Most startup disputes are founder disputes, and most founder disputes trace to things never written down: who owns what, who vests when, what happens when someone leaves with the code. A founder agreement is cheap insurance drafted while everyone still likes each other.
| Item | Position |
|---|---|
| Timing | Best signed at or before incorporation; hardest after the first conflict |
| Vesting | Investor-standard structures typically run 3–4 years with a one-year cliff |
| IP | Unassigned pre-incorporation IP is a classic diligence red flag |
| Form | Contract between founders + reflected in the company's articles where needed |
The executed founder agreement, IP assignment deeds, a plain-language summary each founder signs off, and AoA amendment drafts where the articles must mirror the deal.
Cap table intentions, founder roles, any pre-incorporation IP inventory, and honest answers to the uncomfortable "what if" questions the drafting asks.
Commercial choices belong to the founders; the engagement makes them explicit and enforceable. Concealed side-arrangements defeat the exercise.
Litigation between founders and investor-round documentation (SHA/SSA — supported separately through the funding scope).
We trust each other. Why paper it?
Because the agreement is for the day trust is strained — funding stress, health events, diverging ambitions. Every disputed startup once had founders who trusted each other.
Is reverse vesting really necessary for founders?
Investors will demand it anyway; adopting it early keeps a departing co-founder from walking away with a third of the company for six months' work.
Can this fix a founder who already left?
Departures without paperwork need settlement negotiation, not templates — a separate, honest scoping. The agreement prevents the next one.
Agreement or just good articles?
Both, aligned — the AoA binds the company, the agreement binds the founders, and gaps between them are where disputes live.
The applicable scope, documentation, professional responsibilities and timelines are agreed in an engagement letter before commencement.
Cap Table ManagementESOP ImplementationStartup ValuationRequest a Scope DiscussionThis page describes the service in general terms as on 6 August 2026 and is not professional advice or an assurance of any outcome. Registrations, filings, refunds and departmental outcomes depend on facts and the concerned authority. Figures and due dates change; verify current positions before acting.
| Compliance | Due | Note |
|---|---|---|
| FLA return (RBI) | 15 July (annual) | All entities with FDI/ODI on books |
| FC-GPR | 30 days from allotment | For fresh foreign investment |
| Valuation report (Rule 11UA / FEMA) | Before issue price is fixed | Method and valuer depend on route |
| ESOP: board/valuation/PAS-3 chain | Event-based | Perquisite TDS on exercise |
| DPIIT recognition | Anytime (before benefits) | Needed for 80-IAC and angel-tax relief |
Dates as generally applicable on 15 July 2026; extensions/notifications can change them — confirm current dates before relying.
The hard questions asked while easy.
Terms turned into enforceable clauses.
Each founder briefed; execution done.
AoA/records updated where required.
Have questions about this service? Contact us for a free consultation.
Book Consultation WhatsApp UsLet our expert team help you with professional CA services tailored to your needs.
Schedule a Meeting