By Melissa Higham - 16 Oct 2012
Starting a new company can be risky. There is no guarantee that
all founding members will stay the course. Many people do not
realise the importance of managing this risk through a written
agreement between the founders.
Division of ownership of startup companies between founders may
require careful management. If the founders acquire equity in the
company when it is first formed, there may be problems if one or
more of them leave the company before it is well established. They
may retain ownership of a significant portion of the company even
though they are no longer actively involved.
This risk can be managed by way of a shareholders agreement. The
agreement should be tailored so that it reflects the nature of the
company and the expectations of the founders.
Getting an appropriate agreement in place when the company is
formed avoids future issues. It also helps make investment by
outsiders more attractive.
Contacts
Melissa
Higham