Lawyers for founders · Buenos Aires

Lawyers for founders in Buenos Aires: incorporating, splitting equity and going to market

Raskovsky & Asociados works with founders and young companies through the stretch that runs from the idea to formal operation: choosing the corporate vehicle, ordering the relationship among the shareholders, registering the trademark, closing the first contracts and hiring the first employee. It is the stage in which the most structural decisions of the project are made and, at the same time, the stage in which counsel is least often sought.

The reason is understandable. Early on there is no budget and everything feels more urgent than legal work. The problem is that almost none of these decisions is neutral: the corporate form conditions future financing, ownership of the product conditions the sale of the company, and the way the first collaborator was brought on board conditions an exposure that tends to surface years later, once the company has assets to answer with.

The corporate vehicle: SA, SRL or SAS

There is no single answer and no form that is better in the abstract. The choice depends on how many shareholders there are, on whether investors are expected to come in, on the business activity, on the degree of formality the company is prepared to sustain in its day-to-day operation, and on the jurisdiction where it will be registered.

It is worth bearing in mind that the registration regime for SAS has changed depending on the jurisdiction, so the merits of one form over another also depend on which registry is involved. This is a point we review against the rules in force at the time of incorporation, not those in force when the project was first conceived.

One criterion usually settles the discussion: if the plan contemplates investors, the structure has to be able to take in capital without being rebuilt. Reorganizing a company in the middle of a round is expensive, slow, and always negotiated from the weaker position.

The shareholders’ agreement: the document nobody signs in time

The bylaws say who the shareholders are. The shareholders’ agreement says what happens when the relationship among them stops working. They are different documents serving different purposes: the first is public and rigid, the second is private and adapts to what the shareholders actually agreed.

The usual objection is that it is unnecessary among people who trust each other. Experience says otherwise: the agreement is not signed because there is distrust, but because at the moment of a falling-out there is no longer any way to agree on anything. A sound shareholders’ agreement defines, at a minimum:

• What each shareholder contributes and how non-cash contributions are valued
• How equity vests over time and what happens if a founder leaves early
• Which decisions require a supermajority or unanimity
• How a stake is transferred and what rights the others have against that sale
• What happens in the event of deadlock, death or incapacity of a shareholder
• What commitments as to dedication, confidentiality and non-competition each one assumes

It is the document with the best ratio between what it costs and what it prevents.

Trademark and product: who owns what

Two assets account for much of the value of a young company: its brand and what it has built. Neither protects itself.

On trademarks, using a name does not confer exclusive rights by the mere fact of use: the Argentine system grants rights through registration. Before investing in brand identity it is worth running a prior-rights search and defining the classes in which protection is sought, because a trademark registered in the wrong class leaves precisely the core business unprotected.

On the product, the question is who built it. Where the product was built by a third party — a freelancer, an agency, a collaborator who later left — and there was no express assignment of rights, ownership may not sit where the founders assume. It is one of the most frequent findings in due diligence, and one of the most awkward to fix once an investor is already looking.

The first contracts the company goes to market with

A young company does not need a complete contractual framework: it needs a few documents, well drafted, that cover the actual operation. In most cases that minimum set includes:

• Terms and conditions, or a master services agreement
• Work orders or commercial schedules per client
• Confidentiality agreements to be signed before showing the product
• Contracts with critical suppliers and with those doing the development
• Assignment of rights over everything produced on commission

The clauses with the greatest impact are not the ones that look legal, but the commercial ones: what exactly is delivered, when it is deemed accepted, when the payment obligation arises, and how far liability extends if something fails. A contract with no cap on liability exposes the company to amounts that bear no relation to what it invoices.

The first hire

Bringing on the first employee is a turning point, and also where the most common exposure for young companies concentrates: sustaining under an invoice a relationship that is, in substance, employment.

Section 23 of the Employment Contract Law (LCT) presumes the existence of an employment contract by the mere fact that services are rendered. Where there is a set schedule, instructions, exclusivity and continuity, the label the parties gave the relationship carries little weight. The difference between registering from day one and waiting is not a difference in monthly cost: it is a difference in accumulated exposure, which becomes enforceable at the worst possible moment.

The genuinely independent contractor is a different case, and a perfectly valid one. What determines the classification is not the instrument signed but how the service is actually rendered, and that is the point we review before the arrangement becomes entrenched.

How we work

A partner handles the matter, with direct contact. At this stage that matters for a practical reason: almost every question a founder has is at once a corporate, contractual, employment and tax question, and answering them separately produces solutions that do not fit together. We work alongside the company’s accountant from the outset, because the legal structure and the tax treatment have to be a single decision.

When the project reaches the financing stage — rounds, convertible instruments, term sheets, due diligence — the work continues in the Start-Ups and Venture Capital practice. And if an employment, contractual or trademark dispute arises along the way, it is handled in-house, by the same team that already knows the structure.