The Founders Contract is a crucial legal document used when establishing a new company in the Philippines, typically implemented during the initial stages of company formation or formalization of a business relationship between co-founders. This agreement is essential for clearly defining the rights, responsibilities, and expectations of all founding members, while ensuring compliance with Philippine corporate law, particularly the Revised Corporation Code. The document addresses critical aspects such as equity distribution, intellectual property rights, decision-making processes, and exit strategies, serving as a preventive measure against future disputes and misunderstandings. A well-structured Founders Contract is particularly important in the Philippine context, where specific requirements regarding foreign ownership, corporate governance, and securities regulations must be carefully considered and incorporated into the founding documents.
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1. Parties: Identification of all founding members, their complete details and contact information
2. Background: Context of the agreement, including the business concept and purpose of the company
3. Definitions: Key terms used throughout the agreement
4. Company Formation: Details about the company structure, incorporation process, and initial capitalization
5. Roles and Responsibilities: Specific duties and responsibilities of each founder, including time commitment and role descriptions
6. Equity Distribution: Initial share allocation, vesting schedules, and any share restrictions
7. Capital Contributions: Details of initial and future capital contributions, including cash, assets, or services
8. Intellectual Property Rights: Assignment of IP rights to the company and protection of company intellectual property
9. Decision Making and Management: Governance structure, voting rights, and major decision requirements
10. Confidentiality: Non-disclosure obligations and protection of company secrets
11. Non-Competition and Non-Solicitation: Restrictions on competing activities and solicitation of employees or customers
12. Exit Provisions: Procedures for founder departure, including voluntary and involuntary exits
13. Share Transfer Restrictions: Limitations on transfer of shares and right of first refusal provisions
14. Dispute Resolution: Process for resolving conflicts between founders
15. Term and Termination: Duration of the agreement and circumstances for termination
16. General Provisions: Standard legal clauses including governing law, amendments, and notices
1. Deadlock Resolution: Specific procedures for resolving situations where founders cannot reach agreement on crucial decisions
2. Founder Loans: Terms and conditions for any loans made by founders to the company
3. External Investment: Procedures and rights related to accepting external investment
4. Death and Incapacity: Procedures for handling a founder's death or permanent incapacity
5. Family Succession Rights: Rights of family members to inherit or manage founder shares
6. International Operations: Provisions for international business operations and compliance
7. Technology Development: Specific provisions for technology development and ownership
8. Founder Benefits: Special benefits or perks provided to founders
1. Schedule A - Initial Shareholding: Detailed breakdown of initial share allocation and classes of shares
2. Schedule B - Founder Details: Complete biographical information and qualifications of each founder
3. Schedule C - Vesting Schedule: Detailed vesting terms and conditions for founder shares
4. Schedule D - Initial Business Plan: Overview of the business strategy and initial operational plans
5. Schedule E - IP Assignment: Detailed list of intellectual property being assigned to the company
6. Schedule F - Initial Contributions: Itemized list of each founder's initial contributions (cash, assets, IP, etc.)
7. Schedule G - Key Performance Indicators: Metrics for evaluating founder performance and contribution
8. Appendix 1 - Company Formation Documents: Copies of incorporation documents and initial corporate filings
9. Appendix 2 - Share Certificates: Ƶ or copies of share certificates
10. Appendix 3 - Corporate Governance Guidelines: Detailed procedures for company management and decision-making
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