Co Founder Non Compete Agreement

The new shares should only be issued with the unanimous agreement of all the founders, in order to avoid a dilution of their various stocks. In contract law, a non-compete clause (often NCC) or a non-compete agreement (CNC) is a clause whereby a party (usually a worker) agrees not to enter a similar profession or trade in competition with another party (usually the employer). Some courts call them „restrictive alliances.“ As a contractual provision, a CNC is bound by traditional contractual requirements, including consideration. The co-founders come together for many reasons, including pooling each person`s unique skills, connections and networks. The co-founders could be friends, family or simply professional acquaintances, who together see a vision that they want to achieve with the help and contributions of the other. 11. Withdrawal of a founder: unfortunate events of death, disability, efficiency, violation of the law, sexual harassment, embezzlement, etc., involving one of the founders, should describe in detail a mechanism of procedure for the departure/withdrawal of the founder. In the event of death or disability, a compensation package may be made available to the founder or his legal heirs. More importantly, in these events and in all other circumstances concerning the founder, there should be an act of moral turpitude, a mechanism whereby the participation of such a founder would be redeemed either by the company or by the other founders at the slightest discount value. Non-compete obligations are automatically invalidated in California, with the exception of a small number of specific situations that are expressly authorized by law. [26] They were banned in 1872 by the original California Civil Code (Civ. Code, formerly) [27], under the influence of American jurist David Dudley Field II [28] My co-founder threatened to sue me in the United States because I am an American citizen.

This means that a founder, if he leaves before the one-year date, does not receive equity. As soon as their birthday passes, they receive 25% of their equity, 50% after 2 years and if they stay until after the 4th anniversary, they will receive 100% of their equity. If a founder leaves before the full vesting, non-member shares are withdrawn and admitted into the company. Probably not, although the answer will depend on the specific jurisdiction law that determines your relationship.