Introduction
It is possible the time will come when you and your co-founder part ways. This article describes the steps you need to take within Fidelity Private Shares to properly record your co-founder's departure.
Change board members
If your cofounder had a seat on the board, you will likely be removing them as part of the separation. To do this, run the Change Board Members workflow located under the Governance subheading.
The workflow will allow you to either generate the necessary board and stockholder approvals to initiate the change, or you may upload these documents if you already have them in-hand.
Change corporate officers
As with the board of directors, it is likely your cofounder is also a company officer. Run the Change Corporate Officers workflow to remove them from their position. This workflow is located under the Corporate Structure subheading.
You will have the option to either have Fidelity Private Shares generate the necessary board resolution and approval for you if these documents need to be created, or upload the appropriate documents if you already have them in-hand. To remove a corporate officer, click the green X icon to the far right of their name.
Please keep in mind that both the President and Secretary positions must be filled before proceeding, so you will need to click the Add button to appoint a new individual to fill the newly empty position before clicking Continue.
The workflow will then prompt you to upload the cofounder's resignation (or any appropriate resignation documentation that you'd like to upload for record keeping). Finally, the workflow will ask how you would like to collect board approval. Once the workflow is finalized and signatures are collected, your corporate officers will be updated.
Run termination
For HR and equity related matters, it will be necessary to run the Termination workflow to remove your cofounder as an employee and repurchase any unvested shares, assuming the cofounder holds a Restricted Stock Agreement. Run the Terminate an Employee/Consultant or other Stakeholder workflow located under the Human Resources subheading.
This workflow will allow you to properly record the cofounder's departure from a human resources perspective, as well as the repurchase of shares.
Access settings
Typically, a cofounder will have a very high level of access to the company's Fidelity Private Shares account. You will want to restrict their access so that the departing cofounder no longer has this broad visibility. To do this, find the cofounder in the User Directory and click on the three-bar menu to the right of their name.
Please read this article for a thorough breakdown of the different access levels in Fidelity Private Shares.
If you have outstanding questions about recording your cofounder's departure in Fidelity Private Shares, please reach out to our team at support.fps@fidelity.com.
Screenshots are for illustrative purposes only.
Fidelity Private Shares LLC provides cap table management and other administrative services to private companies and their equity compensation plans.
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