This mistake I will be talking about in this article cost Eduardo Saverin, Facebook co-founder a whooping 30% equity stake in Facebook Inc.

You certainly don’t want to be cut in that web.

You definitely don’t want to be booted out of a company you’ve worked hard and laboured to build.

Right?

Starting a business is exciting and its commonplace not to talk about all the legal stuff , afterall you don’t plan to run into trouble .

This common mistake is neglecting to discuss and agree on certain important legal issues at the point of starting a business.


But newsflash, if you fail to talk about these issues, I can assure you sooner or later they will popup and that may be the beginning of the end of your company.

It is important that co-founders agree on certain important issues and have it documented in a legally- binding  co-founder’s agreement.

Would you like to know?

But you say, our company has a memorandum and articles of association,

Yes, I know, but as you will soon discover, it isn’t sufficient.

What is a co-founder’s agreement and what does it contain?

Why is it so important?


You will discover in this article, many issues you and your co-founders have not addressed nor agreed upon and see how that can mar your investment.

A co-founder agreement contains among other things what the co-founders of a company have agreed upon with regards to the following; roles and responsibilities of each founder, equity ownership and vesting , remuneration, confidentiality, the goals, vision of the company, appointment of employees, signatory rights, mergers and acquisition, exit strategy, issuing new share , percentage of ownership, type of shares, how board members will be appointed, merger, signatory rights, quorums and resolutions, conflict of interest among many other things.

Would you like to know more?


Check https://charislegalpractice.com.ng/avoid-this-legal-mistake-most-co-founders-of-companies-make/ for the full article.

Noted