Whether you are registering your first company, bringing in an investor, chasing a customer who will not pay or falling out with a partner, the legal choices you make shape the business for years. This guide explains, in plain words, how to choose a structure, register and stay compliant, paper founders and investors properly, write contracts that protect you, handle employees and data under the new laws, recover dues and resolve disputes before the NCLT. When you are ready, describe your requirement in the form and an enrolled advocate who handles corporate work can call you. It is free for clients.
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When people hear "corporate lawyer", they often imagine large law firms working on billion-dollar mergers. In India, most corporate legal work looks quite different. It is a founder in Jaipur deciding whether to register an LLP or a company, a family business in Ludhiana splitting between two brothers, a software startup in Bengaluru raising its first angel round, a garment exporter in Tiruppur chasing payment from a buyer, or a restaurant owner in Delhi trying to understand what the new labour codes mean for twelve employees. A corporate lawyer, at this level, is an advocate who helps businesses get set up properly, stay compliant, put agreements in writing and handle disputes when they come.
Much of this work is advisory and drafting rather than court work. It overlaps with chartered accountants and company secretaries, who handle accounts, tax filings and many MCA forms. A good business usually needs all three, with the advocate focused on structure, contracts, rights between owners, disputes and anything that may end up before a tribunal or court.
Choosing between proprietorship, partnership, LLP, one person company and private limited company; drafting the partnership deed, LLP agreement or articles of association.
Founders' agreements, vesting, shareholders' agreements, term sheets, share issues, convertible instruments, ESOP plans and the FEMA filings that come with foreign money.
Customer and vendor agreements, distribution and franchise deals, service level agreements, NDAs, leases and technology licences, with clauses that actually protect you.
Offer letters, policies under the new labour codes, POSH committees, non-solicitation and confidentiality terms, and privacy notices and processes under the DPDP law.
Shareholder and partner disputes, oppression and mismanagement petitions before the NCLT, recovery of dues, MSME council claims, insolvency petitions and commercial suits.
Bringing in or buying out partners, converting entities, mergers, sale of a business, closing a company by strike-off or voluntary liquidation.
Most legal problems in young businesses come from things not done in the first year, when everyone was too busy building. This checklist covers what an advocate would ask a new founder about.
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There is no single best structure. The right choice depends on ownership, liability, funding plans, tax and how much paperwork you can handle. Here is how the common options compare.
| Structure | Liability | Owners | Good for | Main drawbacks |
|---|---|---|---|---|
| Sole proprietorship | Unlimited; personal assets at risk | One person | Small traders, freelancers, testing an idea | No separate legal identity; hard to raise money or bring in partners |
| Partnership firm | Unlimited and joint | Two or more partners | Family businesses, small professional firms | Each partner liable for the firm's debts; an unregistered firm cannot sue third parties on contracts |
| Limited liability partnership | Limited to contribution | At least two partners, two designated partners with one resident in India | Professionals, consultancies, small businesses wanting limited liability with less compliance | Less attractive to equity investors; no ESOPs |
| One person company | Limited | One natural person who is an Indian citizen and resident | Solo founders wanting a company with limited liability | Single shareholder; must convert to bring in more shareholders |
| Private limited company | Limited | 2 to 200 members, at least 2 directors | Startups and growing businesses raising equity or issuing ESOPs | Most compliance of these options |
| Public company | Limited | At least 7 members and 3 directors | Large businesses, those planning to list | Heavy compliance and governance requirements |
Two points are often misunderstood. First, limited liability does not protect directors or partners from personal liability for their own wrongs, personal guarantees they sign, or certain statutory dues. Second, an unregistered partnership is legal, but Section 69 of the Indian Partnership Act, 1932 prevents it from suing a third party to enforce a contract, so registration matters. Our partnership deed service covers drafting and registration.
