Fill in the hard answers now, while everyone is still friends.
Who this is for: Two or more people starting a company together in Ontario — a startup, a consultancy, a side project that's getting serious. What you'll get: a structured worksheet to surface and write down the decisions that quietly break partnerships, so your lawyer can turn your answers into a proper founders' agreement (also called a shareholders' agreement once you incorporate).
⚖️ This is a general guide, not legal advice. It can't account for your specific situation. Use it to get oriented, then confirm the details with a licensed Ontario lawyer.
How to use this worksheet
Print it. Each founder fills it out separately first, then you compare answers in a room together. The gaps between your answers are the conversation. Where you disagree, write down the disagreement — that's exactly what the agreement needs to resolve.
A handshake is not a plan. Most founder break-ups don't come from bad people; they come from good people who never agreed on the answers below and assumed they were on the same page.
Founders completing this worksheet:
- Founder 1: ____________________________
- Founder 2: ____________________________
- Founder 3: ____________________________
- Date: ____________________
1. The company itself
- Working company name: ____________________________
- What the business actually does (one sentence): ____________________________
- Will you incorporate? ☐ Yes ☐ Not yet ☐ Unsure
- If yes — federal or Ontario? ☐ Federal (CBCA) ☐ Ontario (Business Corporations Act) ☐ Need advice
💡 Incorporating creates a separate legal "person" that owns the business, holds the contracts, and shields your personal assets. The founders' agreement governs the relationship between the owners of that company. You want both.
Have we agreed? ☐ Yes ☐ Not yet
2. Equity split — who owns what
The single most important number in the document. Equal splits feel fair but can leave nobody in charge; unequal splits need a reason everyone accepts.
| Founder | % ownership (shares) | Why this number (cash in, time, idea, network, IP) |
|---|---|---|
| _______ % | ||
| _______ % | ||
| _______ % | ||
| Total | must equal 100% |
Questions to settle:
- Is the split based on today's contribution or expected future contribution? ____________________
- If someone contributes far less than expected, does their stake change? ☐ Yes (via vesting — see §5) ☐ No
- Are you keeping a slice unallocated for future hires (an option pool)? ☐ Yes, ______% ☐ No
Have we agreed? ☐ Yes ☐ Not yet
3. Roles, titles, and who decides what
Titles are cheap; decision rights are not. Two "co-CEOs" with no tiebreaker is a recipe for gridlock.
| Area | Who leads it |
|---|---|
| Product / operations | ____________________ |
| Sales / customers | ____________________ |
| Finance / books | ____________________ |
| Hiring / people | ____________________ |
| Final tiebreaker (the "buck stops here" person) | ____________________ |
- Titles: ____________________________
- Who is the official director(s) on record? ____________________________
Have we agreed? ☐ Yes ☐ Not yet
4. Decision-making — what needs a vote
Decide now which decisions one founder can make alone, which need a majority, and which need everyone. Reserving big decisions for unanimous (or supermajority) consent protects minority owners.
| Decision | One founder | Majority | Unanimous |
|---|---|---|---|
| Day-to-day spending under $______ | ☐ | ☐ | ☐ |
| Hiring / firing staff | ☐ | ☐ | ☐ |
| Taking on debt or a loan | ☐ | ☐ | ☐ |
| Issuing new shares / bringing in investors | ☐ | ☐ | ☐ |
| Selling the company | ☐ | ☐ | ☐ |
| Changing anyone's salary | ☐ | ☐ | ☐ |
- How do we break a deadlock if a required vote ties? ____________________________
Have we agreed? ☐ Yes ☐ Not yet
5. Vesting — earning your shares over time
Vesting means you earn your ownership gradually by sticking around, rather than owning it all on day one. Without it, a founder who quits after two months could walk away owning a third of the company forever. This is the clause that protects the people who stay.
- Vesting period (commonly around four years — confirm what fits you): ______ years
- Cliff (a minimum time before any shares vest at all; often one year): ______ months
- Does time already worked count toward vesting? ☐ Yes ☐ No
- What happens to unvested shares if a founder leaves? ☐ Returned to company ☐ Bought back at a set price ☐ Other: ____________
💡 A cliff means if a founder leaves before the cliff date, they vest nothing. After the cliff, shares vest in regular installments. It sounds harsh but it's standard and it protects everyone equally.
Have we agreed? ☐ Yes ☐ Not yet
6. If a founder leaves — good leaver vs. bad leaver
People leave: burnout, a new baby, a better offer, or a falling-out. Agree now how the company and the remaining founders treat someone on the way out. The usual approach splits departures into two buckets.
Good leaver — leaves on reasonable terms (illness, family, mutual decision, the company asks them to go without cause).
- Keeps vested shares? ☐ Yes ☐ No
- Company can buy back vested shares at: ☐ fair market value ☐ a set formula ☐ Other: ____________
Bad leaver — leaves in a way that harms the company (resigns early to compete, is dismissed for serious misconduct, breaches the agreement).
