Document background
The Founders Shares Agreement is a crucial document used when establishing a new company or formalizing arrangements between existing founders in Canada. It serves as the cornerstone document defining the relationship between founders and their rights and obligations regarding company ownership. This agreement becomes particularly important under Canadian corporate law as it establishes clear mechanisms for share vesting, transfer restrictions, and decision-making processes, while ensuring compliance with both federal regulations (such as the Canada Business Corporations Act) and provincial securities laws. The document typically includes detailed provisions for protecting intellectual property, maintaining confidentiality, and managing potential founder departures or disputes. It's essential for startups and new businesses to have this agreement in place before commencing operations or seeking external investment.