Incorporation in India is now almost entirely online through the Ministry of Corporate Affairs portal. For companies, the integrated SPICe+ form also issues the company's PAN and TAN and links applications for GST, EPFO, ESIC, professional tax in some states and a bank account. A straightforward incorporation can be completed within a couple of weeks if documents are in order.
An LLP is registered through the FiLLiP form, with the LLP agreement filed within thirty days of incorporation. A one person company follows the company route with a nominee named for the sole member.
Incorporation is only the start. Depending on your activity, location and size, you may need several other registrations. Missing one can lead to penalties or block bank accounts, tenders and payments.
| Registration | Who needs it |
|---|---|
| GST | Businesses above the turnover threshold for their state and category, inter-state suppliers of goods, e-commerce sellers in most cases, and others required by law. See our GST registration service. |
| Udyam | Micro, small and medium enterprises wanting MSME benefits, including protection against delayed payments. See our Udyam registration service. |
| Shops and establishments | Shops, offices and commercial establishments under state law, usually within a short time of starting. |
| Provident fund and ESI | Establishments crossing the employee thresholds under the social security code, now governed by the Code on Social Security, 2020. |
| Professional tax | Employers and professionals in states that levy it. |
| Import Export Code | Businesses importing or exporting goods or services. |
| FSSAI licence or registration | Food businesses, including restaurants, manufacturers, cloud kitchens and online food sellers. |
| Trademark | Not compulsory, but essential to protect your brand. See our trademark registration service. |
| Sector licences | Drugs, alcohol, fintech, insurance broking, education, healthcare and many other activities have their own licensing regimes. |
| Startup India recognition | Optional. DPIIT recognition gives eligible startups self-certification under some labour and environmental laws, easier public procurement and certain tax benefits. |
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Annual compliance is where most small companies slip. The Ministry of Corporate Affairs charges additional fees for late filings, and the registrar can strike off a company that has not carried on business for two years, which it often infers from missing filings. Directors of a company that fails to file for three years can be disqualified for five years. The table shows the core filings; your company secretary or chartered accountant should maintain the full calendar.
| Requirement | Private company | LLP |
|---|---|---|
| Financial year | April to March | April to March |
| Board meetings | At least four a year, with no more than 120 days between two; small companies and OPCs at least one in each half of the year, at least 90 days apart | Not required in the same form; partners meet as the LLP agreement provides |
| Annual general meeting | Within six months of the end of the financial year, normally by 30 September; OPCs are exempt | Not applicable |
| Financial statements | Form AOC-4 within 30 days of the AGM | Form 8, statement of account and solvency, by 30 October |
| Annual return | Form MGT-7 or MGT-7A within 60 days of the AGM | Form 11 by 30 May |
| Audit | Compulsory for every company | Required only above turnover or contribution thresholds |
| Director KYC and disclosures | Director KYC as notified, and annual disclosure of interest and non-disqualification | Designated partner KYC as notified |
| Statutory registers | Members, directors, charges and others, kept at the registered office | Registers as required |
| Event-based filings | Changes in directors, auditors, office, capital, charges and beneficial owners, usually within 30 days | Changes in partners, office and agreement within 30 days |
Tax compliance runs alongside: income tax returns and audits, TDS returns, GST returns and annual returns, and labour code filings. A missed MCA filing is usually cheap to fix if caught early, and expensive if left for years.
Indian law gives smaller businesses several advantages, and the thresholds were raised recently. Knowing whether you qualify can save money and give you leverage.
