Team, Co-founders & Legal

Do I really need a lawyer and a formal shareholders agreement, or is a signed founders agreement on paper enough for now?

A starting point

A plain founders agreement is fine at day zero to lock intent, but before you raise or hire, you need a proper shareholders agreement (SHA) drafted or reviewed by a startup lawyer. It governs vesting, transfer restrictions, drag and tag rights, and what happens when someone exits. A cheap SHA now costs less than the equity dispute it prevents. Use a template to draft, then pay a lawyer once to make it real.

Go deeper

Hand-picked from around the web, each with a note on why it earns your time.

3 resources 3 link-checked Read Use

Read

📄 Article
✓ Link checked India Free Beginner

Why we picked it The single clearest explanation of the two documents Indian founders confuse: the founders' agreement (equity, vesting, roles, IP, departure, signed at or before incorporation) versus the shareholders' agreement (investor voting rights, drag/tag, reserved matters, signed at your raise). It nails the timing rule that trips people up: sign before shares are issued, because you cannot bolt vesting onto already-issued shares without every founder consenting. It is blunt that IP a founder built before incorporation belongs to that founder personally until a formal IP Assignment moves it to the company, which is exactly what breaks a diligence during your first term sheet.

Founders' Agreement: Definition, Key Clauses, and Template for Indian Startups

From EquityList by EquityList 15 min read

  • Founders' agreement governs the co-founder relationship; the shareholders' agreement layers in investor protections later, they are not the same document
  • Sign at or before incorporation and always before shares are issued, or vesting cannot be applied retroactively
  • Pre-incorporation IP stays with the individual founder until a formal IP Assignment Agreement transfers it to the company
Open equitylist.co →

Use

📋 Template
✓ Link checked India Free Beginner

Why we picked it This is the checklist and the template in one, written for Indian Pvt Ltd reality, not a US Delaware copy-paste. It walks all nine load-bearing clauses (equity split, 4-year vest with 1-year cliff, good/bad leaver buy-back, roles, reserved matters and deadlock, IP assignment of pre-incorporation work, exit, dispute resolution) and gives a 16-clause template skeleton. Two India-specific traps it flags will save you a real fight: post-exit non-competes are void under Section 27 of the Contract Act, and any share-related term only binds the company once it is mirrored into your Articles of Association (per V.B. Rangaraj v. V.B. Gopalakrishnan).

Co-Founder Agreement for Indian Startups: Clauses and Template (2026)

From iPleaders by iPleaders 25 min read

  • Nine essential clauses plus a full template skeleton you can adapt: equity, vesting, leaver mechanics, roles, deadlock, IP, confidentiality, exit, arbitration
  • Post-termination non-compete clauses are unenforceable in India under Section 27, so lean on in-term restrictions and non-solicit instead
  • Vesting and buy-back terms bind the company only when written into the Articles of Association, not just the founders' side letter
Open blog.ipleaders.in →
📋 Template
✓ Link checked India Free Intermediate

Why we picked it This is the government's own sample SHA, published on the official Startup India (DPIIT) templates page alongside term sheets and founder agreements, so it is a durable, no-cost drafting starting point that already reflects Indian company-law structure. Its drag-along clause, for instance, spells out the 30-day notice mechanics you would otherwise pay a lawyer to draft from scratch. Draft from this, then pay a lawyer once to make it real for your cap table.

Shareholder Agreement of Company (Sample SHA Template)

From Startup India by Startup India (Invest India, DPIIT) 13-page template

  • A free, government-published SHA sample you can open, edit, and take to a lawyer instead of paying to draft from a blank page
  • Includes the load-bearing exit clauses (drag-along with a 30-day notice period, tag-along, transfer restrictions) that a plain paper founders agreement omits
  • Sits on the official Startup India tools page with matching term-sheet and founder-agreement templates, so the whole early-stage document set comes from one trusted source
Open startupindia.gov.in →

People also ask

How should co-founders split equity fairly? For most early teams, split close to equal, an even split signals you see each other as true partners, and long-term contribution rarely matches wh... Beginner 3 resources → What is vesting and why do I need a vesting schedule? Vesting means you earn your shares over time (the standard is 4 years with a 1-year cliff) instead of owning them all on day one. It's the single m... Intermediate 3 resources → Should I use a dynamic equity split like Slicing Pie instead of fixed percentages? Dynamic models like Slicing Pie allocate equity based on actual contributions over time, which is genuinely fairer at the pre-funding grunt stage w... Advanced 3 resources → What must go into a co-founder / founders' agreement in India? Cover equity split, vesting and leaver clauses, roles and time commitment, IP assignment to the company, decision-making and deadlock resolution, a... Intermediate 3 resources → How much equity should I set aside for an ESOP pool for employees? Carve out roughly 10-15% for an option pool before you raise, so early hires get real ownership without diluting you unexpectedly later. In India, ... Advanced 3 resources → What happens to equity if a co-founder leaves early? With vesting done right, they keep only what they've earned and the unvested portion returns to the company, which is exactly why vesting exists. W... Intermediate 3 resources →