IP, Co-Founder Disputes, and Code Ownership: Legal Safeguards for SaaS Startups

If you're building a SaaS company in India, your product might be code, but your real value is ownership — of that code, your brand, and the business itself.

In the early days, most founders skip the legal cleanup. It’s easy to assume: “We’re building together. We’ll figure it out later.”

Until “later” becomes a team exit, a fight over equity, or worse — a claim that someone else owns the IP behind your core platform.

If you want to avoid founder drama, code ownership disputes, or losing control of your own product, you need a few legal basics in place. Not when you raise. Now.

1. Co-Founders: Friendly Until They’re Not

You can build the best software in the world, but if your co-founder walks out with half the code and 30% of the company, you're stuck.

That’s why a founders’ agreement isn’t a formality — it’s your foundation.

You need to cover:

● Who’s doing what (and what happens if they stop)

● Equity split (not just handshake promises)

● What if someone quits? What if you disagree on direction?

● Who owns the code, designs, customers, trademarks — everything

❗Without a written agreement, default Indian partnership laws apply — and those are not startup-friendly.

And please, add a vesting schedule. If someone leaves six months in, they shouldn’t own 25% of the company forever.

2. IP ≠ Yours Unless It’s Assigned

Here’s a hard truth: just because someone wrote code for your startup doesn’t mean your

startup owns it.

Unless there's a contract that clearly says:

“This work belongs to the company — not the individual who created it.”

You’re open to disputes.

Get this in writing with:

● Employees — use IP assignment clauses in their offer letters

● Freelancers & contractors — always sign agreements that transfer code/design/IP

● Co-founders — yes, even among friends, put it on paper

Without this? A person who hasn’t worked with you in years might still have a legal claim over

your product.

3. Register What You Can — Especially Your Brand

You don’t have to register every piece of code. But you should protect:

● Your startup’s name and logo (trademark)

● Any unique content (copyright)

● Any patent-worthy innovations (rare in SaaS, but possible)

Why? Because the day you launch publicly or raise funds, your brand is exposed. And anyone

can try to copy — or worse, register it before you do.

We’ve seen startups have to rebrand before Series A because someone else

trademarked their name.

Don’t wait. File early.

4. When Founders or Devs Leave, Does the IP Stay?

Only if you made sure of it. And you’d be shocked how often this gets missed.

You need clauses that say:

● Code written during their time at the company stays with the company

● Anything created with company time, tools, or resources belongs to the company

● They can’t reuse it in a future project or startup

Also worth including: non-solicitation and non-compete clauses, within legal limits, to protect

against them taking your team or clients with them.

This isn’t about paranoia. It’s about clarity.

5. Clean Up Your Cap Table and Docs Before Fundraising

Investors hate uncertainty. The moment they ask:

“Who owns the IP?” and you say “Well, technically the code’s on GitHub and we had a freelancer build the backend” — you’ve already lost leverage.

Before raising, make sure:

● All IP assignments are signed

● Cap table reflects only vested, confirmed equity

● ESOP policies are filed correctly

● Brand is trademarked (or at least applied for)

If you can't prove you own your product, it's very hard to raise money on it.

Real Talk: You Don’t Need More Contracts. You Need the Right Ones.

Legal is annoying — until it saves your company.

You’re not locking down these docs to be rigid. You’re doing it so you can move fast without

looking over your shoulder.

If you care about product velocity, clean ownership, and keeping future investors confident —

this is non-negotiable.

At Lex Certitude, we help Indian SaaS startups protect their code, their brand, and their cap

table — before it becomes a fight.

Want to run a quick audit of what you’ve got signed — and what’s missing? Reach out to

us contactus@lexcertitude.com

Legal Disclaimer

This article is intended for general guidance only. IP ownership and founder agreements may

vary based on company structure and jurisdiction. Always consult legal counsel for documents

specific to your situation.