Who owns the business?

We met at a hackathon, developed a new business application, and registered a company. We did not have money for a lawyer, so we drafted an agreement ourselves, which set out the shareholding. We all signed it.

There was some work done on the app and there was a rough prototype. We didn’t generate any sales so we went our separate ways. One member of the team continued to develop the app and found a test site. With a little more work it was launched and sold through the Apple App Store. Sales began to pick up and eventually reached $200K in the first year.

The shareholders all meet to discuss what to do. Some wanted to take their share of the profits. The developer said he did all the work and was entitled to a larger share of the profits and that the business needed the cash to grow.

The shareholders were split 50-50 and could not reach a decision. The developer said he was quitting and setting up on his own. The others claimed they owned the intellectual property. Each had a different version of what they agreed to do when they started the business.