Stage-wise legal support

Pre-incorporation — founders’ agreement covering equity vesting, IP assignment, leaver provisions and roles; incorporation as Pvt Ltd / LLP / OPC; DPIIT registration for Startup India benefits (tax holiday under Section 80-IAC, exemption from angel tax under Section 56(2)(viib), self-certification under labour laws); IP filings — trademark, copyright and patent through agents in Kota and pan-India; fundraising — angel, seed, Series A; scaling compliance.

Founders’ agreement essentials

A robust founders’ agreement should cover: equity split with vesting schedule (typically 4 years with 1 year cliff); roles, responsibilities and time commitment; IP assignment to the company; non-compete and non-solicit; confidentiality; transfer restrictions (lock-in, right of first refusal, tag-along, drag-along); good leaver / bad leaver definitions; dispute resolution; and exit triggers. Most disputes between co-founders are solvable in advance with two pages of careful drafting.

Term sheets and Series A documentation

Term sheets are mostly non-binding but the confidentiality, exclusivity and expenses clauses are binding. The full equity round produces: Share Subscription Agreement (SSA), Shareholders’ Agreement (SHA), amended Articles of Association, Disclosure Letter, and ESOP Plan. Reps and warranties, indemnity caps, anti-dilution (full-ratchet vs broad-based weighted average), liquidation preference (1×/2×/non-participating), board composition and reserved matters are the negotiated levers.

Convertible instruments — SAFE, CCD, CCPS

Indian-law convertible instruments are typically Compulsorily Convertible Debentures (CCDs) or Compulsorily Convertible Preference Shares (CCPS) under the Companies Act and FEMA. SAFEs (Y-Combinator standard) are favoured but their FEMA compliance is settled only as CCDs. Caps, discount, MFN clauses, and conversion mechanics need careful drafting and Form FC-GPR / PAS-3 filings.

Compliance checkpoints to clear before raising

Cap table cleanup; share certificates issued and stamped; ROC filings current (AOC-4, MGT-7, DIR-3 KYC); statutory registers maintained; GST and TDS up to date; IP registered / applied for; founder employment agreements with IP assignment; data protection / privacy policy compliant with the Digital Personal Data Protection Act, 2023; consumer terms (if B2C); and corporate authorisations on file.