| Status | Current criteria | What it gives you |
|---|---|---|
| Small company | Private company with paid-up capital up to ₹10 crore and turnover up to ₹100 crore, as revised from 1 December 2025; not a holding or subsidiary company, and not a Section 8 company | Fewer board meetings, no cash flow statement, simpler annual return, lower filing fees and penalties, eligibility for fast-track mergers |
| Micro enterprise | Investment in plant and machinery or equipment up to ₹2.5 crore and turnover up to ₹10 crore, from 1 April 2025 | MSMED Act protection on delayed payments, priority lending and government schemes |
| Small enterprise | Investment up to ₹25 crore and turnover up to ₹100 crore | Same delayed payment protection |
| Medium enterprise | Investment up to ₹125 crore and turnover up to ₹500 crore | Schemes and benefits, but not the MSMED delayed payment provisions, which protect micro and small suppliers |
| DPIIT-recognised startup | Generally up to 10 years from incorporation with turnover not above ₹100 crore in any year, working on innovation or a scalable model | Relaxations under some laws, tax benefits for eligible startups, faster patent examination, ESOPs for promoters within the startup period |
Micro and small suppliers registered on Udyam have a strong tool against slow-paying buyers. Under the MSMED Act, a buyer must pay within the agreed period, which cannot exceed forty-five days, and otherwise owes compound interest at three times the bank rate. The supplier can refer the dispute to the state's Micro and Small Enterprises Facilitation Council, which attempts conciliation and then arbitration. A buyer challenging the council's award in court must first deposit seventy-five percent of the amount. Income tax law also now restricts a buyer's deduction for payments owed to micro and small suppliers until they are actually paid, which has changed payment behaviour in many industries.
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Co-founder disputes destroy more young companies than competitors do. They usually start the same way: two or three friends start a business with equal shares and no written terms, one of them stops contributing or leaves, and the others discover that the departing founder still owns a third of the company and can block decisions. A founders' agreement, signed before money and emotions are involved, prevents most of this.
| Clause | What it settles |
|---|---|
| Equity split | Who holds what, and on what basis: idea, capital, time, skills |
| Vesting | Founders earn their shares over time, commonly four years with a one-year cliff, so someone who leaves early does not walk away with a large stake |
| Roles and time commitment | Who does what, and whether founders can work on other ventures |
| Decision-making | Which decisions need unanimity, which a majority, and how deadlocks are broken |
| Leaver provisions | What happens to unvested and vested shares when a founder leaves, distinguishing good leavers from bad leavers, and at what price shares are bought back |
| IP assignment | All work created for the business belongs to the company, including work done before incorporation |
| Confidentiality and non-solicitation | Founders do not misuse company information or poach staff and clients |
| Dispute resolution | Mediation and arbitration, seat and governing law |
Two legal points matter in India. First, vesting and buyback arrangements must be structured to work under company law, for example through a share transfer to other founders or a buyback that complies with the Companies Act, and should be mirrored in the articles. Second, a non-compete that stops a founder working in the field after leaving is generally void under Section 27 of the Contract Act, although restrictions during their time with the company are enforceable.
When investors come in, the founders' arrangement is replaced or supplemented by a shareholders' agreement, often with a share subscription agreement. These documents decide control, exits and what happens when things go wrong.
A shareholders' agreement binds the parties who sign it. But the Supreme Court held in V.B. Rangaraj v. V.B. Gopalakrishnan (1992) that restrictions on share transfers not contained in the articles do not bind the company. That is why investor rights in a private company are carried into its articles of association by a special resolution after the agreement is signed. A shareholders' agreement whose key terms never reach the articles can be surprisingly weak when tested.
Raising funds into an Indian company involves company law, foreign exchange rules if the investor is outside India, tax and, for some sectors, regulatory approval. Mistakes are expensive to correct after the money arrives.
| Instrument | How it works | Points to watch |
|---|---|---|
| Equity shares | Investor gets ordinary shares with voting rights | Valuation and shareholder approval; private placement rules for issues beyond existing members |
| Compulsorily convertible preference shares | Preference shares that convert into equity on agreed terms; common for venture funding | Conversion formula, anti-dilution and liquidation preference set in the terms |
| Convertible notes | Debt that converts into equity later; permitted for DPIIT-recognised startups from investors, subject to minimum amounts and conditions | Conversion or repayment within the permitted period; FEMA reporting for foreign investors |
| Debt | Loans from banks, NBFCs or other lenders | Charges must be registered with the ROC within the time allowed; personal guarantees by founders |
Issuing shares to new investors in a private company is a private placement under Section 42 of the Companies Act. It needs a special resolution, an offer letter, money received only through banking channels into a separate account, allotment within sixty days and a return of allotment filed with the ROC. Using the money before allotment, or receiving cash, can lead to penalties and a refund obligation.
