The Founders Collaboration Agreement is essential when two or more individuals or entities come together to establish a business venture in India. This document is typically prepared before or during company formation and serves as the cornerstone of the founding team's relationship. It addresses crucial aspects such as equity distribution, roles and responsibilities, decision-making processes, and intellectual property rights, while ensuring compliance with Indian legal requirements, particularly the Companies Act 2013 and relevant commercial laws. The agreement is especially important for startups and new ventures where clear frameworks for collaboration and dispute resolution are crucial for long-term success. It provides protection for all parties involved and helps prevent future misunderstandings by clearly documenting the founders' intentions and agreements.
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1. Parties: Identification and details of all founding members entering into the agreement
2. Background: Context of the collaboration, business concept, and purpose of the agreement
3. Definitions: Key terms used throughout the agreement and their specific meanings
4. Scope of Collaboration: Detailed outline of the business venture and each founder's role
5. Contributions: Details of initial and ongoing contributions (capital, assets, IP, services) from each founder
6. Ownership Structure: Distribution of equity and any classes of shares among founders
7. Management and Decision Making: Governance structure, voting rights, and decision-making processes
8. Intellectual Property Rights: Assignment and protection of IP created before and during the collaboration
9. Confidentiality: Protection of confidential information and trade secrets
10. Non-Compete and Non-Solicitation: Restrictions on competitive activities and solicitation of employees/customers
11. Founder Commitments: Time commitment, exclusivity, and other obligations of founders
12. Departure and Exit: Procedures for founder exit, including voluntary departure and removal
13. Dispute Resolution: Methods for resolving disputes between founders
14. Term and Termination: Duration of the agreement and circumstances for termination
15. General Provisions: Standard legal clauses including governing law, notices, and amendments
1. Vesting Schedule: Details of equity vesting arrangements when founders' shares are subject to vesting conditions
2. Technology Development: Specific provisions for technology development and ownership when the venture is tech-focused
3. External Investment: Procedures and rights regarding future investment rounds and investor relationships
4. Founder Employment: Terms of employment when founders will be employees of the company
5. International Operations: Additional provisions for businesses operating across multiple jurisdictions
6. Family Succession: Provisions for family-owned businesses regarding succession and family member involvement
7. Special Rights: Any special rights or privileges granted to specific founders
8. Resource Allocation: Detailed provisions for allocation of company resources and opportunities
1. Schedule 1 - Business Plan: Detailed business plan including mission, strategy, and objectives
2. Schedule 2 - Initial Contributions: Itemized list of each founder's initial contributions with valuations
3. Schedule 3 - Ownership Structure: Detailed cap table and share class rights
4. Schedule 4 - Intellectual Property: List of existing IP brought into the venture by each founder
5. Schedule 5 - Reserved Matters: List of decisions requiring special majority or unanimous consent
6. Schedule 6 - Roles and Responsibilities: Detailed description of each founder's roles and responsibilities
7. Schedule 7 - Vesting Terms: Detailed vesting schedule and conditions if applicable
8. Appendix A - Form of Deed of Adherence: Template for new founders or shareholders joining the agreement
9. Appendix B - Share Transfer Forms: Standard forms for share transfers between founders or to third parties
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