You built the product before the company existed. Does the company actually own it?

A company is a separate legal person from its founders, and that separation cuts both ways. It gives you limited liability, but it also means the company owns nothing you created before it existed, not the code, not the brand, not a registered domain, purely because the company was later built around it. Ownership stays with whoever actually created the asset until it's formally, explicitly assigned to the company. "We'll sort the paperwork later" is a genuinely risky sentence here, because later is usually when it's discovered, not fixed quietly.

The assignment itself has formal requirements that a generic template or a rushed one-pager routinely misses. Under the Copyright Act, it has to be in writing and signed, identify the work, and specify what's being assigned. Miss the duration, and the law doesn't treat that as permanent, it deems the assignment to last just 5 years, after which the rights automatically revert to you personally, not the company. Miss the territorial extent, and it's presumed to cover India only, leaving the company without rights to the same code or brand the moment it starts serving customers, or raising money, outside India. Neither trap announces itself; the assignment looks perfectly valid on the day it's signed.

Before you can assign anything to the company, you need to have actually owned it yourself. If a freelance developer or an agency, in India or overseas, built the product before you incorporated, paying their invoice doesn't transfer their copyright. An independent contractor keeps ownership of what they create unless their own agreement with you contains an explicit assignment clause, something informal or verbally-arranged engagements frequently skip entirely. A founder who assigns "their" code to the company without ever having a valid assignment from the person who actually wrote it has assigned nothing.

Assigning IP to the company in exchange for shares, rather than cash, is common, and it isn't just a paperwork variant. It's a non-cash consideration, which needs a registered valuer's report before the shares can be allotted. Because you're a non-resident receiving those shares, FEMA's fair-value pricing rules and RBI reporting apply to the issue exactly as they would for any other foreign investment into the company.

On your own tax position, a self-generated trademark or brand name has a nil cost of acquisition, so the entire value you receive for it, in cash or in shares, is taxed as capital gains, not just the notional "profit" on it. The tax treatment of assigning self-created code specifically is a more case-specific question worth confirming with a CA before the structure is finalised, rather than assuming it mirrors the trademark position.