We are experts in a lot of legal areas
Startup packages
INCORPORATION AND STRUCTURING OF ENTITY
Depending on the goals, members, location, tax considerations, etc., the startup maybe registered as a Partnership, Limited Liability Partnership, Private Company, Public Company, One Person Company, and various other legal structures. The pros and cons of each entity can be advised to the startup and a suitable decision taken. We assist with the complete incorporation and Government filings thereafter.
CRITICALITY OF FOUNDERS’ AGREEMENT
The Founders’ Agreement helps to identify the rights of the founders vis-à-vis each other; This agreement decides each founder’s contribution as well as ownership and role in the startup. It sets the expectations and guidelines before an entity is incorporated in order to abstain from any kind of miscommunication between the founders. The Founders’ Agreement can be superseded or supplemented with the Shareholders’ Agreement in case of companies.
REGULATORY APPROVALS
Each type of entity is governed by separate laws, though there are certain common laws which are to be complied with, like the Companies Act, which is applicable for all companies. Other than the laws relating to the incorporation, tax laws, labour legislations, environmental laws, securities laws, contract law, intellectual property laws, regulator related regulations and directions; there are various other laws required to be complied with.
TAX RELATED COMPLIANCE
There would be relevant TDS and GST related approvals and compliances the startup needs to have in place. We can help startups in a number of ways through filing accurate returns, completing tax compliances in a timely manner, availing optimum input credit from vendors, etc.
REGISTRATION OF INTELLECTUAL PROPERTY
The founder should have well documented ownership of all the IP assets in order to abstain from any ownership disputes and protect against any competing business violating their intellectual property rights. The IP rights to be protected include trademark and brand protection, copyright protection for content, patent protection for any new invention, design protection for industrial designs, etc. The rights may also be assigned through properly drafted assignment agreements, which clearly specify the duration, extent and scope of the assignment.
DRAFTING OF NON - DISCLOSURE AGREEMENTS BEFORE SHARING CRITICAL INFORMATION WITH ANY THIRD PARTY
Every startup should enter into non disclosure agreements before sharing any sensitive or critical information with outsiders, and also ensure their employees are bound by such confidentiality obligations. In the event of a breach, the startup could end up losing critical information relating to their product or innovation techniques, the damages of which could be difficult to ascertain and could end up causing a complete loss to the business in terms of being leaked to competitive companies/firms.
AGREEMENTS FOR ONBOARDING EMPLOYEES/CONSULTANTS ON/OFF ROLE
The founders should focus on exhaustive and clear employment agreements and offer letters for recruitment of new personnel, be it in a full – time role or off role consultants. Every individual working with the startup, should be aware of their legal obligations in terms of scope of work and job description, respecting the confidentiality of the business and ideas of the startup, and ensuring that all intellectual property rights in their work constitutes work for hire and is owned by the startup.
PITCH DECK/INVESTOR PRESENTATION
Any investor looking to give funds or investing in a startup, will ask for the pitch deck/investor presentation, to understand the business of the startup, projections, product/service details, etc. The deck should clearly include information relating to the startup business, and the problem being solved by the startup, since that highlights the unique element of the startup compared to others in the market.
AGREEMENTS WITH CUSTOMERS AND VENDORS
It is important to get into any business arrangement only after entering into a formal agreement, be it with customers/clients or with vendors. In the absence of a formal agreement, it will become difficult for the startup in case any dispute arises at a later stage, for instance, a dispute relating to payment, recovery, delivery of services, etc. and taking the recourse of litigation may become a costly proposition. The agreements would cover all critical issues for the startup like scope of work, milestones, payment terms, exit and termination provisions and rights, dispute resolution and jurisdiction clauses, etc.
DRAFTING OF COMPANY POLICIES AND BY-LAWS
As a startup evolves and grows over time, it should have clearly defined policies and by-laws, including policies for prevention of sexual harassment, corporate governance, code of conduct for employees and management, anti fraud, anti corruption and anti bribery policies, IT and cyber security policies for proper use of resources, etc.
SEED INVESTMENT TERM SHEET AND AGREEMENT
A term sheet that provides a clear outline of the investment sought, the stakes offered and the investment rights should be made available to any potential investor. If the term sheet is provided by the startup itself, the startup comes from a strong position and can also negotiate their rights better. The term sheet would be followed by relevant shareholders’ and investor agreements.
Ongoing Requirements
COMPLIANCE MANAGEMENT
The path to good corporate governance and to being a good corporate citizen is compliance with the laws of land. To make sure that a complete list of applicable legislation I compiled and avoid the risks laid out below, it is better entrusted to experts who have sufficiently researched and documented all commercial laws.
Audit of Statutory Compliance pertaining to the entire gamut of legislation applicable to the industry
Contract Management
As an ongoing means to ensure good management of all documents, contracts, agreements, MOUs, etc. entered into by the startup, proper contract management is required, and this function can be outsourced to external advisors, who will ensure that all contracts are being tracked for renewal, liability, payments, termination, etc.
In the absence of a proper tracking and record keeping mechanism, the startup may miss out on important deadlines, and unnecessarily accept liability under agreements they did not intend to.
Legal compliance and management by third party experts will go a long way in establishing the startup’s credibility. It is also carried out to satisfy external clients, especially international clients, who need to adhere to certain procedures for transacting business. We also help in ensuring the startup is protected and ringfenced from all risks, liabilities, penalties, which maybe imposed due to non-compliance and the amounts for which could go into billions. Prevention is better than cure, and being on top of all legal requirements, helps to maintain the startup’s reputation and prevents in long term court battles and Government/regulatory actions.
