Co-founder agreement

Package

Drafting of Agreement (Does not includes any registration). Inclusive of government fee & taxes

₹ 11000.00/-

₹ /-

Co-founder agreement

What is a co-founders agreement?

The legal document that defines the manner in which the co-founders are required to act within the organisation and with each other is known as the founder’s agreement or co-founders agreement. The co-founders agreement lays down the terms and conditions regarding the manner in which the business will be operated between the founders of a company.

Careful documentation is the key to have a secure relationship between the co-founders of a startup as the agreement defines the individual roles, responsibilities, rights, and liabilities of each co-founder. 

Drafting and vetting of the contract requires knowledge of the laws applicable and key legal terms, which can only be understood by talking to an experienced startup consultant who holds the knowledge of the startup document. While drafting a co-founders agreement, it is essential to include certain essential elements in addition to the general information of the business. 

Co-Founders agreement is an inter see agreement among the Founders of a Company.It is primarily an insurance to prevent dispute among founders

What is the process of drafting a a co-founders agreement?
Step 1

Select Package

Select packages as per your choice and fill out the forms

Step 2

Comprehensive Agreement

(2-3 working days) We Will draft a comprehensive agreement based upon your selection and requirements.

Step 3

revision of Agreement

(2-3 working days) We Will provide you with a copy of the agreement for you to revise.

Step 4

Redrafting (if required)

(1-2 working days) Ig you still feel that there is something that can be modified, we will promptly add it.

Step 5

Final Submission

(2-3 working days) We Will do the final submission of soft/hard copies to you.

What is the process of drafting a will?
Step 1

Select Package

Select packages as per your choice and fill out the forms

Step 2

Comprehensive Agreement

(2-3 working days) We Will draft a comprehensive agreement based upon your selection and requirements.

Step 3

revision of Agreement

(2-3 working days) We Will provide you with a copy of the agreement for you to revise.

Step 4

Redrafting (if required)

(1-2 working days) Ig you still feel that there is something that can be modified, we will promptly add it.

Step 5

Final Submission

(2-3 working days) We Will do the final submission of soft/hard copies to you.

What documents and information must be included in a co-founders agreement?

Shareholders’ agreements usually contain the following key provisions:

Documents
  • PAN Card 
  • Adhaar Card
Information
  • Parties to the Agreement
  • Brief about the company
  • Important Definitions
  • Shareholding patterns and Capital
  • Pre-emptive Rights and Transfer of Shares
  • Management
  • General Obligation of Founders
  • Founders Responsibilities
  • Share Vesting
  • Intellectual Property

What are the clauses, when added to the co-founder’s agreement, provide umbrella protection to both the co-founders as well as the company?

  • Equity ownership: This clause mentions the consideration invested by a founder in the form of monetary investment, experience, network and IPRs. The ownership clause specifies the number of shares owned by each founder, the total amount of capital invested by a co-founder, and division of profits between them.
  • Vesting: The founders’ agreement in India must lay down the mechanism to deal with a situation where a co-founder exits or is removed from the company. For such a case, a vesting structure must be included in the agreement to define how the shares that will be taken up by other founders.
  • Roles And Responsibilities: The co-founders’ agreement must specify the roles and responsibilities of each of the co-founder of the startup. 
  • Transfer Of Shares: The Agreement must also state restrictions on co-founders regarding the transfer of their shares to any third party. The clause also includes the legal remedy that can be availed in case the co-founder of clause also consists of the legal recourse that can be availed in case the co-founder breaches this clause.
  • Intellectual Property: This clause is included to ensure that the intellectual property developed by a founder is assigned to the startup and not individually owned by the founder. This protects the IPR and trade secrets of the business in case the founder wishes to leave the organisation in future.
  • Confidentiality: The confidentiality clause prohibits any co-founder from using, selling, or distributing any business information or sensitive information of the startup’s clients to any third party after leaving the organisation. 
  • Non-Compete Clause: The non-compete clause prevents a co-founder who is leaving the startup from soliciting any of the startup’s clients or starting any similar competitive business after leaving the organisation. 
  • Designation And Employment: The co-founders’ agreement must mention the designation assigned to each of the co-founder and the details about their employment, such as salary, reimbursement provisions, bonus, etc. and their legal rights.
  • Removal Or Exit Of Cofounder: The agreement must define how a co-founder may leave the organisation. This also includes the provisions relating to the removal of a co-founder i.e. the situations in which a co-founder may be removed and the procedure to be followed during and after the removal.
  • Dispute Resolution: This clause mentions the manner in which any disputes between the co-founders shall be resolved. The provision also includes the remedy that can be availed in case of violation of the co-founders’ agreement by any of the cofounders.

The above-mentioned list of essential clauses of a co-founders agreement is not exhaustive, and the founders may include other essential provisions as per the nature of the business and the relationship between them.

What is the process of drafting a will?
Step 1

Select Package

Select packages as per your choice and fill out the forms

Step 2

Comprehensive Agreement

(2-3 working days) We Will draft a comprehensive agreement based upon your selection and requirements.

Step 3

revision of Agreement

(2-3 working days) We Will provide you with a copy of the agreement for you to revise.

Step 4

Redrafting (if required)

(1-2 working days) Ig you still feel that there is something that can be modified, we will promptly add it.

Step 5

Final Submission

(2-3 working days) We Will do the final submission of soft/hard copies to you.

What are the benefits of having a co-founders’ agreement?

  • Protection of interests: A co-founder agreement will safeguard and protect the interests of both the founder and co-founder in case of any misunderstanding and dispute. 
  • Diplomatic understanding: Develop a diplomatic understanding among partners of the same business.
  •  Legally Binding: This agreement will make it legally binding and ensure an organised manner of work.
  • Dispute Resolution: Any future dispute can be easily resolved once put under the ambit of a legal document.

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