Founders agreement in Bangalore

An Agreement between founders, that outlines all the important aspect of their relationship

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What is a Founders' Agreement?

Bengaluru has always been a place of opportunities, education, career growth, new start-ups etc. Since many people from the nation are landing up in Bengaluru for its sophisticated and peaceful livelihood, the place has become a hub for new beginnings in terms of a career. Entrepreneurship has become a synonym of enthusiasm and many want to become one for achieving their goals in their respective areas of expertise. Because of wide industrial advantages in Bengaluru, people are looking upon themselves that they will be a successful entrepreneurs. Having said that all, a startup requires more than one person’s input for its successful growth and progress and hence a company has more than one founder for fulfilling such purpose. Here comes the role of founders’ agreement. Get founders agreement Bengaluru drafted without stepping out of your house at Company Vakil.

This agreement describes various roles of the founding members of a company; responsibilities also arise with that, the equity vested in them, the ownership of intellectual property created by them and their roles and responsibilities. It is an official contract that is signed between all the co-founders of a firm. This document states all the ownership, and initial investments and responsibilities made by each of the founders of the company. It is suggested to make an agreement at the incorporation stage of an enterprise as it lays out the responsibilities and roles of each of the co-founders. Mainly, 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 targets of all the co-founders by assigning each of them a specific role and responsibility towards the betterment of the enterprise. Founders’ agreement is always better in a written format than an oral contract.

  1. Many matters tend to go undiscussed between co-founders. This agreement gives the opportunity to the team members to discuss the matters that were left undiscussed between co-founders, thus clearing any doubts and allowing for a better relationship.
  2. The members get an opportunity by this. The opportunity generally specifies their role in the company and also gives every founding member a good understanding of the roles of other founding members.
  3. The roles and duties are clearly segregated and defined through Co founders’ agreement Bengaluru.
  4. Investors usually ask for such agreements before investing and increases creditability and investor’s faith.
  5. It also helps formalize the relationship between two or more people who intend to start a business venture.

ESSENTIALS OF A FOUNDERS’ AGREEMENT BANGALORE

  1. Definition of the business
  2. Details of capital raised by founders and investors
  3. Ownership details in the company
  4. Roles and responsibilities of each of the founders
  5. Compensation or salary is drawn
  6. Details of exit formality for founders
  7. Details regarding the dissolution of the firm
  8. Details of dispute resolution
  9. Miscellaneous provisions (assignment of intellectual property rights, non-compete clauses, etc.,)

 

PROCEDURE FOR FOUNDERS’ AGREEMENT BANGALORE

  • The first step is to establish the responsibilities and roles of each co-founder so to have a well-functioned management system.
  • The next step is to allocate ownership of new enterprise amongst founding team. Upfront splitting up of equity between the founders is imperative.
  • It is then necessary to implement terms for market vesting for all founders’ equity so that future planning can be done.
  • When co-founders start reiterating an idea and come up with a business plan or start developing and building a platform or a product, intellectual property (IP) is created. It is necessary to ensure that whatever developments are done in IP do not belong to an individual but the entity.

 

REASONS TO HAVE A FOUNDERS’ AGREEMENT BENGALURU

  • The main cause for entering into this kind of Founders’ contract is that it avoids any future ambiguity that may come up with respect to the enterprise.
  • This agreement sets the expectations and targets of the founders and assigns a specific role and responsibility to them to perform their roles.
  • It identifies possible hurdles and provides precautionary remedies.
  • Keeping in mind the above reasons, entering into a formal, written, and legally enforceable agreement is advisable.
  • The co-founders must engage in discussions about issues like ownership, compensation, the board of directors, titles etc. and must address certain questions regarding the agreement.
  • For arriving at an exact and conclusive answer in respect of such questions, it helps in the examination of the components of a founders’ agreement.

TIME TAKEN in registration process

2-3 days

Founder's Agreement

FREQUENTLY ASKED QUESTIONS


Q1. A Co founders’ agreement Bengaluru should be prepared after or before incorporation?

Generally, it is done before incorporation but it is upon one’s discretion and can be done after incorporation as well.

 

Q2. What is a Co founders’ agreement Bengaluru?

This is an agreement which is made between the co-founders of a company in Bengaluru. It essentially sets out the ownership, duties, responsibilities, and the initial investment of each founder.

 

Q3. What are the compulsory elements of the Co founder agreement Bengaluru?

Ownership, business definition, Capital, roles and responsibilities, compensation and dissolution are important elements of a founders agreement in India.

 

Q4. How much time is taken for getting a Startup founders agreement in Bengaluru?

It usually takes about 2-3 days to get a founder’s agreement.

 

Q5. What are the benefits of a Startup founders agreement in Bengaluru?

Following are the benefits of having it:-

  • It Clears the Air on may matters that may not been discussed between the co-founders
  • It gives an opportunity for early team members to discuss the important matters and clearing their doubts and having a better relationship. 
  • Further on it defines the roles of all the co-founders and early team members. 
  • It leads to a good understanding amongst the founding members.

 

Q6. What is all necessary to be answered in the Co founder agreement Bengaluru?

Therefore, needs to answer any difficult situations that may arise during the course of incorporation, setting up and running of the business.

 

Q7. What are the important components of the Co founder agreement Bengaluru?

A founder’s agreement should necessarily state Goals, ownership, responsibilities, obligations, Procedure for conflict resolution and decision making and Non-compete, non-solicit and confidentiality clauses.

 

Q8. Founder’s agreement is an oral or a written document?

It can be made in both ways but it is preferable to make the document in written format.

 

Q9. What is the best form of a startup founders’ agreement in Bengaluru?

It is always advisable to have a formal, written, and legally enforceable agreement.

 

Q10. What clauses and provisions are added in a founders’ agreement Bengaluru?

Provisions like non-compete clauses, assignment of Intellectual Property rights, loans from founders, severability, etc., usually feature in such contracts.