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Co Founder Agreement for Pakistan

Co Founder Agreement Template for Pakistan

A comprehensive legal agreement governed by Pakistani law that establishes and regulates the relationship between co-founders of a new business venture. The document outlines crucial aspects such as equity distribution, roles and responsibilities, decision-making processes, and intellectual property rights while ensuring compliance with Pakistani corporate law, including the Companies Act 2017 and Contract Act 1872. It serves as a foundational document that helps prevent future disputes and provides clear guidelines for business operations, exit procedures, and dispute resolution mechanisms.

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Co Founder Agreement

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What is a Co Founder Agreement?

The Co-Founder Agreement is a critical legal document used when two or more individuals decide to establish a business venture together in Pakistan. It should be implemented at the earliest stages of business formation, ideally before or during company incorporation. The agreement comprehensively addresses key aspects of the co-founder relationship including equity distribution, roles, responsibilities, decision-making processes, intellectual property rights, and exit procedures. Operating under Pakistani jurisdiction, it must comply with the Companies Act 2017, Contract Act 1872, and other relevant local legislation. This document is essential for protecting all founders' interests, preventing future disputes, and establishing clear governance structures for the business venture. It typically includes detailed schedules covering business plans, capital contributions, and vesting arrangements.

What sections should be included in a Co Founder Agreement?

1. Parties: Identification and details of all co-founders entering into the agreement

2. Background: Context of the agreement, including the business concept and purpose of the collaboration

3. Definitions: Detailed definitions of key terms used throughout the agreement

4. Business of the Company: Detailed description of the business venture, its objectives, and scope

5. Roles and Responsibilities: Specific duties and responsibilities of each co-founder

6. Equity Distribution: Initial shareholding structure and any vesting schedules

7. Capital Contributions: Details of initial and future capital contributions by each co-founder

8. Decision Making: Process for making key business decisions and voting rights

9. Intellectual Property Rights: Ownership and assignment of IP created before and during the business

10. Confidentiality: Protection of confidential information and trade secrets

11. Non-Competition and Non-Solicitation: Restrictions on competing activities and soliciting employees/customers

12. Exit Provisions: Procedures for co-founder exit, including voluntary and involuntary departures

13. Dispute Resolution: Process for resolving disputes between co-founders

14. General Provisions: Standard legal clauses including governing law, notices, and amendments

What sections are optional to include in a Co Founder Agreement?

1. Tag-Along and Drag-Along Rights: Rights related to share sales when one co-founder sells their stake

2. External Investment: Procedures for accepting external investment and dilution protection

3. Death and Incapacity: Procedures in case of death or incapacity of a co-founder

4. Family Succession Rights: Rights of family members to inherit shares and roles

5. International Operations: Provisions for international business operations and compliance

6. Technology Development: Specific provisions for technology development and ownership

7. Founder Employment Terms: Employment-related terms if founders are also employees

8. Islamic Finance Compliance: Provisions ensuring compliance with Islamic finance principles

What schedules should be included in a Co Founder Agreement?

1. Schedule 1 - Business Plan: Detailed business plan including financial projections

2. Schedule 2 - Initial Capital Contributions: Detailed breakdown of each founder's initial capital contributions

3. Schedule 3 - Vesting Schedule: Detailed equity vesting schedule for each founder

4. Schedule 4 - Intellectual Property Register: List of existing IP brought into the business by each founder

5. Schedule 5 - Share Valuation Methodology: Agreed method for valuing shares for various transactions

6. Appendix A - Founder Details: Detailed information about each founder including contact details and qualifications

7. Appendix B - Company Formation Documents: Copies of company registration and other formation documents

8. Appendix C - Key Performance Indicators: Agreed metrics for measuring founder performance and business success

Authors

Alex Denne

Head of Growth (Open Source Law) @ tiktok成人版 | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

Pakistan

Document Type

Agreement Contract

Cost

Free to use
Relevant legal definitions














































Clauses













































Relevant Industries

Technology and Software

E-commerce

Financial Services

Healthcare

Manufacturing

Professional Services

Retail

Education Technology

Telecommunications

Clean Energy

Biotechnology

Agriculture Technology

Logistics and Transportation

Media and Entertainment

Real Estate

Consulting Services

Relevant Teams

Legal

Executive Leadership

Corporate Governance

Business Development

Strategy

Finance

Human Resources

Company Secretariat

Risk Management

Compliance

Board of Directors

Relevant Roles

Chief Executive Officer

Chief Technology Officer

Chief Financial Officer

Chief Operating Officer

Chief Marketing Officer

Managing Director

Executive Director

Founder

Co-Founder

Managing Partner

Business Development Director

Technical Director

Creative Director

Product Director

Strategy Director

Innovation Lead

Startup Founder

Entrepreneur

Industries








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