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10 Legal Tips For Startup In India

In this presentation, we will talk about the top ten legal tips for startup business in India. This one helps the founders who want to start their startup and what are the legal terms that they should aware of? Ahlawat & Associates is one of the top law firms in India. So, if you want to know more about us then check it out.<br>Visit here:<br>https://www.ahlawatassociates.com/setting-business-india/

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10 Legal Tips For Startup In India

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  1. 5 Questions to Ask When Hiring a Real Estate Attorney

  2. Choose the right legal structure for your startup • The decision should be taken based on individual circumstances and a host of factors, such as: Business trajectory, Tax consideration and regulatory, Number of stakeholders and much more.

  3. 2. Registrations and Business License • Post incorporation of a business entity in India, some necessary registrations are required and mandated by law. • Business licenses are permits issued by a government authority that allows startups to start/conduct/continue to operate a particular business within its territorial jurisdiction lawfully.

  4. 3. Intellectual Property Protection • It is essential to obtain trademark registration for the business name/trade name under the Trademarks act. Registration of a company or business in India does not by itself give protection against others who might commence using identical or similar marks.

  5. 4. Founder Equity - Split and Vesting • Founder equity should be split amongst founders based on the nature of the role played by each founder along with their time, effort, and capital contribution to the startup. • Founder shares should be always subject to a vesting schedule - typically over a period of three to four years.

  6. 5. Founder Agreements • The founders agreement is most valuable tool to establish the relationship between the founders of a startup. The agreement should represent a clear understanding of the founders on all key issues related to the startup. • Founder agreements should clearly mention the roles and responsibilities of the founders.

  7. 6. Employment Contracts • Stopping employees from setting up competing entities (Non competing clause) • Poaching other employees/clients/customer (Non-solicitation clause) • Preventing employees from claiming any intellectual property right on the work done/developed during the course of employment.

  8. 7. Employee Stock Option Pool (ESOP) • ESOP’s are incentives given to employees/director of a company to attract talent and retain employees by rewarding them. ESOPs create a sense of ownership among employees. • In India, we typically see a pool of 10% to 15% allocation towards an ESOP pool.

  9. 8. Third Party Agreements • Prior to entering into third-party agreement and while negotiating the terms, it is advisable to execute a non-disclosure agreement. • Clauses related to breach, termination and dispute resolution should be well negotiated and captured in all third party agreement.

  10. 9. Investing Structuring • One of the most challenging and time-consuming aspects of operating a startup is to raise capital fopr working capital requirement and growth. • It is imperative for startups to seek proper legal advice while negotiating the deal terms for investment and the rights for the investors.

  11. 10. Compliance Management • Compliance and its importance are often overlooked by many startups. • It is extremely critical for the sustainable growth of any business that the startup is in compliance with legal, secretarial, accounting, taxation, employee-related and other associated compliance.

  12. Contact Us We are always happy to make valuable new contacts. admin@ahlawatasscociates.in www.ahlawatassociates.com A-33, Lower Ground Floor, Defence Colony, New Delhi – 110024, India. 011-41023400

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