Startup and MSME
Startup Legal Checklist for Indian Founders: Agreements, ESOPs and IP
By ATTPL Legal Editorial Team · · 2 min read
Seven legal foundations every startup should lock in before raising money: founders' agreement, IP assignment, ESOP policy and more.
Fix legal basics early
Most startup disputes come from missing paperwork, not malice. Cleaning it up before a funding round saves time and money.
Seven foundations
- Founders' agreement: roles, equity, vesting, exit and dispute rules.
- IP assignment: all code, designs and brand assets owned by the company.
- Employment and consultant contracts with confidentiality clauses.
- ESOP policy and grant letters that follow the Companies Act and tax rules.
- Customer and vendor contracts with clear liability and payment terms.
- Compliance calendar for ROC, GST, TDS and labour filings.
- Trademark registration for your name and logo.
Funding-ready records
Investors review the cap table, board minutes, share certificates and statutory registers. Missing or inconsistent records slow due diligence.
What belongs in a founders' agreement
Beyond equity split, a good agreement covers roles and time commitment, vesting with a cliff, what happens if a founder leaves, intellectual property assignment, non-compete and non-solicit terms to the extent enforceable, decision-making and deadlock rules, and how disputes will be resolved. Writing these down while the founders are friends is far easier than negotiating after a disagreement.
Revisit the agreement when you raise funding, since investors will introduce their own protective provisions.
Employment, consultants and confidentiality
Every person who creates code, designs or content for the startup should sign an agreement assigning the intellectual property to the company. Employment contracts should include confidentiality and clear notice periods. For freelancers and consultants, use written service agreements that specify deliverables, payment, ownership and confidentiality.
ESOPs and regulatory points
An employee stock option plan needs board and shareholder approvals, a clear grant letter, a vesting schedule and a method to value and exercise options. Tax treatment affects employees, so explain it clearly. Keep a ledger of grants, vesting and exercise to avoid disputes and speed up due diligence in funding or acquisition.
Support
ATTPL Legal's startup legal services work with ATTPL Consultancy for registration and compliance, so your legal and corporate setup stays aligned.
Frequently asked questions
When should I register a trademark?
As early as possible, ideally before public launch, so someone else cannot claim your name.
Do cofounders need a vesting schedule?
It is strongly recommended so that equity is earned over time and protects the company if a founder leaves.
Sources and further reading
This article is general information, not legal advice, and does not create a lawyer-client relationship. Laws and procedures change; consult a qualified advocate about your specific matter.
