Co Founder Agreement for New Zealand

Co Founder Agreement Template for New Zealand

A comprehensive legal agreement governed by New Zealand law that establishes the formal relationship between two or more co-founders of a business venture. The document outlines crucial aspects including equity distribution, roles and responsibilities, decision-making processes, intellectual property rights, and exit provisions. It serves as a foundational document that helps prevent future disputes by clearly defining each founder's rights, obligations, and expectations while ensuring compliance with New Zealand's Companies Act 1993 and related legislation.

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What is a Co Founder Agreement?

The Co-Founder Agreement is essential for any new business venture in New Zealand where multiple founders are involved in establishing and running the company. This document should be created at the earliest stages of business formation, ideally before or during company incorporation. It sets out the fundamental terms of the founders' relationship, including share ownership, vesting schedules, roles and responsibilities, decision-making processes, and intellectual property rights. The agreement must comply with New Zealand law, particularly the Companies Act 1993, Partnership Act 1908, and Contract and Commercial Law Act 2017. It serves as a crucial risk management tool by preventing future disputes and providing clear mechanisms for resolving any conflicts that may arise between co-founders.

What sections should be included in a Co Founder Agreement?

1. Parties: Identifies and provides full details of all co-founders entering into the agreement

2. Background: Outlines the context of the agreement, including the business concept and the intention to establish/run the company together

3. Definitions: Defines key terms used throughout the agreement for clarity and legal certainty

4. Company Structure: Details the company's legal structure, share allocation, and initial capitalization

5. Roles and Responsibilities: Defines each co-founder's specific roles, duties, and areas of responsibility within the company

6. Time Commitment: Specifies the expected time commitment from each co-founder and any rules about external activities

7. Decision Making: Outlines the process for making business decisions, including voting rights and required majorities

8. Intellectual Property: Establishes ownership and protection of IP created before and during the business relationship

9. Confidentiality: Details obligations regarding confidential information and trade secrets

10. Vesting: Establishes the vesting schedule for shares and conditions for accelerated vesting

11. Exit Provisions: Defines procedures for founder departure, including share transfer rules and valuation methods

12. Dispute Resolution: Outlines the process for resolving disagreements between co-founders

13. General Provisions: Contains standard legal clauses including governing law, entire agreement, and amendments

What sections are optional to include in a Co Founder Agreement?

1. Remuneration: Details any salary, dividends, or other compensation arrangements - optional if dealt with in separate employment agreements

2. Non-Compete: Restricts founders from engaging in competing businesses - optional based on jurisdiction and specific circumstances

3. Employee Stock Option Pool: Establishes an ESOP for future employees - optional for early-stage agreements

4. Board Structure: Details board composition and governance - optional for smaller ventures or early-stage companies

5. Investment Rights: Specifies terms for future investment rounds - optional for early-stage agreements

6. Insurance: Requirements for company and personal insurance - optional based on business nature and risk

7. External Activities: Rules about other business activities and time commitments - optional if covered in roles section

What schedules should be included in a Co Founder Agreement?

1. Schedule 1: Share Allocation: Detailed breakdown of initial shareholding percentages and share classes

2. Schedule 2: Vesting Schedule: Detailed vesting timelines and milestones for each founder's shares

3. Schedule 3: Business Plan: Initial business plan and key milestones

4. Schedule 4: IP Register: List of existing IP brought into the business by each founder

5. Schedule 5: Roles and Responsibilities Matrix: Detailed breakdown of each founder's duties and areas of authority

6. Appendix A: Company Constitution: Copy of or reference to the company constitution

7. Appendix B: Deed of Adherence: Template for new shareholders to become bound by the agreement

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

New Zealand

Publisher

Genie AI

Document Type

Agreement Contract

Cost

Free to use
Clauses
Relevant Industries

Technology and Software

Professional Services

E-commerce

Manufacturing

Healthcare

Financial Services

Media and Entertainment

Real Estate

Education Technology

Retail

Biotechnology

Clean Energy

Agriculture Technology

Consulting

Food and Beverage

Relevant Teams

Legal

Executive Leadership

Board of Directors

Corporate Governance

Company Secretariat

Business Development

Strategy

Corporate Affairs

Relevant Roles

Chief Executive Officer

Chief Technology Officer

Chief Financial Officer

Chief Operating Officer

Managing Director

Company Founder

Startup Founder

Business Owner

Managing Partner

Executive Director

General Counsel

Legal Counsel

Company Secretary

Board Member

Director

Industries
Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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