18. Insurance and Warranties. Each Founder represents and warrants that he or she is not a party to any other agreement that would limit the Founder`s ability to fulfill his or her obligations under that Agreement. Each founder represents and warrants that no third party may claim any intellectual property rights or other proprietary rights it owns with respect to the product or service. No shareholders` agreement or limited rights agreement, but a binding legal document outlining some of the following conditions (and others): any future agreement requiring participation in the ownership of the business concept and the technology and intellectual property associated with it must be transferred to a third party before the company is set up, must be agreed by each founder. In the case of such an agreement, the obligations arising from this founding cooperation agreement must be disclosed to that third party. – Equity sharing – roles and time commitments – Vesting Schedules + Share issuance – How to make decisions – A co-founder can fire another Instead of letting your startup get to this point, make sure, in your founding agreement, that you know who is responsible for what. As you write down the role and responsibilities of each founder, make sure not only that the goat stops with whom to stop, but also that you and your co-founders warm up each other`s work. Because this kind of inefficiency can lead to the downfall of a startup. «I started a company with four founders and we didn`t define roles,» writes Jason Lengstrof, an expert in remote work. «What happened in the end was that one person didn`t do anything they weren`t interested in, one person started a number of tasks and left them half ready for someone else to accomplish, and one person could only do process-based work, leaving it to the fourth person (me) to do everything else (and write down the processes). It created resentment and made it very difficult to adapt the turnover in the future, because it was found that I could do anything and that is why I became the last point of responsibility, even if later we had defined new roles.
Our only way out was to sell the business. And that`s it! To learn more about us and explore our template library, visit our website. You must also indicate when and how you and your co-founders would agree to the sale of intellectual property. Who makes this decision? Is it a majority vote? Up to the CEO? Vote unanimously? And if this IP is sold, who will have the money? Be sure to sketch out all of these factors in this section. This one is not negotiable. First, put on paper the names of all the parties involved. Also, make sure your startup`s name is in it, even though it might change later. It`s hard to overestimate the importance of a startup name – which is why designating a company can seem so overwhelming. A big name can help take your business to the next step, but a terrible one can flow through you before you`ve even started. So how do you find a big business name? A business creation contract is a legal contract concluded by the founders of a startup. It can cover everything involved until what happens when someone leaves. This is a legally binding contract and should be established at the beginning of the company`s life cycle in order to put everything on the table before a group of co-founders join forces. What will you do if a dispute over something appears in this agreement? In this section, you describe this procedure.
Many startup creators choose to require that any dispute with the founding agreement be settled through binding arbitration, but it`s up to you and your co-founders to decide what you want to do. Now let`s look at the essentials that are a must in any founding agreement.