A foundation agreement should be written, not oral. The agreement of a founder is in fact a written agreement between the co-founders of the company, which is carried out in the need to properly indicate rights, obligations, responsibilities and commitments. They are not co-founders linked to the contract. It is an agreement that clearly defines the strategy for issues such as ownership, board of directors, approval or resignation of partners, etc. The foundation agreement is concluded in order to avoid any ambiguity regarding the activities between co-founders in the future. As we know, there is always the possibility of occurring an uncertain situation such as the death of one of the co-founders or the resignation, the continuation of business. Therefore, in order to avoid the loss it can make to the company or to enter such a situation, this will have an impact on the business. To avoid this loss for security purposes, the founder`s approval is taken. The above list of the essential clauses of a co-founder`s agreement is not exhaustive and the founders may contain other essential provisions, depending on the nature of the company and the relationship between them. The agreement should clearly define the roles and responsibilities of each of the company`s co-founders. Overall, the roles and responsibilities of the co-founders can be divided as operations, marketing, administration and finance. In the event of a dispute between the co-founders, there should be an appropriate method of dispute resolution to be present. For example, if the founders agree to terminate the company, then the preferred option to settle this dispute is arbitration, mediation, etc.
Due to the nature of their association with the company, the founders are aware of a lot of confidential information about the company, some of which may constitute trade secrets. Founders should be contractually prevented from disclosing the confidential information that the co-founder receives during his collaboration with the company, as this can cause irreparable harm to the company. In fairfest Media Ltd. v. ITE Group PLC (2015 (2) CHN 704), the petitioner, organizer of travel fairs, entered into a confidentiality agreement with the respondent for a period of 6 (6) months in anticipation of a joint enterprise agreement with the respondent at a later date. In accordance with the terms of the confidentiality agreement, the respondent was prevented from disclosing the confidential information for a period of two (two) years from the date of termination of the confidentiality agreement. The type of information for which the petitioner sought protection relates to the marketing strategy, customer base, calculation and cost-effectiveness of the travel fair organization. Where the parties did not conclude the negotiations, the petitioner sought a court injunction to prevent the respondent from using the confidential information for a period of two (two) years from the closing date of the confidentiality agreement.
The High Court of Kolkata found that business information such as costs and pricing, planned capital investments, inventory, marketing strategies and client lists may be considered trade secrets, and has taken a publication ban preventing the respondent from disclosing information about the petitioner`s marketing strategy and customer received for a period of two (two) years from the date of termination. which imposed the confidentiality agreement after the termination of the non-disclosure agreement. In the application of the confidentiality agreement after the information, the Tribunal also invoked the principle that a person who has received confidential information cannot use it as a springboard for activities detrimental to the person who provided the confidential information. In addition, the Tribunal used the Saltmen Engineering Co rule to determine what it would be confidential information in an English case.