Special contract with founders?
From Vermont Virtual
If the founder(s) wish to have payment of the filing fee, formation fee, or an advance of working capital -- or their special efforts to establish the company and recruit participants -- treated as a debt of the virtual company, there should be a contract between the virtual company and the founder(s) that sets forth the terms of this agreement.
Such a contract can call for repayment of the loan, for special decision-making rights that extend beyond the initial rating period, for a right on the part of the founders to a share of the virtual company's gross revenues over a specified period, or other such terms.
A founders agreement, once entered into, is not subject to change by unilateral action of the virtual company (even if all active members of the company favor such a change). Instead, any amendments would require agreement by both the company and the founders who are parties to the agreement.
The terms of the founders agreement for the VVCC will be posted once it is finalized.
A draft Founders Agreement is set forth below:
FOUNDERS AGREEMENT
This Agreement is by and among ____________, LLC, a Vermont limited liability company (the “Company”) and the persons listed below as its founders (the “Founders”).
Services. The Founders have participated in the formation of the Company and expect to continue to provide various services in connection with the Company.
Compensation. The Company will pay the Founders _____% of the gross revenues of the Company on a quarterly basis during the ___ years after the Company’s formation.
Loan. Various of the Founders have advanced $______ for the purpose of establishing the company and providing working capital. The Company agrees to repay such loans, along with ___% interest per year, upon demand of the lending Founder(s), but not before the ____ anniversary of the date of formation of the Company.
Founder Interests. The allocation of the compensation to which the Founders are entitled under this Agreement, as among the Founders, is set forth below. Interests of the Founders under this Agreement are not transferable without the consent of the Founders.
Hold Harmless. The Company will indemnify and hold the Founders harmless from and against any liabilities that they may incur in connection with their activities in connection with the Company to the fullest extent permitted by the Vermont Limited Liability Company Act. The Founders shall not be liable for actions that they take in good faith on behalf of the Company, absent their gross negligence or intentional misconduct.
Term. The term of this Agreement shall be the same as the term of the Company and this Agreement shall terminate upon the complete liquidation of the Company.
Decisions of the Founders; Amendment. Consent of the Founders under this Agreement requires the approval of a majority of the Founders, exercising votes in proportion to the allocation of interests set forth below. This Agreement may only be amended with the consent of the Company and the Consent of the Founders.
Devotion of Time; Other Activities. The Founders may devote such time to the Company as they deem appropriate and may engage in such activities outside of the Company as they wish to pursue, including those which may compete with the Company.
Integration. This Agreement constitutes the entire agreement among the parties as to its subject matter.
Choice of Law. The law of the State of Vermont shall govern this Agreement.
Founders: Allocation:
Loans from Founders (and amounts):