Investment from a person resident outside India must follow the FEMA non-debt instrument rules: sectoral caps and conditions, pricing guidelines, and reporting through the RBI's FIRMS portal, including Form FC-GPR within thirty days of issuing shares. Since 2020, investment from an entity of a country that shares a land border with India, or where the beneficial owner is from such a country, needs government approval. Delays in reporting attract late submission fees or compounding.
The so-called angel tax, which taxed share premium received by unlisted companies above fair value, was abolished by the 2024 budget, removing a long-standing worry for startups raising from domestic and foreign investors. ESOPs can be granted only to employees and directors other than promoters and independent directors, with a minimum one-year vesting; DPIIT-recognised startups can grant them to promoters for a period after incorporation. ESOPs are taxed as a perquisite on exercise, with deferral available for employees of eligible startups.
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Founders often become directors without realising the duties that come with it. Section 166 of the Companies Act requires directors to act in good faith in the interests of the company, its employees, shareholders, community and environment, to exercise due and reasonable care, skill and diligence, to avoid conflicts of interest and not to make any undue gain.
| Where directors face personal risk | What to know |
|---|---|
| Bounced company cheques | Under Section 141 of the Negotiable Instruments Act, directors in charge of and responsible for the conduct of business when the offence was committed can be prosecuted; non-executive directors are generally not liable without specific allegations. |
| Statutory dues | Unpaid TDS, GST, provident fund and similar dues can lead to proceedings against directors or officers in default. |
| Personal guarantees | A guarantee for a company loan makes the director personally liable, and the guarantor can face insolvency proceedings personally. |
| Non-filing | Directors of a company that has not filed financial statements or annual returns for three continuous years are disqualified for five years from being directors of any company. |
| Fraud and wrongful trading | In insolvency, directors who carried on business to defraud creditors, or continued trading knowing insolvency was inevitable, can be ordered to contribute. |
| Related party transactions | Contracts with directors or their relatives need board or shareholder approval in many cases, and the interested director must disclose and abstain. |
Directors' and officers' liability insurance, proper minutes of board decisions, and resigning formally with the ROC filing when you step down all reduce risk. A director who has resigned should make sure Form DIR-11 or the company's DIR-12 has been filed, so their name is removed from the register.
Most business disputes trace back to a contract that was missing, vague or copied from the internet. A good commercial contract is not long for the sake of it; it answers the questions that will matter if the relationship goes wrong.
Most commercial contracts can be signed electronically under the Information Technology Act, 2000, using Aadhaar e-sign or a digital signature certificate. Some documents cannot, including negotiable instruments other than cheques in electronic form, powers of attorney, trusts, wills and contracts for sale of immovable property. Many agreements also attract stamp duty under state law. An unstamped agreement is not void, but it may be impounded when produced in court and admitted only after duty and penalty are paid. In 2023 a seven-judge bench of the Supreme Court held that an arbitration clause in an unstamped agreement is still enforceable, with stamping issues left to the arbitral tribunal. Pay the duty at signing, often through e-stamping, rather than later.
