In the rush to build a product and win customers, legal paperwork is often postponed. But most business disputes — between co-founders, with employees, vendors or clients — begin with a missing or badly drafted contract. Putting the right agreements in place early costs little and saves a lot.
1. Founders’ agreement / shareholders’ agreement
It records each founder’s role, equity, vesting, decision-making and what happens if a founder leaves. When investors come in, a shareholders’ agreement sets out rights such as board seats, transfer restrictions and exit terms.
2. Non-disclosure agreement (NDA)
Before sharing business plans, code or client data with a potential partner, vendor or employee, an NDA protects your confidential information and gives you a remedy if it is misused.
3. Employment agreements and offer letters
A clear employment contract covers role, salary, probation, notice period, confidentiality and assignment of intellectual property created during employment. Note that post-employment non-compete clauses are generally not enforceable in India, so rely on confidentiality and non-solicitation terms instead.
4. Client / service agreements
Define the scope of work, deliverables, timelines, payment terms, late-payment interest, limitation of liability and termination. A good service agreement is your best tool for recovering unpaid invoices.
5. Vendor and supply agreements
Protect quality, delivery schedules, warranties and penalties for delay when you depend on suppliers or outsourced service providers.
6. IP assignment and consultant agreements
If freelancers or agencies design your logo, website or software, make sure the copyright is assigned in writing to your company. Without it, ownership may remain with the creator.
7. Website terms of use and privacy policy
If you collect customer data online, you need clear terms of use and a privacy policy. With the Digital Personal Data Protection Act, 2023 and its rules, data protection compliance is becoming increasingly important for every business.
Include a dispute resolution clause
Every contract should specify the governing law, jurisdiction (for example, courts at Delhi) and whether disputes go to arbitration or mediation. This single clause can save months of litigation.
Need contracts drafted or reviewed?
Adv. Swati Suman drafts and vets business agreements for startups, MSMEs and companies in Delhi NCR. Call or WhatsApp 8789818007.
Disclaimer: This article is for general legal awareness only and is not legal advice. Every case depends on its own facts — please consult an advocate before taking any step.
