{"id":56435,"date":"2021-06-10T13:38:32","date_gmt":"2021-06-10T05:38:32","guid":{"rendered":"https:\/\/zegal.com\/set-up-a-founders-agreement\/"},"modified":"2024-12-27T17:23:59","modified_gmt":"2024-12-27T09:23:59","slug":"set-up-a-founders-agreement","status":"publish","type":"page","link":"https:\/\/zegal.com\/en-au\/use-case\/set-up-a-founders-agreement\/","title":{"rendered":"Set up a founders’ agreement"},"content":{"rendered":"\n

To start, differing from a Shareholders\u2019 Agreement <\/a> \u2014which is typically created after company incorporation\u2014 a Founders\u2019 Agreement is drafted before incorporation. <\/p>\n\n\n\n

Typically, the definition of \u201cfounder\u201d is the \u201centrepreneur who started the business\u201d. In legalese, the founder is \u201cthe first shareholder\u201d of a business. Generally, the details in a pre-incorporation Founders\u2019 Agreement are brief and broad. Whereas a shareholders agreement is written with much more detail. <\/p>\n\n\n\n

A solid Founders\u2019 Agreement<\/a> needs to clearly state several items about your business. These details include the capital put in by each founder; the individual roles and responsibilities; the percentage of shares held by each founder; the intellectual property details; and, importantly, what will happen when one founder wishes to exit the company. Additionally, it\u2019s important to note if the leaving member faces restrictions from competing with the business after exit. <\/p>\n\n\n\n

When drafting a Founders\u2019 Agreement <\/strong>you need less detail than in a Shareholders\u2019 Agreement. However, it is important to focus on a number of key clauses. In particular:<\/p>\n\n\n\n