Kaagazaat

Founders' Agreement

At a glance

Price: ₹1,499 · GST included
Stamp duty: Chargeable as an agreement.
Registration: Not registrable under the Registration Act, 1908 — it creates no interest in immovable property and is not on the s.17 list.
Witnesses: Not legally required for a document of this kind.

₹1,499

GST included

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Also called

Co-Founders Agreement
Startup Founders Agreement
Founder Equity Agreement
Founders MOU
Sthapak Samjhauta
ਸੰਸਥਾਪਕ ਸਮਝੌਤਾ
संस्थापक करार
Cofounder Vesting Agreement

Whether you can fill this in here

You can fill this in here

You can fill this one in on this site, and read the whole draft on screen before you decide anything about it. It is a carefully drafted template; it is not advice about your own facts.

Fill this one in

Why you need it

When you need it

Two or more people starting a company together in Punjab or Chandigarh — before incorporation, or soon after it — and want to fix, between themselves, what a company's Articles of Association and a later Shareholders' Agreement usually do not spell out in enough personal detail: who does what, the equity split, whether it vests over time, what happens if a Founder leaves early, who owns the intellectual property, and how a disagreement between Founders is resolved before it reaches the board. This is an agreement between the Founders personally. It is not the company's constitutional document, and where the company is already incorporated, this Agreement works alongside the Articles of Association and does not override a provision the Articles fix by law. Once outside investors come in, this Agreement is usually superseded by a Shareholders' Agreement — see that template in this library once that stage is reached. Not for: a solo founder (nothing to agree between co-founders); partners of a firm or LLP, for which the Partnership Deed or LLP Agreement is the right document; or a company that already has a Shareholders' Agreement covering the same ground, which should not simply be duplicated by this one.

See stamp duty, registration and witnesses

What follows is written for Punjab and Chandigarh. It states the position there rather than describing how it varies, so the amounts below are the ones that apply — worth confirming at the sub-registrar’s office, because rates change. If the property is anywhere else in India, none of this is yours.

Stamp duty

Chargeable as an agreement. PUNJAB: Article 5, Schedule I-A to the Indian Stamp Act, 1899 as applicable in Punjab; where no more specific sub-clause of Article 5 fits, the residuary rate under Article 5(c). Confirm the current figure with the Sub-Registrar or against the Department of Revenue, Rehabilitation and Disaster Management's published table at revenue.punjab.gov.in before the stamp is bought. CHANDIGARH: the equivalent agreement article under the Chandigarh Administration's Rates of Stamp Duty & Registration Fees table at revenue.chd.gov.in; confirm the current figure at the Sub-Registrar's office, 30 Bays Building, before the stamp is bought. BOTH: this Agreement does not itself allot or transfer shares — an allotment (Form PAS-3) or a transfer (Form SH-4, separately stamped under the instrument-of-transfer rate on securities) is a later, separate step once the company exists and the equity split recorded here is implemented in its share register.

Registration

Not registrable under the Registration Act, 1908 — it creates no interest in immovable property and is not on the s.17 list. It is also not a filing made with the Registrar of Companies; only the company's own returns, resolutions and share filings go to the Registrar once incorporated.

Notarisation

Not legally required. Notarisation is sometimes done to fix the date the Founders' arrangement was reached, which can matter later if a Founder disputes the vesting start date or what was agreed before incorporation.

Witnesses

Not legally required for a document of this kind. Two witnesses are optional and not asked for by this template; add them if the Founders want the extra evidentiary comfort.

Talk to a lawyer about this document₹3,539 including GST (₹2,999 + 18% GST), per documentRequest Stamp Paper

Sample preview — placeholder answers, not your data

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FOUNDERS' AGREEMENT

This Founders' Agreement (this "Agreement") is made at Chandigarh on 2 April 2026.

BETWEEN

Rohit Nair, of House No. 1204, Sector 33-C, Chandigarh 160020, PAN AAECN5678L ("First Founder");

Kavita Bansal, of Shop No. 22, Sector 22-C, Chandigarh 160022, PAN AFRPB2212K ("Second Founder");

and the additional Founders named in the Schedule to this Agreement;

together the "Founders", each a "Founder", in relation to

Northline Analytics Private Limited, CIN U70109CH2026PTC012345, Already incorporated as a private limited company under the Companies Act, 2013, having its registered office (or proposed registered office) at Plot No. 8, Phase 8-B, Industrial Area, S.A.S. Nagar (Mohali) 160055 (the "Company").

