Startup law

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Startup law

Alan Thomson
Hello all,

Here is a question that must have been asked and answered at least once on this list:

I'm a web developer. I have been asked to develop a web project for two partners. Both partners are non-technical. They have offered 5% per year for every year I work with them for up to 3 years along with some money. These shares are offered as options, executable on the completion of each year. The option-ness of the agreement makes me feel vulnerable to them just sacking me on day 364 before my first option can vest. I don't necessarily distrust the partners. But I can imagine that, if we found funding, the power to do this could be taken out of the partners' hands and could be placed in hands of the investors, who would necessarily be ruthless about exploiting any loophole.

So my question is this: Is there a UK startup-centric menu of contracts out there that we can chose from that will make sure we are protecting ourselves? Something like the "Choose a license" widget on the creative commons site.

So if someone could copy and paste an answer (My google searches have not been useful), that would be most appreciated!

Cheers,
Alan

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Alan Thomson
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The Hub Islington
Candid Arts
5 Torrens Street
London EC1V 1NQ
+44 (0) 78 3308 6722
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projectmccoll.co.uk
http://whataplan.com - Hidden gems and exciting things in London





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Re: Startup law

FTired
Administrator
Hi

I don't think there are any boiler plate contracts, but you could include a clause which mentions valid reasons for firing, and a notice given prior to firing of say 6mnths, where you have in writing received a warning about whatever you were fired for. Also note, people tend not to fire unless really necessary, way too many legal problems that can come and bite them, hence 9/10 times even if they wish to fire, they usually ask you to resign, at which point your 'acceleration clause' (you do hv one, dont you :-)), will kick in, especially if it includes a 3mnth period prior to your equity being given.

Again chat with a lawyer on this one...

Iqbal



From: Alan Thomson <[hidden email]>
To: [hidden email]
Sent: Wed, 16 June, 2010 11:42:15
Subject: [entrepreneur-1056] Startup law

Hello all,

Here is a question that must have been asked and answered at least once on this list:

I'm a web developer. I have been asked to develop a web project for two partners. Both partners are non-technical. They have offered 5% per year for every year I work with them for up to 3 years along with some money. These shares are offered as options, executable on the completion of each year. The option-ness of the agreement makes me feel vulnerable to them just sacking me on day 364 before my first option can vest. I don't necessarily distrust the partners. But I can imagine that, if we found funding, the power to do this could be taken out of the partners' hands and could be placed in hands of the investors, who would necessarily be ruthless about exploiting any loophole.

So my question is this: Is there a UK startup-centric menu of contracts out there that we can chose from that will make sure we are protecting ourselves? Something like the "Choose a license" widget on the creative commons site.

So if someone could copy and paste an answer (My google searches have not been useful), that would be most appreciated!

Cheers,
Alan

--
--
---------------------------------------------------------------------------
Alan Thomson
---------------------------------------------------------------------------
The Hub Islington
Candid Arts
5 Torrens Street
London EC1V 1NQ
+44 (0) 78 3308 6722
---------------------------------------------------------------------------
projectmccoll.co.uk
http://whataplan.com - Hidden gems and exciting things in London





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RE: Startup law

William Robins
In reply to this post by Alan Thomson

Alan

 

There is no off the shelf answer that I know of as this kind of a problem is quite unique.

 

I doubt you will be an employee, as you would need to be paid minimum wage if you are and you risk having your shares classified as employment related (which gives you a poor tax treatment).  You will want to be a consultant.

 

We can offer you a bespoke solution for sensible money.  Get in touch if you want a quote.

 

Cheers

 

Best wishes,

 

William Robins

Partner

 

 

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A list of the members of Keystone Law and of the non-members, who are designated as partners, is open to inspection at the registered office being Matrix Studios, 91 Peterborough Road, London SW6 3BU. The term partner is used to refer to a member of Keystone Law or an employee or consultant with equivalent standing and qualifications. The members are either solicitors or registered foreign lawyers. VAT registration number: GB 809 6078 09.

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From: [hidden email] [mailto:[hidden email]] On Behalf Of iqbalgandham
Sent: 16 June 2010 13:27
To: [hidden email]
Subject: Re: [entrepreneur-1056] Startup law

 

Hi

I don't think there are any boiler plate contracts, but you could include a clause which mentions valid reasons for firing, and a notice given prior to firing of say 6mnths, where you have in writing received a warning about whatever you were fired for. Also note, people tend not to fire unless really necessary, way too many legal problems that can come and bite them, hence 9/10 times even if they wish to fire, they usually ask you to resign, at which point your 'acceleration clause' (you do hv one, dont you :-)), will kick in, especially if it includes a 3mnth period prior to your equity being given.

Again chat with a lawyer on this one...

Iqbal

 

 


From: Alan Thomson <[hidden email]>
To: [hidden email]
Sent: Wed, 16 June, 2010 11:42:15
Subject: [entrepreneur-1056] Startup law

Hello all,

Here is a question that must have been asked and answered at least once on this list:

I'm a web developer. I have been asked to develop a web project for two partners. Both partners are non-technical. They have offered 5% per year for every year I work with them for up to 3 years along with some money. These shares are offered as options, executable on the completion of each year. The option-ness of the agreement makes me feel vulnerable to them just sacking me on day 364 before my first option can vest. I don't necessarily distrust the partners. But I can imagine that, if we found funding, the power to do this could be taken out of the partners' hands and could be placed in hands of the investors, who would necessarily be ruthless about exploiting any loophole.

So my question is this: Is there a UK startup-centric menu of contracts out there that we can chose from that will make sure we are protecting ourselves? Something like the "Choose a license" widget on the creative commons site.

So if someone could copy and paste an answer (My google searches have not been useful), that would be most appreciated!

Cheers,
Alan

--
--
---------------------------------------------------------------------------
Alan Thomson
---------------------------------------------------------------------------
The Hub Islington
Candid Arts
5 Torrens Street
London EC1V 1NQ
+44 (0) 78 3308 6722
---------------------------------------------------------------------------
projectmccoll.co.uk
http://whataplan.com - Hidden gems and exciting things in London





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