Legal Support for Startups: What to Secure While It’s Still Cheap
Most of a startup's legal problems stem from the early stage, when founders make verbal agreements and rely on acquaintance sole proprietors (FLPs) for code and design. These issues become noticeable during funding rounds, company sales, or when a co-founder departs. Legal support for a startup is cheapest at the beginning. Below are solutions where Ukrainian law operates differently than founders usually expect.
Founders: Why a 50/50 Split Blocks Exit
A 50/50 equity split carries a consequence rarely considered. Under Article 24 of the Law "On Limited and Additional Liability Companies," a participant holding a 50% stake or more can exit the company only with the consent of other participants, and the Supreme Court confirmed that the second participant has the right to withhold this consent. Thus, each of the two founders can block the other's exit. The law allows including a right to exit without consent in the articles of association, but such a clause requires unanimous approval by all participants. Adding it during registration is simple, whereas in the heat of a conflict, a unanimous decision will no longer be possible.
From day one, register GitHub, domains, cloud services, and advertising accounts under the company rather than individual founders. For details, see the article on legal support for businesses.
Product: Who Owns the Code, Design, and Generated Content
Since 2023, economic rights to commissioned works automatically transfer to the client by default (Article 15 of the Law "On Copyright and Related Rights"). However, if a contract with an independent developer mentions only the "provision of services" without specifying work creation or rights assignment, the transfer of rights can be challenged. An agreement transferring economic rights must be concluded in writing; otherwise, it is void (Article 1107 of the Civil Code of Ukraine). Oleksandr Syrets, legal advisor at MAS Legal, writes about this risk in his analysis of IT company risks.
For graphic design, the same article makes an exception. Rights to a commissioned work of fine art remain with the author unless the contract specifies otherwise—excluding works specifically created as elements of a computer program. The law classifies drawings and graphic designs as fine art. Therefore, the client acquires rights to app interface icons, whereas a logo or marketing illustrations created by the same designer remain with the designer unless explicitly specified in a separate contract clause.
AI-generated content created without human creative input does not constitute a copyrightable work; thus, no copyright arises. The law grants a distinct sui generis right for such objects for 25 years (Article 33). If a designer or agency generates banners or illustrations, a contract covering only standard copyright may not extend to these objects, so rights to generated content should be specified separately.
Team: Sole Proprietor (FLP) vs. Gig Contract
For a Diia.City resident, a gig contract transfers rights without additional conditions: economic rights to IP created under it belong to the resident unless the contract specifies otherwise (Article 24 of the Law "On Stimulating the Development of the Digital Economy in Ukraine"). No such rule exists for standard contractors/sole proprietors, so IP transfer clauses must be drafted into every agreement.
Investors: Trademark Prior to the Round
Before a funding round, investors' legal teams review contracts with everyone involved in product development along with intellectual property rights. According to an EPO and EUIPO study, European startups that filed for a trademark at an early stage were 4.3 times more likely to secure venture funding. While this indicates correlation, trademark applications should always be filed under the company's name rather than the founder's.
EU Market: What Applies Right Now
The GDPR applies to a Ukrainian company without an office in the EU if it offers services to individuals in the EU or monitors their behavior. In such cases, a formally designated EU representative is usually required. As of August 2, 2026, transparency rules under the AI Act apply—including for third-country providers: users must be informed when interacting with a chatbot, and generative system content must be machine-readably marked. Requirements for high-risk systems under the AI Omnibus have been postponed to December 2, 2027, and typically do not apply to support chatbots. The European Accessibility Act, effective June 28, 2025, mandates accessibility for e-commerce and consumer services in the EU while exempting micro-enterprises offering services (under 10 employees and turnover up to €2 million).
The Minimum Essentials at the Start
An exit clause in the articles of association, written agreements with explicit IP transfer for all product contributors, trademarks, domain names, and accounts registered to the company, alongside GDPR, AI Act, and accessibility compliance checks before EU expansion. The attorneys at MAS Legal Solutions provide legal support for startups, ranging from corporate documentation to investment round preparation.
Sources: Analysis based on the Law of Ukraine "On Limited and Additional Liability Companies" (Article 24) and the Supreme Court position in Case No. 910/13957/19, the Law of Ukraine "On Copyright and Related Rights" (Articles 1, 15, and 33), the Civil Code of Ukraine (Article 1107), the Law of Ukraine "On Stimulating the Development of the Digital Economy in Ukraine" (Article 24), EPO and EUIPO study "Patents, trade marks and startup finance" (2023), Regulation (EU) 2016/679 (GDPR, Articles 3 and 27), Regulation (EU) 2024/1689 (AI Act, Articles 2 and 50) as amended by Regulation (EU) 2026/1744, Directive (EU) 2019/882 (European Accessibility Act), and materials from MAS Legal Solutions regarding IT company risks.
