Guides › Incorporated to Operational

Incorporated to Operational in progress

The follow-on guide to The $500 Founder Guide. Once you have the entity, EIN, bank account, and email working, this guide picks up the next leg — turning an incorporated shell into a company that's correctly registered with the state and federal systems you actually need, insured against the risks that grow with operations, and compliant with the employer rules that kick in as you start hiring.

For grant-submission account setup (SAM.gov, Login.gov, ORCID, SciENcv, DOE PAMS, etc.), see Setting Up to Submit Federal Grants. For where to find SBIR/STTR funding opportunities, see SBIR Agency Links & Resources. This guide focuses on the operational layer underneath those.

OSHA — when does it apply to you?

OSHA's general-duty clause applies to almost every U.S. employer from day one, but most of the heavier obligations — written programs, recordkeeping forms, posting requirements, and reportable-injury thresholds — kick in once you cross specific headcount thresholds.

A practical rule of thumb: once your company has 15 or more workers in a single calendar year — counting both W-2 employees and 1099 contractors — you should assume full OSHA scope applies and that you'll be expected to maintain written safety programs, Hazard Communication / SDS files, and the recordkeeping forms covered in the Hiring & R&D Safety guide. Below that, you're still on the hook for general-duty safety and for any state-specific rules (state OSHAs are often stricter than federal).

Other compliance thresholds that scale with headcount include FMLA (50+ employees in a 75-mile radius), ADA (15+ employees), ADEA (20+ employees), and various state-specific employer mandates. Stub now — full treatment in the published version of this guide.

Insurance for hazardous-tech labs

If you're working with hydrogen, carbon-dioxide capture, lithium batteries, high-pressure systems, exothermic chemistry, controlled substances, biohazards, or any other class of hazard with real explosion, release, or contamination risk, standard small-business general-liability policies usually don't cover you correctly. Generic insurance agents often don't understand the chemistry or the engineering, mis-rate the risk in either direction, exclude the actual coverage you need, or quote policies that wouldn't pay out if something happened.

You want an agent who works with hard-tech R&D regularly.

Community recommendation

Multiple startups in the Science Founders community have used Tim Jiang at Lee Insurance to structure and price liability insurance for lab R&D operations. He's the agent we've consistently seen quote correctly and structure coverage that fits the actual risk profile of hard-tech operations.

Science Founders has no financial arrangement with Lee Insurance or Tim Jiang. This is a community referral based on member experience.

Tim Jiang — New Business Manager, Lee Insurance

Office: 212-962-2232 ext. 1221
Direct: 332-253-4381
Fax: 212-233-1421
31 Pell Street, New York, NY 10013
CA License: #0G47886

If you're in the climate-tech, energy, or hard-sciences hazard space and a generic broker can't quote you correctly, this is a useful next call.

What else this guide will cover

State and federal system registrations (beyond grants)

State tax registration — corporate income/franchise tax, sales & use tax permits, and any state-specific business-license registries for the state where you actually operate.
State employer registrations — unemployment insurance (SUI/SUTA) account, state income-tax withholding, workers' compensation insurance, and state new-hire reporting. Required before your first payroll runs.
Foreign-entity qualification — registering as a foreign entity in every state where you do real business beyond the state of formation (lab, employees, customers, leases — see §8 of The $500 Founder Guide for the trigger list).
Industry-specific federal registrations — FDA (food, drug, device, biotech), EPA (chemicals, emissions, waste), FCC (radio/wireless), DOT (transport of hazardous materials), USDA (agriculture and animal research), and others as they apply to what you actually make.

Insurance — D&O, GL, Product, R&D Lab

Directors & Officers (D&O) insurance — protects founders, officers, and board members from personal liability for company decisions. Investors will typically require it before or at the seed round; carry it earlier if you have an outside board.
General Liability (GL) insurance — base coverage for premises, operations, and bodily injury / property damage. The first policy any landlord, customer, vendor, or grant agency will ask for.
Product Liability insurance — required once you sell, distribute, or ship physical product (including evaluation units, demo equipment, and beta samples). GL alone does not cover product-defect claims; this is a separate line.
R&D Lab / Property & Equipment insurance — coverage for the lab space, instruments, lab contents, business-interruption, and equipment-breakdown. Often bundled with GL into a Business Owner's Policy (BOP) but scoped and priced separately. The hazardous-tech section above (Tim Jiang at Lee Insurance) is the right starting point for hard-tech operations.
Workers' compensation — state-mandated once you have employees; see also the Hiring & R&D Safety guide for the carrier landscape.
Cyber, E&O, and employment-practices (EPLI) — additional lines that become relevant as you take on customers, contracts, or employees.

Hiring, IP, and federal contracting

Hiring your first employee — payroll setup, state payroll registrations, offer letters, and IP assignment. (Worker classification — W-2 exempt vs non-exempt, 1099 — is already covered in Hiring, Managing & R&D Safety.)
IP assignments and invention disclosure — what every founder, employee, and contractor needs to sign before they touch anything technical.
Federal contracting basics (FAR primer) — cost-reimbursable vs. fixed-price, indirect cost rates, allowability, and what bridging-finance options exist when the payment clock is slow.

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