Starting a new business can be an exciting and promising venture, but it`s important to have the necessary documentation in place to avoid any potential conflicts or legal issues down the line. One of the key documents that every startup founder should have is a founders agreement, which outlines the basic framework for the business, including ownership, decision-making processes, and more.
Many startups may not have the resources to pay for legal assistance in drafting a founders agreement, but fortunately, there are a number of simple templates available online that can be customized to fit the specific needs of your business. Here are some key elements that should be included in a basic founders agreement template:
1. Company information and purpose: Start by outlining the name and purpose of the company, as well as the names and roles of each of the founders.
2. Equity ownership: Determine how equity ownership will be divided between the founders, including any vesting schedules, restrictions on the transfer of ownership, and buyout provisions.
3. Decision-making processes: Establish how major business decisions will be made, including who has voting rights and how disputes will be resolved. It`s also important to set up a process for adding or removing founders, if necessary.
4. Roles and responsibilities: Clearly define the roles and responsibilities of each founder, including areas of expertise and compensation.
5. Intellectual property: Determine how ownership and use of intellectual property will be handled, including any relevant patents, copyrights, or trademarks.
6. Exit strategy: Finally, establish a plan for how the company will be dissolved or sold if necessary.
While each founders agreement will be unique to the specific needs of the business, these are some of the most important elements to include in a basic template. By having a clear and comprehensive agreement in place, startup founders can focus on building their business knowing that potential conflicts have been addressed in advance.