This document outlines 8 mistakes that start-ups should avoid in order to prevent legal battles. It recommends having legally binding founder agreements, complying with all legal and government requirements, establishing robust customer service and dispute resolution systems, making timely vendor payments, securing intellectual property, properly documenting employment terms, implementing terms of use and privacy policies for websites and apps, and hiring experienced legal counsel. The document provides contact information for a law firm that can help start-ups avoid legal problems.

1. MISTAKES THAT A START-UP SHOULD AVOID
A booming outpour of Start-Ups in India is the recent trendsetter.
Recently, we have witnessed many low and high profile Start-Ups
landing up in the Court of law fighting legal battles and sabotaging
their reputation publicly. In order to avoid such mistakes, here are “8
quick tips” that a Start-Up must do to avoid such ugly legal battles.
1. TO HAVE A STRONG LEGALLY BINDING AGREEMENT:
One of the major concerns that a Start-Up should look into is the Founders’
Agreement. One should in a way think of the Founders’ Agreement as a form of
“pre-nuptial agreement”. It should be clear, comprehensive, unambiguous
agreement between the Founders of the Start-Up in order to cut down the
chances of litigation.
2. TO ABIDE WITH COMPLIANCES:
A successful Start-Up should have a good, vigilant and knowledgeable team of
Advocates, Company Secretaries and Chartered Accountants in order to comply
with all the Legal and Government compliances, to avoid litigation by the
Government, Income Tax, ED, EOW, etc.
3. TO HAVE A ROBUST CUSTOMER REDRESSAL SYSTEM:
Treat your Consumers/customers with utmost importance and care by providing
them good services/products. This would decrease the chances of the
consumer/customer to approach the Consumer Forum for redressal.
4. TO MAKE TIMELY PAYMENTS TO VENDORS:
One should make sure you pay your vendors on time failing which the vendor
would opt and approach the Court of Law for recovery of debts.
5. TO HAVE SECURE IP (Intellectual Property) POLICY:
All the Intellectual Property like Copyright, Trade Mark, Designs, Patents
should be registered and should be specifically registered in the name of the
Company/Founders and not on the name of the employee.

2. 6. LACK OF EMPLOYEE DOCUMENTATION:
Make sure that the documentation with the employees are done properly.
Business Start-Ups often encounter problems when they do not maintain
adequate employment documentation. Consequently, Start-Ups should prepare a
core group of employment documents to be signed by most, if not all, employees
such as Employees Handbook, Offer letter, Confidential Information, Non –
Disclosure Agreement etc.
7. NOT HAVING A GOOD TERMS OF USE AGREEMENT AND
PRIVACY POLICY FOR YOUR WEBSITE/MOBILE APP:
A Terms of Use Agreement sets forth the terms and conditions for people using
your Website/Mobile App. Your Privacy Policy is a legal statement on your
website/mobile app. setting forth what you will do with the personal data
collected from users and customers/consumers of the site/mobile app., and how
such data may be used, sold, or released to third parties.
8. NOT HAVING THE RIGHT LEGAL COUNSEL:
In a misguided effort to save on expenses, Start-up businesses often hire
inexperienced legal counsel. Rather than spending the money to hire competent
legal counsel, founders often hire lawyers who are friends, relatives or others
who offer steep fee discounts. In doing so, the founders deny themselves the
advice of experienced legal counsel who can help the founders in avoiding many
legal problems.
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