Founders Agreement Template for Nigeria

A Founders Agreement sets the ground rules when two or more people start a business together in Nigeria. It's a legal contract that spells out how the founders will share ownership, make decisions, and handle their roles in the company. Think of it as a roadmap that helps prevent conflicts before they arise.

This essential document covers key issues like profit sharing, intellectual property rights, and what happens if someone wants to leave the business. Under Nigerian company law, while not mandatory, having a clear Founders Agreement helps protect everyone's interests and can save massive headaches down the road, especially when seeking investment or handling disputes between co-founders.

Create a Founders Agreement right when you start planning your business venture in Nigeria���before money changes hands or work begins. The ideal time is during those early conversations when you're mapping out roles, responsibilities, and ownership stakes with your co-founders.

Having this agreement in place becomes crucial when bringing in investors, dealing with major business decisions, or if personal circumstances change for any founder. Nigerian courts look more favorably on businesses with clear documentation, so establishing these terms early protects everyone's interests and makes future growth smoother, from opening bank accounts to registering with the Corporate Affairs Commission.

• Company Founders Agreement: The standard comprehensive agreement covering basic ownership, roles, and decision-making rights for all co-founders.
• Co Founder Vesting Agreement: Focuses specifically on how founders earn their equity over time, protecting the company if someone leaves early.
• Founder Employment Agreement: Defines the founder's role as both an owner and employee, including salary, benefits, and work responsibilities.

• Co-Founders: The primary parties who sign and are bound by the Founders Agreement, including their rights, responsibilities, and equity stakes in the new venture.
• Corporate Lawyers: Draft and review the agreement to ensure it complies with Nigerian business law and protects all parties' interests.
• Company Secretary: Maintains the agreement as part of official company records and ensures compliance with Corporate Affairs Commission requirements.
• Investors: Often review the Founders Agreement during due diligence to understand the company's ownership structure and decision-making processes.
• Board Members: Reference the agreement when making decisions about founder-related matters and company governance.

• Founder Details: Collect full legal names, contact information, and roles of all co-founders as registered with CAC.
• Ownership Structure: Define exact equity percentages, initial capital contributions, and vesting schedules if applicable.
• Business Basics: Gather company name, registration details, business objectives, and planned operational model.
• Decision Framework: Outline voting rights, management responsibilities, and procedures for major business decisions.
• Exit Strategy: Specify terms for share transfers, founder departures, and company sale scenarios.
• Document Generation: Use our platform to create a legally-sound agreement that includes all required elements under Nigerian law.

• Identification Section: Full legal names, addresses, and roles of all founders, plus company details registered with CAC.
• Equity Structure: Clear breakdown of ownership percentages, capital contributions, and share classes.
• Management Rights: Decision-making processes, voting thresholds, and board composition rules.
• Intellectual Property: Assignment of IP rights to the company and protection of trade secrets.
• Exit Provisions: Share transfer restrictions, right of first refusal, and founder departure procedures.
• Dispute Resolution: Nigerian arbitration clause and governing law specifications.
• Non-Compete Terms: Reasonable restrictions on competitive activities within Nigeria.

A Founders Agreement differs significantly from a Business Acquisition Agreement. While both deal with company ownership, they serve distinct purposes in Nigerian business law.

• Timing and Purpose: Founders Agreements establish initial company relationships at startup, while Business Acquisition Agreements handle the complete or partial purchase of an existing business.
• Parties Involved: Founders Agreements bind co-founders creating a new venture, whereas Business Acquisition Agreements involve buyers and sellers of established businesses.
• Scope of Terms: Founders Agreements focus on roles, equity splits, and ongoing management rights. Business Acquisition Agreements detail asset transfers, valuations, and post-sale obligations.
• Duration: Founders Agreements govern long-term relationships throughout the company's life, while Business Acquisition Agreements primarily cover the transaction period and immediate aftermath.