A founders agreement before incorporation: what should founders settle first?

You are building an MVP together. One founder has registered the domain, another controls the repository, and everyone expects the future company to own the product. Before you incorporate, write down how that will actually happen, along with the decisions, contributions and departures that could change the project.

A founders agreement helps settle the rules while the founders still share a direction. Money, an investor, exhaustion or a change of priorities can make the same conversation much harder later. Clear arrangements give trust something practical to work with.

In my own startup project, we prepared a founders agreement at the idea stage, before the company formalities. It gave us a shared language for questions we would have had to answer anyway. The useful part was discussing the choices early, rather than waiting for a corporate document to resolve them for us.

Agree how the relationship works while you can still discuss the difficult scenarios calmly.

What you will learn

What does a founders agreement do?

A founders agreement is a contract between the people building the startup. It often comes before incorporation or alongside the preparation of company documents. It describes both the intended ownership arrangements and the practical relationship between the founders. These commercial choices are common in startup practice; their legal implementation depends on the governing law and company form.

It should answer questions such as:

• Who contributes work, money, technology, contacts or existing assets?
• Why is equity divided in a particular way?
• What happens if a founder leaves?
• Who owns the code, brand, domain, design and other product assets?
• Which decisions require everyone’s consent?
• What happens when a decision cannot be made?
• How will an investor, employee equity plan or sale affect the founders?

For a Polish company, distinguish this agreement from the articles of association, commonly called umowa spółki. Those are part of the company’s corporate framework. A founders agreement deals more directly with how the founders will cooperate, but it does not replace that framework.

At an early stage, the product can move faster than the paperwork. A domain bought personally, a repository created under an individual account and code written before incorporation do not become company assets merely because the team calls them “ours”. Record what exists and how the future company will obtain the rights or access it needs.

When should you sign it?

A useful moment is when the project is concrete enough to discuss contributions and responsibilities, but before incorporation, outside investment or a serious disagreement. That might be when you start an MVP, incur shared costs, divide responsibilities or talk to a first customer.

You do not need to prepare a complete investment agreement at that stage. The document should fit the project. A practical early agreement can identify the main rules and specify which arrangements must later be implemented through company, IP or investment documents.

Waiting until a conflict means negotiating under pressure. Starting too early with an elaborate document that tries to predict every future round can also prevent the team from agreeing the essentials.

How does it help with a Polish company’s formation?

The founders agreement turns assumptions into choices that can be carried into incorporation. Three questions deserve particular attention.

Which company form fits the project?

A spółka z ograniczoną odpowiedzialnością, usually shortened to sp. z o.o., is a Polish limited liability company. A prosta spółka akcyjna, or PSA, is a distinct Polish company form commonly described in English as a simple joint-stock company. These are different corporate structures, not interchangeable labels for a foreign company form.

The choice affects contributions, equity, investment arrangements, governance, employee incentives and ongoing administration. A bootstrapped product, a business preparing a VC round and a company serving enterprise customers may have different needs. The Polish Kodeks spółek handlowych sets out the corporate framework; this official source is in Polish.

What should the cap table look like?

An equal split can be appropriate, but it should follow a discussion of contributions, risk, time commitment and future vesting. The cap table should not be the accidental result of avoiding that discussion.

Record the reasoning. It helps distinguish a real change in contribution from a later feeling that the split is unfair. It also gives an investor a clearer account of how the ownership structure was built.

What needs to go into other documents?

Some promises can operate between founders as contractual obligations. Others need implementation through articles of association, corporate resolutions, IP assignments or investment documents. Depending on the company form and the arrangement, these may include:

• Transfer restrictions and priority rights.
• Corporate consents and rules of representation.
• Reserved matters and departure mechanisms.
• Contributions to the company.
• Transfer or licensing of IP.

A private agreement and company documents that say different things can be difficult to implement. Check the relationship between them before a decision or transfer is needed, including any applicable Polish formal requirements.

What should the agreement cover?

The project and its direction

Describe what the team is building, the intended market, the business model and the basic assumptions behind cooperation. This need not repeat the pitch deck. It should help resolve a later disagreement about whether you are building a SaaS product, a software services business or a marketplace.

