Legal For Startups From the point of choosing the appropriate business structure to the scope and extent of necessary contracts, there are numerous legal issues to address when starting a company. While certain legal issues may even bring a start-up to a grinding halt if neglected, there are many others that are possible to be handled with ease, provided you have the right information to make timely decisions. Given their importance across sectors, the following issues and details will be covered in Legal For Startups. Legal Aspects for Starting Up: What are the basic forms of doing business and their relative benefits? Essential procedures and prerequisites of each form of business. Contractual safeguards: How do we limit contractual liability? Relevant stakeholders (promoters/co-founders; employees; consultants; clients and vendors) and the respective contract liability mitigating strategies. Employees and workplace regulations: When are we subject to employee benefits? With increasing international focus on workplace regulations, employees have many legal rights that must not be neglected. Basic criteria for applicability of such regulations and their implications shall be discussed.
1. Law for StartupsProf. Anil B. SurajIIM Bangalore6th September, 2014
2. Objectives Different forms of business entities Snapshot of Workplace regulations Contractual safeguards vis--vis: Senior management Consultants Employees Investors, Clients and Vendors Data Protection and diligence 3. Forms of Business Entities Business and for-profit entities: Sole-proprietorship General Partnership Limited Liability Partnership Corporations Private; Public; and Listed Not-for-profit formats Trusts, Societies and Companies Registration is essential, but not conclusive Licenses may be applicable for trading and operations 4. Workplace Regulations Distinction between Labour workforce andProfessional Employees Threshold for compliance = usually, 10 persons Non-compliance may lead to even criminalpunishment for senior management ordesignated partners or in-charge Directors 5. Contractual safeguards Senior management Partners; Directors; andPromoters Nature of contribution, share in profits, and guarantees Decision making powers and obligations Fiduciary role in maintaining integral compliance Consultants Professionals; Advisors; Agents orContractors Distinct from employees Clear terms of engagement + Indemnity clauses Specific authority needed to represent the business 6. Contractual safeguards Employees on regular rolls and full-time Clear terms of master-servant relationship Non-compete and other reasonable restrictions Confidentiality obligations Investors, Clients and vendors externalfactors Sector-specific & dominance of standard formats Serious implications on valuation and autonomy 7. Data Protection Commercial Data = includes the proprietary andrepository forms Data + IPRs = comprehensive protection oftechnology, processes and know-how Protocols & tools to: identify; isolate and protect Civil and criminal remedies available 8. Q & Aabsuraj@iimb.ernet.in