Research cutoff: 22 July 2026
Scope: General research for game founders and small studios. It is not a legal opinion for a particular team, employment relationship, asset or dispute.
Executive summary
Game start-ups often begin with friends, weekend contributors or a personal repository. The team then forms a company, accepts investment, hires employees and connects to contractors, publishers and stores. The legal relationships do not become uniform merely because the story changes from “team” to “company” to “product”. One person may be a pre-incorporation collaborator, author, shareholder, director, employee and creditor at different times. One game may contain pre-existing code, joint contributions, employee-developed software, commissioned art, platform accounts and third-party components.
A contract label such as “partner”, “part-time” or “consultant” is evidence, not a conclusion. The practical framework is relationship, asset, restriction and evidence. A company’s incorporation is not an automatic transfer of a pre-incorporation demo, repository, domain, trademark, developer account or social account. Those assets require a transfer or licence, delivery and account migration. Equity is not automatically the total price of past labour, loans and intellectual property.
Employment analysis should focus on control and personal, economic and organisational dependence. Remote work, a personal computer, project bonuses, a freelance registration or an invoice do not decide the relationship. A game’s code, text, art, music and data may fall under different authorship and ownership rules. Non-compete obligations for employees must be kept separate from directors’ duties, shareholder arrangements and commercial restrictions. Trade-secret protection is not a synonym for a non-disclosure agreement: the owner must identify the secret, establish non-public status and value, use reasonable measures and prove acquisition, use, loss and causation.
The strongest small-studio controls are ordinary operational facts: individual accounts, least privilege, version records, download logs, device return, prompt offboarding and controlled evidence preservation. They help both the merits of a claim and the ability to prove it.
1. Classify the relationship over time
A start-up should keep an identity-period-matter table rather than one permanent job title. For each person, record the counterparty, period, tasks, management method, payment or equity consideration, devices and accounts, work product, rights document and continuing obligations.
The relationship may be a partnership contract, employment, non-full-time employment, commission, service, contract for work, mandate, shareholder relationship or a combination. The Civil Code’s partnership contract concerns a common undertaking, shared interests and shared risk; a group chat called a “studio” is not enough. A founder who assigns daily work, controls hours and pays a regular amount may create an employment relationship before incorporation, even if the team uses the word “co-founder”. A contributor who chooses methods, bears rework risk and delivers a defined asset may be an independent contractor, but that conclusion must match actual practice.[1]
Use six factual tests for an ambiguous participant: who directs the work; how compensation is formed; who bears operating risk; who supplies and controls tools and accounts; whether the work is integrated into the company’s ordinary business; and whether the person can reject tasks, substitute staff or serve other clients. No factor is automatically decisive. A remote contributor can be tightly managed; a bonus-paid employee remains an employee; a fixed monthly “consultant fee” can coexist with employment control.
The relationship type sets minimum labour, social-insurance and termination obligations. It also affects the statutory starting point for work-product ownership and the availability of employee non-compete restrictions. If a real employee is written down as a “partner”, the company may face wage and social-insurance exposure while still lacking clean rights in the code. If a genuine independent contractor is placed under attendance, discipline and leave rules, the company may create stronger employment evidence than intended.
2. Before incorporation: responsibility and assets
A pre-company team should identify who signs external contracts. The counterparty may be a founder, an existing affiliate, an unincorporated project group or the future company. Changing the header after incorporation does not automatically transfer earlier payment, delivery, liability or infringement obligations. The safer mechanism is an assumption, novation or re-execution document that states what has been performed, paid, delivered and transferred.
A company’s separate legal personality does not automatically capture pre-incorporation assets. A demo, code repository, domain, trademark application, developer account, social channel or art package can remain with its original holder. Continued company use may evidence a licence or performance but does not necessarily create an assignable, financeable right. The transfer schedule should identify the object, source, date, right, territory, duration, payment or contribution, sublicensing, third-party restrictions and technical handover.
Account assets require special treatment. A platform may restrict a change of contracting party. If an account cannot be transferred, the company needs a company-controlled administrator, recovery email, two-factor arrangement, revenue account, backup and exit plan. A founder’s personal phone or password should not remain the only path to a production build.
