This is a common situation in the world of technology and startups, and it’s a good idea to take steps to protect your interests.
As a business owner who has had good and bad partners, you learn, even with all the bad lawyer jokes, you need a good attorney.
Here are some steps you can take whether you’re starting out or are already in business but never took the time to deal with structure:
- Formalize the partnership: Get a legal agreement drafted by a lawyer, specifying the terms of the partnership, the percentage of ownership, and the roles and responsibilities of each party. This agreement should also outline what happens in the event of a dispute and should include clauses related to any intellectual property that the app may generate. It should also include a clause about non-competition and confidentiality.
- Create a company: In many countries, you can create a company where both of you are shareholders, and the company owns the app. This way, even if your partner leaves the country, they can’t just take the app as it would belong to the company. It’s important to ensure that the shares of the company are split in the way you’ve agreed.
- Use a Source Code Repository: For the codebase, you could ask your partner to use a Source Code Repository like GitHub, GitLab, or Bitbucket where you both have access. This way, you always have access to the latest version of the source code, even if she leaves.
- App Store Ownership: The app can be published on the App Store under the company’s account, and both of you can have access. The earnings from the app can be set up to go to the company’s account, and then distributed according to the agreement you’ve set up.
- Patent or Copyright: If the app has some unique features or technology, consider getting it patented or copyrighted. This way, you have legal ownership of that technology, making it harder for someone to exclude you from the benefits.
These steps don’t guarantee everything will go smoothly, but they can help protect your interests.
Don’t skimp on the legal and don’t try and lawyer it on your own with templates you find online.
Trust is key in any business partnership, so it’s worth having an open and frank discussion with your friend about your concerns.
The process of setting up these safeguards can serve to strengthen your business relationship by ensuring that both parties feel secure.
I write seven days a week to help business owners and real estate investors:
✅ Accelerate value,
✅ Become better leaders,
✅ Access capital
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