Founder Note 003IP & AssetsPre-incorporation

Who Owns the IP in a Startup Before Incorporation?

By Ilyès, CEO & GoodFounder · 5 min read

Before incorporation, code, designs, domains and product assets often sit with individual founders. Without a clear assignment commitment, the future company may not clearly own what it needs.

Look at where your product actually lives right now. The code is in someone's personal GitHub. The domain is on one founder's registrar account. The designs are in a Figma tied to a personal email. The cloud bill hits one person's card.

This is normal. Early on, the product sits with whoever built each piece. It is not a scandal. But it is worth being honest about what it means: before incorporation, your intellectual property belongs to people, not to a company, because there is no company yet.

The risk is not drama. The risk is ambiguity.

When the company is finally formed, it needs to clearly own the thing it is built on. If the code, the brand and the key assets were never committed to the project, you can end up with a company that does not actually own its own product, and a founder who, on paper, still does.

The fix is not complicated. In the founder agreement, founders agree among themselves that the project IP is meant for the project and the future company, and each founder commits to assign or transfer that IP to the company once it exists, and to cooperate on the paperwork that makes it real. The same goes for assets and access: domains, repositories, cloud accounts and credentials should be on their way to the company, not stuck under one person's login.

One caution worth taking seriously. If any of you built on top of pre-existing work, or wrote code while employed somewhere with an IP clause, flag it early. That is exactly the kind of thing founders should raise with counsel before it becomes a problem.

The product should belong to the mission, not to whoever happens to control the login.

Ilyès, CEO & GoodFounder

Frequently asked questions

Does a founder agreement transfer IP to the company?

Not directly, because before incorporation the company does not exist yet. Founders commit to assign their project IP to the future company once it is formed, and to sign the documents that complete the transfer.

What if a founder used code from a former employer?

Flag it early. Pre-existing, third-party or former-employer IP should be disclosed and reviewed with counsel before incorporation, because it can affect what the company is free to own.

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Related notes

This is general information, not legal advice. Goodvernance does not provide legal advice. Learn more.