Equity and contributions

Explain the equity allocation by reference to actual contributions and commitments. Those might include existing technology, sales relationships, financing, personal risk, operational work and full-time or part-time involvement.

Avoid treating the initial split as a complete answer to future contribution. Agree what happens when someone cannot deliver the expected work or the project changes direction.

Vesting and departures

Vesting links the founder’s economic interest to continued involvement over time. Without a departure mechanism, an early leaver may retain a significant stake while the remaining team does the work needed to grow the business.

Set out the vesting period, any cliff, what happens on departure, buyback or transfer arrangements and exceptions. For a Polish company, the implementation must fit the company form, the corporate documents and the applicable formalities. Copying a foreign template does not establish that the mechanism can be carried out locally.

Distinguish good leaver and bad leaver situations by their consequences. A departure for health reasons or with the team’s agreement may justify different terms from a serious breach or abandonment of the project. Address equity, payment, handover, access and continuing obligations rather than relying on the labels alone.

Responsibilities and decisions

Even when everyone does a little of everything, assign responsibility for product, technology, sales, finance, legal work, compliance and investor relations. The arrangements should allow the team to adapt while making it clear who owns an important task.

Separate day-to-day authority from reserved matters, which require specified consent. Examples include issuing equity, admitting an investor, selling key IP, materially changing the business model, taking on substantial liabilities or selling the company.

Define the threshold and the process. A broad statement that “important decisions require consent” leaves too much room for disagreement about what counts as important.

Deadlock

A deadlock is an inability to make a decision under the agreed governance rules. It can concern funding, product direction, a pivot or a sale. A 50/50 structure is an obvious example, but other consent arrangements can also create an impasse.

Possible routes include another discussion round, mediation, a casting vote for specified matters or an agreed exit process. The mechanism must fit the team’s finances, ownership structure and stage. A forced purchase process can have very different effects on founders with unequal access to money.

Rights to the product

Identify pre-existing code, design, documentation, branding, domains and other assets. Record who created them, who holds the rights and what will be transferred or licensed to the company.

Also decide how new IP will be documented and how the company will control repositories, accounts and domains after incorporation. An investor or enterprise customer may want evidence of the rights, not just an assurance that the founders agree the product belongs to the business.

Confidentiality and other projects

Founders see information the startup may need to protect: code, roadmaps, customer terms, financial data and investor discussions. Agree how that information can be used, how conflicts of interest will be handled and whether founders may run competing projects.

Any confidentiality, non-solicitation or competition restrictions should be written for the actual relationship and checked against the applicable Polish rules. A restriction that looks comprehensive but cannot operate as intended does little to protect the business.

Investment and employee incentives

An early agreement can anticipate investment without pretending to be a full financing document. Discuss priority or pro-rata rights, tag-along and drag-along arrangements, dilution and consent to transfers. These choices will later need to work with the company’s and investor’s documents.

If the team plans employee equity or phantom shares, discuss the intended pool and its effect on ownership early. A cash incentive linked to company value and an actual equity programme have different legal and commercial mechanics.

Common mistakes

The most costly omissions are often basic:

• Deferring the discussion until an investor or conflict forces it.
• Allocating equity without considering vesting or an early departure.
• Assuming the company owns IP without implementing the transfer.
• Leaving decision rights and reserved matters unclear.
• Allowing the founders agreement and corporate documents to conflict.
• Using provisions too vague to apply in a real dispute.
• Making an early document so complex that nobody signs it.

The agreement should fit the stage of the project and give the team rules it can actually use.

Is the agreement enough on its own?

Usually, further documents are needed to implement it. These may include articles of association, resolutions, IP assignments, arrangements for domains and accounts, investment agreements and employee incentive documents.

Treat the founders agreement as a record of the decisions and a plan for implementation. Review which actions need to happen before incorporation, on incorporation and before taking investment or signing an enterprise contract.

A checklist before incorporation

Put the decisions into documents that work together

A founders agreement cannot guarantee that the founders will always agree. It can make sure that difficult questions are discussed while the relationship still allows a considered answer.

That becomes valuable when an investor, cash-flow pressure, a pivot or someone’s departure changes the project. For a startup incorporating in Poland, the next step is to translate those decisions into a consistent set of documents under Polish law.

See our legal support for startups in Poland or discuss your founders arrangements.