Three founders of a game development studio are celebrating investor interest. A term sheet is on the table, the valuation is attractive, and the deadline for closing the round is six weeks away. Two weeks later, the round falls through. Not because of the game. Not because of the market. Because no one knows who owns how many shares. The IP rights to the code formally belong to a freelancer who left six months ago. And the articles of association are based on the default S24 template, without a single provision protecting the founders.
Everyone in game development knows that a game’s IP must be protected. Few realise that the studio’s structure must be protected as well.
Despite the correction in 2023-2025, when at least 120 studios disappeared from the market and employment fell from approximately 15,300 to approximately 14,500 people, the Polish game development market still generates revenue of around PLN 5.5 billion and attracts investment capital. The problem is that corporate governance at many studios is failing to keep pace with product development. A lack of formal arrangements between founders, fragmented copyrights, and default articles of association block funding rounds, cause conflicts, and expose management boards to personal liability.
In this article, you will find a specific action plan: from auditing the ownership structure and securing IP rights to preparing the studio for investor discussions. Each recommendation is based on the provisions of the Commercial Companies Code and the Copyright Act, with an explanation of what they mean for your business.
Key concepts you need to know
Before we get into the details, it is worth clarifying the terminology. The concepts below come up in every investor discussion and every corporate audit of a game development studio.
| Concept | What it means in the context of a game development studio |
|---|---|
| Corporate governance | A set of rules determining who makes decisions in the company, how shareholdings are accounted for, and how the management board operates, the studio’s formal “operating system” |
| Shareholders’ agreement | An agreement between founders/shareholders governing the allocation of shares, exit rules, non-compete obligations, and dispute resolution mechanisms, it supplements the articles of association |
| Vesting | A mechanism under which a founder gradually acquires rights to shares in return for remaining with and working for the company for a specified period |
| Cap table | A shareholding table listing all shareholders and their percentage holdings, including the history of issuances and dilution |
| Deadlock | A situation in which shareholders cannot make a decision because the votes are evenly split, a decision-making impasse |
| Tag-along / drag-along | Protective mechanisms: tag-along allows a minority shareholder to join a share sale transaction; drag-along allows a majority shareholder to compel the others to sell |
| SPV (special purpose vehicle) | A separate legal entity established for a specific project/title, allowing the risks and finances of individual games to be separated |
| Chain of title | Documentation confirming that the company owns the economic rights to every element of the game (code, artwork, music, and script) |
| Due diligence | A legal and financial review of the company conducted by an investor before the transaction closes, it verifies the structure, documentation, and risks |
Why game development studios grow faster than their legal structures
The games industry has certain characteristics that cause corporate issues to accumulate faster than in other technology sectors.
Multiple projects. A studio develops two or three titles in parallel. Costs and revenue are mixed within one company. An investor interested in one title cannot invest in it “cleanly” because it is unclear which project is making money and which is generating losses.
A distributed creative team. A video game is a composite work consisting of source code, artwork, music, a script, and dialogue. Each element is subject to a different legal regime. Some are created by employees under employment contracts, some by B2B contractors, and some by overseas freelancers. Without written agreements transferring economic rights, the studio does not formally own the IP in its own game.
Informal arrangements between founders. Three friends set up a studio. They divide up their duties but do not formally allocate the shares. The articles of association use the default S24 template and include no vesting, dispute resolution mechanism, or restrictions on share transfers. No one thinks about this while the studio is not making money. When commercial success or an investor arrives, the conflict begins.
Time pressure during funding rounds. The investor wants to close the round within 6-8 weeks. Due diligence requires an orderly cap table, up-to-date National Court Register documents, an IP rights list, and key agreements. If the studio has not prepared these, the round is delayed or falls through.
According to data from “The Game Industry of Poland” report, 490-494 game developers and publishers operated in Poland in 2022, while the industry employed more than 15,000 people and generated revenue of approximately EUR 1,286 million. Almost 20% of developers and publishers were listed on the Warsaw Stock Exchange. These figures mean that hundreds of studios operate through structures that were not designed for investors or scaling.
