Can this agreement be signed electronically?

Yes. Electronic signatures are generally enforceable under the federal ESIGN Act (15 U.S.C. ch. 96) and state UETA statutes where adopted; confirm the parties consent to electronic records and retention procedures.

Is notarization required for founder signatures?

Not typically required for standard partnership or equity agreements. Notarization may be advisable for IP assignments or where state filing or real property interests are implicated; follow state notary rules where applicable.

How do we amend vesting terms after signing?

Amendments require written agreement signed by all parties and should reference the original effective date. Consult tax counsel about Section 83(b) consequences before changing equity or vesting economics.

What happens if a founder transfers shares without approval?

Transfer restriction clauses (ROFR, buy-sell) govern remedies. Unapproved transfers can trigger buy-back rights, injunctive relief, or damages depending on contract language and governing law.

Is a typed or click-to-sign name binding?

A typed name or click-to-sign can be binding if it demonstrates intent, consent, attribution, and retention consistent with the ESIGN four-part test; keep a robust audit trail as evidence.

How long should we keep the signed agreement?

Retain the executed agreement for the full term plus at least 3 years. If tax or regulated industry issues apply, follow the IRS and HIPAA retention baselines noted elsewhere.

Electronic Signature
Templates
Legal
Founders Partnership Agreement

Founders Partnership Agreement

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FOUNDERS PARTNERSHIP AGREEMENT

This Founders Partnership Agreement ("Agreement") is made as of by and between Founder 1: , principal address: ; and Founder 2: , principal address: . Each of the foregoing may be referred to herein individually as a "Founder" and collectively as the "Founders."

RECITALS

WHEREAS, the Founders desire to form a partnership relationship under the terms set forth in this Agreement to carry on the business described in Section 2 (the "Business"); and

WHEREAS, the Founders intend to set forth the respective capital contributions, ownership interests, governance, vesting of equity, assignment of intellectual property, and the terms for transfer or disposition of partnership interests; and

WHEREAS, the Founders believe it is in their mutual best interests to record their agreement in writing to avoid disputes and to provide a stable framework for the operation and potential growth of the Business.

NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein and other good and valuable consideration, the receipt and sufficiency of which are acknowledged, the Founders agree as follows:

1. FORMATION

1.1 Partnership. The Founders hereby form a partnership (the "Partnership") for the purpose of conducting the Business. The Partnership shall commence on the Effective Date set forth above and shall continue until dissolved in accordance with this Agreement.

2. PURPOSE

2.1 Business. The purpose of the Partnership is to develop, commercialize, and exploit the products and services described as: (the "Business"). The Partnership may engage in any lawful activities reasonably related to the Business.

3. CAPITAL CONTRIBUTIONS; OWNERSHIP

3.1 Initial Contributions. The Founders shall make initial capital contributions as follows: Founder 1 contribution: USD; Founder 2 contribution: USD. All contributions shall be recorded in the Partnership's books.

3.2 Ownership Percentages. Ownership of the Partnership shall be as follows: Founder 1: ; Founder 2: . These percentages determine allocations of profits, losses and distributions except as otherwise provided herein.

4. MANAGEMENT AND VOTING

4.1 Management. Unless otherwise agreed in writing, the Founders shall jointly manage the Partnership. Each Founder shall use reasonable efforts and devote such time as reasonably required to carry out the Business. The day-to-day operations shall be managed by: .

4.2 Voting. Except as otherwise provided, decisions requiring approval of the Founders shall be made by majority vote based on Ownership Percentages. Major decisions, including but not limited to sale of substantially all Partnership assets, admission of additional partners, amendment of this Agreement, or incurrence of indebtedness in excess of USD, shall require unanimous written consent.

5. VESTING OF FOUNDERS' INTERESTS

5.1 Vesting Schedule. Founder equity shall vest according to the following schedule: Cliff period of months, followed by monthly vesting over years. In the event of termination for cause, unvested interests shall be forfeited.

5.2 Acceleration. Acceleration of vesting upon certain events (e.g., change of control) shall occur only if approved in writing by Founders holding at least of the Ownership Percentages.

6. INTELLECTUAL PROPERTY

6.1 Assignment. Each Founder hereby assigns and agrees to assign to the Partnership all right, title and interest in and to all inventions, discoveries, improvements, works of authorship, designs, know-how and other intellectual property conceived, developed or reduced to practice by such Founder, alone or with others, in connection with the Business, whether or not during regular working hours.

