startup legal

After starting a startup, what legal things every startup should to know to run a business peacefully during early days? Well, most of the startups forget to establish a strong and trustworthy legal structure all along not having legal documents. However for every startup, it is very important to know about the basic legal documents and their requirements to avoid any legal mess in the future.

Maintaining basic legal documents is very important for every startup as it helps every startup to enhance its competitiveness and credibility in the market. However after the Startup India Action Plan awareness for legal procedures/documents has increased among the startups in India. Now they have been recognizing the importance of trademark, Intellectual Property Right (IPR), Patents, Startup Registration and other actions laid out to compete against established companies by providing them power of protection to their innovative idea and properties.

Legal formalities are important to every startup to follow to avoid any legal issues down the road. Here we have outlined the top five legal documents that every startup need to know before start working structuring a business idea.

Intellectual Property Right (IPR)

Intellectual Property Right (IPR) helps startups to maintain a complete ownership of all its assets in writing form. It protects them from any legal mess with other copy cat companies that trying to reproduce the same products and services under same business model. In digital era, IPR is more important for technology startups because it shows the real value of a business idea or technology innovation to the VCs and investors. It also protects every startup from any unjustifiable legal issue or action taken by any other company or individual with copy cat business and products. Startup can use IPR power to protect new creations, designs, inventions etc hassle free. IPR is accepted across the world because it ensures the availability of original products and provides full credit to the inventors of the product.

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Believe it or not, “Trademark” is an effective way of referring your startup or brand nationally and internationally! It maintains your monopoly over a mark that you have been using for representation of your business. It is an important asset and an effective tool of communication and pass massages to the consumers. However, according to government policies, the licensing of a trademark is compulsory for every business so that none other company or individual can use the same for its own benefits. Basically, it is a property asset that can be used only by you for your business several-fold. Only you have a right to use, sold and leasing it out for business purposes.


Bylaws help to establish the working rules in a startup. If you want ensure that you run your startup with less complications, you should need to formulate bylaws to establish a strong internal working culture. Bylaws help you to settle down all your disputes with employees, team leaders and shareholders etc. New board members and leaders can be also approved according to bylaws.

Patent Registration

Government grants patent on innovations for a certain time so that other one cannot use the same formula. The process of submitting an application of a patent need to be filed as per certain set legal standard. However, Patent Registration became cheaper and faster in India after the Startup India Action Plan 2016. To encourage more patent filings, the Indian government issued amended rules after this action plan. If any startup files for first patent, an 80 per cent rebate would be provided on fees as per the latest amendments.

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Founder and Shareholder Agreements

Both of these agreements are necessary as they bind each founder and shareholder to the business for long run all along avoiding conflicts among founding parties and shareholders. These agreements defined the role of co-founders and shareholders in the startup and summarize about a basic and smooth communication process to prevent disputes and clashes. Shareholder agreement needed only when startup is ready to take private investment. Through this legal document, shareholders’ rights can be defined to administer a startup peacefully.

Helping Resources

So far, managing all these legal procedures is not easy for every startup as it needs knowledge of legal terms, but now it is little simple! the legal service provider startups like Vakilsearch, LawRato ( ) MeetUrPro, IndiaFilings, Vahura and many others who are providing legal advice from lawyers online and educating startups and entrepreneurs on the all regulatory requirements. They all are committed to helping startups and entrepreneurs to manage and run their small businesses calmly and professionally. They help entrepreneurs to start, manage and grow their businesses successfully, without wasting much time on understanding complicated and non-uniform business related legal formalities and regulations, stakeholders’ issues and risk-averse investors etc. However startups who are attempting to hire or outsource legal help should be aware of more efficient, affordable and transparent legal service providers and lawyers to compete with all legal challenges successfully.

Time is also precious for every startup but being a founder you should have to manage all these documents is important to secure company’s future. So, it’s good option if you seek help of a legal advisor to review and fulfilling basic legal formalities and corporate documents in the starting days.

[Top Image – Shutterstock]


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