The start-up ecosystem is booming in India. One of which is Artificial Intelligence (AI) and Machine Learning (ML). Some of the start-ups in this area are:
- Intello Labs uses AI/ML to automatically assess and analyze the quality of fresh food to increase transparency in the supply chain and reduce the price and risk of food waste.
- Vernacular.ai: aims to make call centre operations more efficient by automating our customer service process using an AI voice system.
- Hyperverge:develops AI models that analyze images and videos that help enterprise customers streamline their processes and work more effectively.
In this small write-up an attempt is made to enlighten the Entrepreneur about the business and corporate laws of the country and the authors are making their best attempt to render their Best Legal Advice.
Top Ten Legal Tips are:
- Protecting Intellectual Property (IP) Laws i.e. Trademarks and Copyrights: It can be protected by formulating firm-level IP Policy, entering into Non-Disclosure Agreements (NDAs), having contractual provisions, licensing agreement and IP Assignment Agreement. Website terms of use agreement to include how the site can be used, disclaimers, liability limitations, disclosure on the site’s privacy policy in dealing with customer information, copyright protection warnings, the jurisdiction where any disputes must be brought.
- Preparing Employee Manuals &Human Resource Documentations: It is important that the company should have an HR handbook/manual circulated among the employees including employee benefits, compensation policies, code of conduct, leave policies, complaint procedures and resolution of disputes, conflict of interest policy, accident and emergency policies, travel and expense policy, anti-drugs, smoking and alcohol policy, anti-sexual harassment policy as per Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. There are also employee contracts that are to be duly drafted and executed.
- Pre-Investment Compliances: There are investors documents like the Subscription Agreement and Shareholder Agreement which are to be properly placed. Other compliances are Books of accounts, legal audit, term sheet, non-compete arrangements, compliances with respect to the Registrar of Companies and capitalization table are to be necessarily and inevitably fulfilled.
- Post-Investment Compliances: The compliances post-investment includes ROI Compliant and Consultant Agreements. Founders Agreement is also required with all the basic details of the company such as roles, responsibilities, executive compensation, operational details and exit clauses among others.
- Data Privacy & Protection: In modern societies, in order to empower us to control our data and to protect us from abuses, it is essential that data protection laws restrain and shape the activities of companies and governments. In Justice K.S. Puttaswamy V. Union Of India And Ors, Writ Petition (Civil) No 494 Of 2012, a petition was filed challenging the constitutional validity of the Aadhar card as it required biometrics such as fingerprints, iris scans etc. of the citizens. It was contended that as registration for Aadhar is mandatory, it leads to the violation of the right to privacy of the citizens. Thus, it was held by the Supreme Court that a fundamental right to privacy is guaranteed under the Constitution of India. It is mandatory to put a privacy policy/terms and conditions in a short, simple and summarized manner so that before signing in to any application the user may easily read and understand them. It is mainly to avoid and protect the company from any claims in future.
- Enabling Secure Payments and Online Transactions: Until now, there has been no secure way to send money or pay money online. However, with the advent of payment gateways, online financial transactions have become faster and more secure. Some of the best payment gateways are: Paypal India, PayUmoney, Paytm, Razorpay and many more. There are two ways in which online transactions can be done. Firstly, second party payment gateway, it allows to process payments via debit cards, credit cards and net banking. Secondly, third-party payment gateway, it allows to process digital payments through multiple channels like prepaid digital wallets and even UPI.
- Drafting & Executing Agreements & Contracts: Agreements likeVendors agreement, Software License Agreement, Assignment Agreement, Outsourcing Agreements, Insurance Agreements, Employment Agreement etc are to be diligently drafted and executed.
- Duly following Taxation Regime: The income tax reports filing as per the Income Tax Act, 1961, Quarterly TDS returns, GST returns filing (quarterly or half-yearly) should be filed on time. Also, filing of Tax audit report, payment of GST, TCS, TDS and periodic assessment as per law should be complied with.
- Obtaining Permits and Licenses: Applying for and obtaining Company/LLP Registration certificates, GST registration, Udyog Aadhar registration, MSME registration, Employee Provident Fund Registration, Employee State Insurance Registration, registration under the start-up India registration scheme etc.Licenseunder theShop and Establishment Actapplies to all premises where trade, business or profession is carried out but it varies from state to state.
- Specific Industry basedCompliances – Specific compliances with respect to foreign transactions i.e. under the guidelines issued by the Reserve Bank of India (RBI) and the compliances under the Foreign Exchange Management Act (FEMA) of 1999 are to be complied with in certain cases. Further, there are specific compliances with respect to the Mergers & Acquisitions (M&A) which are to be duly complied with.
At the end it can be easily construed that a proper roadmap has to be prepared by the start-up which includes obtaining adequate professional advice from the professional and then should run their business which is well compliant to the statutory and non-statutory laws of the land.
Authored By: Adv. Anant Sharma &Aashita Khandelwal
Credit: www.mylawyersadvice.com
