The Co-Founder Agreement is a crucial document used when establishing a new business venture in Germany, typically at the pre-incorporation stage or during early company formation. It serves as the fundamental contract between founding members, addressing essential aspects such as equity distribution, capital contributions, management rights, and intellectual property assignments. The agreement must comply with German corporate law, including the German Civil Code (BGB) and relevant business legislation. This document is particularly important for startup ventures and new business partnerships, as it helps prevent future disputes by clearly defining each founder's rights, obligations, and expectations. The Co-Founder Agreement should be drafted with consideration of both immediate needs and potential future scenarios, such as company growth, investment rounds, or founder exits.
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1. Parties: Identification of all co-founders and the company (if already incorporated)
2. Background: Context of the agreement, business idea, and purpose of collaboration
3. Definitions: Key terms used throughout the agreement
4. Company Formation: Details about company structure, legal form, and registration process
5. Equity Distribution: Initial shareholding structure and any vesting arrangements
6. Capital Contributions: Financial and non-financial contributions of each founder
7. Roles and Responsibilities: Detailed description of each founder's role and commitment level
8. Decision Making: Governance structure and voting rights for key decisions
9. Intellectual Property Rights: Assignment and protection of IP created before and after formation
10. Confidentiality: Protection of business secrets and confidential information
11. Non-Competition: Restrictions on competing activities during and after involvement
12. Exit Provisions: Procedures for founder departure, share transfers, and company sale
13. Term and Termination: Duration of agreement and circumstances for termination
14. General Provisions: Standard legal clauses including governing law and jurisdiction
1. Founder Employment: Used when founders will also be employees, defining employment terms
2. Share Option Pool: Include when planning future employee share schemes
3. Investment Rights: When anticipating future investment rounds and related rights
4. Deadlock Resolution: For agreements with equal shareholding to resolve potential deadlocks
5. Family Succession Rights: When founders want to include provisions for family inheritance
6. Founder Illness/Incapacity: Provisions for managing long-term illness or incapacity of founders
7. International Operations: When business operations will span multiple countries
1. Business Plan: Detailed business strategy and objectives
2. Initial Shareholding Structure: Detailed breakdown of share ownership and classes
3. Vesting Schedule: Detailed terms of share vesting arrangements
4. Intellectual Property Register: List of all IP assets brought into the business
5. Form of Deed of Adherence: Template for new shareholders joining the agreement
6. Technical Contribution Details: Specification of technical assets or knowledge contributed
7. Founder CVs: Professional backgrounds and qualifications of founders
8. Initial Budget: First-year operational budget and financial projections
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