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On 21 November 2025, the central government brought into force the four labour codes: the Code on Wages, 2019, the Industrial Relations Code, 2020, the Code on Social Security, 2020 and the Occupational Safety, Health and Working Conditions Code, 2020. They replaced twenty-nine older labour laws, and the central and state rules under them have been rolled out since. For businesses, several changes stand out.
| Area | What changed or matters most |
|---|---|
| Definition of wages | A uniform definition under which allowances beyond a limit are added back to wages, affecting provident fund, gratuity and other contributions |
| Appointment letters | Employers must issue written appointment letters to employees |
| Fixed-term employment | Recognised across sectors, with parity of benefits and gratuity after one year of service |
| Social security | Wider coverage, including frameworks for gig and platform workers |
| Industrial relations | Higher threshold for prior permission for lay-offs, retrenchment and closure; standing orders for establishments above the threshold |
| Registrations and returns | Single registration, licence and return systems replacing many separate filings |
Alongside the codes, a few laws apply to almost every employer. The Sexual Harassment of Women at Workplace Act, 2013 requires every workplace with ten or more employees to constitute an Internal Committee, adopt a policy and file annual reports. Employment contracts should cover confidentiality, IP assignment, notice periods and non-solicitation; as with founders, broad post-employment non-competes are generally unenforceable. Our labour lawyer guide covers employment disputes and the codes in more depth from the worker's and employer's side.
The Digital Personal Data Protection Act, 2023 and the rules notified in November 2025 create India's first general data protection regime. They apply to any business that collects or uses digital personal data of individuals, from an online store's customer list to an HR database.
Until the main obligations start, the Information Technology Act and its rules on reasonable security practices continue to apply. Practical first steps: map what personal data you hold and why, update privacy notices, review vendor contracts for data clauses, and decide who will handle grievances. Our cyber lawyer guide covers data breaches, online fraud and IT Act issues.
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A business's most valuable assets are often intangible. Indian law offers several kinds of protection.
| Right | Protects | How you get it |
|---|---|---|
| Trademark | Names, logos, slogans, packaging | Registration under the Trade Marks Act, 1999, valid for ten years and renewable; unregistered marks have limited protection through passing off |
| Copyright | Software code, content, designs, photographs, music | Arises automatically on creation; registration is optional but helps as evidence |
| Patent | New, inventive and industrially applicable inventions | Application and examination under the Patents Act, 1970; software as such is generally not patentable |
| Design | Shape, configuration or ornamentation of products | Registration under the Designs Act, 2000 |
| Trade secrets | Recipes, client lists, processes | No registration; protected through contracts and confidentiality measures |
The most common gap is ownership. Copyright in work made by an employee in the course of employment generally belongs to the employer, but work by freelancers, agencies and founders before incorporation belongs to its creator unless assigned in writing. An assignment must be in writing and should cover rights, territory and duration. Check that your logo, website, app and core code are assigned to the business before an investor's lawyers ask.
When owners fall out, the business often becomes a battlefield: bank accounts frozen, directors removed at meetings the other side never heard about, shares allotted to change control, and accusations of siphoning. Indian law offers specific remedies, and speed matters, because facts on the ground can change quickly.
Under Sections 241 and 242 of the Companies Act, members can petition the National Company Law Tribunal if the company's affairs are conducted in a manner prejudicial to them or to the company, or oppressive. In a company with share capital, the petition can be filed by at least one hundred members or one-tenth of the members, whichever is less, or by members holding one-tenth of the issued share capital, and the tribunal can waive these requirements in suitable cases. The NCLT's powers are wide: it can set aside allotments and transfers, remove directors, regulate the company's affairs, order one group to buy out another, and grant interim protection quickly.
| Common complaint | Typical relief sought |
|---|---|
| Shares allotted to dilute a member without proper notice | Setting aside the allotment and restoring the shareholding |
| Director removed or meetings held without notice | Declaring the meeting invalid; restoring the director |
| Funds diverted to a related company | Investigation, audit and restraint on transactions |
| Complete deadlock in a two-family company | An order for one side to buy out the other at a fair valuation |
| Exclusion from management in a quasi-partnership company | Relief on principles similar to a partnership, including buyout or winding up in extreme cases |
Disputes between partners in a firm are usually governed by the partnership deed, which often contains an arbitration clause, and by the Partnership Act, which allows dissolution by the court on grounds such as misconduct or persistent breach. For LLPs, the LLP agreement governs, with the NCLT available for winding up and certain remedies. An advocate's first step is usually to secure the business's accounts and records and preserve the status quo with interim orders.
