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Should founders and co-founders have a contract of employment? [closed]
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There is a startup/small enterprise with X employees. Initially, this startup didn't provide the usual contract of employment for their workers as it was just a startup then. As the startup grew the need of having formal job contracts became obvious.
All X employees got their printed contract to sign in, which is fine. But surprisingly some of the co-founders (CTO for example) got a printed copy of it too... This left all Chief Officers who received this printed copy a bit puzzled and belittled, why they received a contract and while others didn't.
Should the contract of employment be printed only for normal employees or for everyone including Chief Executives?
Is there some kind of "guide" or "management standard" that specifies the best course to take?
Thanks.
management contracts employer-relations people-management
asked Apr 27 '16 at 19:28
adelriosantiago
1093
closed as off-topic by gnat, Dawny33, Kent A., jimm101, NotMe Apr 29 '16 at 13:25
This question appears to be off-topic. The users who voted to close gave this specific reason:
- "Questions seeking advice on company-specific regulations, agreements, or policies should be directed to your manager or HR department. Questions that address only a specific company or position are of limited use to future visitors. Questions seeking legal advice should be directed to legal professionals. For more information, click here." – gnat, Dawny33, Kent A., jimm101, NotMe
 |Â
show 1 more comment
up vote
1
down vote
favorite
There is a startup/small enterprise with X employees. Initially, this startup didn't provide the usual contract of employment for their workers as it was just a startup then. As the startup grew the need of having formal job contracts became obvious.
All X employees got their printed contract to sign in, which is fine. But surprisingly some of the co-founders (CTO for example) got a printed copy of it too... This left all Chief Officers who received this printed copy a bit puzzled and belittled, why they received a contract and while others didn't.
Should the contract of employment be printed only for normal employees or for everyone including Chief Executives?
Is there some kind of "guide" or "management standard" that specifies the best course to take?
Thanks.
management contracts employer-relations people-management
asked Apr 27 '16 at 19:28
adelriosantiago
1093
closed as off-topic by gnat, Dawny33, Kent A., jimm101, NotMe Apr 29 '16 at 13:25
This question appears to be off-topic. The users who voted to close gave this specific reason:
- "Questions seeking advice on company-specific regulations, agreements, or policies should be directed to your manager or HR department. Questions that address only a specific company or position are of limited use to future visitors. Questions seeking legal advice should be directed to legal professionals. For more information, click here." – gnat, Dawny33, Kent A., jimm101, NotMe
3
Do the founders get a salary?
– CodesInChaos
Apr 27 '16 at 19:54
Well, they actually do, it is kind of "symbolic" though but they do have a salary.
– adelriosantiago
Apr 27 '16 at 20:36
1
How do they know the others didn't? Was the CEO going around the office marking his territory because he doesn't have a contract?
– user8365
Apr 27 '16 at 20:40
1
Who of these own a stake in the company? If you don't - i.e. you are an employee - then what's the downside to having a contract? It's probably in your interest. Why not ask whoever handed out the contracts?
– Rup
Apr 28 '16 at 0:03
@JeffO Definitively no Chief Officer marked his territory in the way you mention. There was simply no requirement for some CO's to fill in the needed information for the future contract.
– adelriosantiago
Apr 28 '16 at 17:38
 |Â
show 1 more comment
up vote
1
down vote
favorite
up vote
1
down vote
favorite
There is a startup/small enterprise with X employees. Initially, this startup didn't provide the usual contract of employment for their workers as it was just a startup then. As the startup grew the need of having formal job contracts became obvious.
All X employees got their printed contract to sign in, which is fine. But surprisingly some of the co-founders (CTO for example) got a printed copy of it too... This left all Chief Officers who received this printed copy a bit puzzled and belittled, why they received a contract and while others didn't.
Should the contract of employment be printed only for normal employees or for everyone including Chief Executives?
Is there some kind of "guide" or "management standard" that specifies the best course to take?
Thanks.
management contracts employer-relations people-management
asked Apr 27 '16 at 19:28
adelriosantiago
1093
There is a startup/small enterprise with X employees. Initially, this startup didn't provide the usual contract of employment for their workers as it was just a startup then. As the startup grew the need of having formal job contracts became obvious.
