Co-founder agreement in India: a checklist for women founders
A practical Indian co-founder agreement checklist for women founders: equity, roles, pay, decisions, IP ownership, account access, exits and deadlocks.
In this guide
Write the founder deal before the work and money become hard to unwind
A co-founder agreement records how the founders intend to work together, own the venture and handle change. It does not replace the company's memorandum and articles, an LLP agreement, employment terms, intellectual-property assignments or mandatory law. Ask a lawyer to align the agreement with the entity and its filed documents before signing or issuing shares.
Name every founder, role and contribution clearly
List each person's planned time commitment, responsibilities, cash contribution, equipment, relationships, technical or creative work and any prior asset being licensed. Separate what a founder has already delivered from future work. If a founder is taking lower pay or providing unpaid care-like labour to keep the business running, record the arrangement, review date and decision process instead of letting it disappear into an informal promise.
State the ownership math and what happens if someone leaves
Record the proposed share or profit split, amount and timing of each contribution, transfer restrictions, dilution process and how an unissued or departing founder's interest will be handled. If the founders want vesting or a company buyback, get Indian legal and tax advice on the structure, documentation and lawful mechanism; do not paste a US vesting clause into an Indian agreement without review.
Set pay, expenses and benefits separately from equity
Write whether founders receive salary, director remuneration, reimbursement, a loan repayment or a share of profits, who approves it and what records are required. Equity is not the same as wages for work, and a promise of future shares may not pay rent or compensate for months of labour. Revisit compensation when the business receives funding or reaches a stated revenue milestone.
| Topic | Agreed principle | Document or decision owner |
|---|---|---|
| Founder names, roles and time commitment | ||
| Shares or profit shares, contributions and future dilution | ||
| Salary, expenses and unpaid work review date | ||
| Signing authority and spending approvals | ||
| Existing and newly created IP ownership | ||
| Departure, transfer, deadlock and dispute route |
Give every founder a fair way to participate and see the records
Design decision rights around the real work
Distinguish everyday decisions a role owner can make from decisions needing a board, partner or founder vote. Name reserved matters such as issuing shares, borrowing, selling key assets, changing the business, hiring or removing a founder and approving related-party payments. Set notice, quorum, voting and conflict-of-interest steps that actually work if one founder is travelling or on leave.
Share information and account access with more than one trusted person
Specify who can see bank statements, books, tax returns, payroll, customer contracts, source files and the MCA or payment portal. Use individual accounts, role-based permissions and a documented recovery process rather than one founder holding the only password, phone or OTP. The company should control its email domain, cloud storage and payment accounts, and at least two authorised people should know how to maintain continuity.
Protect credit, inventions and creative work
Identify pre-existing code, designs, writing, recipes, data and brand material each founder brings. State which new work the company will own or license, how contributor credit will be recorded, and how confidential information may be used after departure. Keep authorship, inventor contribution and legal ownership distinct; have the right assignment or licence signed for each type of work.
Plan for founder departure, disagreement and safety
Use a process for disagreement before a crisis
Set an escalation path: a direct meeting with a written agenda, a short cooling-off period, a neutral adviser or mediator, and then the agreed legal dispute route. Define what counts as a deadlock, who continues routine operations while it is resolved and whether either founder can ask for an urgent safety or court remedy. Arbitration or mediation language should be reviewed for enforceability and fit.
Cover resignation, incapacity, misconduct, death and sale
Agree notice periods, access handover, return of property, customer continuity, transfer rights, valuation method and any permitted buyout process. Avoid a clause that lets one founder confiscate another's earned wages, shares or personal work without a fair process. Have an adviser test what happens if the company cannot afford the proposed buyout or the parties dispute valuation.
Add a safe route for harassment, discrimination or retaliation
A founder agreement cannot replace workplace law or a POSH process. It can identify a neutral reporting contact, preserve access to independent advice and say that nobody may destroy records, punish a complaint or cut off a founder's access as retaliation. If a founder is also an employee, director or complainant, get independent legal advice so governance decisions do not compromise a statutory complaint or inquiry.
Questions about co-founder agreements
Is a handshake enough if we trust each other?
Trust helps, but memories can differ when money, workload or investor interest changes. A signed, reviewed agreement gives the founders a shared reference and makes hard conversations easier before a conflict. Record decisions as they change; do not rely on chat messages alone for company filings or a transfer that law requires to follow a particular form.
Can we use a free agreement template?
A template can help you identify topics, but it may use the wrong entity law, ignore the articles or LLP agreement, conflict with mandatory rules or create an unenforceable remedy. Use a template as a discussion checklist, then have an Indian corporate lawyer adapt and reconcile the final documents.
Should all founders have equal shares?
Not automatically. Founders can consider time, risk, capital, work, future commitments and replacement difficulty, but they should agree the basis openly and document it. A percentage alone does not explain voting, board seats, salary, information rights or how future shares will dilute each holder.
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Sources and publication record
Draft prepared 26 September 2026; project-team editorial review pending · Sources checked .
- Companies Act, 2013India Code, Ministry of Law and Justice, Government of India
- Limited Liability Partnership Act, 2008India Code, Ministry of Law and Justice, Government of India
- Sexual Harassment of Women at Workplace Act, 2013India Code, Legislative Department
- Ministry of Women and Child Development: POSH Act, Rules and resourcesMinistry of Women and Child Development, Government of India
- The Copyright Act, 1957India Code, Ministry of Law and Justice, Government of India
- The Patents Act, 1970India Code, Ministry of Law and Justice, Government of India
- The Designs Act, 2000India Code, Ministry of Law and Justice, Government of India
- CERT-In cybersecurity advisory for micro, small and medium enterprisesIndian Computer Emergency Response Team, Ministry of Electronics and Information Technology