Founders Service Agreement Template for England and Wales

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Key Requirements PROMPT example:

Founders Service Agreement

"I need a Founders Service Agreement for my UK-based fintech startup, where I'll be serving as both CEO and board member, with a focus on equity-based compensation and specific provisions for intellectual property protection in the financial technology sector."

Document background
The Founders Service Agreement is essential when establishing a formal relationship between a startup and its founder(s) under English and Welsh law. This document is typically used during company formation or when formalizing existing arrangements, providing clarity on the founder's position, duties, and benefits. The agreement covers crucial aspects such as equity arrangements, intellectual property rights, confidentiality obligations, and termination provisions. It serves as a foundational document that helps prevent future disputes and ensures all parties understand their rights and obligations.
Suggested Sections

1. Parties: Identification of the company and the founder

2. Background: Context of the agreement and founder's relationship with company

3. Definitions: Key terms used throughout the agreement

4. Appointment and Term: Terms of appointment and duration

5. Duties and Obligations: Founder's responsibilities and commitments

6. Remuneration: Compensation, benefits, and expenses

7. Intellectual Property: IP rights assignment and protection

8. Confidentiality: Non-disclosure obligations

9. Restrictive Covenants: Non-compete and non-solicitation provisions

10. Termination: Circumstances and process for ending the agreement

11. General Provisions: Standard boilerplate clauses including governing law, notices, and entire agreement

Optional Sections

1. Share Options: Details of any share option schemes - include when founder is being offered equity incentives

2. Board Position: Terms of board appointment - include when founder will serve as director

3. International Travel: Terms for international work - include when role involves international duties

4. Garden Leave: Provisions for garden leave during notice period - include when heightened business protection is needed

Suggested Schedules

1. Schedule 1: Share Vesting Terms: Detailed vesting schedule and conditions for any equity compensation

2. Schedule 2: Job Description: Detailed outline of roles and responsibilities

3. Schedule 3: Company Policies: Key policies founder must comply with

4. Schedule 4: Benefits Package: Detailed description of benefits and allowances

5. Schedule 5: Restricted Activities: Detailed list of competitive activities and restrictions post-termination

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

Clauses
Industries

Employment Rights Act 1996: Primary legislation governing employment rights, including contracts, unfair dismissal, and basic employment protections

Companies Act 2006: Core legislation governing company operations, directors' duties, and corporate responsibilities

Copyright, Designs and Patents Act 1988: Legislation protecting intellectual property rights, crucial for founder-created IP

UK GDPR and Data Protection Act 2018: Laws governing personal data processing and protection requirements

Income Tax Act 2007: Legislation governing taxation of income, relevant for founder compensation

Unfair Contract Terms Act 1977: Law regulating unfair terms in contracts and limiting their enforceability

Competition Act 1998: Legislation relevant for non-compete clauses and competition restrictions

Working Time Regulations 1998: Rules governing working hours, rest periods, and related rights

Equality Act 2010: Anti-discrimination legislation protecting against unfair treatment

National Minimum Wage Act 1998: Legislation ensuring minimum compensation requirements are met

Trade Marks Act 1994: Protection of company brands and trademarks created during founder's service

National Insurance Contributions Act 2014: Legislation governing social security contributions for founders

Financial Services and Markets Act 2000: Regulatory framework for financial services companies if applicable

Small Business, Enterprise and Employment Act 2015: Legislation affecting small business operations and employment

Consumer Rights Act 2015: May be relevant if the business involves consumer interactions

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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