6.2 Further Assurances. Each Founder shall execute and deliver such further instruments and take such further actions as are reasonably necessary to vest and confirm ownership of the foregoing intellectual property in the Partnership.

7. CONFIDENTIALITY

7.1 Confidential Information. Each Founder shall hold in strict confidence and not disclose or use any Confidential Information of the Partnership except as necessary to perform duties for the Partnership. "Confidential Information" means non-public information relating to the Business, including trade secrets, customer lists, pricing, product plans, financial data, and technical information.

7.2 Exceptions. Confidential Information does not include information that is or becomes generally available to the public other than by breach of this Agreement or information lawfully received from a third party without restriction.

8. TRANSFER RESTRICTIONS; RIGHT OF FIRST REFUSAL

8.1 Restrictions. No Founder shall sell, assign, pledge or otherwise transfer any interest in the Partnership except in accordance with this Section 8. Any attempted transfer in violation of this Agreement shall be null and void.

8.2 Right of First Refusal. Prior to any proposed transfer of a Founder's interest to a third party, the transferring Founder must deliver notice specifying terms of the proposed transfer. The non-transferring Founder shall have a period of days to elect to purchase the interest on the same terms.

9. BUY-SELL; DEATH OR DISABILITY

9.1 Events. Upon the death, permanent disability, bankruptcy, or other triggering event affecting a Founder, the remaining Founder(s) shall have the option to purchase the affected Founder's vested interest. The purchase price shall be determined by mutual agreement or, if the parties cannot agree within 60 days, by an independent appraiser selected in accordance with the Partnership's procedures.

10. ACCOUNTING, TAXES AND DISTRIBUTIONS

10.1 Records. The Partnership shall keep complete and accurate books and records in accordance with generally accepted accounting principles. Each Founder shall have reasonable access to such books and records during normal business hours.

10.2 Distributions. Net profits shall be allocated and distributed to the Founders in accordance with their Ownership Percentages unless otherwise unanimously agreed in writing. The Partnership may withhold reasonable reserves for anticipated expenses, taxes or capital needs.

10.3 Tax Treatment. The Partnership shall be treated for tax purposes in a manner consistent with partnership taxation unless otherwise required by law. The Founders shall cooperate in preparation and timely filing of all tax returns and informational statements.

11. REPRESENTATIONS AND WARRANTIES

Each Founder represents and warrants to the other Founders that (a) such Founder has the full power and authority to enter into and perform this Agreement, (b) the execution and delivery of this Agreement and the performance of such Founder's obligations will not violate any other agreement or legal obligation, and (c) to the best of such Founder's knowledge, no pending litigation or claim exists that would materially impair such Founder's ability to perform under this Agreement.

12. NOTICES

All notices required or permitted under this Agreement shall be in writing and delivered personally, by certified mail (return receipt requested), or by nationally recognized overnight courier to the addresses set forth below or to such other address as a Founder may designate by notice.

Notice address for Founder 1 Notice address for Founder 2

13. AMENDMENTS; WAIVER

13.1 Amendments. This Agreement may be amended, modified or supplemented only by a written instrument executed by all Founders.

13.2 Waiver. No waiver of any provision of this Agreement shall be effective unless in writing and signed by the party waiving compliance. No waiver shall be deemed a waiver of any other provision or of the same provision at any other time.

14. GOVERNING LAW; DISPUTE RESOLUTION

14.1 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of , without regard to its conflict of laws principles.

14.2 Dispute Resolution. In the event of any dispute arising out of or relating to this Agreement, the Founders shall first attempt in good faith to resolve such dispute through negotiation. If negotiation fails, the dispute shall be resolved by binding arbitration administered in accordance with the applicable arbitration rules mutually agreed by the Founders, with judgment on the award entered in any court of competent jurisdiction.

15. ENTIRE AGREEMENT; SEVERABILITY

15.1 Entire Agreement. This Agreement, together with any schedules or exhibits attached hereto and any written agreements executed concurrently, constitutes the entire agreement among the Founders with respect to the subject matter hereof and supersedes all prior agreements and understandings, whether written or oral.

15.2 Severability. If any provision of this Agreement is held invalid or unenforceable by a court of competent jurisdiction, such holding shall not invalidate or render unenforceable any other provision of this Agreement, and the parties shall endeavor to substitute a valid and enforceable provision that achieves the parties' original intent to the maximum extent permitted by law.

