Co-founder Separation Agreement

Our package starts from $900 + GST and includes:

• drafting a Deed of Settlement & Release
• drafting a Resolution of Members for the purpose of approving the separation
• drafting a Share Transfer Form that gives effect to the transfer of shares
• phone consultations of up to 60 minutes with a Sprintlaw lawyer, who will take your instructions, advise you on the legal issues you need to know and answer your questions about the document
• 1 complimentary amendment to the final draft we provide, as long as you request the amendment within 10 business days of us delivering the final draft

Sprintlaw operates in Australia, New Zealand, and the UK. In Australia, Sprintlaw is a regulated law firm and is an incorporated legal practice with number 32845, regulated by the Law Society of New South Wales. In New Zealand and the UK, Sprintlaw operates as a legal consultancy and is not a traditionally regulated law firm.

We chose to set up as a legal consultancy, rather than a regulated law firm, in New Zealand because it made our expansion into the New Zealand market faster and easier. It has also meant a lower compliance burden and reduced overhead costs when performing legal work. We are then able to pass these cost savings on to our clients, allowing us to provide high quality legal services at a fraction of the cost of traditional firms.

So what’s the difference between Sprintlaw NZ’s consultancy model and a traditional NZ law firm? In many respects, we are similar. Like a law firm, we offer legal services to small business clients covering most of their regular legal needs, including drafting and reviewing contracts and providing legal and regulatory advice.

However, there are some important differences and limitations to be aware of.

Our lawyers: The legal services we provide in New Zealand are not provided by New Zealand-qualified lawyers. Our lawyers are Australian-qualified or UK-qualified lawyers who are familiar with New Zealand laws and requirements, and are able to provide high quality legal services to New Zealand businesses. Given the strong similarities between Australian, English, and New Zealand law, and the areas of law in which we practise, being small business and startup law, we do not view the fact that our lawyers have not qualified in New Zealand as having any substantive impact on the quality of our service. We are committed to providing high quality, affordable legal services to all our New Zealand clients.

Reserved areas: We are not permitted to provide services in reserved areas of law under section 6 and section 35 of the Lawyers and Conveyancers Act 2006 (see here). These include appearing in court or conducting litigation proceedings, managing conveyancing matters, or giving advice under the Property (Relationships) Act 1976. As such, Sprintlaw does not operate in these areas. We find these areas are rarely relevant to our small business clients seeking commercial legal advisory services.

Privilege: When working with traditional law firms, advice provided is considered “privileged”. This means that correspondence between a client and solicitor can, if made confidentially and for the purposes of legal advice, be withheld from a court or third party in connection with litigation proceedings. As Sprintlaw operates as a legal consultancy, certain advice we provide may not be “privileged” and may instead be treated in the same manner as advice from your accountant or anyone else who is not a regulated adviser such as a solicitor or barrister. This does not affect our confidentiality obligations to you, and our engagement letter confirms that any advice or discussions we have will be kept confidential. Given that Sprintlaw does not operate in court-related or litigious matters, we find that privilege is rarely an issue for the kind of legal work we do.

Insurance: Sprintlaw is not required to have professional indemnity insurance that meets the New Zealand Law Society’s minimum requirements. Regardless, Sprintlaw has chosen to maintain professional indemnity cover so our clients still benefit from insurance protection.

A Co-founder Separation Agreement can help set out what happens when one founder leaves the business. Depending on your situation, it may deal with matters such as the departing founder’s shares or ownership interest, intellectual property, confidential information, company property, any ongoing restraints, and how the separation will be communicated and documented.

The right terms will depend on your company structure, any shareholders agreement or constitution already in place, and the circumstances of the departure. We can help tailor the agreement so it works with your existing documents and the practical needs of the business.