Co-founder Agreements


A co-founder agreement is a legal document that protects a new business from any disputes arising between the founders in the future. It consists of information like the founder(s) details, capital contributed, and the roles assigned to different co-founders.

Co-founder Agreement Lawyers Perth

A co-founder agreement is a document agreed upon and signed by the founders of a business. It includes information like ownership details and capital invested. Disputes among founders are common due to difference in opinions, uneven work-distribution, or finance-related arguments. To prevent such events from damaging the business, a co-founder agreement must be signed between the partners. The agreement should contain all the conditions necessary to deal with such arguments. Co-founder dispute lawyers give legal advice to companies regarding co-founder agreement execution and the prevention of potential future disputes.

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Things That Need To Be Included In A Co-founder Agreement:

  • Distribution of ownership clause – It evaluates the distribution of equity among the founders at the start of the business. It is based on several aspects like the capital invested by each founder, connections in the target market, and experience. It prevents the rise of disputes in the future regarding the ownership status of the founders.
  • Provisions regarding the exit of a co-founder – The agreement must contain provisions for the situation when a co-founder resigns or is terminated from the company. It also includes the details regarding the distribution of the former founder’s shares among the remaining ones.
  • Roles and responsibilities – It is important to assign the roles and responsibilities of the co-founders beforehand. It also includes the list of departments headed by the founders like marketing or administration.
  • Value addition by the co-founders – The founders add value to the firm in the form of intellectual work, technical knowledge, or strong marketing leads. There must be an agreement between the co-founders regarding these additions and the equity gained in return. It helps in maintaining transparency between the founders.
  • Decision-making powers – While running a business, there is a need to make difficult decisions. The structure of decision making in a company decides its future. The agreement consists of the board structure and the hierarchy of decision-making abilities.
  • Source of finance – Apart from the initial capital contributed by the founders, the business will need a steady source of finance to function on a day-to-day basis. It is essential to decide the distribution of finances among the founders to prevent a financial standstill in the future.
  • Clause of Confidentiality – The co-founders must enter a confidentiality clause in the agreement to prevent any leaks of sensitive information or trade secrets. It restricts the founders from sharing sensitive information acquired through the company to any external source as such sharing might cause harm to the business.
How Can Our Commercial Lawyers Help You With Co-founder Disputes?

How Can Our Commercial Lawyers Help You With Co-founder Disputes?


Co-founder agreement lawyers at commercial law lawyer Perth help in formulating the conditions of the agreement. Specific terms are needed to continue the smooth running of the company despite any dispute. The legal team can advise you on constructing the agreement to ensure proper equity distribution and confidentiality. Loopholes in the co-founder agreement can disrupt the functioning of the business, so it is necessary to hire proper legal support to ensure error-free execution of the agreement and to prevent any future disputes.

How Can Our Commercial Lawyers Help You With Co-founder Disputes?
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