A simple definition of the word “founder” is an individual who starts a business. Therefore, founders are several entrepreneurs who have come together having the same goal of creating a company. There are different styles and variations of Founder’s agreements. However, they often appear as business written agreements generally amid every founder considering sharing of equity. There is also a consideration as to the compensation of money invested and the period of time an individual will remain in the business for the share to be fully invested (Broadwin, 2010). Although there is no exact concurrence over how, a widespread agreement exists above the value of forming agreements among founders of a company. The power behind such sorts of agreements may act as a purpose of the dialogues made, resulting into putting to place the conclusions acting as a task of the official agreement and documenting itself. The main purpose behind of a conversation agreement is to provide an open and straightforward discussion of the mind-set, ambitions, fears and the arrangements amongst the people concerned with the establishment, in hoping and reducing the likelihood incapacitating surprises toward the company later in life (Broadwin, 2010).
The core reason of buy-back clause law is rightfully enabling the original retailer, to purchase back prior making any other selling attempts. Including this clause in an agreement, it is important because it ensures that each founder benefits in the business. This clause ensures that the original founder is able to buyback full or a portion invested by the founder. Such a case is possible after their involvement in the business ends or resigned.
- Meeting all contractual requirements: You should prepare a written contract agreement between a specific party which your trading with and your business to take not of the important expectations on both sides and agreeing to the terms and conditions stipulated in the contract.
- Avoiding undercapitalization: Having knowledge and accurately assessing the expenses met by your company and evaluation of future expenditure in estimating the needed capital to continue in operation and getting return profits into cash to repay outstanding amount.
- Manage everything in writing: Humans will always be humans thus; it is to your advantage if all the negotiations and agreements are put in writing and later signed. This is important for future reference incase a dispute arises between you and another party in matters concerning defying the terms and conditions. It is more like for a person to forget or deny a spoken agreement.
- Implementation of an ethics-training curriculum: This is the most important part in a company. You should ensure proper information about principles and work ethics in the company. This helps the staff to be accountable for whatever choices made.
Piercing the corporate is a lawful choice to manage the rights or responsibilities of a business as the privileges or accountability of its stakeholders. Often a business is treated as a one legal person, having the responsibility for the debts and the main beneficiary. When a corporate engages itself in unlawful acts such as fraud or is used for personally benefiting shareholders, officers, or directors, the separate business existence is disregarded by the court. The directors, shareholders and the officers face an imposition of personal legal responsibility. In simple terms, the “veil” that is responsible for dividing the company from the people after the business is pierced (Broadwin, 2010).
Reference
Broadwin, D. (2010). Founder Agreements – Vesting, Vesting and more Vesting. High Contrast.
What Is a Founders Agreement. Anti Essays. Retrieved August 7, 2013, from the World Wide Web: http://www.antiessays.com/free-essays/379504.html
