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Co-Founder Agreement

A Co-Founder Agreement allows you to set out the equity ownership, initial investments and responsibilities of each co-founder. It is a non-binding agreement.

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4.2 (77 reviews)

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Last updated January 13, 2025

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Under 10 minutes

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Suitable for Australia

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Written by

Edwin Montoya Zorrilla

Reviewed by

Damin Murdock

Document Overview

Getting together with a friend or two and creating a new business is an exciting time in any entrepreneur’s life. However, co-founders are often so busy building and running their new business that they skip a hugely important step, the Co-founder Agreement. A Co-founder Agreement is a speculative, non-binding agreement between co-founders setting out the ownership, initial investments and responsibilities of each co-founder. This agreement also safeguards you in the case of a dispute, as it can provide protection to show what the co-founder agreed to.

If you are making a Pty Ltd company, you may also want to consider making a Shareholders Agreement.

The Legal Risk Score of a Co-Founder Agreement Template

Our legal team have marked this document as mediun risk considering:

  • The requirement for unanimous consent for significant decisions, including additional capital contributions and amendments to the agreement, could lead to operational gridlock if co-founders disagree.
  • The assignment of all intellectual property to the project without provisions for compensation beyond equity share may not adequately reward individual contributions, especially if the project's value does not increase as expected.
  • The non-binding nature of the agreement means that the commitments made are not enforceable in court, which could result in uncertainties and reliance on good faith among co-founders.
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Co-Founder Agreement Checklist

Complete your free Co-Founder Agreement with our checklist

Ensure All Signatures Are Collected

Collect signed copies of the agreement from all co-founders to ensure mutual acknowledgment and agreement on the terms outlined.

Seek Legal Review

Have the agreement reviewed by a legal professional to ensure that it meets all necessary legal standards and truly reflects the intentions of all parties involved.

Plan for Binding Agreement

Work towards the incorporation of the project and the signing of a legally binding shareholders agreement as suggested in the document to solidify the terms and conditions agreed upon.

Regularly Review and Update Agreement

Schedule periodic reviews of the agreement to update any terms based on the evolving needs of the project and the contributions of the co-founders.

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