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Whether you're hoping to go public or starting a modest company with a few close friends, a Founders' Agreement is a great first step for your business. You'll be able to lay out and establish... Read more
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Making a Founders' Agreement
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What is a Founders' Agreement?
Whether you're hoping to go public or starting a modest company with a few close friends, a Founders' Agreement is a great first step for your business. You'll be able to lay out and establish important rules around decision-making power, ownership distribution, and distribution of your business's shares, all in one simple document. Keep in mind that you don't need to file a Founders' Agreement with your state or local government, so simply create one and keep it with your other important corporate documents, like your Meeting Minutes and tax records.
Use the Founders' Agreement document if:
- You want to lay out the ownership distribution for your new business
- You want to establish the relationship between your business's co-founders
Since a Founders' Agreement isn't a legal requirement to go into business, you can actually create one as soon as you and your co-founders have the idea for your business. The important thing is that your Founders' Agreement codifies the rules you and your business partners will adhere to as your business grows and prospers. It's important to nip any possible disagreements in the bud and make sure that everyone knows where they stand, as far as ownership and decision-making powers are concerned.
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