Founders Agreement Template for Canada

A Founders Agreement is a formal contract between the initial owners of a startup that spells out everyone's rights, roles, and responsibilities. It acts like a roadmap for how co-founders will work together, make decisions, and split both the rewards and risks of building their company.

In Canadian startups, this vital document typically covers ownership percentages, intellectual property rights, decision-making processes, and exit strategies. It helps prevent future disputes by clearly stating what happens if someone leaves, how profits get shared, and who controls major business choices - making it much easier to resolve conflicts when they arise under Canadian business law.

Create a Founders Agreement right when you start planning your business venture with partners - ideally before any money changes hands or work begins. This timing helps set clear expectations and prevents misunderstandings about ownership, roles, and decision-making while everyone is still excited and cooperative.

The agreement becomes especially crucial when co-founders bring different assets to the table, like one person contributing cash while another offers expertise or intellectual property. Under Canadian law, having this document in place early protects everyone's interests and makes it much easier to resolve future disputes, attract investors, or handle leadership changes.

• Founders Contract: The core agreement outlining basic roles, responsibilities, and equity distribution between co-founders
• Co Founder Exit Agreement: Specifically handles the process and terms when a founder leaves the company
• Founder Stock Purchase Agreement: Focuses on equity transactions and share ownership terms
• Founder Loan Agreement: Covers situations where founders lend money to their startup
• Startup Advisor Equity Agreement: Manages equity arrangements with external advisors who contribute expertise

• Co-Founders: The primary parties who sign and are bound by the Founders Agreement, typically including technical founders, business leads, and key early team members
• Corporate Lawyers: Draft and review the agreement to ensure it complies with Canadian business law and protects all parties' interests
• Business Advisors: Help structure key terms around equity, roles, and responsibilities based on industry standards
• Investors: Often review these agreements during due diligence before investing in the startup
• Board Members: Reference the agreement when making decisions about founder-related matters or dispute resolution

• Founder Details: Gather full legal names, contact information, and roles for all co-founders
• Ownership Structure: Define equity splits, vesting schedules, and any special share classes
• Business Essentials: Document company name, business purpose, and initial capital contributions
• Role Definition: Outline each founder's responsibilities, time commitments, and decision-making authority
• Exit Planning: Specify buyout terms, non-compete clauses, and intellectual property rights
• Documentation: Use our platform to generate a customized agreement that includes all these elements in compliance with Canadian law

• Party Information: Complete legal names, addresses, and roles of all founders and the company
• Equity Structure: Detailed breakdown of ownership percentages, share classes, and vesting schedules
• Governance Terms: Decision-making processes, voting rights, and board composition rules
• Intellectual Property: Assignment of IP rights and confidentiality obligations
• Exit Provisions: Procedures for founder departures, share transfers, and company sale
• Dispute Resolution: Clear mechanisms for handling disagreements under Canadian law
• Execution Requirements: Proper signature blocks, witness provisions, and dating format

While a Founders Agreement and an Collaboration Agreement might seem similar, they serve distinctly different purposes in Canadian business law. A Founders Agreement specifically governs the relationship between startup co-founders, focusing on ownership and long-term company structure. In contrast, a Collaboration Agreement typically handles shorter-term joint projects or specific business ventures between independent parties.

• Scope and Duration: Founders Agreements are comprehensive, long-term documents that shape company structure, while Collaboration Agreements usually cover specific projects with defined endpoints
• Equity Matters: Founders Agreements include detailed equity distribution and vesting schedules; Collaboration Agreements rarely involve ownership stakes
• Decision Rights: Founders Agreements establish permanent governance structures, while Collaboration Agreements focus on project-specific decision-making processes
• Exit Provisions: Founders Agreements include complex mechanisms for company sale or founder departure; Collaboration Agreements typically just outline project completion terms