Partnership Founder Agreements
Reasons to have a Foundation Agreement
- It clearly spells out how you intend to run the corporation hence there are minimal disputes between founders.
- The objectives of the corporation are established in the agreement.
- The agreement also captures the responsibilities of each founder
- Capital contribution and distribution of profits may be included in the agreement.
- The purpose of the agreement.
- Roles and responsibilities of the Founders/Partners.
- Whether Third party investments are allowed
- Initial total capital and contributions of each Founder
- The maximum amount of debt that can be incurred by each Founder in course of running the business.
- Withdrawals from the Company’s account this includes limits and basis for such withdrawals.
- Effective date of execution.
- Mode of conflict resolution.
- Mode of termination of the agreement once goal is accomplished.
FREQUENTLY ASKED QUESTIONS
1. What happens if we wish to change the terms of the agreement?
You can amend the agreement by entering another agreement amending the other. All Uwakili agreements give allowance for amendment via a written agreement consented to by all parties. Amendment can be of even a single clause.
2. What if we want to change roles and responsibilities?
The agreements leave it open for the parties to determine roles and responsibilities in the future i.e. after the agreement is entered into. This is because circumstances and Parties may change; however it is important for the Parties to have a discussion about this and have them outlined clearly whether or not they will change later on.
3. What if the capital base changes?
This contract only requires that the initial capital be indicated. Should the capital base increase over time then this will be reflected in the books of account which the agreement requires to be kept.
- Founders' Accord
- Founders' Collaboration Agrement
- Founder Advisor Agreement
- Advisor Compensation Agreement
A Founder’s accord provides new business owners with a written outline of founding team’s roles and responsibilities. It is essential when settling founder disputes that may arise in future and serves as a valuable reference point. It basically covers the following matters:
- Company Name
- Business Idea
- Founders’ Names
- Equity Stakes
- Job Titles
- Board of Directors
- Ownership Stakes
- Confidentiality Requirements
- Define the relationship of the founders.
Outline a basic communication and conflict-resolution clause.
A founder advisor agreement usually defines a startup-advisor relationship. It sets forth the advisor’s incentive equity amount and a vesting schedule. It should also include various terms and conditions. A Founder advisor agreement may be terminated by either the startup or the advisor at their consent.
Other Agreements you may need
- Identify the contracting parties.
- Spell out the subject matter of the agreement and its objectives
- Summarize the essential terms of the agreement
- Be signed by the contracting parties.