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New guide: what Indian co-founders should agree before the company is formed

LSS Editorial Desk · Legal Space Services 1 min read

Our new co-founder agreement guide explains equity splits, founder vesting under Indian company law, good and bad leavers, moving code into the company, and what happens when a founder leaves.

We have published a new guide to the co-founder agreement, written for founders of Indian startups and small companies.

Why it matters

Most startups that fall apart do not fall apart over the product. They fall apart over questions nobody answered at the start: who owns what, what happens if one founder stops working, and who owns the code that one of them wrote before the company existed. Company law answers those questions by default, and its defaults were not written for startups. A founder who leaves after a year keeps every share; code written before incorporation stays with the person who wrote it.

What the guide explains

  • How to split equity, and why cash is better rewarded separately.
  • How founder vesting works in India, where a company cannot freely buy back its own shares.
  • Good and bad leaver terms, and why they must be written precisely.
  • Why the key clauses must also be written into the articles of association.
  • Moving code, domains, social handles and trademarks into the company.
  • The risk from a founder’s previous employer.
  • Founder salaries, founder loans and the deposit rules.
  • Removing a founder, and what happens on death or incapacity.

The guide links to our shareholders agreement and ESOP guides for the stage when investors arrive. Founders who want the agreement prepared can order it from the guide page; we start with a questionnaire that each founder answers separately.

LSS Editorial Desk Editorial desk, Legal Space Services, New Delhi · Published 22 September 2026 · Approved by our office

News on this page is general information, not legal advice. For your own matter, talk to our team, or find an advocate for court work — the advocate’s fee is engaged and paid by you directly.

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