Unpaid invoices are the most common legal problem for small businesses. The route depends on who owes the money and how much.
An operational creditor, such as a supplier, must first serve a demand notice under Section 8 of the Code. If the debtor shows a pre-existing dispute within ten days, the application will usually be rejected, as the Supreme Court explained in Mobilox Innovations v. Kirusa Software (2017). Where there is no genuine dispute, admission of insolvency means the board is suspended and a resolution professional takes control, which is why many debtors settle at the demand notice stage. Creditors should be aware, though, that if the company goes into insolvency, operational creditors often recover only a fraction of their dues after secured lenders. Insolvency is best used where the debt is clear and the debtor can pay but will not.
If your own company is in financial trouble, pre-packaged insolvency is available for MSMEs, and early advice can help restructure debts, negotiate with lenders or close the business in an orderly way that limits directors' exposure.
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| Goal | Usual route | Notes |
|---|---|---|
| Bring in or buy out a partner or shareholder | Share transfer or new issue; retirement deed for a partner | Valuation, tax on transfer, consent requirements in the articles or deed |
| Convert a firm or LLP into a company, or a company into an LLP | Conversion procedures under the Companies Act or LLP Act | Tax neutrality depends on meeting conditions |
| Merge group companies | Fast-track merger under Section 233 for eligible small companies, startups and holding-subsidiary cases; otherwise an NCLT scheme | Fast-track avoids NCLT hearings if creditors and regulators do not object |
| Sell the business | Share sale or business transfer agreement | Due diligence, warranties and indemnities, employee transfer, tax structuring |
| Close a company that never started or has stopped business | Strike-off application in Form STK-2 | Needs no liabilities, closed bank accounts and director consent |
| Close a solvent company with assets | Voluntary liquidation under Section 59 of the IBC | Declaration of solvency, liquidator appointed by members |
| Close an LLP | Strike-off under the LLP rules or winding up | Similar conditions to companies |
Closing a company properly matters. A company left dormant without filings keeps accumulating late fees, and its directors risk disqualification. Strike-off is relatively cheap when the company has no liabilities; it is much harder after years of non-compliance.
Businesses receive notices from many quarters: the Registrar of Companies for missing filings or defects, the RBI or authorised dealer bank for FEMA lapses, tax authorities, labour inspectors, pollution boards and sector regulators. Many notices can be resolved cheaply if answered promptly and properly.
Two filings that are often overlooked deserve mention. Companies must identify their significant beneficial owners, the individuals who ultimately hold or control ten percent or more, and file their details with the ROC. And larger companies that cross the net worth, turnover or profit thresholds under Section 135 must spend on corporate social responsibility and report it.
For tax notices, including GST and income tax, our tax lawyer guide explains replies, appeals and timelines.
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Most Indian businesses are family-owned, and their legal problems are as much about relationships as law. The founder's generation built the business on trust; the next generation inherits shares, property and expectations, often without any agreed rules.
Our will lawyer guide explains wills, succession and probate, which are often the backbone of business succession planning.
Not every organisation is set up to make profit. Charitable and social organisations in India usually take one of three forms, each with its own legal framework.
| Form | Governing law | Points to know |
|---|---|---|
| Public charitable trust | State trust laws, or general law where no state act applies | Simple to form through a trust deed; trustees manage; changes can be hard |
| Society | Societies Registration Act, 1860 and state versions | Members elect a governing body; common for schools and associations |
| Section 8 company | Companies Act, 2013 | A company with charitable objects that cannot distribute profits; licensed by the central government; credible with donors and funders |
Whatever the form, income tax exemption needs registration with the tax department, and donors' tax deductions need separate approval. Receiving foreign contributions requires registration or prior permission under the Foreign Contribution (Regulation) Act, 2010, with a designated bank account and strict restrictions on use and transfer. Mistakes in FCRA compliance can lead to cancellation of registration, so take advice before accepting any money from abroad.
