Founders' Agreement (India) by OLL
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FOUNDERS AGREEMENT
This Founders Agreement (the “Agreement”) is entered into, on _____________, (“Effective Date”), by and among:
_______________, a company incorporated under the laws of India and having its registered office _________________,
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This template outlines the governance, ownership, and operational framework for a new company's founders. It covers essential aspects such as equity vesting, roles and responsibilities, non-compete clauses, and procedures for the sale of shares or founder departure.
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About this template
What is this template?
This document is a governance contract between a company and its initial founders that defines equity ownership, vesting, and decision-making authority. It is not a standard employment contract, as it contains specific clauses for 'Reserved Matters' requiring unanimous consent and 'Tag-Along Rights' for share transfers.
When should you use it?
Use this when multiple individuals are incorporating a company in India and need to lock in roles, intellectual property assignments, and share vesting terms. If you are hiring an early employee rather than a founder, use an Employment Agreement with an ESOP Addendum instead.
What's inside
| Clause | Name | What it does |
|---|---|---|
| 1 | Terms and Conditions | Assigns specific C-suite roles including CEO, COO, and CMO and specifies that majority Board decisions are final. |
| 2 | Co-Founder Directors | Removes the Chairman's casting vote and lists Reserved Matters in Schedule 1 requiring unanimous consent. |
| 5 | Vesting of shares | Vests 25% of shares on the Effective Date with the remainder vesting in equal monthly installments over 3 years. |
| 6 | Bank Authorization | Requires Board determination for all purchases and transactions exceeding a specific INR amount. |
| 7 | Sale of Shares | Grants remaining Founders a 30-day right of first refusal and a Tag-Along Right for third-party sales. |
| 8 | Non-Disclosure and Non-Competition | Prohibits engaging in competitive business or owning more than 5% of a competitor's stock until a Founder exits. |
| 12.1 | Voluntary Termination | Requires 60 days' notice for resignation and mandates the transfer of unvested shares at face value. |
| 12.2 | Termination for Cause | Permits immediate removal for fraud or gross negligence and triggers a compulsory buy-back of shares at face value. |
Who it's for
- co-founders of an Indian company in the education technology research and development industry
- founders implementing equity vesting schedules over a three-year period to manage early-stage exits
- business partners in India requiring unanimous approval for creation of ESOP pools or debt over INR 1,500,000
- Indian startups seeking exclusive jurisdiction of courts in Bangalore for shareholder disputes
How long it runs and how it's signed
Law it's drafted under
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