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Drafting a Founders Agreement

Drafting a Founders Agreement

When starting a business, it`s essential to ensure that everyone involved is on the same page. A founders agreement is a legal document that outlines the roles, responsibilities, and ownership of a company`s founders.

Drafting a founders agreement may seem like a daunting task, but it`s crucial to have one in place to avoid potential conflicts down the road. Here are some essential elements to consider when drafting a founders agreement.

Roles and Responsibilities

Who will be responsible for what? It`s important to outline the roles and responsibilities of each founder. This includes both day-to-day tasks and long-term goals for the company.


The founders agreement should include a section that outlines the ownership of the company. This includes how much each founder will own and what happens if one of the founders leaves the company.


Vesting is the process of earning ownership in a company over time. It`s essential to include a vesting schedule in the founders agreement to ensure that each founder earns their share of ownership gradually over time.


How will decisions be made for the company? It`s important to outline the decision-making process for critical areas like finances, hiring, and product development.

Confidentiality and Non-Compete Clauses

Confidentiality and non-compete clauses are standard in founders agreements. These clauses help protect the company`s intellectual property and ensure that founders don`t compete against the company.

Dispute Resolution

It`s essential to have a plan in place for resolving disputes between founders. This can include mediation, arbitration, or other methods of dispute resolution.


Drafting a founders agreement may seem complicated, but it`s essential to have one in place to ensure the success of the company. The agreement should include sections on roles and responsibilities, ownership, vesting, decision-making, confidentiality and non-compete clauses, and dispute resolution.

Working with a lawyer experienced in founding agreements can help ensure that your agreement covers all areas and protects the interests of all the company`s founders.

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