Commercial Companies Code provisions that directly affect your studio
The Commercial Companies Code (consolidated text: Journal of Laws 2024, item 18) contains provisions that many founders only learn about during due diligence. The table below summarises those that are most important for a game development studio.
| Commercial Companies Code provision | What it governs | Implications for a game development studio |
|---|---|---|
| Article 159 | Special benefits and obligations of shareholders, they must be included in the articles of association or they will be ineffective | A founder’s obligation to transfer IP to the company, a non-compete obligation, and a requirement to provide services personally, if they are not included in the articles of association, the company cannot enforce them effectively |
| Article 174 | The principle of equal shareholder rights; preference shares (max. 3 votes per share) | Founders can retain control of the company after a financial investor comes on board, but the preference must be included in the articles of association |
| Article 180 | Form of share transfers, in writing with notarised signatures | Every change to the ownership structure requires a visit to a notary, adding cost and time |
| Article 182 | Restrictions on share transfers, the articles of association may make a transfer conditional on the company’s consent | Lock-up, right of first offer, and right of first refusal provisions must be included in the articles of association, provisions contained only in the shareholders’ agreement do not bind purchasers of shares |
| Article 230 | Transactions exceeding twice the share capital require a shareholders’ resolution | With share capital of PLN 5,000, the threshold is PLN 10,000, almost every publishing agreement requires a resolution; solution: increase the share capital or modify the threshold in the articles of association |
| Article 299 | Personal liability of management board members for the company’s obligations where enforcement against the company is ineffective | Founders serving on the management board are personally liable, with all their assets, for the company’s debts if they fail to file for bankruptcy in time |
Liability under Article 299 of the Commercial Companies Code, what it means for you
If enforcement against the company proves ineffective, management board members are jointly and severally liable for its obligations. This liability is personal and extends to all their private assets.
You can be released from this liability if you demonstrate that:
- You filed a bankruptcy petition at the appropriate time or an order opening restructuring proceedings was issued.
- Your failure to file the petition was not your fault.
- The creditor suffered no loss despite the petition not being filed.
Meeting just one of these conditions is sufficient. But to do so, you must monitor the company’s liquidity continuously and respond before it is too late. With informal decision-making structures, no one is responsible for this, until the management board is held responsible.
How to secure copyright in a game, employee vs. B2B contractor vs. freelancer
A video game is not a single work. It is a collection of separate elements, each subject to a different legal regime under the Act of 4 February 1994 on Copyright and Related Rights.
Two legal regimes in one project
Source code is classified as a computer program (Article 74 of the Copyright Act). If it is created by an employee as part of their employment duties, the economic rights belong to the employer automatically, without the need for a separate agreement (Article 74 § 3). This is an original acquisition.
Artwork, music, scripts, and dialogue are governed by the general regime for employee-created works (Article 12). The employer acquires the economic rights only upon acceptance of the work, within the scope arising from the purpose of the employment contract. This is a derivative acquisition and requires actual acceptance.
The creator owns the rights, unless they transfer them
| Engagement model | Who owns the rights to the code | Who owns the rights to the artwork/music | What you need to do |
|---|---|---|---|
| Employment contract | Employer, automatically (Article 74 § 3) | Employer, upon acceptance (Article 12) | Make sure the scope of duties includes game development; formally accept the works |
| B2B contractor / freelancer | Creator, until they transfer the rights under a written agreement | Creator, until they transfer the rights under a written agreement | Sign a written rights transfer agreement expressly specifying the fields of exploitation (Article 41 § 2, Article 53) |
| No agreement | Creator, the studio has no rights | Creator, the studio has no rights | Regularise the legal position immediately, without doing so, you cannot legally release the game |
Fields of exploitation, what you must specify in the agreement
Under Article 41 § 2 of the Copyright Act, a rights transfer agreement covers only the fields of exploitation expressly listed in it. Failure to specify a particular field means that the rights for that field have not been transferred.
For a game development studio, this means that every agreement with a creator must list at least:
- Digital reproduction (copies on servers and distribution platforms).
- Making the work available to the public online (Steam, GOG, App Store, Google Play).
- Modifications and porting (versions for other platforms, DLC, updates).
- Rental or lending of the computer program.
- Translation and adaptation (localisation).
Remember: an agreement transferring economic rights must be made in writing or it will be invalid (Article 53). Oral arrangements with a freelancer do not transfer any rights, the studio has no legal title to use the work.
Chain of title, the rights trail the investor will check first
During due diligence, the investor verifies whether the company actually owns the rights to all elements of the game. A gap in the chain of title, for example, the absence of a written agreement with an artist who created assets for the prototype, can block the entire transaction.
The growing popularity of the B2B model among experienced game development specialists (where senior B2B remuneration reaches approximately PLN 24,000 compared with approximately PLN 12,000 gross under an employment contract) increases the risk of gaps in the chain of title. The more contractors there are, the more agreements need to be reviewed.