Equity can represent capital contribution, an asset transfer price, future service incentive or risk sharing. “You write the code and receive ten percent” does not say whether the code is assigned, licensed, paid for, contributed as capital, or available if the person leaves before incorporation. Keep separate tables for capital, historical debts, asset transfer and continuing employment or incentives. The 2023 Company Law changes to limited-liability-company contribution duties make it unsafe to treat oral equity as completed contribution or completed rights transfer.[2]
Joint contribution also needs a rule. A Git commit does not automatically make every contributor a co-author of the entire game or software. Separate technical suggestions, tests, generic tools, directed employee work and genuinely original joint expression. A pre-incorporation agreement should address continued use, termination, future-company transfer, standalone licensing, attribution and revenue if the project ends or the team splits.
3. Founders, governance and exit
A founder can hold five overlapping positions: shareholder, director or officer, employee, intellectual-property owner and creditor. They can coexist, but the legal consequences cannot be merged. Removing a founder as director does not automatically terminate employment. Ending employment does not automatically cancel shares. A share buyback does not automatically transfer personal code. Continued share ownership does not automatically impose employee non-compete duties.
Once incorporated, responsibilities should sit in the company’s charter, shareholder or board resolutions and delegated authority. “Product belongs to A, technology to B and business to C” describes a division of labour, not the authority to hire, spend, publish, grant rights or enter a related-party transaction. Production domains, signing certificates, repositories, cloud accounts and recovery channels should reflect company authority, with dual recovery and audit for critical actions.
Directors and officers have company-law duties regarding loyalty, diligence, company opportunities and competing business.[3] Those duties focus on the office and the company’s interests. They are not a permanent industry ban after departure. A shareholder agreement can contain a competition restriction, but its legitimate interest, subject, duration, territory, consideration and effect still require analysis. A commercial acquisition restriction is not automatically the employee two-year rule; a commercial wrapper is not a reliable way to evade mandatory employee protection.
An exit file should address the person, shares, money, rights, accounts and secrets separately: employment termination, wages, bonuses and expenses; transfer or buyback and corporate approvals; founder loans; work-product assignment or continuing licence; devices, source, keys and accounts; confidentiality and lawful competition; attribution; and evidence preservation. A general “everything is settled” sentence is weaker than a signed checklist with actual handover records.
4. Employment, part-time work and contractors
Under the Labour Contract Law, an employment relationship generally starts when the employer begins using the worker; the absence of a written contract does not prevent the relationship from existing.[4] Guiding Case 238 and other court materials examine actual dispatch, payment source and labour control rather than an internal-contract label. In a game studio, fixed workdays, daily stand-ups, leave approval, mandatory tasks, performance review, fixed monthly pay, discipline, company email and work that forms the company’s core product are strong facts for employment.
“Part-time” is not one legal category. It may be non-full-time employment, independent service supplied by someone with another full-time job, or a nominal label on a full-time relationship. The Labour Contract Law’s non-full-time framework generally uses hourly pay, an average of no more than four hours per day and twenty-four hours per week for the same employer, a shorter payment cycle and a different termination rule.[5] A person who works full days under monthly pay and attendance control is not transformed by a title.
A full-time employee may also work elsewhere. The employer can address a second relationship when it seriously affects completion of the first job or the employee refuses to correct a conflict after being asked.[6] The contract should identify the legitimate conflict, work-time, device, repository and client boundaries rather than prohibit every outside activity.
A contract for work focuses on an accepted result and the contractor’s method and risk. A mandate or service arrangement focuses on an entrusted matter. A client may specify milestones, security interfaces and acceptance standards without creating employment control; it becomes risky when the client also imposes staff scheduling, daily discipline and unlimited method direction while denying the contributor any business risk or substitution ability.
Remote work changes location, not the factual test. Digital time systems, response deadlines, screen monitoring and approval chains may show even tighter control. “Intern” also is not a complete legal answer: teaching arrangement, student status, three-party documents and actual production work all matter. Community patches, mods and test reports need a contribution rule or licence; participation in a core product does not automatically give the company every right.
5. Wages, hours, insurance and incentives
A launch crunch is not a working-time exemption. China’s working-time rules generally use eight hours per day and forty hours per week; overtime, rest-day compensation and statutory-holiday pay have different conditions.[7] Flexible scheduling, remote work and “voluntary effort” do not on their own remove the rules. Special working-time systems may require approval.
