A co-founder`s agreement is a legal document that outlines the rights, obligations, and responsibilities of the co-founders of a new business. It is essential to have a co-founder`s agreement in place to prevent misunderstandings and disputes down the line.

When drafting a co-founder`s agreement, it`s important to cover several key areas. These include the following:

Ownership: The agreement should clarify how much equity each co-founder has in the company. This will ensure that everyone is aware of their ownership stake and prevent disputes over ownership percentages later.

Roles and responsibilities: The agreement should outline each co-founder`s role and responsibilities within the company. This can include areas such as product development, marketing, finance, and legal.

Decision making: The co-founder`s agreement should also cover how decisions will be made within the company. This can include areas such as board meetings, voting rights, and dispute resolution.

Compensation: The agreement should outline how the co-founders will be compensated for their work. This can include salaries, equity, and bonuses.

Exit strategy: It`s important to have an exit strategy in place before starting a business. The co-founder`s agreement should outline what will happen if one or more co-founders want to leave the company. This can include the sale of the company or the buyout of the departing co-founder`s shares.

Overall, a well-drafted co-founder`s agreement can help ensure the success of a new business by setting clear expectations and preventing disputes. It`s important to consult with a lawyer experienced in startup law to ensure that the agreement is legally binding and covers all necessary areas.