Founders Agreement Template for Pakistan

A Founders Agreement sets the ground rules when two or more people start a business together in Pakistan. It spells out each founder's roles, responsibilities, and ownership stakes, helping prevent future disputes. Think of it as your startup's founding blueprint that covers everything from profit sharing to decision-making powers.

Beyond the basics required by Pakistani company law, a good Founders Agreement handles tricky issues like intellectual property rights, exit strategies, and what happens if someone wants to leave. It protects everyone's interests while keeping the business running smoothly, especially important given Pakistan's evolving startup ecosystem and corporate governance requirements.

Get your Founders Agreement in place right at the start of your business venture in Pakistan, ideally before registering your company or making any major decisions. This document becomes essential when multiple founders are pooling resources, bringing different skills, or contributing varying amounts of capital to launch the enterprise.

The timing matters most when defining sensitive matters like equity splits, vesting schedules, and decision-making authority. Put it in writing while relationships are positive and everyone's excited about the venture - waiting until conflicts arise makes negotiations much harder. Pakistani corporate law offers basic protections, but a well-timed Founders Agreement prevents costly disputes and keeps everyone aligned.

• Co Founder Contract: Basic version covering essential roles, responsibilities, and profit sharing between founders
• Co Founder Vesting Agreement: Focuses on gradual equity release over time to ensure long-term commitment
• Startup Shareholders Agreement: Comprehensive version including detailed governance and minority protection rights
• Startup Equity Agreement: Specialized version for equity distribution, particularly useful for Pakistani tech startups with complex ownership structures

• Startup Founders: The primary parties who draft, negotiate, and sign the agreement, typically including tech entrepreneurs, business innovators, and professional partners
• Legal Counsel: Corporate lawyers who review and refine the agreement to ensure compliance with Pakistani company law and protect founders' interests
• Business Advisors: Help structure equity arrangements and governance mechanisms, especially for startups seeking investment
• Corporate Secretaries: Maintain official records and ensure the agreement aligns with company registration requirements
• Investors: Often review Founders Agreements before making investment decisions to evaluate management structure and stability

• Personal Details: Gather complete legal names, CNICs, and contact information for all founders
• Business Basics: Define company name, structure, and registration details as per SECP requirements
• Contribution Details: Document each founder's initial capital, assets, or intellectual property contributions
• Ownership Structure: Decide equity splits, vesting schedules, and share transfer restrictions
• Role Definition: Outline specific responsibilities, decision-making powers, and time commitments
• Exit Planning: Specify procedures for founder departure, company sale, or dissolution
• Platform Support: Use our automated system to generate a legally-sound agreement that includes all essential elements

• Identification Details: Full legal names, CNICs, and addresses of all founders as per SECP requirements
• Business Description: Company name, registration details, and primary business activities
• Capital Structure: Initial investments, equity distribution, and vesting schedules
• Management Rights: Decision-making processes, voting rights, and operational control
• IP Assignment: Clear transfer of intellectual property rights to the company
• Non-Compete Terms: Reasonable restrictions under Pakistani competition laws
• Exit Mechanisms: Share transfer rules, buyout procedures, and dispute resolution
• Governing Law: Explicit statement of Pakistani jurisdiction and applicable laws

People often confuse a Founders Agreement with a Business Acquisition Agreement. While both deal with business ownership, they serve distinctly different purposes in Pakistani corporate law.

• Timing and Purpose: Founders Agreements establish initial relationships when starting a new venture, while Business Acquisition Agreements transfer ownership of an existing business
• Parties Involved: Founders Agreements bind co-founders creating something new together; Acquisition Agreements involve buyers and sellers of established businesses
• Scope of Terms: Founders Agreements focus on equity splits, roles, and future operations; Acquisition Agreements detail purchase price, asset transfers, and existing liabilities
• Legal Framework: Founders Agreements align with SECP startup regulations; Acquisition Agreements follow merger and acquisition laws under Pakistani corporate code
• Duration: Founders Agreements typically govern ongoing relationships; Acquisition Agreements mainly cover the transaction period and immediate aftermath