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Co Founder Equity Agreement Template for Pakistan

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Key Requirements PROMPT example:

Co Founder Equity Agreement

"I need a Co-Founder Equity Agreement for a technology startup in Karachi with three founders: 40% equity for the technical founder with 3-year vesting, and 30% each for two business founders with 2-year vesting, including provisions for future investment rounds."

Document background
The Co-Founder Equity Agreement is a crucial document used during company formation or early-stage operations in Pakistan to formalize the relationship between founding members. This agreement becomes necessary when two or more individuals decide to establish a business venture together and need to clearly define their ownership stakes, responsibilities, and rights. The document must comply with Pakistani corporate law, particularly the Companies Act 2017 and related regulations, while addressing key aspects such as equity distribution, vesting schedules, roles and responsibilities, decision-making processes, and intellectual property rights. It serves as a foundational document that helps prevent future disputes and provides a clear framework for the company's governance and ownership structure.
Suggested Sections

1. Parties: Identification of all co-founders and the company, including full legal names, addresses, and registration details

2. Background: Context of the agreement, including company formation status and purpose of the arrangement

3. Definitions: Definitions of key terms used throughout the agreement

4. Equity Allocation: Details of initial equity distribution among co-founders, including number of shares and percentage ownership

5. Vesting Schedule: Terms of equity vesting, including vesting period, cliff period, and vesting conditions

6. Roles and Responsibilities: Detailed description of each co-founder's role, duties, and commitments to the company

7. Time Commitment: Expected time dedication from each co-founder and any limitations on outside activities

8. Decision Making: Process for major business decisions and voting rights

9. Intellectual Property: Assignment of IP rights to the company and protection of company intellectual property

10. Confidentiality: Obligations regarding confidential information and trade secrets

11. Transfer Restrictions: Limitations on transfer of shares and right of first refusal provisions

12. Termination: Circumstances and process for termination of co-founder relationship

13. Dispute Resolution: Process for resolving disputes between co-founders

14. Governing Law: Specification of Pakistani law as governing law and jurisdiction

Optional Sections

1. Non-Compete: Restrictions on competitive activities, recommended when co-founders have industry connections

2. Tag-Along Rights: Rights of minority shareholders to join in sale of shares, important for unequal equity splits

3. Drag-Along Rights: Rights to force minority shareholders to join in sale, useful for future exit possibilities

4. Death and Incapacity: Procedures in case of co-founder death or incapacity, important for older founders or high-risk ventures

5. External Investment: Provisions for future investment rounds and equity dilution, crucial for startups seeking funding

6. Founder Loans: Terms for any initial capital contributions as loans, useful when founders provide initial funding

7. Compliance with Religious Law: Additional provisions for Shariah compliance if required by the parties

Suggested Schedules

1. Schedule A - Share Capital Structure: Detailed breakdown of share classes, numbers, and ownership percentages

2. Schedule B - Vesting Schedule Details: Detailed vesting timeline and milestones for each co-founder

3. Schedule C - Intellectual Property Register: List of existing IP being transferred to the company

4. Schedule D - Company Business Plan: Overview of company objectives and strategic plan

5. Schedule E - Initial Roles and Responsibilities: Detailed description of each founder's initial role and key performance indicators

6. Appendix 1 - Share Transfer Forms: Standard forms for share transfers under Pakistani law

7. Appendix 2 - Board Resolutions: Initial board resolutions approving the agreement and share issuance

Authors

Alex Denne

Head of Growth (Open Source Law) @ ¶¶Òõ¶ÌÊÓÆµ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Relevant legal definitions
















































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Relevant Industries

Technology

E-commerce

Financial Services

Healthcare

Education Technology

Software Development

Manufacturing

Professional Services

Media and Entertainment

Retail

Biotechnology

Clean Energy

Telecommunications

Artificial Intelligence

Consulting

Relevant Teams

Legal

Executive Leadership

Corporate Governance

Board of Directors

Corporate Secretary Office

Compliance

Finance

Human Resources

Strategic Planning

Relevant Roles

Chief Executive Officer

Managing Director

Company Founder

Chief Technology Officer

Chief Financial Officer

Chief Operating Officer

Legal Counsel

Corporate Lawyer

Company Secretary

Business Development Director

Startup Founder

Entrepreneur

General Counsel

Board Member

Director

Industries








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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