What to do next
Identify what was created before incorporation
Code, designs, brand names, prototypes and business method work created before the company existed cannot have been created by it. Absent an assignment from each founder, those rights typically sit with the individuals - which is the gap diligence finds.
Check for founder IP assignment agreements
A founder assignment transferring pre-incorporation and ongoing IP to the company is standard practice and frequently skipped by first-time founders. Look for one in the incorporation documents, the shareholders agreement or any employment agreement with the company.
Deal with a departing founder promptly
A founder leaving with unassigned IP is the highest-risk version of this. Address it as part of the separation, alongside share arrangements and any leaver provisions - not afterwards, when their leverage is at its highest.
What to prepare
Incorporation documents, any founder or shareholder agreement, employment or consulting agreements with the company, the development record showing who created what and when relative to incorporation, repository history you control, and correspondence about ownership expectations.
Possible legal pathways
A confirmatory assignment, which is straightforward while relationships hold and expensive once they do not. Otherwise a licence where full assignment is unachievable, a declaratory claim on ownership, or resolution alongside the wider shareholder dispute - which is often where this actually belongs, since IP is rarely the only issue.
Frequently asked questions
We built it before incorporating - who owns it?
Generally the individuals who created it, unless they assigned it to the company. The company cannot own what it did not exist to create.
Does being a shareholder mean the company owns my work?
No. Shareholding and IP ownership are separate. Contribution without assignment does not transfer rights.
A founder left and claims they own the code.
That claim may be correct if there was no assignment. Get advice quickly - this typically has to be resolved before a financing can close.
Can we fix it now?
Usually, through a confirmatory assignment, and far more easily while relations are good. Investors routinely require exactly this.
Is this an IP dispute or a shareholder dispute?
Frequently both, and they are usually best resolved together - IP is rarely the only issue when founders fall out.
This is general information, not legal advice. Laws vary by location and every situation is different — speak with a qualified lawyer about your specific circumstances.