You would lay out how things are divided in your paperwork when you form the company. If there are no outside investors, it's simpler for a company to fold.
In the case of one person leaving, all their invested shares fall back into the management pool and are distributed proportionally amongst the remaining co-founders (but not investors, they always only have the number of shares they paid for).
Also make sure you do an 83b election (in the US) for vesting shares. Otherwise you pay income taxes on the value of them as they vest. Google it for lots more info, it's pretty straightforward
In the case of one person leaving, all their invested shares fall back into the management pool and are distributed proportionally amongst the remaining co-founders (but not investors, they always only have the number of shares they paid for).
Also make sure you do an 83b election (in the US) for vesting shares. Otherwise you pay income taxes on the value of them as they vest. Google it for lots more info, it's pretty straightforward
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