What founders should clarify before signing a shareholder agreement
Most founder disputes are not caused by bad intentions. They are caused by arrangements that were never written down while the relationship was still comfortable.
A shareholder agreement is not a formality that follows a handshake. It is the document that decides what happens when the founders no longer agree — about direction, about money, about who continues.
Signing it early, while the relationship is still comfortable, is the cheapest moment to have the difficult conversation.
Who decides what
Equity percentages describe ownership. They do not describe control. Set out which decisions require a simple majority, which require unanimity, and which sit with the board rather than the shareholders.
Without that list, ordinary operating decisions can become negotiations, and significant decisions can be taken by one person who technically had the votes.
What each founder is actually committing
Capital, time, intellectual property and existing customer relationships are all contributions, and they are rarely equal. Record what each founder is contributing and when.
Where a founder is contributing part-time effort or work created before incorporation, say so, and state clearly that the resulting intellectual property belongs to the company.
What happens if someone leaves
Vesting, good and bad leaver treatment, transfer restrictions and valuation methods should be settled before anyone has a reason to argue about them.
- How shares vest, and over what period
- What happens to unvested shares on departure
- Whether remaining shareholders can require a transfer
- How the shares are valued, and by whom
How a deadlock is broken
Two equal founders can reach a genuine impasse. A deadlock mechanism — an independent chair, a buy-out formula, a structured mediation step — turns a stalemate into a process.
The clause matters most in the situation nobody expects when signing.
Before you sign
Read the agreement as though the relationship has already broken down, and ask whether the document still works. If it does, it is doing its job.
This article is general commentary written for a demonstration website. It is not legal advice and should not be relied upon for any specific matter.
