A Co-founder Agreement is a contract between Co-Founders setting out the ownership in the company, initial capital contribution, duties and responsibilities of each Co-Founder. This agreement also safeguards you in the case of a dispute, as it can provide protection to show what the co-founder agreed.

A Founders’ Agreement is an official contract that is signed between all the co-founders of a firm. This document states all the responsibilities, ownership, and initial investments made by each of the founders of the company. It is advised to make a founders’ agreement at the incorporation stage of an enterprise as it will lay out the responsibilities and roles of each of the co-founders.

An agreement is made at the time of the incorporation to avoid ambiguity that may arise in the enterprise in future. It also sets up the expectations and goals of all the co-founders by assigning each of them a specific role and responsibility towards the betterment of the enterprise.

Main points covered in the Co-Founders Agreement

• Parties to the Agreement
• Brief about the company
• Important Definitions
• Shareholding patterns and Capital
• Pre-emptive Rights and Transfer of Shares
• Details of dispute resolution
• Management
• General Obligation of Founders
• Founders Responsibilities
• Share Vesting
• Intellectual Property
• Details of exit formality for founders
• Compensation (salary drawn by each of the co-founders)