How to handle the legal formality of cofounder leaving?

Question

My cofounder and I have been working on a project for like 2 months and we incorporated a month ago through Stripe Atlas as a C corp.He left recently due to disagreement and we're not on the best terms.But over texts he said that he hasn't vested the stocks so he assumes everything belongs to me and he will not be working on the project anymore. I wonder if there is any formal document he has to sign for it or just the existence of texts should be good enough.I know the conventional advice will be to be safe and talk to lawyers but lawyers are charging way more than it would cost me to just incorporate a new company tbh.The company is brand new so I don't feel bad about just letting go of it tbh. I am just cautious of any future claims he might make.

mtmail · Accepted Answer

I'd say get something written down, with a date and signature. It doesn't have to be fancy, it can be 1-2 sentences only. It should make clear what assets/rights are given up and that he made the decision with prior thinking about it. I don't think he'd claim the existing text messages are fake later but might claim it was meant differently, under influence (drunk) or pressured.
If the company is big in the future such a (former) founder can stirr up just enough hassle and doubt to look for some kind of payout, deserved or (more likely) not.
I've been in a similar situation (a company wasn't incorporated yet) but I got a nice signed letter. That gave me confidence I own assets, e.g. the logo, even though the other project person paid for it with his own money. I guess that also something to watch out for: did your co-founder pay for anything that isn't owned by company yet (e.g. domain registration).

muzani · Answer

The texts might be enough. But in my experience, if someone wants to fight over it, they will, and regardless of whether they're wrong or right, you'll just end up paying a settlement because it's not worth the fight.
In the same position, what I just do is incorporate a new company.
Not sure how much lawyers cost there, but normally talking to a lawyer is free around here. They charge money when you start dealing with paper. There's often a lot of nuances that doesn't make it into the story, which may change the real outcomes.