Overview
A Founders Agreement is a legal document entered into by the founders of a company at the early stage of the business. It defines the relationship between the founders and sets out their respective roles, responsibilities, ownership structure, and rights. In India, a Founders Agreement plays a crucial role in avoiding future disputes by clearly documenting the understanding between co-founders before the business grows.
The agreement typically covers important aspects such as equity shareholding, capital contribution, decision-making powers, management roles, vesting of shares, and restrictions on transfer of shares. It also addresses confidentiality, non-compete obligations, and intellectual property ownership. By putting these terms in writing, founders can ensure alignment and commitment towards the long-term vision of the company.
Many startups face internal conflicts due to lack of clarity among founders regarding ownership and control. A well-drafted Founders Agreement helps prevent such situations by defining exit mechanisms, dispute resolution methods, and consequences of founder misconduct or withdrawal. This document becomes especially important when external investors or stakeholders are involved.
At BizGlobal, we assist startups and entrepreneurs in drafting clear and customised Founders Agreements that protect the interests of all founders. Our team ensures that the agreement is aligned with Indian corporate laws and business goals, providing a strong foundation for sustainable growth and investor confidence.
