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Founders’ Agreement

At Registerkaro, we offer a professional and affordable service for drafting and registering your Founders’ Agreement. We have a team of experienced and qualified lawyers who can help you create a customized and comprehensive Founders’ Agreement that suits your business needs and goals. We also take care of all the legal formalities and documentation required for registering your Founders’ Agreement with the relevant authorities.

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Equity Ownership and Capital Contributions
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Roles and Responsibilities:
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Intellectual Property Rights
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Compensation and Benefits
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Exit and Termination Clauses
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Future Funding and Dilutionn
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What is Founders’ Agreement?

A Founders’ Agreement is a legal document that defines the roles, responsibilities, and ownership of each founder in a business. It also covers important aspects such as intellectual property, decision making, dispute resolution, exit strategy, and more. A Founders’ Agreement is essential for any startup that wants to establish a clear and fair relationship among the co-founders and set the foundation for a successful venture.

Founders’ Agreement

Founders’ Agreement

Components of Founders’ Agreement

This Agreement can vary depending on the nature and scope of the business, but there are some common components that should be included in any Founders’ Agreement. These are:

Components of Founders’ Agreement

Names of founders and startup : This section identifies the parties involved in the agreement and the name of the company they are forming.

Startup description : This section describes the purpose, vision, and goals of the startup and the products or services it offers.

Ownership structure : This section specifies the percentage of equity ownership of each co-founder and how it is distributed. It also defines the voting rights and decision-making authority of each co-founder.

Roles and responsibilities : This section assigns the roles and responsibilities of each co-founder and outlines their expected contributions and commitments to the startup. It also sets the performance standards and evaluation criteria for each co-founder.

Capital contribution : This section states the amount of capital invested by each co-founder and how it is used. It also determines the valuation of the startup and the dilution of equity in case of future funding rounds.

Intellectual property : This section clarifies the ownership and protection of the intellectual property created by the co-founders or the startup. It also defines the confidentiality and non-disclosure obligations of each co-founder.

Compensation and benefits : This section determines the salary, bonus, stock options, and other benefits of each co-founder and how they are paid. It also covers the tax and legal implications of the compensation and benefits.

Vesting schedule : This section establishes the vesting schedule of the equity of each co-founder and how it is affected by the termination, resignation, or death of a co-founder. It also defines the conditions and procedures for the transfer or sale of equity by a co-founder.

Exit strategy : This section outlines the possible exit scenarios for the co-founders and the startup, such as acquisition, merger, IPO, or dissolution. It also sets the terms and conditions for the exit, such as the valuation, distribution, and liquidation of the assets and liabilities of the startup.

Dispute resolution : This section provides the mechanism and process for resolving any disputes or conflicts that may arise among the co-founders or between the co-founders and the startup. It also specifies the jurisdiction and governing law of the agreement.

Amendments and modifications : This section states the requirements and procedures for making any changes or updates to the agreement. It also defines the validity and enforceability of the agreement.

Signature and date : This section confirms the consent and agreement of each co-founder to the terms and conditions of the agreement. It also records the date of signing the agreement.

Annexures and attachments : This section includes any additional documents or information that support or supplement the agreement, such as the business plan, financial projections, corporate bylaws, etc.

Documents Required for Founders’ Agreement

To prepare and register your Agreement, you will need to provide us with the following documents:

  1. PAN card and Aadhaar card of all the co-founders
  2. Passport size photographs of all the co-founders
  3. Business name and address proof
  4. Business registration certificate (if applicable)
  5. Business plan and financial projections
  6. Any other document as per the nature and scope of your business
Documents Required for Founders’ Agreement

Procedure for Drafting Founders’ Agreement

Following is the step-by-step for procedure for drafting an Agreement:

Step 1:

Create the agreement draft, covering essential details like company goals, terms, and co-founder responsibilities.

Step 2:

Review the draft to ensure all necessary elements are included and remove any unclear clauses.

Step 3:

Include any additional details needed in the agreement for clarity.

Step 4:

Confirm unanimous acceptance of the final draft by all co-founders.

Step 5:

Formalize the agreement by notarizing it on a non-judicial stamp paper.

Step 6:

Collect signatures from all co-founders after notarization.

Step 7:

Seek expert advice before finalizing the agreement to prevent potential disputes.

