Legal

Founder Documents – The Most Important Document for a Start Up

Being an entrepreneur is fun. It’s your idea and your decision, no boss to report. All you have to do to acquire those big bucks is execute your golden ideas. However, in the rush of creating new things you might miss out on the important ones.

This is the reason, you should sometimes hit the pause button. Slowing down does not mean giving up on your idea. It just means that you should take a look around and solidify the foundation before you begin your marathon towards the success.

A business is a legal organization. You need to get all the documents in place before starting over. Missing out on anything might make you regret later. Among all the legalities drafting proper Founder Documents is an important task which requires your attention before anything else.What is Founder Document?Everyone is not familiar with the term founder agreement or document. This is a legal document, rather this one is an agreement regarding the business which occurs between the founders or the shareholders of the company.

Founder Documents

From the concept, it seems that this is a formal document which is drafted over the stone. The business law has also set the high standard while is comes to drafting shareholder agreement.In reality, this document is easy to draft. This is an agreement between the founders regarding issues the business might face. On the contrary to what people think, this is a written document and not a strictly legal one.The document works as a written road map about how the relation between the founders will work in the future. In addition, how a company will work also gets documented here. However, this is not the last word of the business ethics type of deed which you will have to follow at any cost.

It is just an assessment paper which accounts how a business would run when it is at the start up position.Who Prepares It?Some swears by the lawyers of accountants. They think that a lawyer’s presence is required to draft this document. However, this is a misconception. More than often, it has been noticed that the founders are the best persons to decide how a company will run.

 Most of the text in the document is just a practical expression rather than legal one.Of course, some of the aspects of the document is legal. This cannot be ignored or denied. Yet, you can prepare this document yourself too. Not always you need to hire a professional to prepare the agreement.

Common Reasons to Write It YourselfFounder Documents can and should be written by the founders using templates that are available online. Cost is the first reason to want to handle this task yourself. Lawyers charge a lot of money just to draft the document. The task you can perform only by customizing an agreement template.

The funny fact is that even few lawyers use the templates to create the document. They download the text and customize it to suit your organizational need. This you can do too.The quality of the TemplateYou might judge the quality of a template by the coverage of the issue and the language used. If the document is written in plain English which is easy to understand, the document is good enough to use.