Contact us if you would like to verify whether your studio has a complete chain of title to all elements of the game.
Sp. z o.o., PSA, or S.A., which legal form is right for a game development studio with an investor
Choosing a legal form is one of the first decisions that will affect how easy, or difficult, it is to raise funding, implement incentive schemes, and complete an exit.
| Criterion | Sp. z o.o. | PSA | S.A. |
|---|---|---|---|
| Minimum capital | PLN 5,000 | PLN 1 | PLN 100,000 |
| Contribution in the form of work | Not permitted | Permitted (in exchange for shares, but not as a contribution to share capital) | Not permitted |
| Electronic registration | Yes (S24, PLN 350) | Yes (S24, PLN 250 + PLN 100 MSiG fee) | No, only before a notary (PLN 500 + PLN 100 MSiG fee) |
| Supervisory board | Optional | Optional | Mandatory |
| Incentive schemes (ESOP/vesting) | Limited, work cannot be contributed | Flexible, shares in exchange for work, founder shares | Limited, work cannot be contributed |
| IPO (stock exchange listing) | Requires conversion into an S.A. | Cannot be publicly traded | Yes, directly |
| Return of capital | Requires a reduction in share capital | Permitted, flexible share capital | Requires a reduction in share capital |
| Investor familiarity with the legal form | High, market standard | Growing, increasingly accepted by VCs | High, standard for large transactions |
When a PSA makes sense for a game development studio
The simple joint-stock company (introduced by the amendment to the Commercial Companies Code of 19 July 2019 and in force since 1 July 2021) is a legal form designed with start-ups in mind. It allows shares to be subscribed for in exchange for work, making it easier to implement vesting and ESOP schemes without requiring founders to make cash contributions at an early stage.
Founder shares in a PSA guarantee a fixed proportion of voting rights, which means founders can retain control even after several share issuances to investors.
Limitation: a PSA cannot be publicly traded. If you are planning an IPO, you must first convert it into an S.A.
When a sp. z o.o. is sufficient
A sp. z o.o. remains the most common legal form in the Polish game development industry. Investors know it well, it has established case law, and its corporate body structure is straightforward. If your studio does not plan to implement incentive schemes based on shares granted in exchange for work, a sp. z o.o. may be sufficient.
It is worth considering a hybrid approach: establish the company quickly through S24 (cost: PLN 350), then prepare detailed articles of association before a notary with provisions protecting the founders. The company will be entered in the National Court Register quickly, receive a tax identification number, and be able to open a bank account and begin operating, while you refine the corporate arrangements before the funding round.
Converting a sp. z o.o. into a PSA
If you operate as a sp. z o.o. and want to convert it into a PSA, the process takes approximately 2-4 months and includes 7 stages, from preparing the conversion plan to registration in the National Court Register. Notarial costs amount to approximately PLN 1,500-2,000, court fees are PLN 600, and an auditor’s opinion is not required. The conversion ensures the entity’s continued existence, you retain the tax identification number, assets, agreements, permits, and licences.
Shareholders’ agreement, what it must contain before an investor arrives
A shareholders’ agreement is an innominate contract governed by the law of obligations and based on Article 353¹ of the Civil Code. It is effective only between its parties, it does not automatically bind purchasers of shares who are not parties to the agreement.
This is why the most important protective mechanisms must be reflected in both the shareholders’ agreement and the articles of association. The shareholders’ agreement supplements the articles of association, it cannot replace them.
What a game development studio’s shareholders’ agreement should govern
- Deadlock resolution mechanism. Where two founders have equal shareholdings, any dispute can paralyse the company. The agreement should provide for an escalation procedure: mediation → arbitration → a “Russian roulette” mechanism (one shareholder offers to buy the other’s shares at a specified price; the other can either accept the offer or buy the first shareholder’s shares at the same price).
- Founder vesting. The standard arrangement is 4-year vesting with a one-year cliff. A founder who leaves before one year has elapsed retains no shares. After one year, they retain 25%, with the remainder vesting proportionally each month. This mechanism must be reflected in the articles of association (Article 159 of the Commercial Companies Code, or it will be ineffective).
- Good leaver / bad leaver clauses. Good leaver (departure for legitimate reasons), shares are repurchased at market value. Bad leaver (departure in breach of obligations, such as violating a non-compete), shares are repurchased at nominal value or at a discount.
- Non-compete obligation. A clearly defined scope: what activities are prohibited, in which territory, and for how long after leaving the company.
