Founder Termination Agreement Template for Singapore

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Key Requirements PROMPT example:

Founder Termination Agreement

"Need a Founder Termination Agreement for a Singapore tech startup where the founder will retain 10% of their shares but resign from all positions, with a 12-month non-compete period starting March 2025."

What is a Founder Termination Agreement?

The Founder Termination Agreement is essential when a founder decides to exit or is required to leave a company in Singapore. This document is crucial for ensuring a clean break while protecting all parties' interests. It typically includes provisions for share transfers, final compensation, confidentiality obligations, and non-compete restrictions, all within Singapore's legal framework. The agreement helps prevent future disputes by clearly documenting the terms of separation and ensuring compliance with local corporate and employment laws.

What sections should be included in a Founder Termination Agreement?

1. Parties: Identification of the company and the departing founder

2. Background: Brief history of founder's involvement and reason for termination

3. Definitions: Key terms used throughout the agreement

4. Effective Date of Termination: Specific date when founder's roles and responsibilities cease

5. Share Treatment: Handling of founder's shares, including transfer or retention terms

6. Resignation from Positions: Formal resignation from all positions (director, officer, etc.)

7. Final Payments: Details of final compensation, benefits, and outstanding amounts

8. Confidentiality Obligations: Ongoing duties regarding company confidential information

9. Return of Property: Process for returning company assets and documents

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

1. Severance Package: Additional compensation terms beyond statutory requirements

2. Transition Services: Terms for temporary advisory or handover services if founder will assist with transition period

3. Non-Compete Provisions: Restrictions on future competitive activities to protect company interests

4. Mutual Release: Release of claims between parties for a clean break with no future claims

5. Ongoing Obligations: Continuing duties post-termination when founder retains certain responsibilities

What schedules should be included in a Founder Termination Agreement?

1. Schedule 1 - Share Details: Complete breakdown of share ownership and transfer terms

2. Schedule 2 - Company Property: List of items to be returned to company

3. Schedule 3 - Final Payment Calculation: Detailed breakdown of all final payments

4. Appendix A - Resignation Letters: Form of resignation from various positions

5. Appendix B - Share Transfer Forms: Required documentation for share transfers

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

Industries

Employment Act (Chapter 91): Primary legislation governing employment relationships, covering termination provisions, notice periods, salary-in-lieu requirements, treatment of unused leave, and statutory protections. Applicable even when founders are also directors.

Companies Act (Chapter 50): Regulates corporate governance including director resignations, ACRA filing requirements, ongoing director's duties, and share transfer provisions. Essential for properly documenting leadership transition.

Securities and Futures Act (Chapter 289): Governs securities-related matters including insider trading provisions and disclosure obligations, particularly relevant if the company is listed or deals with securities.

Personal Data Protection Act 2012: Regulates the handling of personal data post-termination, including data retention requirements and ongoing confidentiality obligations.

Competition Act (Chapter 50B): Provides framework for non-compete provisions and market restriction considerations to ensure enforceability of post-termination restrictions.

Share Ownership Provisions: Detailed arrangements for the treatment of founder's shares, including transfer mechanisms, valuation methods, and buy-back provisions.

Intellectual Property Rights: Provisions governing the assignment and protection of IP rights post-termination, including both pre-existing and developed IP.

Confidentiality Obligations: Terms specifying the scope and duration of confidentiality obligations regarding company secrets, client information, and proprietary data.

Non-Compete and Non-Solicitation: Restrictions on future business activities and interaction with company employees/clients, ensuring reasonable scope and duration.

Severance and Benefits: Details of any termination payments, benefits continuation, and treatment of outstanding compensation elements.

Release of Claims: Mutual release provisions covering potential legal claims between the founder and the company.

Continuing Obligations: Ongoing responsibilities of the founder post-termination, including transition assistance and future cooperation requirements.

Company Property: Requirements for the return or transfer of company assets, documents, and access credentials.

Director Resignation Process: Formal procedures for resigning from director positions, including timing and required documentation.

Tax Implications: Consideration of tax consequences related to termination payments, share transfers, and other financial arrangements.

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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