The document outlines various legal issues faced by startups, including essential incorporation documents and crucial clauses in contracts. It covers important laws governing corporate bodies, competition, consumer protection, environmental regulations, and labor laws, as well as specific laws relevant to various industries. Additionally, it emphasizes the significance of dispute resolution mechanisms like litigation and arbitration in the Indian legal context.

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Delhi Mumbai Allahabad Hyderabad Chandigarh Bangalore
Gurgaon Pune Jaipur Mysore
This is meant for private circulation and is provided for your personal information only. © 2016
PSP LEGAL
Advocates & Solicitors
LEGAL ISSUES FACED BY START-UPS
By:-
Aditya Parolia
Partner, PSP Legal

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3. BUSINESS PLAN
LEGAL AND REGULATROY
STRUCTURE
A SUCCESSFUL STARTUP
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“Ignorantia juris non excusat ”
Ignorance of law is no excuse

5. Documentation and Contracts
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• Incorporation Documents – Memorandum of
Articles , Articles of Association, Shareholders
Agreement;
• Confidentiality and Non- Disclosure Agreements;
• Employment Contracts;
• Non-Compete / Non- Solicitation Agreements;
• Intellectual Property Assignment Agreements;
• HR Policies;
• ESOPs;
• Software License Agreement;

6. • Software Development Agreement;
• Assignment Agreement;
• Agency/Franchisee Agreement;
• Vendor/Supplier/Contractor Contracts;
• Online Agreements;
• Outsourcing Agreements;
• Click-Wrap Agreements;
• Privacy Policy;
• Lease;
• Insurance Agreements;
• Strategic Alliance Agreement;
• Equipment/Tech Lease.
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7. IMPORTANT CLAUSES
• Definitions;
• Indemnity Clause;
• Confidentiality;
• Representations and Warranties;
• Jurisdiction and Governing Laws;
• Dispute Resolution;
• Other Boiler Plate Clauses.
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9. COURTS
LITIGATION
MEDIATION
ARBITRATION
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11. Civil
Dispute
Criminal
Disputes
Corporate/
Commercial
Disputes
Matrimonial
Disputes
Consumer
Disputes
Tribunals
(Service ,
Environment)
Arbitrations
(Domestic And
International)
Debt
Recovery
Service/
Labour Matters
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Dispute Resolution

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Litigation
 Supreme Court of India;
 High Courts of various States;
 District Courts;
 Company Law Board;
 Environmental Tribunals;
 Competition Commission;
 Board and Appellate Tribunal Authority
for Industrial & Financial
Reconstruction;
 Anti-Dumping Authorities;
 Consumer Protection Fora;
 Armed Forces Tribunal;
 Debt Recovery Tribunal;
 Labour Courts.
Arbitration
 The International Chamber of
Commerce (ICC),
 London Court of International
Arbitration (LCIA),
 Zurich Chamber of Commerce,
 Singapore International Arbitration
Center (SIAC),
 Dubai International Arbitration
Center (DIAC),
 Stockholm Chamber of Commerce,
 The Institute of Arbitrators and
Mediators Australia (IAMA)
 United Nations Commission on
International Trade Law
(UNCITRAL)

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Companies Act, 2013 Governs all Corporate Bodies.
Competition Act, 2002: Law to ensure free and fair competition in the market.
Consumer Protection Act,
1986:
Law relating to protection of consumers from unscrupulous
traders/manufacturers.
Environment Protection
Act, 1986:
Provides framework for seeking environmental clearances.
Foreign Exchange
Management Act, 1999
Regulates foreign exchange transactions including foreign
investment.
LABOUR
Factories Act, 1948 Law regulating labour in factories, Industrial Disputes Act
and Workmen compensation act

15. Important laws
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LABOUR LAW DEALING WITH DISPUTES
Industries (development and
Regulation act), 1951
Governs all Industries
DISPUTE SETTLEMENT
Arbitration and Conciliation
Act, 1996
Provides for statutory recognition and procedure for
arbitration and convention awards
TAXATION
Central Excise Act, 1944 Governs duty levied on manufacture.
Customs Act, 1962 Deals with import regulations.
Customs Tariff (Amendment)
Act, 2003
The Act puts in place a uniform commodity classification
code based on globally adopted nomenclature system for
use in all trade-related transactions.
Income Tax Act, 1961 Governs direct taxes on income of all persons, both
corporate and non-corporate as well as residents and
non-residents.
Sales Tax Act, 1948 Governs the levy of tax on sales.

16. Important laws
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SPECIFIC SECTOR
Electricity Act 2003 Regulates generation, transmission, distribution, trading
and use of electricity and generally for taking measures
conducive to development of electricity industry,
promoting competition.
Securitisation and
Reconstruction of Financial
Assets and Enforcement of
Security Interest Act, 2002
Seeks to put in place securitisation and asset foreclosure
laws creating a legal framework for establishment of
Asset Reconstruction Companies.
OTHER LAWS
Information Technology Act
2000
Law governing E-commerce transactions.
Money Laundering Act Prevents money laundering and provides
for confiscation of property derived from, or involved in,
money laundering
Special Economic Zones Act
2005
A comprehensive Act : Provides for the establishment,
development and management of the Special Economic
Zones for the promotion of exports and for matters
connected therewith or incidental thereto.

17. Important laws
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Patents Act, Copyright Act,
Trade Marks Act
Protect intellectual property rights.
Indian Contract Act, 1872 The Indian law that governs contracts is codified as the
Indian Contract Act, which encapsulates provisions
governing the entire life of a contract from its formation
to its implementation and conclusion. ICA also provides
remedies for breach of contract.
Sale of Goods Act, 1930  The basic provisions of the ICA also apply to the
contract of sale of goods. The basic requirements of a
contract include offer and acceptance, legally
enforceable agreement, mutual consent, parties
competent to enter contracts, free consent, lawful
object and considerations that apply to the contract of
sale of goods.
 In a contract of sale of goods the seller transfers or
agrees to transfer the property (ownership) of the
goods to the buyer for a price. A sale is an executed
contract, i.e., there is a contract as well as a
conveyance. In other words, the property of the goods
is transferred from the seller to the buyer.

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Chamber
303, C.K Daphtray Block,
Supreme Court of India,
Tilak Lane,
New Delhi-110001
Delhi
C-38, Lower Ground Floor,
Panchsheel Enclave,
New Delhi-110017
Ph. No.: 011-451051567
Chandigarh
418-P, Sector 12-A,
Panchkula- 134109
Haryana
Pune
503 Corporate Plaza
106A Senapati Bapat Road
Shivajinagar,
Pune - 411016 (India)
Tel: +91-20-25631155/40032169
Allahabad
Flat No.1/12, Alkapuri, Hastings Road,
Opposite Circuit House, Allahabad
Ph. No.: 0532-2424106
Bangalore
Chamber no. 5 ,No.2,
Mourya Mansion,
1st Floor, 1st Main, 1st Cross,
Gandhinagar,
Bangalore - 560009.
Aditya Parolia
+91-9868012992
aditya.parolia@psplegal.org

19. Disclaimer
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This presentation is not intended to be, nor is, a source or form of publicity,
advertisement or solicitation of work.
This presentation or any communication related to this presentation does not
establish or purport to establish an attorney-client relationship, nor is it to be
construed as an invitation for such relationship.
The viewer acknowledges that he/she has read and understood the disclaimer
as provided hereinabove. The viewer acknowledges that there has been no
inducement, invitation or solicitation of any nature whatsoever from PSP
Legal. or any of its members to create an attorney-client relationship through
this presentation.