Meaning of Terminating Founders’ Agreement

Terminating a Founders’ Agreement is a serious decision that can affect the future of your business and your relationship with your co-founders. Therefore, you should consider the following factors before proceeding with the termination:

The terms and conditions of your Agreement : You should review your Founders’ Agreement carefully and check if it contains any clauses that specify the conditions and procedures for terminating the agreement. For example, some Agreements may require a mutual consent of all the co-founders, a notice period, a vote of the board of directors, or a payment of a termination fee. You should also check if your agreement has a dispute resolution mechanism, such as arbitration or mediation, in case of any conflicts or disagreements among the co-founders.

The reasons and consequences of terminating the agreement : You should evaluate the reasons why you want to terminate the agreement and weigh the pros and cons of doing so. For example, you may want to terminate the agreement because of a breach of trust, a lack of commitment, a divergence of vision, or a personal conflict with your co-founders. However, you should also consider the potential consequences of terminating the agreement, such as losing your equity, intellectual property, or customers, damaging your reputation, or facing legal action from your co-founders or other stakeholders.

The alternatives to terminating the agreement : You should explore the possibility of resolving the issues with your co-founders without terminating the agreement. For example, you may try to communicate openly and honestly, negotiate a compromise, seek a third-party intervention, or modify the terms of the agreement. You may also consider exiting the business gracefully and amicably, by selling or transferring your shares, or finding a suitable replacement for your role.

Meaning of Terminating Founders’ Agreement

Why choose Registerkaro for Founders’ Agreement service?

Registerkaro is the best choice for Founders’ Agreement service because:

Why choose Registerkaro for Founders’ Agreement service?
  1. We offer a fast and hassle-free service that saves you time and money.
  2. We have a team of expert and qualified lawyers who can draft and register your Founders’ Agreement as per the latest laws and regulations.
  3. We provide a customized and comprehensive Founders’ Agreement that covers all the essential aspects of your business and co-founders relationship.
  4. We provide round-the-clock support and guidance to answer any queries or doubts you may have regarding the Founders’ Agreement process.
  5. We have a 100% customer satisfaction rate and a loyal client base of more than 5000 businesses.

So, what are you waiting for? Contact us today and get your Founders’ Agreement done with Registerkaro. We are here to help you start and grow your business with confidence and peace of mind.

FAQs

What is a Founders’ Agreement?

It is a legal document that defines the roles, responsibilities, and ownership of each founder in a business. It also covers important aspects such as intellectual property, decision making, dispute resolution, exit strategy, and more.

Why do I need an Agreement of Founders?

A Founders’ Agreement is essential for any startup that wants to establish a clear and fair relationship among the co-founders and set the foundation for a successful venture. A Founders’ Agreement can help you to: Protect your rights and interests as a founder. Clarify the expectations and contributions of each co-founder. Avoid future disputes and conflicts with your partners. Align your vision and goals with your co-founders. Secure your intellectual property and confidential information. Plan for contingencies and exit scenarios.

When should I make a Founders’ Agreement?

You should make a Founders’ Agreement as soon as possible, preferably before you start working on your business idea or raising funds. The earlier you make a Founders’ Agreement, the easier it will be to negotiate and agree on the terms and conditions with your co-founders.

How can I make a Founders’ Agreement?

You can make an Agreement with the help of a professional and affordable service like Registerkaro. We have a team of experienced and qualified lawyers who can help you draft and register your Founders’ Agreement as per your business needs and goals. You can contact us and share your business details and co-founders information, and we will take care of the rest.

What are the documents required for a Founders’ Agreement?

To prepare and register your Agreement, you will need to provide us with the following documents: PAN card and Aadhaar card of all the co-founders. Passport size photographs of all the co-founders. Business name and address proof. Business registration certificate (if applicable). Business plan and financial projections. Any other document as per the nature and scope of your business.

How long does it take to get an Agreement?

It usually takes around 7 to 10 working days to get your Agreement done with Registerkaro. However, the exact time may vary depending on the complexity and scope of your business and the availability of the co-founders for signing the agreement.

How much does it cost to get an Agreement of Founders?

The cost of getting an Agreement with Registerkaro depends on the number of co-founders and the type and size of your business. You can contact us and get a free quote for your Agreement service. We assure you that we offer the most competitive and reasonable prices in the market.

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