Game teams produce many time records: commits, builds, tickets, chat, meetings and release logs. They show activity but not automatically overtime; the employer should connect the record to an assigned task and an approved schedule. A release-window plan with rota, approval, compensatory leave and preserved records is safer than avoiding an attendance system and later disputing every timestamp.
A project bonus may be a wage component, a conditional incentive or a discretionary award. Read the contract, compensation policy, past practice, objective target and adjustment process. A clause saying the company can decide everything at will cannot necessarily defeat a clear, repeated promise. On delay, separate the cause, target changes, earned stages, wages, approved overtime, expenses and lawful compensation. Do not withhold all wages as leverage for handover.
Social insurance is not solved by a worker’s “voluntary waiver”. The Social Insurance Law, Labour Contract Law and the 2025 judicial interpretation on labour disputes treat such arrangements as legally ineffective in relevant circumstances; an employer that later makes the required contribution may seek return of a separately paid substitute amount under the stated conditions.[8] Students, non-full-time workers and cross-city remote workers require fact-specific administration, not a general cash substitution.
Rules about wages, hours, performance and discipline affect employees’ vital interests and should follow the statutory consultation and notice process.[9] Monitoring code and endpoints also processes employee information. Define purpose, scope, retention and access. A security need is not a licence to inspect unrelated private chat, personal cloud storage or a family device.
6. Work product and company ownership
A game contains software, documents, narrative, art, music, video, UI, spreadsheets, databases and marketing material. Software has specialised employee-development rules; other works may be employee works, special employee works, joint works, commissioned works or company works. The same person can receive different treatment for code and art in the same sprint.
The Copyright Law distinguishes ordinary employee works from special cases involving the employer’s material and technical conditions and employer responsibility.[10] The Software Protection Regulation identifies circumstances in which software developed during employment for assigned work, as a natural result of the job or by using the employer’s dedicated resources and confidential information belongs to the organisation.[11] These rules do not mean every personal-time tool created by an employee belongs to the employer. They require a connection between assignment, job function, resources, responsibility and the specific version.
A clean asset schedule links the ticket, branch, commit or source package to the contributor, task, date, materials, third-party components, rights instrument, delivery and production use. “Paid by the company” is useful evidence but not the whole ownership analysis. For commissioned art and external code, require a rights warranty, permitted modifications, source delivery, licence compatibility and a third-party notice.
Rights, delivery and usability are three separate questions. A company may possess a broad licence but lack the build files, signing key or editable assets needed to ship. A company may have a code transfer but still need permission for a contractor’s embedded font or sound. A founder’s pre-existing library may be licensed for the game without being assigned. Investors and publishers will ask about all three.
7. Employee non-compete and different restrictions
Labour Contract Law Articles 23 and 24 permit post-employment non-compete agreements for senior management, senior technical personnel and other personnel with confidentiality obligations, with monthly compensation and a maximum two-year period.[12] It is an exception that protects a real confidential interest, not a reward for calling someone “core”. The current judicial approach asks whether the person actually had access to secrets and whether the restriction matches the secret and competition.
Do not combine four restrictions:
| Situation | Main basis | Questions | Automatic employee compensation and two-year cap? |
|---|---|---|---|
| Employee after departure | Labour law and judicial rules | Eligible person, secret access, scope, compensation, real competition | Generally yes |
| Director/officer while in office | Company loyalty and opportunity duties | Disclosure, approval, benefit and loss | No, unless a separate employment rule applies |
| Shareholder agreement | Civil and company contracts | Legitimate interest, subject, term, consideration and effect | No automatic employee rule |
| Outsourcing, publishing or M&A covenant | Commercial contract and competition limits | Transaction necessity and proportionality | No automatic employee rule |
An invalid non-compete does not excuse trade-secret misuse. A director-duty claim is not automatically a labour breach. A shareholder is not automatically an employee with a labour non-compete. Each claim needs its own facts and remedy.
