You have two separate problems. One belongs to the company: their shares, your agreements, and whether the code they wrote was ever assigned to the company. The other belongs to the product: who can run it, deploy it and fix it now. Secure every account the product depends on today, check that the company owns the code in writing, and get the product assessed by someone independent before deciding whether to hire, rebuild or relaunch.
What's the problem
The person who built the product has gone, and with them, everything they knew about it. You may hold the business relationships and the vision, but not the passwords, the deployment process, or any idea why it breaks when it does.
Why it happens
- Early-stage paperwork gets skipped. Founders often start building before anyone signs a shareholders' agreement or an intellectual property assignment. That's fine until someone leaves.
- A co-founder isn't automatically an employee. The rule that an employer owns its staff's work applies to employment under a contract of service. A founder who never had one may still personally own what they wrote, unless they assigned it to the company in writing.
- One person held everything. Admin rights to the code, the cloud account and the domain, plus all the knowledge of how it fits together.
How to fix it
- Make sure the company, not a person, holds every account. At least two trusted people should have owner rights on the code organisation, the cloud account and the domain.
- Remove or reduce the departed founder's access, and replace any keys and passwords they knew.
- Find the paperwork: the shareholders' agreement, any employment contract, and any IP assignment to the company. If there isn't one, ask them to sign one now, while things are civil.
- Get the equity side sorted with a lawyer. Vesting, buy-back of shares, and what happens to their stake.
- Get the product assessed. What works, what's fragile, what's undocumented, and what it would take to get it live and keep it there without them.
- Write down what you learn, so the product never depends on one person again.
Australian law
Under section 35(6) of the Copyright Act 1968 (Cth), an employer owns copyright in work an employee makes under the terms of their employment under a contract of service. If your co-founder wasn't employed by the company that way, the company may only own their code if they assigned it, and section 196(3) says an assignment has no effect unless it's in writing and signed. See who owns the code my developer wrote.
General information, not legal advice.
When to call Preventionlabs
The equity and the agreements are for your lawyer. The software is ours. Once the company holds the code and has the right to authorise work on it, the assessment is free. If we take it on, we get the product live, protected to MVP level and scalable, and hand it back with plain-language documentation on how it fits together and how to run, deploy and scale it. The knowledge stops living in one person's head.
Submit your project for a free assessmentFree assessment. $10,000 AUD flat to get it live, only if we take it on and you go ahead.
Sources
- Copyright Act 1968 (Cth): Section 35(6): works made by employeeslegislation, compilation No. 65
Where a literary, dramatic or artistic work to which neither of the last two preceding subsections applies, or a musical work, is made by the author in pursuance of the terms of his or her employment by another person under a contract of service or apprenticeship, that other person is the owner of any copyright subsisting in the work by virtue of this Part.
- Copyright Act 1968 (Cth): Section 196(3): assignments must be in writinglegislation, compilation No. 65
An assignment of copyright (whether total or partial) does not have effect unless it is in writing signed by or on behalf of the assignor.
- GitHub: Roles in an organizationofficial docs
Organization owners have complete administrative access to your organization. This role should be limited, but to no less than two people, in your organization.