Easy to Use Legal Templates
Quickly and easily create any legal agreement for you or your team.
Affordable Plans
Straightforward pricing plans and bespoke packages built to simplify all your legal demands.
Vast Document Library
Zegal’s comprehensive collection of agreements means you always have what you need at your fingertips.
What is Zegal?
Watch to see how Zegal can help your business create, negotiate, and sign legal documents and contracts.
Why choose Zegal?
With Zegal, you can reduce legal risks and improve the efficiency of your contract workflow, allowing you to focus on your core business operations.
Our platform is flexible, scalable, and tailored to the needs of your business.
What is a Founders Agreement?
A Founders Agreement is a legal document created between the co-founders of a business at the early stages of the venture. This agreement outlines the ownership structure, roles and responsibilities, and various operational aspects of the company.
A Founders Agreement is a foundational framework for how the business will be run, how decisions will be made, and how disputes among founders will be resolved.
The main advantage of having a founders’ agreement is protection against financial liability for company actions. Drafting a Founders’ Agreement involves:
- Envisioning a venture.
- Sharing passions and ambitions.
- Negotiating.
- Experimenting with business cases for various issues.
- Making projections.
What is the importance of the Founders Agreement?
The importance of a founders agreement lies in its ability to preemptively address potential disputes and misunderstandings by clearly defining the terms of the partnership, including decision-making processes, equity distribution, and procedures for handling the departure or addition of founders.
This clarity and foresight can be invaluable in ensuring the smooth operation and governance of the business, particularly in its formative stages.
One key component often included in Founders Agreements is a share vesting agreement.
What are the things to include in a Founders Agreement?
When drafting a Founders agreement, it is important to focus on a number of key clauses.
- Ownership Structure: Details on the percentage of ownership each founder has in the company. This is usually based on the contribution of capital, resources, or intellectual property each founder brings to the business.
- Roles and Responsibilities: Clear definitions of each founder’s role within the company, including job titles and descriptions of duties. This helps prevent overlap and ensures that all critical business areas have dedicated oversight.
- Capital Contributions: Information on the initial capital contributed by each founder and any future expectations regarding financial contributions.
- Vesting Schedule: A schedule that outlines how and when the founders will earn their equity in the company. Vesting schedules prevent situations where a founder leaves the company early on but retains a significant equity stake.
- Decision Making: Guidelines for making business decisions, including day-to-day management and strategic direction. This section may specify voting rights and what constitutes a majority decision.
- Dispute Resolution: Mechanisms for resolving disagreements between founders to prevent deadlock situations that could harm the business.
- Exit Strategy: Provisions for what happens if a founder wants to leave the company, including how their equity is handled and whether they can be bought out.
Is a founder’s agreement legally binding?
A founder’s agreement is legally binding because it protects the legal rights of each founder by clearly describing the roles and responsibilities of each founder. A founder’s agreement also acts as a dispute resolution mechanism in case it arises in the future.
Do founders get restricted stock?
Founders do get restricted stock, but they are usually vested over a period of time. Founders use restricted stock to ensure continued contribution by all founders for the corporation. Additionally, the company has the right to repurchase any unvested shares at their original issuance price upon termination of employment or during departure.
Conclusion
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. It will help you provide the foundation to your business by outlining expectations, guiding decision-making, and reducing risk. In one simple document, you’ll be able to establish important rules that will set the stage for how you will run your business. Without a clear understanding of how you will work together, things can get messy quickly.
Stay compliant with the Zegal template library
Zegal legal template are meticulously crafted with the precision of AI and the expertise of seasoned human lawyers, providing a unique blend of speed and reliability.
You can trust that Zegal agreements are legally sound and fully compliant with current regulations.
Whether you're a startup, SME, or a larger enterprise, Zegal contract management will automate and speed up your legal processes.
Using Zegal will reduce risk, save money, and improve efficiency. Let us take care of the paperwork so you can focus on running your business.
Don’t compromise on speed or compliance. Stay secure, compliant, and efficient with Zegal.
Nice things people say about Zegal.
"Using Zegal allows us to take a lean and efficient approach that cuts costs while maximising results."
Alex So
Managing Partner
"Zegal is easy to use and customer service is responsive and helpful! I strongly recommend it!!"
Alan NG
CEO
"Zegal makes onboarding a new client or employee fast and simple."
Veronika Kuznetsova
Managing Director
“Zegal really works well for all our legal documentation needs, and it is also user-friendly and mobile at the same time.”
Daniel W. Ho
Managing Director & Principal Consultant
“Zegal is like my teammate, helps me draft the right template, quickly gets my work done, and also saves me money on legal needs.”
Alan Schmoll
CEO & Co-Founder
“With colleagues, partners, and clients across the globe, Zegal provides an easy-to-use tool that streamlines processes that saves costs and time.”
Tony Wines
CEO of Turnkey
“Zegal has been such a great help in my business operations.”
Amanda A Atan
Managing Director at VIBES Mastery
“With Zegal, we work smarter rather than harder. Being a business professional, a proper document management system is always a must.”
Edgar Kautzner
Managing Consultant
“Zegal, a platform for compact package of legal templates, secured e-signing, reasonable cost and high level customer service.”
Paul Falzon
Director
“Zegal is easy to use, affordable and the platform is simple to navigate which makes the process of putting together a document fast and fuss-free.”
Jonathan Wong
Founder & Managing Director
“Love the new flow/design, very quick and easy to use now. I have done 2 or 3 customer contracts in a flash over the past 2 days.”
Chris Head
General Manager and Managing Editor
“Consistently positive experiences with Zegal’s technology, and customer services teams, who ensure that our issues or questions are responded to immediately.”
Tony Wines
CEO of Turnkey