# Change summary — Cofounder Agreement v2

Version 2.0 — Public Review Draft | September 19, 2026

Compared with the published August 2, 2026 version 1.0. This summary is non-operative and is not a legal redline or a legal opinion. Version 1 remains available unchanged.

## Structural and governance changes

- Front matter, Clauses 1–4, and definitions: identify the Original Cofounders, Original Founder Block, Later Participants, Tax Coordinator, and holding-only purpose; keep California LLC plus Delaware corporation.
- Clauses 6.6, 9.2, and 11: later founders normally hold separately issued corporate securities; joining the shared LLC remains a separate unanimous decision. Original founders need unanimous approval for separate venture economics, including nominees and successor entities.
- Clause 9.7 and Schedule D: require implementing corporate documents and appropriate incoming-holder joinders before the relevant issuance. Internal promises are not represented as binding outsiders or overriding director duties.
- Clauses 4.1 and 14: default operating IP and assets to the operating corporation. Address pre-formation assignments and prevent duplicate contribution/basis assumptions. Separate IP holding requires approval and review.
- Clauses 16.2(f), 17.4, and Schedule B: restrict the expert to factual determinations, distinguish administrative records from amendments, and reconcile overlapping approvals with the express drag mechanism. No expert may supply missing minority consent.
- Clause 15.2: replace the prior general post-exit restraint with loyalty and trade-secret protections; any statutory exit restraint requires separate fact-specific counsel drafting. This is a substantive change prompted by the holding-only structure, not merely a formatting edit.

## Tax and liquidity changes

- Clauses 5.1 and 6.5: require actual consideration, recipient, transfer dates, express vesting selection, and tax ownership/election analysis. Remove suggested vesting terms from operative text; retain an example in the guide.
- Clauses 7.1 and 21.6: distinguish economic rights from legally required tax allocations and capital accounts. Require supplementary partnership provisions when the actual facts demand them; no bookkeeping amendment to minority economics.
- Clauses 7.4–7.5: add common-rate pro rata quarterly tax advances, credit for prior cash distributions, reserve and solvency limits, reconciliation, and mandatory withholding treatment. Personal tax differences do not produce individualized gross-ups.
- Clauses 12.5, 12.7–12.8, and 13.1: review transfer tax consequences, compare stock versus LLC-interest and other exits before commitment, and condition stock distributions on approval and equivalent protections.
- Clause 21: add classification covenants, reasonable-efforts QSBS obligations, original-issuance and annual evidence, event-based review, filing responsibility, confidential tax inputs, and record retention. No QSBS warranty or mandatory five-year hold.
- Schedules A and C: use repeatable member/responsibility records and designate tax roles and election evidence.
- Schedule D: add entity/corporate-protection records, per-lot ownership and basis history, annual review, tax advances, and transaction comparisons.

## Protections retained

No unilateral adverse economic changes; proportional dilution subject to affected-member consent; minority board nomination measured against Founder Equity; protected reserved matters and information rights; unanimous amendments; fair-value buyout floors without minority/marketability discounts; tag/drag safeguards; and constraints on compensation-based circumvention remain. Express vesting, drag, buy-sell, and lawful withholding exceptions are reconciled rather than presented as absolute prohibitions on every ownership change.

## Deliberate limits

This is a review draft with completion fields. It does not form entities, issue stock, elect tax treatment, file personal elections, amend existing agreements, supply every bespoke partnership tax provision, or replace companion corporate documents. The holding jurisdiction remains California. Ohio variants and DAF planning are excluded. This version is offered for public review, not approved for signature.

## September 19 public-review revision

- Clauses 5.4 and 20.1, Schedule D: coordinated closing, executed interim arrangements for early work/transfers, actual dates, responsible entities, and explicit companion-document precedence.
- Clauses 6.7–6.8 and Schedule A: optional, fully documented milestone awards; independent factual acceptance review; explicit dependency, delay, partial-credit, service and exit choices; incomplete proposals do not change existing rights.
- Clauses 10.3–10.5 and Schedule C: explicit service, compensation, authority, resources, outside activities and severance selections, subject to mandatory law; operational departure does not create a new vested-equity forfeiture or call right.
- Clause 14.2 and Schedule A: substantively replace the blanket Background IP license with identified ownership and separately executed adequate licenses. Clause 14.4 adds contributor/rights records, company-controlled access and existing-business asset-transfer evidence. Clause 18.1 now distinguishes disclosed third-party rights from personally owned material.
- Schedule A: explicit acceleration and buyout-payment completion, with existing operative protections and amendment consents preserved. No universal new salary, severance, acceleration or milestone award is imposed.
- Presentation: public review draft dated September 19, 2026; independent legal review not recorded. The earlier v1 remains available and existing signed agreements are not amended by publication.