START UP LEGALS: WHAT NOT TO F* UP!

What do you absolutely need to have covered at the start?

1. Manage Your Cap Table and Have a Mechanism to Deal with Leaver Shares

• Keep your cap table on a simple spreadsheet.
• Put simple Shareholder/Founder Agreements and bespoke Articles of Association in place as soon as possible.
  Tip: Don’t use anything fancy at this stage!

These agreements and articles work like a prenup—hopefully, you’ll never need to rely on them. But things happen: founders sometimes can’t stay the distance, and fallouts are sadly common.

The documents should outline:

• Founder roles, equity splits, and decision-making power.
• A conflict resolution process.
• Most importantly: What happens to a leaver’s shares.

Having these in place resolves disputes early and stops early leavers from keeping a large stake, which can be a major red flag for potential investors.

If you don’t have these documents, it can take so much time and money to fix that it could damage your startup beyond repair. (We’ve seen it happen...)

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2. Intellectual Property Ownership and Protection

• Ensure IP is transferred to the company.
• Protect trade secrets and confidential information.
• Register trademarks, patents, and other IP in the company’s name.

If this isn’t done early, it can be difficult or even impossible to fix later. If your company’s value is tied to its IP (e.g., brand, proprietary software), but you can’t show it’s owned by the company and properly protected, it’ll scare off investors, customers, and partners.

Here’s how to get it right:

• Use simple IP assignments from founders, freelancers, agencies, etc., for any IP they create (e.g., software, brand). Agreements like OneNDA work well.
• Register your brand and unique product names as trademarks in the countries where you operate. Use the correct specification and classifications to prevent others from using similar names.
• If you’re developing novel products or technology, consult a patent specialist early to determine if patent protection is possible. (Remember: it’s too late once you’ve launched.)

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Almost Everything Else Can Be Put in Place as You Scale.

If you want to discuss how we can help ensure you get these basics right, get in touch at info@legaledge.co.uk.

We also offer:

• A Cap Table and Corporate Document Review.
• A free Trade Mark Audit—perfect if you’re unsure whether your brand is protected or think your current documents aren’t fit for purpose.

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