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Discussion: Being An Entrepreneur.

Part A: What is a founders' agreement? Describe the purpose of a buyback clause and why it's important.

Part B: List and explain four (4) steps entrepreneurs can take to avoid legal disputes.

Part C: List and briefly describe three (3) specific steps that an entrepreneurial organization can take to build a strong ethical culture.

Part D: What is meant by the term "piercing the corporate veil"? How can the corporate veil be pierced?

Solution Preview

To assist you with better understanding your assignment and the topic of entrepreneurship and the legal aspects of starting your own business, I have included links as reference. You will find additional information on the topic within them.

A) According to, a founders agreement is a written outline between the founding partners of a business. The agreement defines how ownership will be divided, who will leave, the amount of decision making power each founder has, as well as, what each individuals contribution to the company will be. Creating a founders agreement aides in establishing guidelines so that everyone goes into the partnership with an understanding of what his/her role and responsibility to the company is and what the expectation of each partner is. Many friends and family members go into partnerships blind and with assumptions about how duties and responsibilities will be divided and not making concrete decisions beforehand can ignite discourse in the long or short run. You may read more about this topic by reviewing the link below.


A buy back clause defines how un-vested stock will be repurchased or regained should a founder be terminated or leave for any reason. These stocks may be ...