16. MISCELLANEOUS

16.1 Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, and all of which together shall constitute one and the same instrument. Facsimile or electronic signatures shall be binding for all purposes.

16.2 Survival. The warranties, covenants and obligations set forth in Sections 6 (Intellectual Property), 7 (Confidentiality), 8 (Transfer Restrictions), and 15 (Entire Agreement; Severability) shall survive termination or expiration of this Agreement to the extent necessary to give effect to their purposes.

SIGNATURES

IN WITNESS WHEREOF, the Founders have executed this Agreement as of the date first written above.

Founder 1 — Printed Name:

By:

Date:

Founder 2 — Printed Name:

By:

Date:

What a Founders Partnership Agreement Is

A Founders Partnership Agreement is a written contract between two or more founders that sets out their ownership percentages, roles, decision-making processes, capital contributions, vesting schedules, intellectual property assignment, dispute resolution, and exit mechanics. It governs day-to-day governance and long-term contingencies, including dilution, buy-sell triggers, and confidentiality obligations. For startups, the agreement reduces ambiguity, documents expectations, and provides enforceable remedies if disputes arise. Although customizable, it should align with state corporate or LLC statutes and consider tax and securities implications before execution.

Why a Founders Partnership Agreement Matters

A Founders Partnership Agreement clarifies ownership, establishes governance, defines vesting and IP assignment, and reduces future litigation risk. It provides enforceable terms under ESIGN and UETA when executed electronically and supports fundraising, investor diligence, and orderly exits.

Who Typically Uses This Agreement

Startup founders, early employees, investors, and corporate counsel commonly use a Founders Partnership Agreement when organizing equity, roles, and intellectual property.

Seed-stage founders aligning ownership percentages, responsibilities, and vesting to prevent future disputes
Angel investors verifying governance arrangements, investor protections, and liquidation preference terms during diligence
Startup attorneys drafting enforceable intellectual property assignment, restrictive covenants, and vesting schedules

The agreement is useful for internal governance and external fundraising, providing clarity for courts, investors, and future hires.

Core Clauses to Include in the Agreement

A professional Founders Partnership Agreement organizes core clauses that manage equity, control, IP, vesting, transfers, governance, and exit terms.

Ownership

Specify initial equity split, method for future dilution, capitalization table mechanics, and treatment of option pools. Include calculation examples and consequences for missed capital contributions to avoid ambiguity among founders.

Roles & Duties

Define each founder's title, primary responsibilities, time commitment expectations, and full-time employment requirements. Include restrictions on competing activities and processes for temporary leaves or reassignment of duties to maintain operational clarity.

Vesting

Describe vesting schedule, cliff period, acceleration conditions linked to termination or acquisition, repurchase rights, and treatment on involuntary departure. Include procedures to enforce or accelerate vesting when required by investors.

IP Assignment

Require founders to assign inventions, code, and domain rights to the company, disclose pre-existing IP, and warrant no conflicting obligations. Specify ongoing cooperation to perfect assignments and handle future filings.

Transfer Restrictions

Outline right of first refusal, buy-sell windows, drag and tag-along rights, and valuation methods for transfers. Include escrow, funding obligations, and procedures for involuntary transfers or creditor claims.

Governance & Exit

Establish board composition, voting thresholds, tie-breaker mechanisms, amendment procedures, dispute resolution (arbitration/mediation), and clear exit mechanics including sale, dissolution, or founder removal processes.

Step-by-Step: From Draft to Signed Agreement

Follow these steps to complete and execute a Founders Partnership Agreement in a compliant, orderly manner.

01

Gather Information: Collect names, contributions, and tax IDs.
02

Draft Terms: Write clauses for equity, vesting, and IP.
03

Review with Counsel: Confirm tax and securities compliance.
04

Execute and File: Sign, notarize if needed, and distribute copies.

Configure an Online Workflow

Configure an online workflow to create, route, and collect electronic signatures for the agreement.

Field	Configuration
Document Template	Final approved template \| Version control enabled
Signer Authentication	Email link \| Optional SMS or SSO multifactor
Field Types	Signature, initials, date, checkbox \| Conditional fields supported
Auto-Reminders	3-day intervals \| Escalation to admin after 7 days

Where to Send and How Signing Works

Routing steps show how the agreement moves from drafting to signed copies and final storage.