- What happens to their vested shares? ☐ Bought back at a discount ☐ Bought back at cost paid ☐ Other: ____________
- Unvested shares: ☐ forfeited in all cases
Define the line:
- What counts as a "bad leaver" in our company? ____________________________
⚠️ Watch out: Buy-back pricing and "good vs. bad leaver" definitions are where founder agreements get genuinely complicated and emotionally charged. Write down your intentions here, but have a lawyer draft the actual mechanics — a vague clause is worse than none.
Have we agreed? ☐ Yes ☐ Not yet
7. Intellectual property — make sure the company owns it
This is the one founders forget, and it can sink a future investment or sale. By default, the person who writes the code, designs the logo, or invents the process may personally own that IP — not the company. Every founder must formally assign their work to the company.
- Has each founder signed (or agreed to sign) an IP assignment transferring all work, code, designs, and inventions to the company? ☐ Yes ☐ Not yet
- Did anyone build part of this before the company existed, or while employed elsewhere? ☐ Yes ☐ No
- If yes, who, and what? ____________________________
- Any IP that a founder is licensing to the company rather than giving it? ____________________________
⚠️ Watch out: If you built something at a previous job, your old employer may have a claim to it. Flag this for your lawyer before it becomes the company's foundation.
Have we agreed? ☐ Yes ☐ Not yet
8. Time commitment
Mismatched expectations on hours are a top cause of resentment. One "full-time" founder and one "whenever I can" founder rarely stays comfortable.
| Founder | Full-time / part-time | Roughly hours per week | Keeping another job? |
|---|---|---|---|
| ☐ FT ☐ PT | ______ | ☐ Yes ☐ No | |
| ☐ FT ☐ PT | ______ | ☐ Yes ☐ No |
- What happens if someone repeatedly doesn't put in the agreed time? ____________________________
Have we agreed? ☐ Yes ☐ Not yet
9. Money — salaries, expenses, and reinvestment
- Will any founder draw a salary now? ☐ Yes ☐ No, not until: ____________
- Starting salaries (if any): ____________________________
- Who approves expenses, and up to what amount without a second sign-off? $______
- Will profits be reinvested or distributed to founders? ____________________________
- Has anyone loaned the company money? If so, how is it repaid? ____________________________
💡 Loans from a founder, unpaid "sweat equity," and out-of-pocket expenses should be written down as they happen. Memories diverge; ledgers don't.
Have we agreed? ☐ Yes ☐ Not yet
10. Bringing in investors and new owners later
- If an investor wants in, who must approve it? ☐ Majority ☐ Unanimous
- Can a founder sell their shares to an outsider? ☐ No ☐ Only after offering to the others first (a right of first refusal)
- If the company is sold, can the majority force the minority to sell too (a drag-along), so a deal isn't blocked? ☐ Yes ☐ No
- If a big shareholder sells, can the smaller ones join the deal on the same terms (a tag-along)? ☐ Yes ☐ No
Have we agreed? ☐ Yes ☐ Not yet
11. Dispute resolution — the exit hatch
Even good partnerships hit a wall. Decide the off-ramp before you need it.
- If two founders are deadlocked, we will first: ☐ talk it out ☐ mediation ☐ bring in a neutral advisor
- If that fails: ☐ mediation then arbitration ☐ a shotgun buy-sell clause (one names a price; the other chooses to buy or sell at it) ☐ wind down the company
- Where do legal disputes get resolved? ☐ Ontario courts ☐ Arbitration in Ontario
💡 A shotgun clause keeps both sides honest because the person setting the price doesn't know whether they'll be buyer or seller. It's powerful but can favour whoever has more cash — discuss the trade-offs with counsel.
Have we agreed? ☐ Yes ☐ Not yet
Final "have we agreed?" checklist
Don't sign anything until every box below is checked.
- Equity split adds to 100% and everyone knows why
- Roles and a final tiebreaker are named
- We know which decisions need a vote, and what kind
- Vesting and a cliff are in place
- Good-leaver vs. bad-leaver outcomes are defined
- Every founder will assign their IP to the company
- Time commitments are written and realistic
- Salary, expense, and loan rules are clear
- Rules for new investors and share transfers are set
- We have a dispute / exit mechanism
- A licensed Ontario lawyer will draft the final agreement
How Treadstone Law can help
A founders' agreement is cheaper than a founder dispute by an order of magnitude. Treadstone Law drafts founders' and shareholders' agreements, handles incorporation, and prepares the IP assignments and vesting terms that protect everyone — on flat, quoted fees, so you know the cost before we start.
- Talk it through: call 1-844-900-1070 or start a file online.
- Learn more: see our corporate services and transparent pricing.
- Ready to go? Start a file online and we'll turn this worksheet into a signed agreement.
This is not legal advice
This guide is general information, not legal advice. Reading it does not create a lawyer-client relationship. Ontario laws, tax rates, and government programs change, and how the law applies depends on your specific facts. For advice about your situation, speak with a licensed Ontario lawyer. Treadstone Law is licensed by the Law Society of Ontario — reach us at 1-844-900-1070 or start a file online.