The Legal Checklist Every Startup Should Complete Before Talking to Investors

If you're a startup founder in India, you already know — raising investment is not just about a pitch deck or a hockey stick graph. Investors don’t write cheques until your legal house is in order.

Whether you’re preparing for a seed round, angel funding, or a Series A raise, having the right legal documents in place is crucial to avoid delays, rejections, or even term sheet withdrawals. Worse, missing pieces in your compliance puzzle can lead to loss of control, IP theft, or legal disputes — all of which are red flags for VCs.

This article breaks down the ultimate legal checklist every Indian startup should complete before speaking to investors, along with pro tips from our legal experts at Scribius.

The Ultimate Startup Legal Checklist

1. Founders’ Agreement (or Co-Founder Agreement)

Why it's critical: It defines roles, equity splits, vesting schedules, and exit rights.

✅ Include:

• Role & responsibilities

• Equity distribution & vesting

• Exit/termination clauses

• IP ownership clarification

🔍 Tip: Make sure the IP created is assigned to the company, not to individual founders.

2. Incorporation Documents

Investors expect your business to be properly structured — usually as a Private Limited Company under Indian Companies Act.

Required:

• Certificate of Incorporation

• PAN & TAN

• Articles of Association (AoA) and Memorandum (MoA)

• GST Registration (if applicable)

Scribius Pro-Tip: Convert from LLP to Pvt Ltd before fundraising — investors usually won’t fund LLPs.

3. Intellectual Property (IP) Ownership

Your product, brand name, and software must be protected — and the company should own it, not the founder personally.

Required:

• Trademark registration (name, logo, brand)

• Copyrights for code, content, UI/UX

• IP assignment deeds from all employees & contractors

Investors will ask: “Who owns the IP?” — have clean documentation ready.

4. Employment & Consultancy Contracts

Early hires are often informal — but VCs need clean paperwork for every person who touched your product.

Documents:

• Offer letters & employment contracts

• NDAs & non-competes

• IP assignment clause in each contract

• Contractor agreements with scope & deliverables

5. Shareholder & Capitalization Documents

Clear cap tables prevent future disputes and dilution issues.

Must-Haves:

• Capitalization table (Cap Table)

• Share certificates issued correctly

• Board & shareholder resolutions

• Any previous investment agreements (SAFE, CCD, SHA, etc.)

6. Financial & Regulatory Compliances

Nothing slows down due diligence like an unfiled ROC form or overdue GST. Not to mention, fines racking up and even the possibility of getting de-listed.

Compliances:

• ROC Filings (Form AOC-4, MGT-7, etc.)

• Income Tax filings (past 3 years if applicable)

• TDS & GST Returns

• Startup India DPIIT Certificate (if applicable)

7. Legal Policies (Especially for Tech/E-com Startups)

If you’re a SaaS, fintech, or D2C startup, your website/app must have user-facing policies.

Mandatory:

• Terms of Use

• Privacy Policy (especially for B2C & global users)

• Cookie Policy (if applicable)

• Refund & return policies (for D2C/e-commerce)

Common Mistakes That Scare Away Investors

❌ No formal founder agreement
❌ Company doesn’t own the IP
❌ Unclear cap table
❌ No contractor documentation
❌ Trademark belongs to individual, not company
❌ Past compliances not filed — especially MCA forms

Need Help? Scribius Can Set It All Up in < 7 Days

We offer a fast, founder-friendly legal pack starting at ₹12,500/month that includes:

✅ Founder Agreement
✅ IP Transfer + TM Filing
✅ Employment Docs
✅ Legal Policies
✅ Shareholder & Equity Docs
✅ Clean-up of past ROC/GST/I-T filings

📞 Book a Free 15-Min Discovery Call Now »

Frequently Asked Questions (FAQs)

Q1. Can I raise funds without a co-founder agreement?
Technically yes, but most investors won’t proceed without one. It's a red flag.

Q2. Do I need a trademark before fundraising?
Yes. A brand without a registered trademark may face IP risks, and investors see that as a liability.

Q3. What’s the minimum legal setup I need to raise a seed round?
A Pvt Ltd company, founder agreement, clean cap table, employment agreements, and IP assignments.

Q4. Can Scribius help with foreign investors’ compliance too?
Yes. We provide FEMA advisory, FDI reporting, and cross-border structuring support.

Final Words

Legal groundwork isn't just red tape — it’s your startup’s foundation.
Don't let messy paperwork kill your funding chances. With the right legal partner, you can focus on growth, not worry about compliance.

👉 Schedule a Free Legal Strategy Call Now →