Drafting LLC Company Agreements: What Is A Capital Contribution?
I recently had a meeting with a client who wanted to make sure his initial investment in an Limited Liability Company was well documented by the LLC. One way to document the initial investment is in the LLC’s Company Agreement. […]
The Company Agreement Explained: Why Do I Need A Company Agreement If I Have A Certificate Of Formation?
Clients regularly ask, “Why do I need a Company Agreement if I have a Certificate of Formation?” To answer the question directly: the difference lies in the purpose of the two documents. Certificate of Formation The Certificate of Formation (also […]
Preparing for Funding Ep2: Founders’ Agreements – Recut
In this episode, we discuss founders’ agreements, including Restricted Stock Purchase Agreements (RSPAs), Confidential Information and Inventions Assignment Agreements (CIIAAs), and Non-Compete and Non-Solicitation Agreements.
A Stock Purchase Agreement is a legally binding contract whereby a purchaser (oftentimes an investor) agrees to purchase shares of a company in exchange for consideration. The consideration is almost always cash, but it could be services or a promissory […]
A Shareholders’ Agreement (SHA) is an agreement among a company’s shareholders that sometimes exists in startups. While most of the shareholders’ rights are laid out in the formation documents, the shareholder agreement may supplement these documents and further provide how […]
A Restricted Stock Purchase Agreement (RSPA) is an agreement issuing restricted stock. RSPAs are typically granted to founders to prevent the founder from leaving the company prematurely and taking a lot of the ownership with her. The RSPA establishes when […]
Non-Solicitation Agreements are usually in employment agreements to prevent the contracting employee from soliciting the company’s other employees and the company’s customers for a competing business venture.
A Non-Compete is an agreement signed by employees and management prohibiting the individual from working for or forming a competing company. Non-competes include a specified geographic region and last for a specified time period after termination.
An Investor Rights Agreement (IRA) is an agreement between an investor and a company that contractually guarantees the investor certain rights including, but not limited to, voting rights, inspection rights, rights of first refusal, and observer rights.
An acquisition agreement where the sellers are selling their stock, membership interests/units, partnership interests, or similar, rather than the assets of the company. An Equity Purchase Agreement may also be called a Membership Interest Purchase Agreement or a Stock Purchase […]