FOUNDERS AGREEMENT
This Founders Agreement (the "Agreement") is entered into on _____________ (the "Effective Date"), by and among:
_______________, a company incorporated under the laws of India and having its registered office at _________________ (hereinafter referred to as the "Company", which expression shall, unless repugnant to the context thereof, mean and include its successors in interest and permitted assigns) of the FIRST PART;
AND
FOUNDERS (as captured below), of the SECOND PART:
A. ______________, son/daughter of ___________ and residing at _______________ (hereinafter referred to as "_______", which expression shall, unless repugnant to the context thereof, mean and include his heirs, permitted assigns, administrators and successors);
B. ______________, son/daughter of late _____________ and residing at ______________ (hereinafter referred to as "_______", which expression shall, unless repugnant to the context thereof, mean and include his heirs, permitted assigns, administrators and successors);
______________ hereinafter each referred to as "Co-Founder/Founder" and collectively as the "Founders".
The Company and the Founders, wherever the context so permits, shall collectively be referred to as "Parties" and individually as "Party".
NOW, THEREFORE, the Parties agree, effective on the date of this Agreement, to the following terms and conditions:
1. Terms and Conditions
1.1 The Company is in the business of research, development, implementation, license and sale of services for the education industry (the "Business").
1.2 At the time of entering into this agreement, the Founders agree to take on the following roles in the Company:
1.2.1 ___________, being the Chief Executive Officer and Director of the Company, is responsible for technology development and product innovation.
1.2.2 ___________, being the Chief Operations Officer and Director of the Company, is responsible for raising funds, financial activities, collaboration with third parties and Human Resources matters.
1.2.3 ___________, being the Chief Marketing Officer and Director of the Company, is responsible for all marketing activities such as channel development, product management and sale development.
1.2.4 While the above clauses list the broad division of responsibilities between the Founders, the allocation is not strict, and responsibilities on some of the activities may be shared between the Founders. Wherever necessary, the Founders shall co-operate with each other and provide the required assistance towards discharging the specific responsibilities for the benefit of the Company.
1.2.5 In case of any inconsistency in the decisions of the Founders, the majority decision of the Board shall be final and binding. This includes all matters including takeover, asset sale, merger, amalgamation, dissolution or liquidation.
2. Co-Founder Directors
2.1 On the date of execution of this Agreement, the board of directors of the Company (the "Board") shall comprise ____________.
2.2 The Chairman of the Board will not have a casting vote in case of a deadlock.
2.3 The matters listed in Schedule 1 of this Agreement require the affirmative consent of all Founders before the Board can pass any resolution on the same.
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About this template
What is this template?
This is a governance and equity agreement between the company entity and its individual founders. It contains a specific list of 'Reserved Matters' requiring unanimous board approval and a 'Change of Control' acceleration clause for share vesting. It is not a standard employment contract or a simple share purchase agreement.
When should you use it?
Use this when multiple individuals are incorporating a company in India and need to define how unvested shares are handled if a founder leaves. Use a Shareholders Agreement instead if external investors are joining the round and introducing their own standard terms.
What's inside
| Clause | Name | What it does |
|---|---|---|
| 1.2 | Terms and Conditions | Assigns specific roles including Chief Executive Officer, Chief Operations Officer, and Chief Marketing Officer to named Founders. |
| 5.2 | Vesting of Shares | Vests 25% of shares on the Effective Date with the remainder vesting in equal monthly instalments over three years. |
| 6 | Bank Authorization | Requires board determination for all Company purchases and transactions exceeding an unfilled INR amount. |
| 7 | Sale of Shares | Grants remaining Founders a 30-day right of first refusal and a Tag-Along Right on proposed third-party share transfers. |
| 8.2 | Non-Competition | Prohibits Founders from owning more than 5% of a competing publicly traded company while they remain shareholders. |
| 12.1 | Voluntary Termination | Requires an exiting Founder to provide sixty days advance notice and offer unvested shares at Face Value. |
| Schedule 1 | Reserved Matters | Lists 22 specific corporate actions, including expenditures exceeding 15,00,000 Rupees, that require unanimous affirmative consent. |
Who it's for
- co-founders of an Indian private limited company in the research or education industry
- startup founders establishing a three-year monthly vesting schedule for initial equity
- directors requiring a 15,00,000 INR cap on unauthorized capital expenditures
- founding teams defining specific CEO, COO, and CMO roles and responsibilities
How long it runs and how it's signed
Law it's drafted under
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