Upload Document: Upload the final PDF or DOCX to the platform.
Place Fields: Add signature, initials, and date fields where required.
Send to Signers: Distribute by email or secure signing link with instructions.
Receive Certificate: Signed PDF returned with an audit trail and timestamps.

Technical and Integration Considerations

Technical and integration requirements for eSigning, authentication, and secure storage.

File Formats: PDF, DOCX, and XLSX supported
Integrations: Salesforce, NetSuite, Google Workspace, Box
Authentication: Email, SMS, SSO, optional knowledge-based

Key Dates and Timing to Note

Timing items below affect enforceability, tax reporting, and vesting expectations; set them clearly in the agreement.

Agreement Effective Date and Commencement:

Enter MM/DD/YYYY; governs applicability and triggering of obligations.

Vesting Cliff and Schedule Start Date:

Set cliff (commonly 12 months) and schedule details.

Investor Closing and Share Issuance Timing:

Align share issuance with funding close and board approvals.

IP Assignment Completion and Record Filings:

Complete assignments before release; record where required by law.

Tax Reporting and Information Returns Timing:

Report equity grants as required; provide Form W-9 when requested.

Milestones from Negotiation to Post-Closing

Sequential milestones chart the lifecycle from negotiation through execution and post-closing obligations.

01

Negotiation and Term Sheet

Agree on economics, roles, and major governance terms.

02

Drafting and Legal Review

Counsel drafts language and verifies tax and securities issues.

03

Execution and Authentication

Signatures collected, notarization or witnesses obtained if required.

04

Post-Signing Compliance

Issue shares, update cap table, and store executed copy.

Common Preparation Mistakes to Avoid

Leaving vesting terms vague or unspecified, which creates disputes about ownership on departure
Failing to assign IP ownership clearly, allowing founders to retain rights that should belong to the company
Using informal percentages without precise capitalization mechanics, leading to unanticipated dilution at financing
Overlooking securities or tax implications for equity grants and failing to consult counsel when needed

Penalties, Risks, and Legal Consequences

1099 Filing Penalties: $60–$330 per form (IRC §6721)

Backup Withholding: 24% backup withholding rate

Incorrect Equity Taxation: Taxable income misreporting risk

Breach Damages: Contract damages and specific performance

Securities Law Risk: SEC scrutiny for unregistered offers

Notarization Omission: May affect enforceability in some jurisdictions

eSignature Vendor Comparison for Executing Agreements

Compare common eSignature vendors on price, compliance, and core capabilities relevant to signing founders agreements; signNow appears first per table convention.

	signNow	DocuSign	Adobe Sign	PandaDoc	HelloSign
Starting Price	$8/user/mo	$15/user/mo	$14/user/mo	$19/user/mo	$15/user/mo
Free Trial	7-day free trial, no credit card	Varies by plan	Varies by plan	Varies by plan	Varies by plan
Bulk Send	Yes	Yes	Yes	Yes	No
Audit Trail	Yes	Yes	Yes	Yes	Yes
HIPAA Compliant	Yes	Yes	Yes	No	No
Envelope Cap	No cap	100 envelopes/user/year	Varies by plan	Varies by plan	Varies by plan

Frequently Asked Questions and Troubleshooting

Answers to common legal and technical questions about drafting, executing, and storing a Founders Partnership Agreement.

Need help? Contact support

Can this agreement be signed electronically?
Yes. Electronic signatures are generally enforceable under the federal ESIGN Act (15 U.S.C. ch. 96) and state UETA statutes where adopted; confirm the parties consent to electronic records and retention procedures.
Is notarization required for founder signatures?
Not typically required for standard partnership or equity agreements. Notarization may be advisable for IP assignments or where state filing or real property interests are implicated; follow state notary rules where applicable.
How do we amend vesting terms after signing?
Amendments require written agreement signed by all parties and should reference the original effective date. Consult tax counsel about Section 83(b) consequences before changing equity or vesting economics.
What happens if a founder transfers shares without approval?
Transfer restriction clauses (ROFR, buy-sell) govern remedies. Unapproved transfers can trigger buy-back rights, injunctive relief, or damages depending on contract language and governing law.
Is a typed or click-to-sign name binding?
A typed name or click-to-sign can be binding if it demonstrates intent, consent, attribution, and retention consistent with the ESIGN four-part test; keep a robust audit trail as evidence.
How long should we keep the signed agreement?
Retain the executed agreement for the full term plus at least 3 years. If tax or regulated industry issues apply, follow the IRS and HIPAA retention baselines noted elsewhere.

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