RECITALS

A. The business of the Company is: Developing and selling a subscription analytics platform for retail businesses.

B. The Founders wish to record their equity, roles and the terms on which they will work together to build the Company.

NOW THIS AGREEMENT WITNESSES AS FOLLOWS.

ROLES

1.1 The First Founder's role is Chief Executive Officer. The Second Founder's role is Chief Technology Officer. Each Founder shall carry out that role diligently and in good faith, and the Founders may change roles between themselves by the consent required under clause 15.

EQUITY

2.1 The Founders' equity in the Company is fixed as follows: First Founder 50%; Second Founder 50%; and as stated in the Schedule for the additional Founders: Faisal Sheikh: 20% (the two named Founders' shares above being reduced to 40% each accordingly).

2.2 Where the Company is not yet incorporated, this equity split shall be implemented by the allotment of equity shares in these proportions on incorporation; where it is already incorporated, the Founders shall procure that the share register and any necessary transfer or allotment reflect this split within a reasonable time of this Agreement, subject to clause 11.

VESTING

3.1 Each Founder's equity is subject to vesting, on the schedule stated below

3.2 The vesting period is 4 years from the vesting start date stated below, with a cliff of 12 months during which no equity vests. On the day the cliff ends, the proportion of the total vesting period already elapsed vests at once, and the remainder vests in equal monthly instalments over the rest of the vesting period, so that a Founder who has completed the full vesting period holds all the equity fixed under clause 2 free of any restriction under this clause 3.

3.3 The vesting start date is 1 April 2026.

IF A FOUNDER LEAVES — UNVESTED EQUITY

4.1 If a Founder ceases to be involved with the Company for any reason before that Founder's equity is fully vested, the unvested portion is forfeited with immediate effect and returned to the company (or, before incorporation, simply lapses) for no payment, and may be reallocated among the remaining Founders or a new hire by the consent required under clause 15.

IF A FOUNDER LEAVES — VESTED EQUITY

What this document is for

Two or more people starting a company together in Punjab or Chandigarh use this to fix, between themselves, what a company's Articles of Association rarely spell out in enough personal detail — who does what, how the equity is split, whether it vests over time, what happens if a Founder leaves early, who owns the intellectual property, and how a disagreement between Founders is resolved before it ever reaches the board.

It works whether or not the company has been incorporated yet, and it binds the Founders personally rather than the company itself. Once outside investors come in, this Agreement is usually superseded by a Shareholders' Agreement covering the same ground in more formal terms.

Before you use this — a promise about a company that does not exist yet does not bind that company

Where the company named in this Agreement has not been incorporated, the Founders are only binding themselves personally to apply for incorporation and to carry the arrangements recorded here into its Memorandum and Articles once it exists — a company cannot be bound by a contract entered into before it came into being. And once a Shareholders' Agreement is later executed, this Agreement stays in force only to the extent that later one does not cover the same ground; the two are not meant to simply stack on top of each other without the Founders saying, in the later document, exactly which clauses of this one survive.

Stamp paper and registration

Stamp paper needed

Yes

Typical stamp duty — Punjab

Ask us — Chargeable under the residuary agreement rate, Article 5(c) of Schedule I-A — but this Agreement's own drafting note gives only the article, not a rupee figure, because the table moves. Confirm the current figure with the Sub-Registrar or against the Department of Revenue, Rehabilitation and Disaster Management's published table before the stamp is bought.

Typical stamp duty — Chandigarh

Ask us — The equivalent agreement article applies, with the same gap — no fixed figure in the template's own source. Confirm at the Sub-Registrar's office, 30 Bays Building, before the stamp is bought.

Registration at the Sub-Registrar

No — Not registrable under the Registration Act, 1908 — it creates no interest in immovable property. It is also not itself filed with the Registrar of Companies; only the company's own returns, resolutions and share filings go there once it is incorporated.

Notary or witnesses

Not required by law. Two witnesses are optional and not asked for by this template. Notarisation is sometimes done anyway, to fix the date the Founders' arrangement was actually reached — useful if a vesting start date is disputed later.

