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Founder Agreement


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The founder agreement is basically an official contract or a legal agreement that is implemented between the co-founders of the company while setting up a business.

This agreement explains the roles, rights, duties, responsibilities, ownership, liabilities as well as the investment proportion of each founder. It is important for you to know that a founder’s agreement should be made in the written format strictly and not in oral.

Two or more partners together can enter into the founder’s agreement which is called co-partners or co-parties. All the founders will enter into the agreement at the time of establishing the business or company.

The main objective of the founder’s agreement is to avoid clashes concerning business activities which often arises with time between the co-founders.

You need to know that this agreement perfectly sets out the plans of the founders who must act within the ambit and who needs to follow the obligatory provisions that are laid down.

Founder agreement also assists in undertaking undefined incidences such as the death of the co-founder and resignation that directly has an effect on the sustained growth as well as the smooth functioning of the business.

Documents required for the founder agreementΒ 

Some of the important documents required for this agreement include:

  • Address proof of all co-founders
  • Identity proof of witnesses
  • Identity proof of all the co-founders
  • A clear aim of the company
  • The number of equity shares of every co-founder
  • The complete percentage of shares of each co-founder

Why it is required?Β 

This agreement often helps in mentioning clearly nature as well as the type of entity that needs to be established by the co-founders, as a result, a proper path is laid down that should be followed.

It also defines the vision, as well as the mission of the entity and effectively, sets the short-term and long-term objectives that need to be attained over time. With this agreement, it becomes easy to assign the roles and responsibilities of the co-founders.

Therefore, to know more about this agreement in detail, you can contactΒ BusinessBadhega.comΒ who has a team of proficient personnel.

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