A founders' agreement sets out co-founders' roles, equity split, vesting (commonly four years with a one-year cliff), assignment of IP to the company, decision-making, commitment, confidentiality, and what happens when a founder leaves, including good leaver and bad leaver terms. It is best signed at or soon after incorporation.
Core terms
- Roles and time commitment
- Equity split and vesting
- IP assignment
- Decision-making and deadlocks
- Confidentiality and non-solicit
Leaver provisions
Unvested shares return to the company; good leavers may keep vested shares at fair value, bad leavers at lower value.
Why investors care
Clean IP ownership and vesting reduce risk in due diligence.
Short on time? Leegal can handle Founders Agreement for you, end to end.
Get expert help →Implementation
Reflect vesting and transfer restrictions in AoA or share agreements.
Frequently asked questions
Is vesting enforceable in India?
Yes, typically through share transfer or buyback mechanisms in agreements and AoA.
Should equity be split equally?
Not necessarily; base it on contribution, role and commitment.
Can non-competes be enforced?
Post-exit non-competes are restricted by Section 27 of the Contract Act; confidentiality and non-solicit are more enforceable.
What if founders never signed one?
Sign a restated agreement before fundraising.
Let Leegal handle your Founders Agreement
Documentation, filing and follow-up by a dedicated expert, so you can focus on running your business.
- Dedicated point of contact
- Transparent pricing
- Pan-India service