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3 Comments

How to onboard someone in pre-incorporation phase?

Hello IH,
My startup is in pre-incorporation phase. I am planning to partner up with a sales/marketing guy. At this moment, I am planning to collaborate with him on 3 month probation to start with.
In this 3 month period I want to understand his working style, lead generation and his way to attack a problem. Once I feel he is a great fit, I would like to get him on board as a permanent employee and share equity percentage.
Since my startup is still in pre-incorporation phase how should I design the contract around above?

Please advice.

  1. 1

    One pretty easy hack in most jurisdictions is to create a sole proprietorship corporation as 'umbrella company' for all of your projects or companies. In this case, the equity of this business would be owned by your SP company and you could legally employ or do contract work under the name of your SP company for the time being.

    Creating a sole proprietorship company usually only requires a bit of paperwork and $100-$200.

  2. 1

    In my opinion, the first thing I would want to figure out is the employment status. Are they going to be directly employed by you (employee) or they a freelance just offering you service as and when required (self-employed).

    If they are an employee, then you will need an employee contract stating that the first 3 months are a trial period ect ect, you can find templates online to give you an idea ( worth getting actual legal advice in my opinion)

    If they are going to be freelancing to begin with, then you will need service agreement (again you can find a template online, but worth getting legal advice)

    I hope that was of some help...

    1. 1

      So I want to hire him as an employee but since my startup is yet not incorporated, how can I get an employee contract?
      I have seen some pre-incorporation founder contract but not sure if they are the right contract here.
      Thanks!!

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