8. What makes a game trade secret
The Anti-Unfair Competition Law protects information that is not generally known, has commercial value and is subject to reasonable confidentiality measures.[13] “Source code”, “user data”, “roadmap” or “balance table” is a category, not an automatic conclusion. The claimant should identify the version, fields, combination or difference, explain why it was not public and show the measures used.
A public SDK, open-source component, released client value, easily reverse-engineered element and common industry method need to be separated from a real secret. A balancing pipeline may be secret in the selection, constraints and tuning relationship even if each isolated parameter is familiar. A launch window, unpublished commercial term, anti-cheat rule, supplier price or high-value user segment may be business information, while an employee’s general skill and experience is not a secret merely because an NDA mentions it.
The secret should be identifiable without being exposed to everyone. A useful internal structure is L1 asset name, L2 secret-point summary, L3 version and carrier, and L4 role, account, approval and access record. The judicial rules recognise that a combination may remain non-public through its selection and arrangement, but the claimant still needs a concrete comparison. Value can come from reduced trial and error, competitive timing, reliability, development cost or a potential commercial advantage; a project’s total valuation is not automatically the value of one secret.[14]
Reasonable measures are proportionate to value, team size and practice. They may include an NDA and policy, classification, least privilege, individual accounts, approval, logs, training, return, offboarding and monitoring. A ten-person studio need not copy an enterprise security stack, but it should be able to answer who needs access, why, whether a bulk export is possible, whether it leaves a record and when access ends. Shared administrator accounts and unrestricted repository cloning undermine a later claim.
9. Cases and the evidence chain
The WOD strategy-game source-code case shows why access is not consent to competitive copying. The former employee downloaded project code in bulk before departure, used a USB device and a computer purchased with the new company’s funds, and deleted jump-host or cloud logs. The Supreme People’s Court linked the purchase, messages, download timing, carrier and log recovery to the individual and the new company. It ordered cessation, confidentiality and non-infringement undertakings and awarded RMB 500,000 in losses plus RMB 398,760 in reasonable expenses.[15]
The value of the case is the chain: normal access baseline, departure date, abnormal bulk action, external carrier, concealment, communication with the new company, benefit and professional recovery costs. It is not a price tag for every employee move.
The Supreme People’s Court’s compressor and PR3 cases show that an organised plan and a complete technical combination can remain protectable even when scattered information is public. The new-energy vehicle chassis case involved concentrated movement of technical staff, drawings and models used in patents and products; the published account reports RMB 640 million-plus compensation.[16] Personnel movement alone is not infringement. The strength comes from access, identical files, disclosure, development timing and actual use.
Evidence facilities should include individual repository accounts and MFA, restricted production builds, alerts for clone and export, retained build and access logs, encrypted company devices, classified files, supplier minimisation, and a same-day offboarding workflow. Preserve the original log, read-only image, hash, custodian and operation record. A screenshot rarely substitutes for the underlying system record.
An investigation must also respect employee privacy. Company devices and announced business-account logs are easier to justify than a private phone, family account or personal mailbox. Freeze company access and logs first; do not remotely wipe a device or let multiple investigators alter the source. Use professional collection, a copy for analysis and a narrow scope.
10. Departure, team split and competing claims
A worker may use general knowledge, experience and skill after leaving. “They know the product”, “they joined a competitor” or “they know our customers” is not itself a secret. A new team should use a clean-room instruction, source record, independent-development log, conflict screening and a rule against importing a former employer’s files or credentials.
A departure can generate several claims:
| Claim | Must be shown | What does not substitute for it |
|---|---|---|
| Labour non-compete | Eligible person, valid scope, compensation, real competition and breach | New company registration or ordinary job move |
| Confidentiality breach | Clear duty, act, loss or agreed liability | Non-compete breach alone |
| Trade-secret infringement | Specific secret, three elements, acquisition/disclosure/use and responsibility | NDA, employee identity or similar product |
| Copyright/software infringement | Title, protected expression, access and copying or substantial similarity | Secrecy or development cost |
| Company-law liability | Director/officer status, opportunity or competing conduct and loss | Ordinary shareholding or labour covenant |
The same facts may support more than one claim, but damages should not be double-counted. Labour arbitration, intellectual-property litigation and preservation applications may have different forums and timing. Build a claim–fact–evidence table before choosing a public accusation.