All X employees got their printed contract to sign in, which is fine. But surprisingly some of the co-founders (CTO for example) got a printed copy of it too... This left all Chief Officers who received this printed copy a bit puzzled and belittled, why they received a contract and while others didn't.
Should the contract of employment be printed only for normal employees or for everyone including Chief Executives?
Is there some kind of "guide" or "management standard" that specifies the best course to take?
Thanks.
management contracts employer-relations people-management
asked Apr 27 '16 at 19:28
adelriosantiago
1093
edited Apr 27 '16 at 20:37
asked Apr 27 '16 at 19:28
adelriosantiago
1093
asked Apr 27 '16 at 19:28
adelriosantiago
1093
asked Apr 27 '16 at 19:28
adelriosantiago
1093
1093
closed as off-topic by gnat, Dawny33, Kent A., jimm101, NotMe Apr 29 '16 at 13:25
This question appears to be off-topic. The users who voted to close gave this specific reason:
- "Questions seeking advice on company-specific regulations, agreements, or policies should be directed to your manager or HR department. Questions that address only a specific company or position are of limited use to future visitors. Questions seeking legal advice should be directed to legal professionals. For more information, click here." – gnat, Dawny33, Kent A., jimm101, NotMe
closed as off-topic by gnat, Dawny33, Kent A., jimm101, NotMe Apr 29 '16 at 13:25
This question appears to be off-topic. The users who voted to close gave this specific reason:
- "Questions seeking advice on company-specific regulations, agreements, or policies should be directed to your manager or HR department. Questions that address only a specific company or position are of limited use to future visitors. Questions seeking legal advice should be directed to legal professionals. For more information, click here." – gnat, Dawny33, Kent A., jimm101, NotMe
3
Do the founders get a salary?
– CodesInChaos
Apr 27 '16 at 19:54
Well, they actually do, it is kind of "symbolic" though but they do have a salary.
– adelriosantiago
Apr 27 '16 at 20:36
1
How do they know the others didn't? Was the CEO going around the office marking his territory because he doesn't have a contract?
– user8365
Apr 27 '16 at 20:40
1
Who of these own a stake in the company? If you don't - i.e. you are an employee - then what's the downside to having a contract? It's probably in your interest. Why not ask whoever handed out the contracts?
– Rup
Apr 28 '16 at 0:03
@JeffO Definitively no Chief Officer marked his territory in the way you mention. There was simply no requirement for some CO's to fill in the needed information for the future contract.
– adelriosantiago
Apr 28 '16 at 17:38
 |Â
show 1 more comment
3
Do the founders get a salary?
– CodesInChaos
Apr 27 '16 at 19:54
Well, they actually do, it is kind of "symbolic" though but they do have a salary.
– adelriosantiago
Apr 27 '16 at 20:36
1
How do they know the others didn't? Was the CEO going around the office marking his territory because he doesn't have a contract?
– user8365
Apr 27 '16 at 20:40
1
Who of these own a stake in the company? If you don't - i.e. you are an employee - then what's the downside to having a contract? It's probably in your interest. Why not ask whoever handed out the contracts?
– Rup
Apr 28 '16 at 0:03
@JeffO Definitively no Chief Officer marked his territory in the way you mention. There was simply no requirement for some CO's to fill in the needed information for the future contract.
– adelriosantiago
Apr 28 '16 at 17:38
3
3
Do the founders get a salary?
– CodesInChaos
Apr 27 '16 at 19:54
Do the founders get a salary?
– CodesInChaos
Apr 27 '16 at 19:54
Well, they actually do, it is kind of "symbolic" though but they do have a salary.
– adelriosantiago
Apr 27 '16 at 20:36
Well, they actually do, it is kind of "symbolic" though but they do have a salary.
– adelriosantiago
Apr 27 '16 at 20:36
1
1
How do they know the others didn't? Was the CEO going around the office marking his territory because he doesn't have a contract?
– user8365
Apr 27 '16 at 20:40
How do they know the others didn't? Was the CEO going around the office marking his territory because he doesn't have a contract?
– user8365
Apr 27 '16 at 20:40
1
1
Who of these own a stake in the company? If you don't - i.e. you are an employee - then what's the downside to having a contract? It's probably in your interest. Why not ask whoever handed out the contracts?
