To make the life of starting entrepreneurs easier and to cut back costs, Startup Estonia in cooperation with leading Estonian law firms created samples of legal documents.
The freely available model documents help entrepreneurs who want to involve investors, share options, protect intellectual property and business secrets or to expand their team. Eve Peeterson, head of Startup Estonia, said that the package of model documents includes 25 of the main contracts and documents that entrepreneurs and startup founders need the most when starting their business.
“The idea to create model documents came from feedback provided by startup founders who said that while starting a business in Estonia is easy, new businesses in the technology sector struggle with drafting contracts and documents and seeking legal advice is not feasible for many new businesses,”
Peeterson said, adding that the model documents are one of the most visited pages on the Startup Estonia website.
The model documents package available at the Startup Estonia website includes, for example, a sample for a founders agreement, which allows entrepreneurs to consider the roles of founders and to assign the sizes of shares as well as determine what happens if a founder leaves the company. There are also documents which help with investor engagement through convertible loans and issuing shares. The model documents also include samples of employment and option agreements as well as intellectual property transfer and non-disclosure agreements for tech companies.
Antti Perli, attorney at law and partner of law firm Ellex Raidla, which led the process of updating and expanding the documents, said that the updates take into consideration changes in law and the best practice of the field over the last three years.
“For example, we published a new employment contract, which reflects the most recent changes in the Employment Contracts Act. We made a version of the convertible loan agreement suitable for single investors. We changed the IP assignment and license assignment agreement to better reflect the distribution of intellectual property in real life. We made a new version of the cap table that is easier to use for entrepreneurs in the early phases. We added a version of the non-disclosure agreement, which can be used when business secrets are traded mutually by both sides. We brought several provisions from the articles of association for investment firms over to the shareholder’s agreement to reduce the need to translate changes made during negotiations into Estonian and English.”
The documents have been drafted by Estonian law firms Ellex Raidla, Cobalt, Eversheds Sutherland, Hedman Law Firm, TGS Baltic, Sorainen, and Triniti. Law firms Njord and Fort Legal supported the drafting of the documents.
The model documents package for entrepreneurs is available for free to anyone to download at the Startup Estonia website http://startupestonia.ee/resources
