If you are starting a company in Ireland with one or more partners, the most consequential document you will ever sign is not your Form A1, your bank mandate, or your first commercial contract. It is your co-founder agreement. And the version that matters most is not the one you sign in year three when a solicitor finally asks for it. It is the one you sign — or fail to sign — in the first ninety days.
Most Irish founders never get there. Companies Registration Office filings show that the overwhelming majority of new private companies limited by shares are incorporated by two or more parties, and the majority of those incorporations are accompanied by no shareholders agreement at all. The founders mean to. They will get one drawn up once revenue arrives, once the first hire is made, once a solicitor mentions it again. By then the gap between what each founder thinks they agreed and what they actually agreed has usually grown into something painful, expensive and very difficult to undo.
This guide is the long version. It covers what an Irish co-founder agreement actually is, why it differs from a shareholders agreement, what should be in it, what it costs, and — most importantly — the conversations the document is really there to force.
What a co-founder agreement actually is
A co-founder agreement is a written, ideally binding, document that records the working understandings between the founders of a new business: who owns what, who decides what, who is committing what, and what happens when one of you wants to leave, gets sick, gets a better offer, or simply changes their mind.
It exists to do one thing: replace memory and goodwill with paper. Memory drifts within months. Goodwill evaporates the first time real money or a real disagreement arrives. Paper does not.
In Irish practice, the term covers a spectrum. At the informal end it is a one-page memorandum of understanding that two friends sign over a kitchen table. At the formal end it is a fully drafted shareholders agreement executed alongside the company constitution at the moment of incorporation. Both are legitimate starting points. Neither is optional.
Co-founder agreement vs shareholders agreement
These two documents overlap heavily and the terminology is used loosely. The practical distinction matters.
| Co-founder agreement | Shareholders agreement | |
|---|---|---|
| Stage | Pre-incorporation or earliest days | Post-incorporation |
| Form | Often informal, sometimes binding | Formal, always binding |
| Drafted by | Founders, sometimes a solicitor | Solicitor |
| Typical Irish cost | €0 – €500 | €500 – €2,500 |
| Enforceable in court | Sometimes | Yes |
| Survives investment | No — usually replaced | Yes — usually amended |
A reasonable Irish path is to write a short co-founder agreement before incorporation, file the company at the CRO, and then convert the agreement into a properly drafted shareholders agreement within the first six months. The version of you that exists in three years, under stress, with money on the line, will thank you.
Why Irish founders skip it
The two reasons founders skip the agreement are always the same: trust and timing.
On trust: "We are friends. We do not need a contract." The founders who say this loudest are the ones who end up in the most expensive disputes. Contracts are not for the friendship. They are for the version of the friendship that exists after eighteen months of unequal effort, missed targets and quiet resentment.
On timing: "We will do it when we have time, money or a solicitor." The cheapest moment to write down your agreement is right now, before there is anything to fight over. Every month you wait, the cost of agreeing the same things rises — first because positions harden, then because lawyers get involved, then because positions harden further because lawyers are involved.
If your company is already incorporated and you do not yet have a shareholders agreement, that is the highest-priority item on your founder to-do list this month. Not next quarter. This month.
Five questions, two minutes, no signup. Surfaces the conversations most Irish co-founders skip — the ones solicitors say cause the majority of disputes.
Run the free check →What an Irish co-founder agreement should cover
Every credible Irish solicitor will draft slightly differently, but the underlying anatomy is consistent. A co-founder agreement that does not address each of the following is incomplete.
1. Equity split
Exact percentages, the rationale that produced them, and an explicit acknowledgement that the rationale is what each founder is being compensated for. Two founders who hold 50/50 because they could not agree anything else are in a different position than two founders who hold 50/50 because they have agreed that contribution will be equal in time, capital and risk.
2. Vesting schedule
The Irish norm is increasingly a four-year vesting schedule with a one-year cliff: nothing for the first twelve months, then quarterly or monthly accrual to year four. Without vesting, a founder who walks at month four leaves the company permanently encumbered with their share of the equity. With vesting, the company has a clean route to recover unearned shares.
3. Roles and responsibilities
One paragraph per founder, written by them, agreed by the others. Not job titles — actual responsibilities. Who owns the product. Who owns sales. Who signs the bank cheques. Who deals with the accountant. Ambiguity here becomes resentment within a year.
4. Decision-making
Which decisions require unanimity, which require majority, who has casting vote on what. The Companies Act 2014 provides defaults; almost no one actually wants the defaults.
5. IP assignment
Every founder explicitly assigns to the company any intellectual property they created before incorporation that the company will rely on. Without this clause, a departing founder can credibly claim ownership of the codebase, the brand or the customer list — and they will.
6. Compensation and expenses
Salaries, when they start, how they are reviewed, what counts as a reimbursable expense, and what each founder is committing in cash or unpaid time. Money is the conversation founders most want to avoid and most need to have.
7. Exit, buyout and bad-leaver provisions
What happens if a founder wants to leave voluntarily. What happens if a founder must be removed. What happens on death, incapacity or long-term illness. How shares are valued in each case. Who has the right to buy and at what price.
8. Restrictive covenants
Reasonable, scoped non-compete and confidentiality clauses. Irish courts will not enforce unreasonable restraints; do not let a solicitor draft something so broad it becomes worthless.
