Business Setup

Co-Founder Agreement

A Co-Founder Agreement sets out the terms between business co-founders — equity splits, roles, vesting schedules, IP ownership, and what happens if a founder leaves.

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What this document covers

Co-founders' details and equity splits
Roles and responsibilities of each founder
Vesting schedule with cliff
IP assignment to the company
Decision-making and voting rights
What happens when a founder leaves
Non-compete and non-solicitation
Confidentiality obligations
Governing law (Companies Act 2015)

Frequently Asked Questions

Why is a co-founder agreement important for a Kenyan startup?
A co-founder agreement prevents the most common and damaging startup disputes: equity allocation disagreements, one founder leaving and retaining a large stake, uncertainty about roles and decision-making, and IP ownership. Most startup failures can be traced to founder conflict — a well-drafted agreement reduces this risk significantly.
Who owns the IP developed before the company is incorporated in Kenya?
IP created before incorporation belongs to the individual who created it unless it is formally assigned to the company. A co-founder agreement should include an IP assignment clause, ensuring all pre-incorporation and during-incorporation work product is assigned to the company.
Is a co-founder agreement valid internationally?
Yes. Co-founder agreements are enforceable across all common law jurisdictions. For startups incorporated in Kenya with founders in other countries, specify the governing law (typically Kenyan law for a Kenyan company) and ensure the agreement complies with the Companies Act 2015.