Founder and Partnership Agreements

You supply the talent, ideas, and ambition. We’ll supply the legal guidance to help your startup with formation, IP protection, and growth strategies.

For any entrepreneur, deciding to go into business with colleagues or friends is a big and exciting step. It’s important, however, to keep your eye on the business side of things. While contracts and legal formalities may not be nearly as fun as watching your dream become a reality, having the right agreements in place is critical to the success of your company.

Chances are, you’re launching your business with people you know and trust. For many, it’s hard to imagine that these relationships could ever go downhill or end in disagreements. The reality, though, is that businesses encounter unexpected conflicts all the time. When no contingencies have been put in place to account for these possible disputes, it’s the business that suffers.

That’s why it’s so crucial to have proper agreements in place from day one. What seem like boring formalities now are the only things that will truly protect your business interests in the future.

Outlining the Future of Your Company

Whether a business is formed as a partnership, an LLC, or any other form of entity, the co-founders need to make sure that they’re on the same page before they take the plunge of going into business together. As with any prospective relationship, planning for future contingencies will save you a lot of time and stress months or even years down the road.

Founder and partnership agreements are often thought of as the prenuptial agreements of the business world. It’s not enough that you and your co-founders share a mutual desire to run a successful business and make money. You need to make sure that you’re in agreement with respect to how the business will be run.

Some of the main issues that partnership or founder agreements often address include:

• The overall vision or goal for the company;
• Setting ownership percentages and deciding how they work;
• Determining who will contribute things like money, time, labor, or property;
• Defining the roles and responsibilities of the founders;
• Setting salaries and profit distributions, if any;
• Establishing how key company decisions will be made, and what decisions will require unanimous agreement;
• Selecting a dispute resolution mechanism;
• Defining the process for a partner leaving or being removed from the company, and what happens to his or her ownership shares;
• Outlining a procedure for adding new partners or hiring employees;
• Deciding how the business can be sold or terminated.

This list is far from exhaustive. Your founding agreements should focus on the issues that you consider most integral to your company’s success. Failing to provide for later bumps in the road could be the death knell of your business when you inevitably reach an impasse.

Not a One-Size-Fits-All Approach

In an age where the Internet places everything we need at our fingertips, it might be tempting to simply download and sign one of the countless founder or partnership agreement templates that you can find online. But while that may be easy, it would also be a mistake.

Every business is unique. The needs and goals of your business aren’t the same as those of your neighbor, so why would the same cookie-cutter agreement work for both of you? Businesses are creatures of contract, and those contracts should be tailored exactly how you want them to be.
We understand that the legal formalities associated with starting a business can seem overwhelming. That’s why it’s important to enlist the help of someone who knows the process inside and out. We’ll help you customize your partnership or founder agreement to your specific needs, setting you on the path to success by ensuring that your company starts off on the right foot.