Document background
The Pre-Incorporation Founders Agreement is a fundamental document used in the Indian business ecosystem when two or more individuals plan to establish a company together. This agreement is particularly crucial in the pre-incorporation phase when founders need to formalize their relationship, responsibilities, and commitments before the actual incorporation process begins. It addresses key aspects such as ownership structure, capital contributions, intellectual property rights, confidentiality obligations, and decision-making processes. Under Indian law, while the document itself isn't statutorily mandated, it derives its enforceability from the Indian Contract Act 1872 and serves as a crucial reference point for future corporate governance once the company is incorporated under the Companies Act 2013. The agreement helps prevent future disputes by clearly documenting all founders' understanding and expectations.