Many growing businesses expand through others: franchisees running outlets under their brand, distributors covering regions, or sellers listing on marketplaces. These relationships are governed mainly by contract, which makes the drafting critical.
| Agreement | Key issues |
|---|---|
| Franchise | Trademark licence and quality control, fees and royalties, territory, training and support, audit rights, what happens to the outlet and customer data on termination |
| Distribution | Exclusive or non-exclusive territory, minimum purchase targets, pricing freedom, credit terms, stock return on termination; restrictions that harm competition can attract the Competition Act |
| Marketplace seller | Platform terms, fees, returns and refund responsibilities, liability under the E-Commerce Rules, account suspension and dispute processes |
| Agency | Authority to bind the principal, commission, and whether the agent can act for competitors |
India has no specific franchise law, so the agreement does most of the work. Termination clauses deserve special care: a franchisee or distributor who has invested heavily will fight a sudden termination, and courts look closely at whether notice and cure provisions were followed. Register the trademark you are licensing, and keep the licence recorded in the agreement, so that your rights in the brand are clear if the relationship ends.
Every case turns on its own facts. A verified advocate can tell you what applies to yours.
These are composite illustrations drawn from common matters, not real cases.
Two friends set up a private limited company with equal shares and no founders' agreement. One leaves to take a job and refuses to sell his shares, while the other runs the business alone and wants to raise money. The advocate negotiates a buyback at a modest valuation, documented with a share transfer and his resignation as director, after pointing out that investors will not invest while a departed founder holds half the company. The remaining founder then adopts articles with vesting and leaver provisions before bringing in a new co-founder.
A small packaging manufacturer registered on Udyam is owed several lakh rupees by a corporate customer. The advocate sends a notice demanding the principal with statutory compound interest under the MSMED Act, then files a reference with the facilitation council. Conciliation fails, the council passes an arbitral award with interest, and when the buyer wants to challenge it in court, it must first deposit three-quarters of the amount. The buyer settles.
In a company owned equally by two families, one side holds a board meeting without notice, allots fresh shares to its members and removes the other family's director. The excluded family files an oppression and mismanagement petition before the NCLT the same week. The tribunal grants interim orders restraining further changes to shareholding and the board, and later sets aside the allotment, finding it was made to gain control rather than for any genuine need of the company.
A startup receives foreign investment and allots shares but misses the FC-GPR filing. The advocate and company secretary file it with a late submission fee and correct the ROC filings for the allotment. Because the lapse was caught before the next funding round, the new investor's diligence notes it as remedied rather than as an open risk.
A consulting company has been dormant since its founders moved on, but it never filed returns after stopping work. The advocate and company secretary bring the overdue filings up to date, close the bank account, clear small liabilities and file for strike-off, before the directors cross the three-year non-filing mark that would have disqualified them.
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Corporate work is priced in many ways. Drafting and advisory work, such as a founders' agreement, a shareholders' agreement or a set of customer contracts, is often charged as a fixed fee per document or package. Ongoing advice may be on a monthly retainer, and some advocates charge by the hour for complex matters. Litigation before the NCLT, commercial courts or arbitral tribunals is usually charged per stage or per hearing. Fees depend on the city, the complexity, the value involved and the advocate's experience. Government fees for incorporation and filings, stamp duty on documents, and the fees of company secretaries and chartered accountants are separate.
For early-stage founders, the most cost-effective spend is usually on getting the structure and core documents right once, rather than paying much more later to unwind a dispute. Our legal fees guide explains common fee arrangements, and eligible individuals can check free legal aid with our eligibility tool.
Lists of the "top corporate law firms" in your city are marketing, not an official ranking; Indian advocates are barred by Bar Council rules from advertising themselves that way. For a business, the better test is whether the advocate has handled matters like yours and works at the pace a business needs.
