Most disputes between business partners, founders and contractors come down to expectations that were never written down. A few well-drafted agreements prevent that by recording, in advance, how people will work together and what happens if they fall out. This article explains, at an educational level, what four common agreements cover and when each is typically needed. It is general information about these documents, not legal advice — the right wording for your situation should be settled with a professional.
Reviewed by CA Harika Chebolu, FCA · Last updated 2026-06-15
Quick answer
A handful of core agreements set out who does what, who owns what, and what happens when things change. Here's what an NDA, consultancy agreement, founders' agreement and shareholders' agreement each do and when you need them.
A non-disclosure agreement protects confidential information shared between parties — business plans, customer lists, pricing, code or designs. It defines what counts as confidential, how the recipient may use it, how long the obligation lasts, and what is excluded (such as information that is already public). NDAs are commonly signed before sharing sensitive details with a potential partner, investor, vendor or employee. An NDA does not by itself transfer ownership of anything; it simply restricts disclosure and misuse. Used early, it lets you have candid conversations without giving away your edge.
A consultancy agreement governs the relationship with an independent professional or contractor you engage for a defined piece of work. It typically sets out the scope of services, fees and payment terms, timelines, confidentiality, who owns the work product created, and how either side can end the engagement. Clear ownership of deliverables matters: without it, you may not own what you paid to have built. This agreement also helps establish that the consultant is an independent contractor rather than an employee, which has practical and compliance consequences, so the distinction is worth getting right.
A founders' agreement is signed between the people starting a business together, ideally early, while everyone is still aligned. It records each founder's role and responsibilities, how equity is split, what happens to a founder's shares if they leave (often through vesting), how decisions are made, and how disagreements are resolved. The hardest scenarios — a co-founder departing or underperforming — are exactly the ones it should address while relations are good. Putting this in writing at the start prevents painful, ambiguous disputes later when far more is at stake.
Templates are a useful starting point: they remind you of clauses to consider and give a common structure. But a template is a skeleton, not a finished document. The defined terms, the specifics of your deal, ownership of intellectual property, dispute resolution and the consequences of exit all need to reflect your actual arrangement. A generic agreement that does not match reality can be worse than none, because it creates false confidence. Treat templates as a way to prepare for a focused conversation with a professional rather than a substitute for one.
Before you share confidential information with someone outside your business — a potential partner, investor, vendor or hire. The NDA defines what is confidential, how it may be used, and for how long. It restricts disclosure and misuse but does not transfer ownership of anything by itself. This is general information, not legal advice.
Because the difficult situations — a co-founder leaving, equity disputes, decision deadlocks — are hardest to resolve once they arise. A founders' agreement records roles, equity splits, vesting and how disputes are settled while everyone is still aligned, which prevents costly ambiguity later.
A template is a helpful starting point but not a finished agreement. It reminds you of clauses to consider, yet the defined terms, IP ownership, deal specifics and exit consequences must reflect your actual arrangement. A generic document that does not match reality can create false confidence, so use templates to prepare rather than to finalise.
Need a clear agreement between founders, shareholders or with a consultant? Write to the firm and we'll help you understand what each document should cover for your situation.