Laying foundation to your new business venture
The parents of any Organization are its founders or partners. Setting up a new business safely and legally compliant is inevitable. The strength of relationship between the founders/partners is directly proportional to the growth of the organization. To simply put it, the better the ties, better is the business; just like in a family ecosystem. And so, before heading forward, a “Founder’s Agreement” is signed between the two parties which is like a marriage document; but this time, between the founders/partners.
Just like the essential ingredients of a happy relationship are trust, responsibility, accountability and Investment, the same goes in business too. All the above-mentioned factors are vital to drive forward a successful business organization. Let’s peep into what makes the agreement a robust one or a strong founder’s agreement.
The purpose of the organization
The sole intent of starting the new organization should be honestly implied.
The nature and structure of the organization
The type of organization and overall structure of the organization, whether it need to be an LLP, Pvt. Ltd, Producer or simple partnership, and that it promises no harm to the country should be showcased before initiation.
Who is who in the organization?
A clear-cut insight into who-is-who and the right assignment of authority be implied without any silos.
Investment and shares
Accurate and precise indication of the shares and expenditures be planned and recorded to avoid legal and financial complications.
Reporting/MIS
Preparing a well organized presentation on the reporting structure, and management authority.
Roles and responsibilities
The right assignment of roles and responsibilities with divisive authorization to each person/entity involved.
Contingency management
Design a course of action that will help the new organization in effectively responding to adverse future situation or event that may or may not happen.
Risk anticipated and remedies to mitigate those risks
Pre-planning remedies to seamlessly manage disruptive situations and the deciding on the responsible person/entity who falls responsible to manage the situation.
Liability of organization to the founders
A well explained documentation on the liability of the organization to the founders, in terms of shares, expenses, management responsibilities, etc.
Intellectual Property management (Patent/Copyright/Trademark etc)
Upfront Indication and decision-making on any Patent/Copyright/Trademark, that goes well with both the parties.
Exit/Entry of members
Give clear indication of the terms and conditions regarding entry of any new people/partners, or the exit of existing members to replace new ones.
Dispute resolution.
Document a legally supervised creation of terms and conditions to seamlessly resolve disputes, just in case they happen
Liability of organization to the founders
A well explained documentation on the liability of the organization to the founders, in terms of shares, expenses, management responsibilities, etc.
When you start your organization by providing honest and transparent answers to the above-mentioned factors, your foundation is set to find success. It also keeps you away from getting into any sort of legal and financial complexities. After all, we are not here to get into troubles, but to succeed as business entities and it’s sure to happen with honesty, reliability, and transparency.
