Starting a business with co-founders and multiple shareholders can be quite a daunting proposition, particularly for those of us who are new to such a situation.
We’ve put together the following guide to help understand what legal documents are needed to get started:
1. Shareholders Agreement
Running a company is difficult, change occurs at rapid pace, emotional and physical demands may strain relationships, disagreements occur. A Shareholders Agreement provides a way to resolve disputes. It also lays down the rules between the shareholders of the company, it deals with directors duties, voting rights, share sale rules and investment decisions.
2. Assignment of Intellectual Property Agreement
In a nutshell, intellectual property law is the law that protects work and ideas. Having an intellectual property agreement allows for co-founders and employees to transfer their IP over to the company when they work for that company. This ensures that the company legally owns the intellectual property its employees create.
3. A vesting agreement
A vesting agreement is one between a company and employee when talking about company stocks. A business might make the decision to issue equity and shares of the business to its employees over time, but many businesses make the mistake of doing this without any process. A vesting agreement includes things like key performance indicators, employee milestones and vesting ‘triggers’ to make sure there is a process to issuing equity correctly and at the right time.
Unsure where to start? Contact a LawPath consultant on 1800LAWPATH to learn more about customising legal documents, obtaining a fixed-fee quote from our network of 600+ expert lawyers or to get answers to your legal questions.