Shareholder Agreement Founders

In this agreement, we have simplified the language as much as possible in order to make it user-friendly for companies not trained in the courts. We structured the agreement as follows: founders usually don`t have to worry about long-term planning or succession issues in contracts. Avoid the seventy-page “Everything But kitchen sink” type of agreement and leave with something that matches the expected life of the agreement (for most companies, this lifespan lasts until the next funding round or any other significant transaction). In the initial phase of your business, when you put it on track, it`s important to have a clear agreement with your co-founders on the key themes that achieve the company`s goals. To regulate the relationship between the founders and partners of a company (for example.B. Restrictions on the transfer of shares or consents necessary for decision-making), you need a partner contract or a business creation contract. In our application, this document offers you the same protection and the same obligations; This is just a selection of your preferred terminology and the name of the agreement. A shareholders` agreement is an agreement between the holders of shares in the startup company. As a general rule, these agreements concern the following issues: Employed Stock Option Plan (ESOP). If such a plan exists, it is important to document it and conclude an agreement setting out the conditions. Often, founders do not want to address such critical topics at the time of organizing a startup for reasons of time and money. Instead, they are ready to have the existing law and organization of these problems controlled. The problem with this approach is that the law and the company`s organizational documents may not cover all these issues or address them in a way that is satisfactory to the founders.

Founders should agree at an early stage on these concerns; Then, if there is a problem, there is a clear way to deal with it. While company organization documents and contracts for the sale of founding shares may address some of these issues, founders should think carefully about whether to use an additional shareholder agreement to address issues that are not already addressed in these other documents. Here are some important practical thoughts on shareholder agreements that founders should follow. Evaluation of actions. It is important that the agreement focuses on the valuation of shares. These clauses can help avoid valuation conflicts between founders and are especially important in the pre-revenue phase of a company, as there are often uncertainties, especially among technology companies, about the real value of the business. A valuation clause provides that shareholders are required to periodically (z.B. annual or semi-annually) determine the value of the shares and determine how the valuation is carried out.

There are two main approaches to evaluation. Since startups are very close when they are created, there is concern that only the founders hold the initial shares and that there are limits as to when the shares can be sold or transferred in another way. The company and/or the other founders would be characterized by a right of pre-emption for the transfer of shares – the selling founder would have to have the company and/or other founders acquire the shares under the same conditions as those offered by a third-party buyer. The founders may also have rights of co-location insofar as the right of pre-emption is not exercised. .