During a team split, protect business continuity and original evidence first. Confirm control of company accounts, bank, domain, repository, build, cloud and store; preserve logs and versions; distinguish company, personal, joint and third-party assets; set the status of employment, shares, office and rights; seek preservation where necessary; and communicate only necessary facts. A broad public allegation can create a separate reputation or unfair-competition risk.
11. A small-studio governance model
Maintain four linked ledgers:
- Relationship ledger: identity, period, contract, management, compensation and insurance.
- Asset ledger: version, contributor, rights holder, third-party dependency, transfer and account control.
- Secret and restriction ledger: secret point, value, access, measures, eligible non-compete person and proportional scope.
- Evidence ledger: contract, resolution, commit, delivery, log, training, handover, collection and retention period.
Use stage-based controls. In a three-to-five-person prototype team, list founder contributions, pre-existing assets, dual repository administrators and third-party material. During hiring and financing, add real employment contracts, compensation and time systems, work-product clauses, company accounts, social insurance and access tiers. Before launch, isolate production data, signing keys, vendor permissions, logs and bonus rules. At departure, revoke access, inventory assets, return devices, freeze evidence and communicate the plan on the same day.
Investors and publishers will examine more than a copyright certificate: whether pre-incorporation code was transferred, whether founders remain bound by a former employer’s restrictions, whether contractors’ relationships are real, whether store accounts belong to the company, whether key vendors gave rights warranties and whether departed staff can still log in. A certificate cannot repair a broken contribution chain.
12. Conclusion and limits
A stable game start-up is not created by making every restriction as broad as possible. It is created by consistency: the actual working relationship matches the contract; the contribution matches the asset record; the restriction matches a real secret and proportionate interest; and the policy matches the technical evidence.
Incorporation does not erase earlier relationships or acquire earlier assets. Equity, wages, loans, service fees and intellectual-property consideration should be accounted for separately. Remote, part-time and project language cannot replace the employment analysis. A game’s many work products require object-specific rights and delivery records. Non-compete, company loyalty, shareholder covenants and commercial restrictions must be kept separate. Trade-secret enforcement depends on a concrete secret and a reliable evidence chain, not on an NDA alone.
This report is general research based on the law and selected cases available by 22 July 2026. Labour practice, special working-time approval, social-insurance administration, court databases, platform terms and the facts of a secret claim require current, case-specific review. It does not determine the status of a particular worker, asset, company or dispute.
Core sources
[1] Civil Code of the People’s Republic of China, partnership and contract provisions; Copyright Law, Article 14: official source ; official source
[2] Company Law of the People’s Republic of China (2023 revision): official source
[3] Company Law provisions on director and officer loyalty, company opportunities and competing business: official source
[4] Labour Contract Law, Articles 7 and 10; Supreme People’s Court Guiding Case 238: official source ; official source
[5] Labour Contract Law, Articles 68–72: official source
[6] Labour Contract Law, Article 39(4) and Article 69: official source
[7] State Council Provisions on Working Hours and Labour Law Articles 41 and 44: official source ; official source
[8] Social Insurance Law; Labour Contract Law; Supreme People’s Court Interpretation (II) on Labour Dispute Issues, Article 19, effective 1 September 2025: official source
[9] Labour Contract Law, Article 4 and procedures for rules directly affecting employees: official source
[10] Copyright Law, Article 18: official source
[11] Regulation on Computer Software Protection, Article 13: official source
[12] Labour Contract Law, Articles 23 and 24: official source
[13] Anti-Unfair Competition Law (2025 revision), trade-secret provisions: official source ; promulgation information: official source
[14] Supreme People’s Court Provisions on Several Issues Concerning the Application of Law in Civil Cases of Trade-Secret Infringement, Article 27: official source
[15] Supreme People’s Court, (2023) Supreme Court IP Civil Final No. 539, WOD game source-code case: official source
[16] Supreme People’s Court, representative trade-secret cases including (2022) Supreme Court IP Civil Final No. 1592 and the new-energy vehicle chassis case: official source ; official source
[17] Supreme People’s Court Provisions on Evidence in Civil IP Litigation: official source
[18] Supreme People’s Court Provisions on Review of Behaviour-Preservation Cases in IP Disputes: official source