The Founder Shareholder Agreement is a critical document used when establishing a new company or formalizing the relationship between existing founding shareholders in the Philippines. It becomes particularly important in startup formations, joint ventures, or when multiple founders are involved in establishing a business. The agreement, governed by Philippine corporate law, specifically the Corporation Code and related regulations, details the founders' rights, responsibilities, and obligations, including share ownership, management participation, decision-making processes, and exit mechanisms. It addresses key aspects such as share transfer restrictions, pre-emptive rights, and dispute resolution procedures, while ensuring compliance with local regulatory requirements, including foreign ownership restrictions where applicable. This document serves as the cornerstone of corporate governance among founders and provides a clear framework for managing their relationship throughout the company's lifecycle.
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1. Parties: Identification of all founding shareholders and the company
2. Background: Context of the agreement, including company formation and business purpose
3. Definitions and Interpretation: Detailed definitions of terms used throughout the agreement
4. Share Capital and Shareholding Structure: Details of initial shareholding, share classes, and capital structure
5. Shareholders' Rights and Obligations: Core rights and duties of shareholders, including voting rights and capital contributions
6. Board Composition and Management: Structure of the board, appointment rights, and management responsibilities
7. Reserved Matters: Decisions requiring special majority or unanimous consent
8. Share Transfer Restrictions: Limitations on transfer of shares and right of first refusal provisions
9. Tag-Along and Drag-Along Rights: Co-sale rights and forced sale provisions
10. Dividend Policy: Framework for declaration and distribution of dividends
11. Information Rights: Shareholders' rights to company information and financial reports
12. Non-Competition and Confidentiality: Restrictions on competitive activities and protection of confidential information
13. Termination: Circumstances and procedures for terminating the agreement
14. Dispute Resolution: Procedures for resolving disputes, including jurisdiction and governing law
15. General Provisions: Standard boilerplate clauses including notices, amendments, and severability
1. Founder Vesting: Include when founders' shares are subject to vesting schedules
2. Intellectual Property Rights: Include when specific IP arrangements between founders need to be addressed
3. Dead Lock Resolution: Include for equal shareholding structures to address potential voting deadlocks
4. Put and Call Options: Include when specific share purchase rights are needed
5. Employee Share Option Pool: Include if an ESOP is planned or implemented
6. Anti-Dilution Protection: Include when protecting against future dilution is required
7. Preferred Rights: Include when creating different classes of shares with special rights
8. Foreign Ownership Compliance: Include when any founders are foreign nationals
1. Schedule 1 - Details of the Company: Company registration details, address, and corporate information
2. Schedule 2 - Initial Shareholding Structure: Detailed breakdown of share ownership and share classes
3. Schedule 3 - Reserved Matters: Comprehensive list of decisions requiring special approval
4. Schedule 4 - Deed of Adherence: Template for new shareholders to join the agreement
5. Schedule 5 - Business Plan: Initial business plan and key milestones
6. Schedule 6 - Founder Responsibilities: Detailed roles and responsibilities of each founder
7. Schedule 7 - Share Valuation Methodology: Agreed method for valuing shares for transfers or exits
8. Schedule 8 - Company Intellectual Property: List of company IP and ownership details
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