What you will need before you start

The company's name, business and status — already incorporated, or not yet
Every Founder's identity, address, PAN and role
The equity split agreed between the Founders, and whether it vests over time
What happens to a Founder's unvested and vested equity if that Founder leaves
Who owns intellectual property created for the business, and from when
How ordinary decisions, reserved matters and a deadlock between Founders are each resolved

Common mistakes

Leaving vesting out because "we trust each other" — vesting is precisely what protects the team from the one scenario trust does not cover, an early exit.
Assuming the reverse-vesting or forfeiture clause alone moves shares out of a departing Founder's name — once shares actually exist, that needs a real transfer, a company buy-back, or a power reserved in the Articles, not just this personal promise between Founders.
Leaving unstated which clauses of this Agreement continue once a Shareholders' Agreement is later signed, instead of saying so expressly as this Agreement itself contemplates.

Questions people ask before using this document

Do we need a Founders' Agreement if the company already has Articles of Association?

Usually yes. The Articles of Association are the company's public constitutional document and rarely go into the personal detail a founding team actually needs — the exact equity split, whether it vests over time, who owns intellectual property, and what happens if someone leaves early. This Agreement works alongside the Articles rather than replacing them.

What is vesting, and why would Founders agree to it?

Vesting means a Founder's equity is earned gradually over an agreed period, rather than all of it belonging to them from day one. It protects the Founders from each other: without it, a Founder who leaves after three months keeps the full equity share agreed for a commitment that was never actually made good. Most professionally advised founding teams use it even before any outside investor is involved.

Can a Founder who leaves be stopped from competing with the company afterwards?

Not broadly. Section 27 of the Indian Contract Act, 1872 voids an agreement restraining a person from carrying on a lawful trade or business, and this Agreement does not attempt a wide restraint of that kind. What it does instead is bind a departed Founder to confidentiality, and to a narrower, time-bound restriction on soliciting the company's staff and customers.

Does this Agreement bind the company if it is not incorporated yet?

Not directly — a company cannot be bound by a promise made before it exists. Until incorporation, this Agreement binds only the Founders personally, as an undertaking to incorporate the company and carry these arrangements into its constitutional documents once it does exist.

What happens to this Agreement once we sign a Shareholders' Agreement with an investor?

This Agreement continues in force only where the later Shareholders' Agreement does not cover the same ground. The two documents are not meant to simply be read together by default — state expressly, in the Shareholders' Agreement itself, which clauses of this earlier one still apply.

Shareholders' Agreement
Once outside investors come in — this Agreement is usually superseded by a Shareholders' Agreement covering the same ground in more formal terms.
LLP Agreement
If the founders are structuring as a Limited Liability Partnership rather than a company — a different document for a different structure.
Non-Disclosure Agreement (NDA)
Before discussing the business in detail with a prospective co-founder, investor or adviser, ahead of finalising this Agreement.
Non-Compete/Confidentiality Agreement
If a Founder is also drawing a salary as an employee and the company wants a separate, stand-alone confidentiality and non-solicitation covenant beyond what this Agreement provides.
Memorandum of Understanding (General Business)
To record an initial intention to found the company together before the equity split and vesting terms in this fuller Agreement are ready to fix.

Questions about this document

Does the Founders' Agreement need stamp paper or stamp duty in Punjab and Chandigarh?

Chargeable as an agreement.

PUNJAB: Article 5, Schedule I-A to the Indian Stamp Act, 1899 as applicable in Punjab; where no more specific sub-clause of Article 5 fits, the residuary rate under Article 5(c). Confirm the current figure with the Sub-Registrar or against the Department of Revenue, Rehabilitation and Disaster Management's published table at revenue.punjab.gov.in before the stamp is bought.

CHANDIGARH: the equivalent agreement article under the Chandigarh Administration's Rates of Stamp Duty & Registration Fees table at revenue.chd.gov.in; confirm the current figure at the Sub-Registrar's office, 30 Bays Building, before the stamp is bought.

BOTH: this Agreement does not itself allot or transfer shares — an allotment (Form PAS-3) or a transfer (Form SH-4, separately stamped under the instrument-of-transfer rate on securities) is a later, separate step once the company exists and the equity split recorded here is implemented in its share register.

Does the Founders' Agreement need registration in Punjab and Chandigarh?

What does the Founders' Agreement cost on Kaagazaat?

₹1,499, GST included.