Co-founder Agreement
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- Co-founder Agreement to Protect Your Business
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About Co-Founder Agreement
A co-founder agreement specifies the duties and responsibilities of the company’s founders. This is not a legally binding contract, but just a written agreement between cofounders that serves as a guide to ensure that all cofounders adhere to the terms and responsibilities of their work. A cofounder agreement may be referred to as a written terms and conditions sheet to guide the future activities of all cofounders.
Advantages of Co-founder Agreement
Help Setting Goal
Setting A Fruitful Goal Is The Foremost Priority For Any Startup. The Co founder Agreement Amplifies And Enables The Founder’s Members Of The Company To Understand, What Will Be The Company’s Plans. Is There A Product Line Offered By The Company? Which Industries Is The Company Operating In? Etc.
Defines Role and Responsibilities
The Co-Founder’s Agreement Describes The Role And Responsibility Of Each Founder Member Of The Company And Builds A System Of Accountability.
Registration Process Flow
1-2 HOURS
2 WORKING DAYS
2 WORKING DAYS
2-3 WORKING DAYS
2-3 WORKING DAYS
Documents required for Co-founder Agreement
- Definition of the business
- Details of capital raised (by founders and investors)
- Ownership details (in the company)
- Roles and responsibilities of each of the co-founders
- Compensation (salary drawn by each of the co-founders)
- Details of exit formality for founders
- Dissolution of the firm
- Details of dispute resolution
- Miscellaneous provisions (assignment of intellectual property rights, non-compete clauses, etc.,)
Comparison
| Comparison Basis | Private limited company | Llp | Sole proprietor |
|---|---|---|---|
| Raising Fund | ✓ | ✕ | ✕ |
| Start-Up India Recognition | ✓ | ✓ | ✕ |
| Complince Cost | ✓ | ✓ | ✕ |
| Suited For | Growing Startup | Service Provider | Small Business |
| Taxation Benefit | ✓ | ✓ | ✕ |
FAQs
The co-founder's agreement will restrict co-founders from engaging in other employment opportunities, whether or not they are relieved or ousted from the company.
Yes, the co-founder's agreement has got to be executed on non-judicial stamp paper for respective value and get notarized from the notary person, so as to make the agreement a legally enforceable one.
Yes, but it depends on the severity of the dispute! for instance, the shares of the co-founder are going to be vested with the company if he violates or breaches the agreement.
It provides for business definition, percentage, or a variety of shares which is held by each co-founder, the extent of every founder’s responsibility, a problem regarding the firing of any founder, a non-compete clause, confidentiality, etc.
The purpose of the agreement is to make the understanding the co-founders have regarding the functioning of their company and the relationship and obligation between co-founders legally binding through a formal written agreement.
As such, there's no need to register the co-founder’s Agreement. Making the identical on stamp paper of non-judicial value is sufficient.
The co-founder's Agreement must get notarized on the non-judicial stamp paper of the required value. As we all know stamp tax varies as to necessity. So one must make sure that he comes under the exact slab.
As it is a legal document that carries the legal relationship between all the co-founders. If you would like one sample then you can find it on our site.
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