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A Founders Agreement spells out the core rules and responsibilities between people starting a business together in Malaysia. It covers essential details like how much ownership each founder gets, who handles which roles, and what happens if someone wants to leave the company.

Think of it as your startup's foundation document - it helps prevent disputes by clearly stating how key decisions get made, how profits will be shared, and what happens to intellectual property. While not legally required under Malaysian company law, having one in place is crucial for protecting everyone's interests and maintaining clear expectations, especially when seeking funding or handling major business changes.

The best time to create a Founders Agreement is right when you start planning your business in Malaysia, before any money changes hands or work begins. This helps prevent misunderstandings about ownership, roles, and responsibilities that could damage both business relationships and operations later.

Common triggers include bringing on new co-founders, securing initial funding, or registering your company with the Companies Commission of Malaysia (SSM). Getting the agreement in place early makes it easier to handle future challenges like profit sharing disputes, intellectual property rights, or situations where a founder needs to exit the business.

• Cofounder Agreement: Basic version focusing on core partnership terms, roles, and equity splits between founders
• Startup Shareholders Agreement: More detailed variation that includes investor relationships, share classes, and voting rights
• Founder Employment Agreement: Specialized version that defines founder roles as employees, including compensation, duties, and work terms under Malaysian employment law

• Business Co-founders: Primary parties who sign and are bound by the agreement, defining their rights, responsibilities, and ownership stakes
• Corporate Lawyers: Draft and review agreements to ensure compliance with Malaysian company law and protect founders' interests
• Company Secretaries: Help maintain the agreement as part of official company records and ensure alignment with SSM requirements
• Early Investors: Often review Founders Agreements to understand company structure and leadership before investing
• Business Advisors: Guide founders through negotiation and implementation of agreement terms

• Basic Information: Gather full legal names, MyKad numbers, and contact details of all founders
• Business Details: Collect company registration info, business nature, and proposed trading name
• Ownership Structure: Document agreed equity splits, initial capital contributions, and vesting schedules
• Role Definition: List each founder's responsibilities, time commitments, and decision-making authority
• Exit Planning: Define procedures for founder departures, share transfers, and dispute resolution
• Template Selection: Use our platform to generate a legally-sound agreement that includes all mandatory elements under Malaysian law

• Party Details: Full legal names, MyKad numbers, and addresses of all founders and the company
• Ownership Structure: Clear breakdown of equity distribution, capital contributions, and share classes
• Management Rights: Decision-making processes, voting rights, and board composition rules
• Non-Compete Terms: Scope and duration of competition restrictions under Malaysian employment law
• IP Assignment: Clear transfer of intellectual property rights to the company
• Exit Mechanisms: Share transfer rules, founder departure procedures, and company dissolution terms
• Governing Law: Explicit statement of Malaysian law jurisdiction and dispute resolution methods

A Founders Agreement differs significantly from a Business Acquisition Agreement in several key ways, though both are crucial documents in Malaysian business law. While a Founders Agreement establishes the initial relationship between co-founders starting a new venture, a Business Acquisition Agreement governs the purchase of an existing business.

• Timing and Purpose: Founders Agreements come into play at business formation, while Business Acquisition Agreements are used when buying an established company
• Scope of Terms: Founders Agreements focus on equity splits, roles, and future operations; Acquisition Agreements detail purchase price, asset transfers, and existing liabilities
• Parties Involved: Founders Agreements bind co-founders creating something new; Acquisition Agreements involve buyers and sellers of existing businesses
• Duration: Founders Agreements typically govern ongoing relationships, while Acquisition Agreements primarily cover the transaction period and immediate transition