A little off-topic, but how should one go about incorporating their side project/saas? Is it ok to start off as a sole proprietorship and later set up a LLC? I'm sure a lot also depends on local laws etc.
It depends. If you are doing a side project next to your regular employment, i would avoid creating any legal entity unless strictly necessary. Why? You add legal obligations to yourself. When you are starting up as solo-entrepreneur, try to minimize distractions and put all efforts in validating the product idea and ship it to your first customers. Sometimes these customers require you to have the legal papers, you take care of these when it is needed to seal the deal.
There could be other reasons. Take for instance my own case. I started freelancing and do side projects. In this case I approached it with a reason. Namely my revenue as freelancer is funneled into my side projects. This means expenses i make like purchasing other services, SaaS or tooling to support my side projects are written off my revenue. Im re-investing my revenue into other venues.
As my side projects are maturing i’m switching now to a limited liable legal entity from self-proprietary.
There could be other reasons. Take for instance my own case. I started freelancing and do side projects. In this case I approached it with a reason. Namely my revenue as freelancer is funneled into my side projects. This means expenses i make like purchasing other services, SaaS or tooling to support my side projects are written off my revenue. Im re-investing my revenue into other venues.
As my side projects are maturing i’m switching now to a limited liable legal entity from self-proprietary.
Hope this gives you some ideas.