Often businesses are started by friends or business partners who haven’t worked together before. This can be an intense and exciting process. Once you take the next step and incorporate a company it can quickly grow to be greater than your previous relationship. Ensuring its future (beyond you) is imperative.
One way to protect the future of the company (and your relationship!) is through a Founders/Directors Deed.
WHAT DOES IT COVER?
A Founders/Directors Deed outlines the roles, responsibilities and expectations of a company's directors. It will also often include a deed of indemnity in circumstances where directors are acting in their capacity as leader or manager of the company.
Being able to rely on a Founders/Directors Deed allows you to rely on each other, which reduces conflict and should actually bring you closer as business partners. Further to this, should something go wrong, a Founders/Directors Deed clearly sets out the steps to be taken in the event one party does want out.
WHY IS THIS IMPORTANT?
Signing a well-drafted Founders/Directors Deed also provides security against future personal or business disputes. This means less stress for all founders and possibly avoiding costly legal proceedings in the future. It also provides potential investors with the comfort of knowing that you have addressed some of the initial hurdles of starting a business before there’s too much at stake