Different Types of Founders’ Agreements

June 25, 2017

A Founders’ Agreement is an agreement that governs the relationship between the co-founders of a company. It describes their respective rights and obligations and how the company should be operated. The main purpose is to ensure that the founders are on the same page and to avoid misunderstandings and disputes in the future.

To learn more, please select the Founders’ Agreement you need:

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Collaborating & Expanding your Business

A Business Collaboration Agreement is a binding document that sets out the rules for cooperation between two companies. This is common when two companies work closely together to complete a project and establishes how the companies will work together, who will do what, the division of tasks, and how the relationship will end.

Working together with a distributor might be a good way to expand your business. A Distribution Agreement can be used to set out terms and conditions of a distribution arrangement. It is important to specify the terms of the cooperation from the start so you can avoid misunderstandings during the course of the relationship.

You may also outsource work using a subcontractor. If you have entered into a contract but want to hire a subcontractor to perform some or all of the work, then you should use a legally binding Subcontracting Agreement to set out the arrangement.

When distributing goods through consignment, use a Consignment Agreement. This is an agreement where a person or business (consignor) ships or entrusts goods to another party (consignee) for the purpose of selling the goods to the end consumer. The consignee generally does not pay the consignor until the goods are purchased by the consumer and the consignee does not receive ownership of the goods.

When sourcing goods for a client from a manufacturer, there are usually three parties involved: the client, the sourcing company, and the manufacturer. An Introduction Agreement sets out the details of such an arrangement and can make sure the client can’t contact the manufacturer directly or vice versa.

Business referrals can help to grow a business significantly. It is best to use a Business Referral Agreement that sets out how much, when, and how the referrer will be paid their fee.

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Before Starting a Business Relationship

If you are looking for potential business partners and will share your business ideas, ask them to sign a Confidentiality Agreement. Under such an agreement, they are legally bound not to disclose or discuss any confidential information to a third party and may use the information only for a specified reason. Use a one-way Confidentiality Agreement if only one business is sharing information or a two-way Confidentiality Agreement if both parties are revealing sensitive information.

A Letter of Intent, also called a Memorandum of Understanding (MOU), can help to set out the key terms of a potential agreement before you enter into a formally binding contract. A Letter of Intent (MOU) typically includes details of the proposed agreement, pre-conditions, key obligations, and intended signing date. This document is not legally binding, but it can contain certain legally binding clauses such as confidentiality.

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Sell Goods & Services

June 20, 2017

There is a wide range of contracts that need to be used in the course of doing business, often dependent on the nature of your business and the country in which you are operating.

Before starting any commercial negotiations, it is a good practice to enter into a Confidentiality Agreement, also know as a Non-Disclosure Agreement (NDA), with businesses to whom you may be disclosing sensitive information. It gives you the ability to take legal action if the other party discloses the information to a third party without your consent.

After a preliminary meeting or discussion and before you enter into a commercial relationship, you can use a Letter of Intent (Memorandum of Understanding) to set out the key terms of the future agreement and the next steps. When working closely with another company, you might need a Collaboration Agreement. When you are selling goods, use a Sale of Goods Agreement, and if a service is being provided, use a Supply of Services Agreement. When you are supplying goods to be distributed, or distributing goods for another business, you need a Distribution Agreement, which regulates how much will be paid, when delivery will take place, and when the distributor will take responsibility for the goods.

A Letter of Intent (Memorandum of Understanding) can help to set out the key terms of a potential agreement. A Letter of Intent (Memorandum of Understanding) typically includes details of the proposed agreement, pre-conditions, key obligations, intended signing date, and next steps. This document is not legally binding but it can contain certain legally binding clauses such as confidentiality to protect sensitive information.

A Collaboration Agreement is a binding document that sets the rules for the cooperation between your company and another. This is common when two companies must work together to complete a project, and it establishes how the companies will work together, who will do what, and how the relationship will end.

A legal agreement for the sale of goods or supply of services helps to make your customers aware of their rights and obligations from the moment you start doing business with them. If you are selling goods, you will need a Sale of Goods Agreement. It typically covers the description of what is to be bought, the price, and practical details such as delivery time and returns. Use a Supply of Services Agreement when one business provides services to another. This agreement describes the scope of services provided as well as the service levels, the fees to be paid, and how to terminate the agreement. Working together with a distributor might be a good way to expand your business. A Distribution Agreement can be used to set out terms and conditions of a distribution arrangement. Whether you are the party supplying or distributing the goods or products, it is important that you specify the terms of your cooperation from the start so you can avoid misunderstandings during the course of your relationship.

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Go Online

As e-commerce has grown, legislation that governs online business has become much stricter. Depending on your jurisdiction, a Website Privacy Policy and Website Terms of Use can be minimum legal requirements, even if your website doesn’t sell goods or services online.

Whether because of the law, or simply because it’s good practice, website providers should clarify how personal data (e.g. name, contact details) provided by users will be used in a Website Privacy Policy. By clarifying the scope of personal data usage and protection, website providers can comply with legal or regulatory requirements for data collection and therefore avoid future disputes concerning data privacy infringement.

A Website Terms of Use sets out the legal relationship between the website operator and its users and ensures that users agree to the terms when using the website. A user often agrees to these terms by clicking a box or simply by using the website.

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