One co-founder wrote most of the code before we incorporated. Who owns that IP, and how do we make sure the company does?
The short answer
Right now that co-founder personally owns the code, not the company, which is a fatal cap-table crack a diligence lawyer will find in five minutes. Every founder must sign an IP assignment agreement transferring all pre-incorporation and ongoing work product to the company. Do this at incorporation, in writing, before anyone raises. Verbal understanding that the code belongs to the startup is worth nothing when that founder leaves angry.
Go deeper, your way
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Why we picked it
The single clearest explanation of the two documents Indian founders confuse: the founders' agreement (equity, vesting, roles, IP, departure, signed at or before incorporation) versus the shareholders' agreement (investor voting rights, drag/tag, reserved matters, signed at your raise). It nails the timing rule that trips people up: sign before shares are issued, because you cannot bolt vesting onto already-issued shares without every founder consenting. It is blunt that IP a founder built before incorporation belongs to that founder personally until a formal IP Assignment moves it to the company, which is exactly what breaks a diligence during your first term sheet.
Founders' agreement governs the co-founder relationship; the shareholders' agreement layers in investor protections later, they are not the same document
Sign at or before incorporation and always before shares are issued, or vesting cannot be applied retroactively
Pre-incorporation IP stays with the individual founder until a formal IP Assignment Agreement transfers it to the company
Why we picked it
This is a ready-to-fill IP assignment and confidentiality agreement hosted on the government's own Startup India portal, so it is drafted for Indian law and free to use. It gives a non-lawyer the actual assignment and confidentiality language to adapt for a developer and get signed. Treat it as a starting point: it is written employer to employee, so swap the party labels for a contractor engagement and, ideally, have a lawyer glance at the final version.
Why we picked it
This is the checklist and the template in one, written for Indian Pvt Ltd reality, not a US Delaware copy-paste. It walks all nine load-bearing clauses (equity split, 4-year vest with 1-year cliff, good/bad leaver buy-back, roles, reserved matters and deadlock, IP assignment of pre-incorporation work, exit, dispute resolution) and gives a 16-clause template skeleton. Two India-specific traps it flags will save you a real fight: post-exit non-competes are void under Section 27 of the Contract Act, and any share-related term only binds the company once it is mirrored into your Articles of Association (per V.B. Rangaraj v. V.B. Gopalakrishnan).
Nine essential clauses plus a full template skeleton you can adapt: equity, vesting, leaver mechanics, roles, deadlock, IP, confidentiality, exit, arbitration
Post-termination non-compete clauses are unenforceable in India under Section 27, so lean on in-term restrictions and non-solicit instead
Vesting and buy-back terms bind the company only when written into the Articles of Association, not just the founders' side letter
