Co Founder Equity Agreement Template for England and Wales

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Key Requirements PROMPT example:

Co Founder Equity Agreement

"I need a Co-Founder Equity Agreement for my new fintech startup launching in March 2025, with three co-founders having different equity splits (40/40/20) and a four-year vesting schedule with a one-year cliff."

Document background
The Co-Founder Equity Agreement is essential when two or more individuals come together to establish a business venture in England and Wales. This document is typically used at the company's formation or shortly thereafter, defining crucial aspects such as equity distribution, vesting schedules, roles and responsibilities, and exit provisions. It provides legal protection and clarity for all founding members, helping prevent future disputes and misunderstandings about ownership and control.
Suggested Sections

1. Parties: Identification and details of all co-founders and the company

2. Background: Context of the agreement and relationship between parties

3. Definitions: Key terms used throughout the agreement

4. Equity Allocation: Details of share distribution between co-founders

5. Vesting Provisions: Terms of share vesting schedule and conditions

6. Roles and Responsibilities: Defined roles and duties of each co-founder

7. Transfer Restrictions: Limitations on share transfer and right of first refusal

8. Termination: Circumstances and processes for agreement termination

Optional Sections

1. Intellectual Property Rights: Provisions for IP ownership, assignment and protection between co-founders and the company

2. Non-Compete Provisions: Restrictions on competitive activities and protection of business interests

3. Investment Rights: Terms governing future investment rounds and related rights

4. Good/Bad Leaver Provisions: Specific terms and consequences for voluntary or involuntary departure of co-founders

Suggested Schedules

1. Share Vesting Schedule: Detailed timeline and conditions for share vesting

2. Business Plan: Initial business plan and strategy document

3. Share Certificate Templates: Standard forms for share certification

4. IP Assignment Forms: Templates and forms for intellectual property transfer documentation

5. Shareholders' Rights Schedule: Detailed breakdown of shareholder privileges, obligations and voting rights

Authors

Alex Denne

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

Relevant legal definitions
Clauses
Industries

Companies Act 2006: Primary legislation governing company formation, share capital, directors' duties, shareholders' rights, and share transfer provisions in England and Wales

Employment Rights Act 1996: Legislation covering employment status, rights, and service agreements for co-founders who may also be employees

Financial Services and Markets Act 2000: Regulatory framework for financial activities and investments that may be relevant to the equity agreement

Partnership Act 1890: Legislation governing partnership relationships and obligations between partners, relevant if the arrangement could be construed as a partnership

Contract Law: Common law principles governing contract formation, consideration, and capacity to contract under English law

Copyright, Designs and Patents Act 1988: Primary legislation governing intellectual property rights and IP assignment provisions

Trade Marks Act 1994: Legislation governing trademark protection and rights that may need to be addressed in the equity agreement

UK GDPR and Data Protection Act 2018: Data protection legislation governing the processing and protection of personal data

Income Tax Act 2007: Tax legislation relevant to equity arrangements, share schemes, and personal income

Competition Act 1998: Legislation governing competition law and anti-competitive practices that may affect the agreement

Enterprise Act 2002: Additional competition law framework relevant to business arrangements and mergers

Insolvency Act 1986: Legislation governing business failure scenarios, creditors' rights, and insolvency procedures

Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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