P. K. Pandya & Co. provides advisory to startups. In fact we are fascinated to help startups.
As startup advisory we hold extensive discussion with founders. If you have questions or doubts like how do I start? Which form of business mode is suitable for my startup? Welcome. You are not alone. We address these any many more questions. In fact, we recommend startups to have a co-founder’s agreement.
At the stage of product or service development, co-founders agreement is suitable, which can be suitably transformed into appropriate business structure like partnership, limited liability partnership (LLP) or limited company.
Why should you consider to have a separate co-founders agreement?
As start-up you have options to register partnership, LLP or private limited company or for non-profit organisation – trust, society or section 25 company.
Although each type of organisation have its advantages, it requires initial registration and hence time and cost. Besides its maintenance also involves time and cost – legal compliance and documentation.
You may not be sure whether business will work out or not and hence co-founder’s agreement helps avoid such initial cost (and botheration of its closure in the event of drop of business plan) and allows to focus on business development or testing the water, build a pilot or prototype. In fact it takes care of much more. Just consider following scenario:
How would you handle different situations like – if one/few of the co-founders had to leave before getting initial funding?
How would you minimize its impact on start-up?
How would you protect your interest?
How would you protect secrecy and trade mark and other Intellectual property rights?
Have you agreed upon role of each of co-founders, decision making process, specifies targets with milestones, performance evaluation and firing, dispute resolution and non-compete restrictions?
How about addressing immediate needs only rather than spending time and cost on creating structure for business idea or ‘future business’, which you are not sure whether will see light of day or not.
We also help you appropriate business structure once you see significant revenue or profit in your startup or where any investor (incubator, venture capital / Private equity) is interested in your startup.