Team, Co-founders & Legal

I am a first-time founder outside the big metros and my co-founder is in Bengaluru. Does where we are based change how we split equity or set up the company?

A starting point

Location does not change the split: contribution, risk, and role do. What it does change is logistics. Incorporate one Indian Pvt Ltd regardless of which cities you sit in, use a single registered office, and put remote-working and decision-making terms in writing so distance does not become an excuse for one founder to drift. Do not give the metro co-founder more equity just because they are near investors. That is a status tax, not a fair split.

Go deeper

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

3 resources 3 link-checked

Read

✍️ Essay
✓ Link checked Free Beginner

Why we picked it This is the canonical case for splitting close to equal, written by a YC group partner. It arms you with the exact four reasons to hand a skeptical cofounder (or your own ego): a great company takes 7 to 10 years, so who wrote the first line of code in month one is noise; more equity means more motivation; almost every startup dies, and a demotivated cofounder is how; and Seibel's blunt line that if you won't give your partner an equal share, you picked the wrong partner.

How to Split Equity Among Founders

From Y Combinator by Michael Seibel 5 min read

  • Value the 7 to 10 years of work ahead, not who had the idea or showed up first, so small year-one differences never justify a lopsided split
  • A cofounder who insists on 90 percent is signaling they will under-motivate the person they most need, which is why investors read it as a red flag
  • If you are not willing to split equity roughly equally, that is a sign you have the wrong cofounder, not the wrong split
Open michaelseibel.com →
📄 Article
✓ Link checked India Freemium Beginner

Why we picked it This is the practical checklist for two founders sitting in different cities: it spells out that you need just one registered office in India, a minimum of two directors and two shareholders, and at least one resident director, all filed online through SPICe+. It even links state-specific pages, so the founder outside the metro and the co-founder in Bengaluru can see that where each of you sits does not fork the incorporation.

Private Limited Company Registration in India

From IndiaFilings by IndiaFilings 15 min read

  • One Indian Pvt Ltd with a single registered office covers both founders regardless of city, no second entity needed
  • At least one director must be an Indian resident, and the whole SPICe+ filing (PAN, TAN, GST, DIN) is done online, so no one has to relocate to incorporate
  • You need a minimum of two directors and two shareholders, which a two-founder team meets by default
Open indiafilings.com →
📄 Article
✓ Link checked India Free Beginner

Why we picked it ClearTax gives the plain-language walkthrough of the four-step process (DSC, DIN, SPICe+ name reservation, incorporation certificate) plus the address-proof documents and post-registration compliance, and it stresses the whole flow is online. Pair it with the IndiaFilings checklist so the founder understands not just the registered-office rule but the ongoing filings both co-founders share once the single company is live.

Company Registration in India: How to Register, Types, Documents, Fees

From ClearTax by ClearTax 12 min read

  • The full registration is online, so co-founders in different cities coordinate over email and digital signatures rather than in person
  • Registered office proof (rent or tenancy agreement plus a utility bill) is required for the one address you choose, in either founder's city
  • Budget roughly Rs. 6,000 to 30,000 and 7 to 10 working days, and plan for the post-incorporation compliance that follows for the single entity
Open cleartax.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 →