Solicitors in Dublin and Cork report that the single clause most often missing from informal Irish co-founder agreements is bad-leaver treatment. It is also the clause most often invoked. Founders avoid drafting it because it presupposes a falling-out — which is precisely why it ends up being needed.
What a co-founder agreement costs in Ireland
A solicitor-drafted shareholders agreement for a straightforward two-founder Irish company typically costs between €500 and €1,500. Three or more founders, share classes, options pools, or external investment will move the figure to €1,500 – €4,000.
These figures are not cheap. They are also not expensive. The same dispute, litigated in the Irish courts, will cost between €15,000 and €100,000 in legal fees alone, plus the relationship, plus the company. The shareholders agreement is among the highest-leverage spends a young Irish company will ever make.
Twenty questions across equity, exits, IP, decision-making and commitment. A solicitor-grade PDF you can take to your co-founder and your lawyer. Refunded if it surfaces nothing new.
Run the free check →What usually happens without one
- Months 0–6: everything is fine. Founders are working hard, equity feels fair, decisions are made by consensus.
- Months 6–12: contributions begin to diverge. One founder is full-time, the other is still part-time. Salary asymmetries emerge.
- Months 12–18: the first real disagreement — usually about money, hiring, or strategic direction. There is no agreed mechanism for resolving it.
- Months 18–24: hidden resentment becomes open conflict. A founder considers leaving. There is no buyout mechanism, no agreed valuation, no vesting, no clean exit path.
- Months 24–36: legal advice is sought, usually by the more aggrieved party. Costs escalate. The business stalls. The relationship is permanently damaged.
This sequence is not pessimistic. It is the modal outcome for Irish founder pairs without a written agreement. Solicitors describe it as a script they have watched play out hundreds of times.
An example
Niamh and David incorporated a Dublin-based SaaS company in 2022, splitting equity 50/50 with a verbal handshake. Eighteen months in, David accepted a senior role at a multinational and asked to remain a passive 50% shareholder. Niamh, now solely responsible for delivery, asked him to return some equity. There was no vesting clause, no buyout mechanism and no agreed valuation method. The dispute took eleven months to resolve through mediation, cost both founders close to €40,000 in fees, and ended the friendship. A standard four-year vesting clause, drafted at incorporation for €900, would have resolved the same situation in a single conversation.
Mistakes Irish founders make
- Treating the CRO filing as the agreement. It is not. It records share allocation; it does not govern how the company is run.
- Using a free template downloaded from a US legal site. Irish company law differs materially from Delaware, English or Scottish law.
- Signing a shareholders agreement without reading it. The provisions you do not understand are the ones that will be invoked against you.
- Allowing one founder to instruct the solicitor unilaterally. The solicitor cannot represent both of you. Each founder should at minimum read the draft independently.
- Refusing to discuss bad-leaver provisions because it feels disloyal. It is the loyal thing to do.
The conversations the document should force
- What is each of us committing — full-time, part-time, capital, customers, IP — and over what period?
- What is our salary policy in year one if revenue is slower than we hope?
- If one of us wants to leave in eighteen months, how do we value their shares and who has the right to buy them?
- What counts as a major decision, and what happens if we cannot agree?
- What outside opportunities — board roles, consulting, advisory work — are each of us free to pursue?
- What do we do if one of us wants to take outside investment and the other does not?
- If the business is acquired in three years for a number that is good for one of us and life-changing for the other, how do we make that decision?
Where to start
- Have the conversations above. Take notes. Do not delegate this step to a solicitor.
- Write a one-page summary of what you agreed. A Google Doc is fine.
- Run the free PartnerReady Lite Check to surface anything you missed.
- Brief an Irish solicitor with experience in startup work. Provide your one-pager and the PartnerReady Report.
- Sign the resulting shareholders agreement before any external party — investor, employee, customer — relies on the company's stability.
Browse a real, anonymised PartnerReady Report before you spend a cent.
Run the free check →Frequently asked questions
- Do we need a co-founder agreement before incorporating in Ireland?
- Yes. The cheapest, calmest moment to agree the hard terms is before there is anything to fight over. A short pre-incorporation memorandum, replaced by a full shareholders agreement once the company is formed, is the standard Irish path.
- Is a co-founder agreement the same as a shareholders agreement in Ireland?
- They overlap. A co-founder agreement is typically pre-incorporation and may be informal. A shareholders agreement is post-incorporation, drafted by a solicitor, and binding. In practice the first is replaced by the second within months.
- What does a shareholders agreement cost in Ireland?
- For a straightforward two-founder Irish private company, expect €500 to €1,500. More complex setups with investors, share classes or options pools run from €1,500 to €4,000.
- What happens if we never sign one?
- You inherit the defaults of the Companies Act 2014 and your company constitution. Those defaults are designed to be neutral, not to reflect what you and your co-founder actually agreed. Disputes typically follow within 12 to 24 months.
- Can we draft a co-founder agreement ourselves?
- You can draft a pre-incorporation memorandum yourselves. The binding shareholders agreement should be drafted or reviewed by a qualified Irish solicitor. The cost is small relative to the cost of a poorly drafted document.
Most disputes begin long before the first legal disagreement.
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