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Limited liability does not cover personal guarantees, your own wrongs, or some statutory and criminal liabilities of directors.
Annual filings are due even for dormant companies, and non-filing can lead to penalties and director disqualification.
Key transfer restrictions and investor rights must be carried into the articles to bind the company.
Post-termination non-competes are generally void in India. Confidentiality and non-solicitation are more reliable.
Copyright stays with the creator unless assigned to you in writing.
Have your documents ready? Book a free call back and share the details with the advocate.
Choose a private limited company if you plan to raise equity from investors or issue ESOPs. An LLP suits professionals and small businesses that want limited liability with lighter compliance and do not expect outside equity.
At least two directors and two shareholders, who can be the same people. One director must stay in India for at least 182 days in the financial year. A one person company can be formed by a single Indian citizen resident in India.
Financial statements in Form AOC-4 within 30 days of the AGM, the annual return in Form MGT-7 or MGT-7A within 60 days of the AGM, director KYC and disclosures, an audit, and event-based forms, besides tax filings.
From 1 December 2025, a private company with paid-up capital up to ten crore rupees and turnover up to one hundred crore, other than holding or subsidiary companies and certain others. Small companies enjoy lighter compliance and lower penalties.
Late fees of one hundred rupees per day per form accumulate, the registrar may strike off the company, and directors of a company that has not filed for three continuous years can be disqualified for five years.
It is strongly advisable. It settles equity, vesting, roles, decision-making and what happens when a founder leaves, and prevents the most common cause of startup disputes.
It binds the parties who sign it, but transfer restrictions and investor rights should be included in the articles of association to bind the company, as the Supreme Court has held.
Restrictions during employment or the term of a contract are generally enforceable, but post-termination non-competes are usually void under Section 27 of the Contract Act, except in narrow cases like the sale of goodwill.
Yes, most contracts can be signed with Aadhaar e-sign or a digital signature under the IT Act. Exceptions include powers of attorney, wills, trusts and contracts for the sale of immovable property. Pay stamp duty where it applies.
Since 21 November 2025, four labour codes replace older laws. Key changes include a uniform definition of wages, compulsory appointment letters, fixed-term employment with gratuity after one year, wider social security coverage and simplified registrations and returns.
Yes. It applies to anyone processing digital personal data, though most obligations take effect in phases after the November 2025 rules. Businesses should start mapping data, updating notices and planning consent and grievance processes.
Send a legal notice; if you are a micro or small enterprise on Udyam, refer the dispute to the MSME facilitation council for statutory interest; otherwise file a commercial suit or arbitration. Insolvency is possible against a company owing one crore rupees or more.
When the default is one crore rupees or more and there is no genuine pre-existing dispute. An operational creditor must first serve a demand notice and wait ten days.
File a petition under Sections 241 and 242 of the Companies Act before the NCLT, if they meet the eligibility thresholds or obtain a waiver. The tribunal can set aside allotments, regulate the company and order buyouts.
Most sectors allow foreign investment automatically within caps and conditions, but some need government approval, and investment from countries sharing a land border with India always needs approval. Shares issued must be reported within thirty days.
If it has no liabilities, file overdue returns, close the bank account and apply for strike-off in Form STK-2. A solvent company with assets can use voluntary liquidation under the IBC.
Within the agreed period, which cannot exceed forty-five days from acceptance of the goods or services, or within fifteen days where nothing is agreed. After that, the buyer owes compound interest at three times the bank rate to a micro or small supplier.
Generally ESOPs cannot be granted to promoters, but DPIIT-recognised startups can grant them to promoters and promoter directors for a period after incorporation. Founders usually hold equity directly, subject to vesting.
A company formed for charitable or social objects, such as education, health or the environment, which cannot distribute profits to its members. It needs a licence from the central government and separate tax registrations for exemption.
Under Section 69 of the Partnership Act, an unregistered firm cannot sue a third party to enforce a contract. Registering the firm with the Registrar of Firms removes this bar.
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