– Rup
Apr 28 '16 at 0:03
Who of these own a stake in the company? If you don't - i.e. you are an employee - then what's the downside to having a contract? It's probably in your interest. Why not ask whoever handed out the contracts?
– Rup
Apr 28 '16 at 0:03
@JeffO Definitively no Chief Officer marked his territory in the way you mention. There was simply no requirement for some CO's to fill in the needed information for the future contract.
– adelriosantiago
Apr 28 '16 at 17:38
@JeffO Definitively no Chief Officer marked his territory in the way you mention. There was simply no requirement for some CO's to fill in the needed information for the future contract.
– adelriosantiago
Apr 28 '16 at 17:38
 |Â
show 1 more comment
2 Answers
2
active
oldest
votes
up vote
4
down vote
This depends on the legal system in your country, but in a lot of countries you generally need to have an employment contract whenever you are receiving any monetary benefits (wages for example) from a company only for tax reasons. Having none may lead to unpleasent surprises in case of personal or company tax audits. This is certainly the case for any EU country - maybe this problem doesn't arise in México.
Nevertheless it doesn't really have any downside for the employee to have a contract so it seems it's generally a smart move to demand one. The only thing you loose is some amount of flexibility - you can't just walk away from the company but have to give your notice period for example.
Having no employment contract generally opens up a lot of possibilities for discussions/disputes afterwards.
How many vacation days does the CTO have? Zero? 30? What's the notice period? What about non-disclosure and non-compete agreements?
Those are just a few of the things you really should have in writing from the beginning.
In my personal opinion, you really need a contract when you start to work fulltime in a startup company. Before this point, it may be beneficial but isn't a absolute must.
Especially in startup environments (who tend to be unstructured or haven't set up proper processes, yet) it's often the case that you need to demand that certain bureaucracy is done which should be a matter of course in the first place. The reason for this is that there is no-one who takes care of this things in a proactive way.
answered Apr 28 '16 at 10:37
s1lv3r
1,490913
suggest improvements |Â
up vote
1
down vote
Yes, it is very good practice to do that.
When there are multiple founders, it is very useful when their relation to the company is properly formalized in form of a work contract so their rights and obligations are clear. This becomes important as soon as there is a disagreement between the founders.
Paying everyone a fixed salary even though they own part of the company is a good way to avoid mixing personal finances with business finances and to properly account for the personal expenses of the company owners in your business planning.
answered Apr 28 '16 at 16:02
Philipp
20.3k34884
Agreed about an agreement between the founders but that's usually (in my limited experience) a different document to their individual employment contracts, as it would typically cover things like how they can dispose of their share of the company, what happens to it if they try to leave too early etc., which isn't really 'employment'.
– Rup
Apr 29 '16 at 0:30
suggest improvements |Â
2 Answers
2
active
oldest
votes
2 Answers
2
active
oldest
votes
active
oldest
votes
active
oldest
votes
up vote
4
down vote
This depends on the legal system in your country, but in a lot of countries you generally need to have an employment contract whenever you are receiving any monetary benefits (wages for example) from a company only for tax reasons. Having none may lead to unpleasent surprises in case of personal or company tax audits. This is certainly the case for any EU country - maybe this problem doesn't arise in México.
Nevertheless it doesn't really have any downside for the employee to have a contract so it seems it's generally a smart move to demand one. The only thing you loose is some amount of flexibility - you can't just walk away from the company but have to give your notice period for example.
Having no employment contract generally opens up a lot of possibilities for discussions/disputes afterwards.
How many vacation days does the CTO have? Zero? 30? What's the notice period? What about non-disclosure and non-compete agreements?
Those are just a few of the things you really should have in writing from the beginning.
In my personal opinion, you really need a contract when you start to work fulltime in a startup company. Before this point, it may be beneficial but isn't a absolute must.
Especially in startup environments (who tend to be unstructured or haven't set up proper processes, yet) it's often the case that you need to demand that certain bureaucracy is done which should be a matter of course in the first place. The reason for this is that there is no-one who takes care of this things in a proactive way.
answered Apr 28 '16 at 10:37
s1lv3r
1,490913
suggest improvements |Â
up vote
4
down vote
This depends on the legal system in your country, but in a lot of countries you generally need to have an employment contract whenever you are receiving any monetary benefits (wages for example) from a company only for tax reasons. Having none may lead to unpleasent surprises in case of personal or company tax audits. This is certainly the case for any EU country - maybe this problem doesn't arise in México.
