As important as the need to have a viable product and resourceful team, every tech start-up needs to ensure that its foundation is solid by using the necessary legal and business tools available.
One key tool required for building a solid foundation for a tech start-up is legally binding agreements intended to guide the relationship of the founders, and set forth the terms upon which the services of the company will be rendered.
Some of these agreements include:
- Shareholders Agreement:
This agreement is most often the foundation upon which most companies are built. Some key terms in this agreement include: right of transfer, share valuation, right of appointment of key officers, etc.
- Employment Agreement:
This is the agreement defining the relationship between the start-up and its employees. Some of its key terms include: commencement date, ownership of IP created by the employee, remuneration, etc.
- IP Assignment/Licensing Agreement:
As tech companies deal primarily with intellectual property, a start-up must have an IP assignment or licensing agreement for their operations.
- Partnership Agreement:
Where the start-up is a partnership, a partnership agreement ought to be signed by the partners specifying terms binding them, like: capital contribution, distribution of profit and loss, roles and responsibilities, etc.
- Non-disclosure Agreement (NDA):
This is important for start-ups that will be seeking for funds from investors. It is to ensure that information they share with outsiders don’t get disclosed or implemented.