- Tag-along and drag-along rights. Tag-along protects a minority shareholder by allowing them to join a sale transaction on the same terms. Drag-along allows a majority shareholder to compel the others to sell, essential for an exit.
- Anti-dilution clauses. These protect founders from excessive dilution during subsequent issuances. The two main mechanisms are full ratchet (more aggressive, it adjusts the price of earlier shares to the price of the new issuance) and weighted average (more founder-friendly, it takes account of the proportion of new and existing shares).
- Obligation to transfer IP to the company. Every founder who contributes code, assets, or other creative elements to the studio should undertake to transfer the economic rights to the company, expressly specifying the fields of exploitation.
A multi-project studio, one company or separate SPVs
If your studio is developing more than one title in parallel, consider separating the projects into individual special purpose vehicles (SPVs).
When an SPV makes sense
| Situation | One company | Separate SPVs |
|---|---|---|
| Investor interested in one title | Difficult, the investor must invest in the entire studio | Simple, the investor invests directly in the SPV holding the specific title |
| One title generates losses | The losses affect the studio’s overall financial result | Losses are contained within one SPV and do not affect other projects |
| Different publishers for different games | Complications in accounting and reporting | Each SPV settles accounts separately with its publisher |
| Planned exit for one title | Requires the separation of an organised part of the enterprise | Sale of shares in the SPV, a simpler and faster transaction |
With a multi-company structure, remember transfer pricing, transactions between related entities (the parent studio and SPVs) are subject to documentation requirements under the Regulation of the Minister of Finance of 21 December 2018.
Checklist: is your studio investor-ready?
Before you begin discussions with a VC fund, go through the checklist below. Every “No” is a potential deal-breaker during due diligence.
| Area | Checklist question | Status |
|---|---|---|
| Cap table | Do you have an up-to-date cap table showing the history of all changes? | ☐ Yes / ☐ No |
| Articles of association | Do the articles of association include provisions on transfer restrictions, share preferences, and the threshold for transactions requiring a resolution? | ☐ Yes / ☐ No |
| Shareholders’ agreement | Do you have a signed shareholders’ agreement covering vesting, deadlock, tag-along, and drag-along? | ☐ Yes / ☐ No |
| IP, code | Have all economic rights to the source code been transferred to the company through written agreements with every creator? | ☐ Yes / ☐ No |
| IP, artwork, music, script | Do you have written rights transfer agreements that expressly specify the fields of exploitation? | ☐ Yes / ☐ No |
| IP, freelancers/B2B contractors | Has every external contractor signed an agreement transferring economic rights to the company? | ☐ Yes / ☐ No |
| National Court Register documents | Are the entries in the National Court Register up to date (management board composition, shareholders, and business activities)? | ☐ Yes / ☐ No |
| Governance | Do you have management board rules of procedure or a responsibility matrix specifying which decisions the management board may make independently? | ☐ Yes / ☐ No |
| Key agreements | Do you have an organised collection of agreements with publishers, platforms, and contractors? | ☐ Yes / ☐ No |
| Liabilities | Do you know the value of all the company’s liabilities, and do you monitor liquidity? | ☐ Yes / ☐ No |
If you have more than three “No” answers, address these areas before beginning investor discussions. Due diligence should take days, not months.
Three scenarios we see most often
Scenario 1: founder conflict when an investor comes on board
Three studio co-founders did not document the rules for allocating shares. When an investor appeared who was ready to provide capital, one founder blocked the transaction by demanding a larger stake. The absence of a deadlock mechanism in the articles of association meant that court proceedings were the only option, which would have taken months. The investor withdrew.
What should have been done earlier: establish the shareholding structure retrospectively with vesting, include a deadlock mechanism in the articles of association (Article 159 of the Commercial Companies Code), and establish good/bad leaver rules.
Scenario 2: chaos with two games in one company
The studio is developing two games in parallel within one company. Costs and revenue are mixed together, and it is unclear which title is profitable. An investor interested in one title cannot invest without being exposed to the risks of the other project.
What should have been done earlier: place each title in a separate SPV with a clear model for funding and allocating costs between the entities.
Scenario 3: rushing before a funding round
The investor wants to close the round within 6 weeks, but the studio does not have an orderly cap table, the articles of association use the default S24 template, and the rights to the code formally belong to freelancers who never signed rights transfer agreements. Due diligence reveals gaps requiring weeks of legal work.
What should have been done earlier: prepare an “investor-ready package”, an orderly cap table, up-to-date National Court Register documents, articles of association containing protective provisions, a complete IP rights list, and key agreements.
