Foundation Agreements

Partnership Founder Agreements

Reasons to have a Foundation Agreement

  1. It clearly spells out how you intend to run the corporation hence there are minimal disputes between founders.
  2. The objectives of the corporation are established in the agreement.
  3. The agreement also captures the responsibilities of each founder
  4. Capital contribution and distribution of profits may be included in the agreement.

Key Considerations:

  1. The purpose of the agreement.
  2. Roles and responsibilities of the Founders/Partners.
  3. Whether Third party investments are allowed
  4. Initial total capital and contributions of each Founder
  5. The maximum amount of debt that can be incurred by each Founder in course of running the business.
  6. Withdrawals from the Company’s  account this includes limits and basis for such withdrawals.
  7. Effective date of execution.
  8. Mode of conflict resolution.
  9. 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.

Founder Agreements

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

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 This agreement allows people to collaborate on speculative, early-stage business projects on fair terms, without a lot of hassle or paperwork. An agreement between potential co founders should:

  • Define the relationship of the founders.
  • Outline a basic communication and conflict-resolution clause.

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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.

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This agreement sets forth the terms of compensation for an advisor of  a business. It should also set the term that the advisor will serve the business. An expense clause should be included stating whether all expenses will be paid or only pre-approved expenses will be paid.

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Partnership Agreements

A partnership deed is also known as a partnership agreement. It is a document that outlines the rights and responsibilities of all parties to a business operation. It has the force of law and is designed to guide the partners in the conduct of the business. It is helpful in preventing disputes and disagreements over the role of each partner in the business and the benefits which are due to them.

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This type of agreement ensures that the partners concerned are not personally liable for the liabilities of the Partnership and the liability of a Partner is limited to the amount of his/her capital contribution to the LLP. Therefore, the LLP and the Partners of a LLP are considered to be separate legal entities and the LLP has a perpetual existence, until dissolved by the Promoters.

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This Agreement will terminate an existing Partnership Agreement. It sets forth the date of the original agreement, the ongoing obligations of the partners and each partner’s release of the other from any future causes of action or disputes concerning the partnership. In order to be valid, this agreement must be signed by both partners.

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Other Agreements you may need

This is a formal agreement between two or more parties. To be legally operative, it must

  1. Identify the contracting parties.
  2. Spell out the subject matter of the agreement and its objectives
  3. Summarize the essential terms of the agreement
  4. Be signed by the contracting parties.

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This is an arrangement between two parties allowing a person to act on behalf of another person in certain matters. The person acting as the nominee may be indemnified against the potentially harmful actions carried out by the another person.

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This is an agreement in which one party agrees not to disclose certain information of another. It outlines confidential information that the parties wish to share with one another for certain purposes, but wish to restrict access to or by third parties.

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