Nevertheless it doesn't really have any downside for the employee to have a contract so it seems it's generally a smart move to demand one. The only thing you loose is some amount of flexibility - you can't just walk away from the company but have to give your notice period for example.
Having no employment contract generally opens up a lot of possibilities for discussions/disputes afterwards.
How many vacation days does the CTO have? Zero? 30? What's the notice period? What about non-disclosure and non-compete agreements?
Those are just a few of the things you really should have in writing from the beginning.
In my personal opinion, you really need a contract when you start to work fulltime in a startup company. Before this point, it may be beneficial but isn't a absolute must.
Especially in startup environments (who tend to be unstructured or haven't set up proper processes, yet) it's often the case that you need to demand that certain bureaucracy is done which should be a matter of course in the first place. The reason for this is that there is no-one who takes care of this things in a proactive way.
answered Apr 28 '16 at 10:37
s1lv3r
1,490913
suggest improvements |Â
up vote
4
down vote
up vote
4
down vote
This depends on the legal system in your country, but in a lot of countries you generally need to have an employment contract whenever you are receiving any monetary benefits (wages for example) from a company only for tax reasons. Having none may lead to unpleasent surprises in case of personal or company tax audits. This is certainly the case for any EU country - maybe this problem doesn't arise in México.
Nevertheless it doesn't really have any downside for the employee to have a contract so it seems it's generally a smart move to demand one. The only thing you loose is some amount of flexibility - you can't just walk away from the company but have to give your notice period for example.
Having no employment contract generally opens up a lot of possibilities for discussions/disputes afterwards.
How many vacation days does the CTO have? Zero? 30? What's the notice period? What about non-disclosure and non-compete agreements?
Those are just a few of the things you really should have in writing from the beginning.
In my personal opinion, you really need a contract when you start to work fulltime in a startup company. Before this point, it may be beneficial but isn't a absolute must.
Especially in startup environments (who tend to be unstructured or haven't set up proper processes, yet) it's often the case that you need to demand that certain bureaucracy is done which should be a matter of course in the first place. The reason for this is that there is no-one who takes care of this things in a proactive way.
answered Apr 28 '16 at 10:37
s1lv3r
1,490913
This depends on the legal system in your country, but in a lot of countries you generally need to have an employment contract whenever you are receiving any monetary benefits (wages for example) from a company only for tax reasons. Having none may lead to unpleasent surprises in case of personal or company tax audits. This is certainly the case for any EU country - maybe this problem doesn't arise in México.
Nevertheless it doesn't really have any downside for the employee to have a contract so it seems it's generally a smart move to demand one. The only thing you loose is some amount of flexibility - you can't just walk away from the company but have to give your notice period for example.
Having no employment contract generally opens up a lot of possibilities for discussions/disputes afterwards.
How many vacation days does the CTO have? Zero? 30? What's the notice period? What about non-disclosure and non-compete agreements?
Those are just a few of the things you really should have in writing from the beginning.
In my personal opinion, you really need a contract when you start to work fulltime in a startup company. Before this point, it may be beneficial but isn't a absolute must.
Especially in startup environments (who tend to be unstructured or haven't set up proper processes, yet) it's often the case that you need to demand that certain bureaucracy is done which should be a matter of course in the first place. The reason for this is that there is no-one who takes care of this things in a proactive way.
answered Apr 28 '16 at 10:37
s1lv3r
1,490913
edited Apr 28 '16 at 10:43
answered Apr 28 '16 at 10:37
s1lv3r
1,490913
answered Apr 28 '16 at 10:37
s1lv3r
1,490913
answered Apr 28 '16 at 10:37
s1lv3r
1,490913
1,490913
suggest improvements |Â
suggest improvements |Â
up vote
1
down vote
Yes, it is very good practice to do that.
When there are multiple founders, it is very useful when their relation to the company is properly formalized in form of a work contract so their rights and obligations are clear. This becomes important as soon as there is a disagreement between the founders.
