diff --git a/LICENSE b/LICENSE
new file mode 100644
index 0000000..27ec27c
--- /dev/null
+++ b/LICENSE
@@ -0,0 +1,13 @@
+DO WHAT YOU WANT PUBLIC LICENSE
+Version 2, December 2004
+
+Copyright (C) 2024
+
+Everyone is permitted to copy and distribute verbatim or modified
+copies of this license document, and changing it is allowed as long
+as the name is changed.
+
+DO WHAT YOU WANT PUBLIC LICENSE
+TERMS AND CONDITIONS FOR COPYING, DISTRIBUTION AND MODIFICATION
+
+0.  You just DO WHAT YOU WANT TO.
diff --git a/README.md b/README.md
new file mode 100644
index 0000000..356fd20
--- /dev/null
+++ b/README.md
@@ -0,0 +1,123 @@
+# Codebase to Prompt
+
+`codebase-to-prompt` is a Rust-based CLI tool designed to bundle files from a directory into a single output file. It supports filtering files by extensions, respecting `.gitignore` rules, and formatting the output in Markdown, plain text, or console-friendly formats.
+
+## Features
+
+- **File Filtering**: Include or exclude files based on their extensions.
+- **Output Formats**: Supports Markdown, plain text, and console-friendly formats.
+- **Git Integration**: Optionally append the current Git hash to the output file name.
+- **Date Integration**: Optionally append the current date to the output file name.
+- **Line Numbers**: Include line numbers in the output.
+- **Hidden Files**: Optionally ignore hidden files.
+- **`.gitignore` Respect**: Optionally respect `.gitignore` rules.
+
+## Installation
+
+1. Ensure you have [Rust](https://www.rust-lang.org/) installed.
+2. Clone this repository:
+   ```bash
+   git clone <repository-url>
+   cd codebase-to-prompt
+   ```
+3. Build the project:
+   ```bash
+   cargo build --release
+   ```
+4. The binary will be available at `target/release/codebase-to-prompt`.
+
+## Usage
+
+Run the tool with the following options:
+
+```bash
+codebase-to-prompt [OPTIONS] [DIRECTORY]
+```
+
+### Options
+
+- `-o, --output <FILE>`: Specify the output file. Defaults to stdout if not provided.
+- `-i, --include <EXTENSIONS>`: Comma-separated list of file extensions to include.
+- `-e, --exclude <EXTENSIONS>`: Comma-separated list of file extensions to exclude.
+- `--format <FORMAT>`: Output format (`console`, `markdown`, `text`). Defaults to `console`.
+- `-d, --append-date`: Append the current date to the output file name.
+- `-g, --append-git-hash`: Append the current Git hash to the output file name.
+- `-l, --line-numbers`: Include line numbers in the output.
+- `-H, --ignore-hidden`: Ignore hidden files.
+- `-R, --respect-gitignore`: Respect `.gitignore` rules. Enabled by default.
+
+### Examples
+
+1. Bundle all `.rs` files in the current directory into `output.md` in Markdown format:
+
+   ```bash
+   codebase-to-prompt -o output.md -i rs --format markdown
+   ```
+
+2. Bundle all files except `.log` files, appending the current date and Git hash to the output file name:
+
+   ```bash
+   codebase-to-prompt -o output.txt -e log -d -g
+   ```
+
+3. Output all files to the console, including line numbers:
+   ```bash
+   codebase-to-prompt -l
+   ```
+
+## Development
+
+### Prerequisites
+
+- [Rust](https://www.rust-lang.org/) (latest stable version recommended)
+
+### Building
+
+To build the project:
+
+```bash
+cargo build --release
+```
+
+### Running Tests
+
+To run tests:
+
+```bash
+cargo test
+```
+
+### Code Structure
+
+- `src/lib.rs`: Core logic for file processing and bundling.
+- `src/main.rs`: CLI entry point.
+
+### Adding Dependencies
+
+To add a new dependency, update `Cargo.toml` and run:
+
+```bash
+cargo build
+```
+
+### Linting and Formatting
+
+To lint the code:
+
+```bash
+cargo clippy
+```
+
+To format the code:
+
+```bash
+cargo fmt
+```
+
+## License
+
+This project is licensed under the MIT License. See the [LICENSE](LICENSE) file for details.
+
+## Contributing
+
+Contributions are welcome! Feel free to open issues or submit pull requests.
diff --git a/src/lib.rs b/src/lib.rs
index 4bea666..c22a2cf 100644
--- a/src/lib.rs
+++ b/src/lib.rs
@@ -195,7 +195,7 @@ fn process_file_entry(entry: &DirEntry, writer: &mut dyn Write, config: &Config)
     let extension = path.extension().and_then(|s| s.to_str()).unwrap_or("");
 
     let apply_include_filter =
-        !config.include.is_empty() && !(config.include.len() == 1 && config.include[0].is_empty());
+        !(config.include.is_empty() || config.include.len() == 1 && config.include[0].is_empty());
 
     if apply_include_filter && !config.include.contains(&extension.to_string()) {
         return Ok(());