You must also indicate when and how you and your co-founders would agree to the sale of intellectual property. Who makes this decision? Is it a majority vote? Up to the CEO? Vote unanimously? And if this IP is sold, who will have the money? Be sure to sketch out all of these factors in this section. When a startup is organized, business creators should consider whether they are entering into a shareholder agreement. As a general rule, a shareholders` agreement defines certain rights and obligations of the founders and the board of directors and differs from the agreement that the founders sign to buy their shares. Founders of nonprofit businesses are unlikely to be discouraged by the issue of business ownership, as the assets (or asset value of) of those businesses would have to be distributed in accordance with federal or state laws. However, the terms and conditions of employment, rewards and credits continue to apply. Typically, founders don`t have to worry about long-term planning or estate issues in agreements. Avoid the seventy-page “Everything But kitchen sink” type of agreement and leave with something that matches the expected life of the agreement (for most companies, this lifespan lasts until the next funding round or any other significant transaction). Tax matters are tricky – and we advise you to hire a tax professional to help you design this part of your founding agreement. What you write here will be so specific to your business and business structure, so please don`t try to swing it yourself or copy it from a template. This is one of those times when investing part of your track is a good step. The basic structure is that common shareholders or a group of holders (e.g.B.
founders) obtain a separate class of shares with several votes per share. The number of votes per share can range from 2 to infinite, but the most common is 10 votes per share. To illustrate, take the following simple heading chart: The last thing to keep in mind is not so beautiful – but it`s important. And this is a non-competition or confidentiality clause. These documents ensure that you and your co-founders can`t go out and advise you for your competitors – or even become a competitor. It`s probably not something you want to think about in the drunken early days of a startup, but it`s worth making a plan, just in case. Any future agreement requiring that ownership of the business concept, technology and associated intellectual property be transferred to a third party prior to the creation of the business must be agreed upon by each founder. In the case of such an agreement, the obligations arising from this founding cooperation agreement must be disclosed to that third party. With all the things that fuel the creation of a startup, it can be tempting to forget to design your founding agreement. You`re going to be good, right? You are all friends. You trust yourself.
You are together! Co-founders should keep their initial legal agreements fairly simple, taking into account two key figures: “I started a company with four founders and we didn`t define roles,” writes Remote Work expert Jason Lengstrof. .