Consulting For Equity Agreement Generator for United States

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Key Requirements PROMPT example:

Consulting For Equity Agreement

"Need a Consulting For Equity Agreement for a senior software architect who will help develop our AI platform for 18 months starting January 2025, offering 2% equity vesting over 2 years with a 6-month cliff."

Document background
The Consulting For Equity Agreement serves as a critical legal instrument for companies, particularly startups and growth-stage businesses in the United States, that wish to leverage external expertise while preserving cash resources. This agreement type is commonly used when companies seek to attract high-value consultants by offering equity compensation as an alternative to traditional cash payment. The document addresses key aspects such as service scope, equity terms, vesting conditions, and IP rights, while ensuring compliance with SEC regulations and state securities laws. The agreement is particularly valuable for early-stage companies looking to access expertise while aligning consultant interests with long-term company success.
Suggested Sections

1. Parties: Identification of the consulting party and the company receiving services

2. Background: Context of the agreement and general purpose of the consulting arrangement

3. Definitions: Key terms used throughout the agreement including 'Services', 'Equity Compensation', 'Intellectual Property'

4. Scope of Services: Detailed description of consulting services to be provided

5. Equity Compensation: Details of equity grant, including type, amount, and vesting schedule

6. Term and Termination: Duration of agreement and conditions for termination

7. Intellectual Property Rights: Assignment and ownership of IP created during consulting period

8. Confidentiality: Protection of confidential information and trade secrets

Optional Sections

1. Additional Compensation: Any cash or other compensation beyond equity - include when hybrid compensation model is used

2. Expenses: Terms for reimbursement of consultant expenses - include when consultant may incur reimbursable expenses

3. Non-Competition: Restrictions on competing activities - include when protecting against competitive threats

4. Insurance: Requirements for professional liability insurance - include when services involve significant risk

Suggested Schedules

1. Schedule A - Services Description: Detailed outline of consulting services and deliverables

2. Schedule B - Equity Terms: Detailed terms of equity grant, including vesting schedule

3. Schedule C - IP Assignment: Specific IP assignment provisions and procedures

4. Appendix 1 - Securities Law Disclosures: Required securities law notices and acknowledgments

5. Appendix 2 - Company Stock Plan: Reference to or excerpt of relevant company stock plan

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

Securities Laws: Primary federal regulations including Securities Act of 1933, Securities Exchange Act of 1934, SEC Rule 701 for equity compensation, SEC Rule 144 for restricted securities, and state-specific Blue Sky laws

Employment/Labor Laws: Fair Labor Standards Act (FLSA), state-specific independent contractor regulations, and IRS guidelines on contractor classification to ensure proper worker categorization

Tax Laws: Internal Revenue Code Section 83 (property transferred for services), IRC Section 409A (deferred compensation), state tax regulations, and tax implications of equity compensation

Intellectual Property Laws: Copyright Act, Patent Act, Trade Secrets Protection, and state IP laws governing the ownership and transfer of intellectual property created during consulting

Corporate Laws: State corporation laws, company bylaws, articles of incorporation, and shareholder agreements that may affect equity distribution

Contract Laws: State-specific contract laws, Statute of Frauds, and Uniform Commercial Code provisions governing contractual relationships

Documentation Requirements: Essential contract components including consulting services definition, equity compensation terms, vesting schedules, IP assignment, confidentiality clauses, non-compete terms, securities compliance, and tax acknowledgments

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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