Introduction to the Co-Founder’s Agreement
A co-founder’s agreement is a legally binding document or contract which is used to outline the roles and responsibilities of the individual owners’ within the organisation and outside as well.
This contract is basically in a written format and can be a standalone document. Another main importance of co-founder’s agreement is that it is designed to protect the rights and interests of each and every co-founder which ultimately would prevent the conflicts down the line.
This valuation is necessary and important for each and every firm or any kind of a business entity.
Need for a cofounder’s agreement
The following are the reasons why the cofounder’s agreement is required.
It uniquely distinguishes each owner’s individual role in the business
It outlines a clear structure for resolving the disputes amonGST the founders
It clearly mentions when the partner would enter and exit the business.
It tells the investors that this business is a serious one
It protects the minority owners of the business