Why Taxapillar for founders agreement?

·    Taxapillar is a trusted choice for founders looking to create a founders agreement. With their advanced tech capabilities and experienced legal professionals, they handle legal work for over 1000 companies each month. They provide an interactive process with the government, ensuring a seamless experience. The original price includes two rounds of iterations, and if any changes are needed, their lawyers will promptly make them and send the revised agreement for review. Join Taxapillar for easy and convenient service that guarantees your satisfaction.

Why Taxapillar for founders agreement?

·         Taxapillar is a trusted choice for founders looking to create a founders agreement. With their advanced tech capabilities and experienced legal professionals, they handle legal work for over 1000 companies each month. They provide an interactive process with the government, ensuring a seamless experience. The original price includes two rounds of iterations, and if any changes are needed, their lawyers will promptly make them and send the revised agreement for review. Join Taxapillar for easy and convenient service that guarantees your satisfaction.

• This agreement sets the guidelines and procedures for dealing with such situations and ensures the expelled co-founder returns the appropriate funds.
• The founders agreement includes a confidentiality clause, mandating the founders to maintain the secrecy of any confidential information related to the business.

• Determines the Type of Entity: A founders agreement plays a crucial role in determining the type of entity to be formed. This allows co-founders to establish a clear path for their business right from the start.
• Outlines Vision, Mission, and Goals: By incorporating the vision, mission, and goals of the entity, the founders agreement provides a well-defined roadmap for the co-founders to achieve success.
• Designates Specific Roles and Responsibilities: The agreement helps assign specific roles and responsibilities to each co-founder, ensuring clarity and avoiding any confusion or overlap in their areas of expertise.
• Creates a Strong Foundation: The founders agreement acts as a framework that helps lay a strong foundation for the business. It sets the structures and expectations necessary for growth and long-term sustainability.
• Promotes Effective Collaboration: By defining the roles, responsibilities, and goals of the co-founders, the founders agreement facilitates effective collaboration among them, promoting teamwork and synergy within the business entity.

  Procedure for Drafting a Founders Agreement

  The procedure for drafting a founders agreement involves several key steps, each essential in ensuring a comprehensive and legally sound document:

  1. Draft Preparation: Begin by preparing the initial draft of the founders agreement. Include all necessary fields, such as the company's objectives, terms, and conditions that the co-founders must adhere to.
  2. Review and Refinement: Once the draft is complete, thoroughly review it to ensure all mandatory provisions are included. Verify that there are no ambiguous or unclear clauses that may lead to misinterpretation or disputes.
  3. Add Supplementary Information: If necessary, incorporate any additional information or details that should be included in the agreement to make it more comprehensive and aligned with the requirements of the co-founders and the business.
  4. Co-founder Acknowledgment: All co-founders must carefully scrutinize the final draft and provide their acknowledgment, indicating that they have thoroughly reviewed and accepted the terms and conditions mentioned in the agreement.
  5. Legal Authentication: After agreement from all co-founders is obtained, the document should be notarized on a non-judicial stamp paper, affirming its authenticity and legal validity.
  6. Co-founder Signatures: Once notarized, obtain the signatures of all co-founders on the agreement, signifying their commitment and consent to abide by the terms specified in the document.
  7. Expert Guidance: Prior to formally entering into the agreement, seek professional guidance from experts familiar with founder’s agreements. Their expertise can help minimize the potential for future disputes by ensuring all necessary legal considerations are appropriately addressed.

     Founders Agreement: Key Terms

     • Founders: The founders section in a founders agreement identifies the co-founders, along with their respective roles and responsibilities within the company.
     • Ownership: The ownership section outlines the equity ownership structure of the business, specifying the percentage of ownership held by each co-founder.
     • Vesting: This section establishes a vesting schedule for the co-founders' equity ownership, ensuring that they earn their equity over time. The typical vesting period is four years, with a one-year cliff.
     • Management and Control: In the management and control section, the decision-making structure of the company is outlined. It includes the process for making important decisions and outlines the roles and responsibilities of each co-founder in the decision-making process.
     • Intellectual Property: The intellectual property section addresses the ownership and protection of the company's intellectual property assets, such as patents, trademarks, copyrights, and trade secrets.
     • Confidentiality and Non-Disclosure: In this section, the importance of upholding the privacy of the business's proprietary information and trade secrets is emphasized, placing the onus on each co-founder to fulfill this responsibility.