Paying everyone a fixed salary even though they own part of the company is a good way to avoid mixing personal finances with business finances and to properly account for the personal expenses of the company owners in your business planning.
answered Apr 28 '16 at 16:02
Philipp
20.3k34884
Agreed about an agreement between the founders but that's usually (in my limited experience) a different document to their individual employment contracts, as it would typically cover things like how they can dispose of their share of the company, what happens to it if they try to leave too early etc., which isn't really 'employment'.
– Rup
Apr 29 '16 at 0:30
suggest improvements |Â
up vote
1
down vote
Yes, it is very good practice to do that.
When there are multiple founders, it is very useful when their relation to the company is properly formalized in form of a work contract so their rights and obligations are clear. This becomes important as soon as there is a disagreement between the founders.
Paying everyone a fixed salary even though they own part of the company is a good way to avoid mixing personal finances with business finances and to properly account for the personal expenses of the company owners in your business planning.
answered Apr 28 '16 at 16:02
Philipp
20.3k34884
Agreed about an agreement between the founders but that's usually (in my limited experience) a different document to their individual employment contracts, as it would typically cover things like how they can dispose of their share of the company, what happens to it if they try to leave too early etc., which isn't really 'employment'.
– Rup
Apr 29 '16 at 0:30
suggest improvements |Â
up vote
1
down vote
up vote
1
down vote
Yes, it is very good practice to do that.
When there are multiple founders, it is very useful when their relation to the company is properly formalized in form of a work contract so their rights and obligations are clear. This becomes important as soon as there is a disagreement between the founders.
Paying everyone a fixed salary even though they own part of the company is a good way to avoid mixing personal finances with business finances and to properly account for the personal expenses of the company owners in your business planning.
answered Apr 28 '16 at 16:02
Philipp
20.3k34884
Yes, it is very good practice to do that.
When there are multiple founders, it is very useful when their relation to the company is properly formalized in form of a work contract so their rights and obligations are clear. This becomes important as soon as there is a disagreement between the founders.
Paying everyone a fixed salary even though they own part of the company is a good way to avoid mixing personal finances with business finances and to properly account for the personal expenses of the company owners in your business planning.
answered Apr 28 '16 at 16:02
Philipp
20.3k34884
answered Apr 28 '16 at 16:02
Philipp
20.3k34884
answered Apr 28 '16 at 16:02
Philipp
20.3k34884
answered Apr 28 '16 at 16:02
Philipp
20.3k34884
20.3k34884
Agreed about an agreement between the founders but that's usually (in my limited experience) a different document to their individual employment contracts, as it would typically cover things like how they can dispose of their share of the company, what happens to it if they try to leave too early etc., which isn't really 'employment'.
– Rup
Apr 29 '16 at 0:30
suggest improvements |Â
Agreed about an agreement between the founders but that's usually (in my limited experience) a different document to their individual employment contracts, as it would typically cover things like how they can dispose of their share of the company, what happens to it if they try to leave too early etc., which isn't really 'employment'.
– Rup
Apr 29 '16 at 0:30
Agreed about an agreement between the founders but that's usually (in my limited experience) a different document to their individual employment contracts, as it would typically cover things like how they can dispose of their share of the company, what happens to it if they try to leave too early etc., which isn't really 'employment'.
– Rup
Apr 29 '16 at 0:30
Agreed about an agreement between the founders but that's usually (in my limited experience) a different document to their individual employment contracts, as it would typically cover things like how they can dispose of their share of the company, what happens to it if they try to leave too early etc., which isn't really 'employment'.
– Rup
Apr 29 '16 at 0:30
suggest improvements |Â
3
Do the founders get a salary?
– CodesInChaos
Apr 27 '16 at 19:54
Well, they actually do, it is kind of "symbolic" though but they do have a salary.
– adelriosantiago
Apr 27 '16 at 20:36
1
How do they know the others didn't? Was the CEO going around the office marking his territory because he doesn't have a contract?
– user8365
Apr 27 '16 at 20:40
1
Who of these own a stake in the company? If you don't - i.e. you are an employee - then what's the downside to having a contract? It's probably in your interest. Why not ask whoever handed out the contracts?
– Rup
Apr 28 '16 at 0:03
@JeffO Definitively no Chief Officer marked his territory in the way you mention. There was simply no requirement for some CO's to fill in the needed information for the future contract.
– adelriosantiago
Apr 28 '16 at 17:38