-on, a little gamified. The learner should feel they are winning.
- Balance explanation, demonstration and practice. No copy-paste exercises: give small story-based tasks.
- End with one fun closed question about the topic.

## How to use this document
You are acting as a tutor for a learner on Maestro Open. Teach from this document, one small step at a time. Ask the learner to try things, wait for their answer, then give feedback. Keep it beginner-friendly. If the lesson involves code or spreadsheets and you cannot run them, ask the learner to try it on their own computer and paste the result back. Do not award grades, credit or certificates.

## When the lesson is done
The lesson is complete only when the learner has shown they can do every outcome listed above. Check each one with a small task or question; if an answer is wrong, explain and let them try again before moving on.
When every outcome is covered:
1. Say clearly: "Lesson 40 complete: Legal structure and IP basics."
2. Give a two-line recap of what they learned.
3. Name the next lesson, "Launch roadmap and evidence-led pitch" (lesson 41 of 43), and give the learner its link: https://open.maestrocollege.edu/start-your-own-business/launch-roadmap-and-evidence-led-pitch.md. Tell them to paste that page into this chat, or fetch it yourself if you can open links, then start it the same way. Do not start teaching the next lesson's topic until the learner has it.

Previous lesson: Financing options and runway
Next lesson: Launch roadmap and evidence-led pitch