Startup Pitch

10 Must-Have Legal Documents Every Startup Needs to Get Right from Day One

Legalwiki

29 May 2025 — 2 min read

Starting up is exciting, but skipping essential legal groundwork can cost you big later. Here's a simplified guide to the 10 most important legal documents (and registrations) every startup must have in place to stay protected, compliant, and investor-ready.

1.Founders' Agreement

This is a legal pact between co-founders that outlines roles, responsibilities, equity split, decision making authority, and conflict resolution. It prevents misunderstandings and ensures clarity from Day 1. If things go south, this document keeps things in check.

2. Incorporation Documents

These include the Certificate of Incorporation, PAN, TAN, and Memorandum & Articles of Association. They legally establish your startup’s identity and structure (Private Limited, LLP, etc.). Without this, your business technically doesn’t exist.

3. Non-Disclosure Agreement (NDA)

NDAs protect your confidential business information when sharing it with employees, freelancers, investors, or potential partners. It ensures your ideas, strategies, and trade secrets aren’t misused or leaked.

4. Employment Contracts

This agreement defines the relationship between the startup and its employees' covering salary, roles, IP ownership, confidentiality, and termination terms. It safeguards both parties and prevents future disputes.

5. IP Assignment Agreement

It transfers ownership of intellectual property (like software, designs, or inventions) created by employees or consultants to the startup. This ensures that your company, not the individual owns all the creations.

6. Shareholders' Agreement

Essential when multiple people hold equity. This agreement outlines voting rights, transfer of shares, profit distribution, and exit terms. It protects the interests of both founders and investors and avoids boardroom chaos

7. Terms of Service

If your business has an app, SaaS, or website, this document governs how users interact with your platform. It sets clear boundaries, limits your liability, and defines acceptable use of your services.

8. Privacy Policy

Legally required if you collect user data. It explains what information you collect, why you collect it, and how you protect it. Transparency here builds trust and keeps you compliant with data protection laws like the DPDP Act.

9. Co-Founder Exit Clause

Part of your Founders’ Agreement, this defines what happens if a co-founder wants to exit the startup. It deals with equity buyback, non-compete terms, and role transition to prevent disruptions.

10. Investment Agreement

This agreement kicks in when you raise funds. It outlines the terms of investment, valuation, investor rights, and future obligations. Every funding round (angel, VC, SAFE note) requires a tailored version.

Bonus: Mandatory Local Registrations (Not Docs, But Must-Dos)

Not documents, but crucial for compliance. Depending on your business type and location, you may need: GST Registration, Shops & Establishment License, Startup India Registration, Professional Tax, MSME / Udyam Registration.

Final Thoughts:

Legal documents aren’t just “paperwork” they’re your startup’s shield. Getting these 10 essentials in place early can save you from major legal and financial headaches later

We at Legalwiki are organizing, Legalwiki Startup Pitching Competition, 2025 - an exclusive opportunity to pitch your idea in front of leading industry experts, get real-time feedback, mentorship, and win exciting rewards.

Winners will get a cash prize, mentorship to accelerate your idea, and an internship opportunity with Manupatra.

To update yourself with LegalNews, visit legalwiki.co