       ·         Termination and Exit: Describing the circumstances in which a co-founder may be terminated from the company, this section also outlines the process for leaving the company. It encompasses crucial aspects such as the right of first refusal and buyout provisions.

       ·         Dispute Resolution: Highlighting the importance of resolving conflicts between co-founders, this section lays out a clear process for dispute resolution. It includes provisions for mediation and arbitration, ensuring a fair and unbiased resolution mechanism.

       Founders Agreement Template

       THIS FOUNDERS' AGREEMENT (referred to as the ‘Agreement’) is hereby executed on [DD/MM/YYYY] by and between [XXXX] (the ‘Company’) and the undersigned founders (the ‘Founders’):

       • [Insert Founder Name]

       NOW, THEREFORE, based on the foregoing and the mutual covenants and agreements set forth below, the parties hereto hereby agree as follows:

       • The founders have set up a business venture known as [XXXX]. The company's initial place of business is situated at [business Address]. Each founder has agreed to contribute ₹₹₹ as non-refundable initial capital to cover anticipated and potential company expenses.
       • Additional capital contributions may be accepted in the future, but only if all founders unanimously provide written consent. Following the establishment of the company, the founders will possess ownership percentages based on the share distribution outlined in the founders agreement. These shares represent the initial proportional ownership of the company and cannot be treated as transferable securities.
       • The voting rights of each Founder in a business venture will be determined by the percentage of shares they hold. In cases where a majority vote is required, a designated person will cast the deciding vote.
       • The Founders have the option to establish a vesting schedule for their shares, indicating the timeline for complete ownership. If a Founder departs from the company before their shares have fully vested, the remaining portion of their shares will be returned to the company.
       • The founders of the company are willing to transfer all rights, titles, and interests related to the business venture to the company, including any ideas or work product. They also commit to taking any required actions to guarantee that the company acquires complete legal ownership of the business venture and any associated intellectual property.
       • Any modifications or waivers to the agreement will only be considered valid if they are in written form and signed by all the founders. The process of resignation and removal of founders is outlined in the Founders Agreement.
       • A founder can resign by providing written notice to the other founders. Upon resignation, the departing founder will receive any positive capital account balance within 180 days. If all founders decide to resign, the company will dissolve, and the agreement will terminate after settling the company's affairs and distributing assets and liabilities accordingly. As per the voting rules indicated in the agreement, a majority of votes is required to remove any founder.
       • The company's founders have the responsibility to uphold the confidentiality of any information labeled as 'Confidential Information'. This encompasses a diverse range of sensitive materials such as business records, trade secrets, financial data, intellectual property, and client lists.
       • Disclosure of this information by the founders is only permissible in cases where utmost necessity exists, and such disclosure has to be unanimously agreed upon by all founders.
       • The procedure for resolving disagreements or breaches related to the "Founders' Agreement":
       • First, the parties will attempt to resolve the issue through mediation supervised by the American Arbitration Association or a similar agency.
       • If mediation fails, the parties agree to move to arbitration, which will also be facilitated by the American Arbitration Association or a similar agency.
       • Any court with jurisdiction may then make a decision based on the arbitration award.
       • If any term of the agreement is deemed unlawful, void, or unenforceable by a court, the parties will revise the agreement to the best of their ability while the remaining provisions remain in effect.

       Entire agreement 

       This Founders Agreement serves as the sole document that consolidates all prior agreements and understandings between the parties involved. It accurately captures their complete understanding, rendering any statements or representations made by the other party outside of this agreement unreliable to both parties. Any modifications to this agreement can only be made through a formal revision signed by all parties. With the utmost professionalism, the parties involved have duly completed this agreement as of the aforementioned date.
       
       

       FOUNDER #1

       [Insert Founder Name]
       FOUNDER #2

       [Insert Founder Name]