Here is the presentation slides that Mytri Reddy gave on Startup Saturday Hyderabad on 10-Jan-2015. Her talk helped us understand the legal structure of a Startup and why not to take Legal compliance lightly. A special thanks to Mytri Reddy and Varuna Law Firm for providing me the slides.

1. Start Ups - Legal
Compliance
Mytri Indukuru, Partner!
Varuna Law
Varuna Law Associates LLP

2. Stages of Growth for
Start Up Companies
Varuna Law Associates LLP

3. How to think about Legal Compliances
❖ When do you start thinking about Legal Issues?!
❖ Stage wise management of Legal Compliance:!
❖ Incorporation Stage:!
❖ Decision on the form of the start up - Sole
Proprietorship, Partnership, LLP, OPC, Private
Company or Public Company !
❖ Memorandum & Articles of Association!
❖ Registrations & Filings
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4. ❖ Early Stage!
❖ Co-founder Agreements & SHA!
❖ Key Employee Employment Contracts - NDA, Non Compete, Confidentiality !
❖ Tax Compliances!
❖ Operational Compliances based on your sector - Environment laws, Trade
License!
❖ Labour & local law compliances!
❖ Policy making - IMPORTANT - For example, Sexual , Non-Discrimination,
Whistleblower !
❖ Contractual Arrangements!
❖ Intellectual Property!
❖ Licensing Agreements - Software
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5. ❖ Later Stage!
❖ Legal Compliances to keep the company ready for investments!
❖ Investment & Valuation!
❖ FEMA & RBI Guidelines if you are looking a funds from
overseas!
❖ Future Stage!
❖ Yearly compliances!
❖ Banking & Finance law support!
❖ Litigation Support!
❖ Legal Support
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6. Founder Agreements
❖ Who is a co-founder.!
❖ Roles & Responsibilities (IP, Remuneration, Performance
Expectations etc)!
❖ Decision Makings including VETO rights!
❖ Succession!
❖ Shareholding including rights during future investments
and restrictions on transfers - ROFO, ROFR, Tag, Drag!
❖ Dispute Resolution
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7. Deadlock
❖ Providing a casting vote to the chairman!
❖ Arbitration - May not be always viable!
❖ Russian Roulette - Any party may serve a notice on any other party offering to
buy out such other party at the price mentioned in the notice. The party that
receives such notice has two options - (a) sell at the price mentioned in the notice,
or (b) buy the first party out at the price mentioned in the notice.!
❖ Texas Shoot Out - Each party sends a notice to a third party mediator, specifying
the price at which it will buy out the other party. The party quoting the highest
price wins and it can buyout the other party at the specified price. An alternative
is for each party to send a notice to a third party mediator, specifying the price at
which it will sell out to the other party. The party quoting the highest price wins
and it can buyout the other party at the specified by the other party.
Varuna Law Associates LLP

8. Varuna Law Associates!
A8 Anand Sheel Enclave, Nandi Nagar, Banjara Hills Road No 14, Hyderabad 500034
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