Put your studio’s structure in order, before an investor does it on their terms
The game development studios that come to us for help fall into two groups. The first comes to us before a funding round and has time to put its structure in order. The second comes during due diligence, when the investor has already identified the problems and every day of delay comes at a cost.
The difference between these groups is not the size of the studio or the game’s budget. It is the point at which someone asked: “Is our legal structure ready for what we are planning?”
We combine corporate law expertise with an understanding of the games industry, we know how multi-project studios operate, how game development funding rounds work, and what questions investors ask during due diligence. We work with real-world scenarios: founder conflicts, fragmented IP, default articles of association, and chaos involving multiple titles.
Our support includes:
- Auditing the ownership structure and corporate documentation.
- Preparing or updating the shareholders’ agreement (vesting, deadlock, tag-along, drag-along, anti-dilution).
- Verifying the copyright chain of title, agreements with every creator, freelancer, and B2B contractor.
- Designing the governance model, a decision-making matrix for the management board vs. the shareholders’ meeting.
- Preparing an “investor-ready package” for due diligence.
- Advising on the choice or change of legal form (sp. z o.o. → PSA).
The first results of putting the structure in order become visible within a few weeks. This is not a project that takes many months, it is a specific plan with measurable steps.
Contact us if you would like to find out whether your studio is ready for investor discussions.
Summary
A game development studio’s legal structure should grow alongside its product, waiting until an investor arrives is too late. A lack of formal arrangements between founders, unsecured IP, and default articles of association are the three most common reasons why investment rounds are delayed or fall through.
Putting corporate governance in order is not bureaucracy. It is an insurance policy against conflict and a negotiating tool when dealing with an investor. The sooner you do it, the stronger your position at the negotiating table.
Start with an audit: check the cap table, review the IP transfer agreements, and examine the articles of association for protective provisions. If you need support, contact us.
Frequently asked questions
Do I really need a shareholders’ agreement with 2-3 founders if we all get along? Yes. Conflicts between founders most commonly arise at two points: when a title becomes commercially successful and when an investor comes on board. As long as the studio is not making money, everyone agrees. When real profits or an investment offer appear, questions about allocation begin. A shareholders’ agreement with vesting, a deadlock mechanism, and good/bad leaver clauses protects every founder and allows disputes to be resolved without going to court.
How quickly can I put the structure in order if the investor wants to close the round within 6-8 weeks? The first results, an orderly cap table, updated National Court Register entries, and identification of gaps in the IP chain of title, can be achieved within a few weeks. Preparing a complete “investor-ready package” (articles of association with protective provisions, a shareholders’ agreement, and complete IP documentation) generally requires 4-6 weeks of intensive work. The sooner you start, the lower the risk that due diligence will identify issues that block the transaction.
Is it better to have one company for several games or separate companies for each title? This depends on the funding model and the plans for each title. If an investor is interested in one title, a separate SPV makes it easier to invest without exposure to the risks of other projects. If the studio funds all games from a single source and does not plan separate funding rounds, one company is operationally simpler. Remember, however, that a multi-company structure requires appropriate transfer-pricing documentation.
How can I protect myself against share dilution when an investor comes on board? Introduce anti-dilution clauses into the articles of association before beginning negotiations with the investor. Once the term sheet has been signed, it is too late, the investor has no incentive to accept such provisions. The weighted average mechanism is more founder-friendly than full ratchet. In addition, consider preferential voting rights (Article 174 of the Commercial Companies Code, max. 3 votes per share) to retain strategic control even after several issuances.
Is the Polish Commercial Companies Code sufficient for handling a foreign investor, or do I need a company abroad? In most cases, Polish company law under the Commercial Companies Code is sufficient. A sp. z o.o. and PSA allow standard investment mechanisms to be implemented, including liquidation preference, anti-dilution, vesting, and ESOP. Foreign VC investors increasingly accept Polish structures, particularly when the articles of association and shareholders’ agreement are prepared in accordance with international standards. A foreign company, for example in the Netherlands or Malta, may make sense for a planned IPO or a complex holding structure, but it generates additional costs and compliance obligations.
How much does it cost to build a studio’s corporate structure from scratch? The cost depends on the complexity: the number of founders, the number of projects, the engagement model used with creators (employees vs. B2B contractors vs. freelancers), and the state of the existing documentation. Putting the structure in order is a preventive investment, its cost is a fraction of the potential loss caused by a failed funding round, a founder conflict, or the loss of IP. We work in stages, tailoring the scope to the studio’s current needs. Contact us to discuss the scope and obtain a quote.
