A cap table is not the whole agreement
Share percentages do not explain who works, who funds the company, how decisions are made or what happens if a founder leaves. Record the commercial understanding while the relationship is working well.
Terms worth settling
The agreement should align with the company's articles and applicable company law. Inconsistency between documents can create uncertainty.
- Initial and future contributions
- Roles, time commitment and compensation
- Board composition and reserved decisions
- Vesting or consequences of early departure
- Share transfers and pre-emption
- Deadlock and dispute process
- Confidentiality and intellectual property
- Funding, dilution and new investors
- Exit, sale and valuation mechanics
Put intellectual property in the right place
Code, designs, content, inventions, domains and customer material may begin with a founder or contractor. Use written assignments or licences so the company owns or can use the assets it relies on. Investor diligence commonly tests this chain.
Review when the business changes
Revisit the agreement when a new investor enters, a founder's role changes, the company raises debt, a major asset is created or the business expands internationally. Amendments should be properly approved and documented.
Common questions
Questions people ask about this issue
Are the articles of association enough for co-founders?
Articles are important, but founders often need additional commercial arrangements that must be drafted consistently with them.
Should equal founders use 50/50 ownership?
Equal ownership can work, but decision rights, deadlock, contribution and exit must be planned carefully.
Verify current requirements
Official and primary resources
Use these sources to check the current law, portal or procedure. External sites are maintained by their respective authorities.