Legal Issues for Small and Medium Businesses

Mumbai, May 20, 2010

Presented by

Poorvi Chothani, Esq.

LawQuest, Mumbai www.lawquestinternational.com
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Vital Legal Issues

Four Key Legal Topics to Address

Legal Restrictions/Limits Select Entity Type Protect Intellectual Capital Develop Basic Legal Documents

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Address Legal Restrictions/Limits

Government/Regulatory
Permits Zoning Licenses

Private
Non-compete Agreements

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Select Entity Type

Sole-Proprietorship
Pros

- Easy/cheap to start
Tax advantages Management flexibility

Cons

- No limit of liability
Lack of continuity/transferability Limits ability to raise capital

NOTE: Must register a d/b/a (assumed name) if not using your legal name
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Select Entity Type

General Partnership
Pros

- Easy/cheap to start
Tax advantages Management flexibility

Cons

- No limit of liability (for partner, too)

Lack of continuity/transferability Limits ability to raise capital

NOTE: Must register a d/b/a (assumed name) if not using your legal name
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Select Entity Type

Limited Liability Company

Currently only professionals are permitted to set up LLPs

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Select Entity Type

Company
Pros

Limited Liability
Continuity/transferability Greater ability to raise capital Perception advantage

Cons

- Some formality/expense required

Limited management flexibility Tax - require additional filings

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Protect Intellectual Capital

Intellectual Property (IP) Includes:
Trademarks / Trade Names / Trade Dress - Searches & Registration Intellectual Property on the Internet
- Domain Name Registration - Multiple First Level Registrations

Copyrights
- Searches & Registration

Patents - Registration Required Trade Secrets - No Registration Required - Non-Disclosure/Non-Competes

- Stringent systems and enforcement for protection
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Develop Basic Legal Documents

Common Legal Agreements You May Need:
Memorandum of Understanding Joint Venture Agreements/Shareholder Agreements Purchase/Services Agreement Terms and Conditions Employment Agreements Consulting Agreements IP-related agreements

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Essentials of an Agreement
All parties are in agreement (after an offer has been made by one party and accepted by the other)
Risk of offers and acceptance Limit by time

Something of value has been exchanged, such as cash, services or goods (or a promise to exchange such an item) for something else of value.
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Essentials of an Agreement
Clear Objectives Clear communication Record of all contracts Tabulate time lines to ensure compliance Tabulate deliverables to ensure compliance Conditions and warranty Requirements to ensure protection of business interests Technical and legal expectations Special inclusions / exclusions required Techniques to obtain the desired outcome when commercial leverage is absent

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Key Elements of a Contract

Dispute Resolution Options
Seat or location of where dispute will be addressed Courtroom Litigation v Arbitration Applicable Law Escalation within the organizations Mediation

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Conclusion

Companies must budget for legal, company secretary and chartered accountant expenses
Failure to adequately address legal and compliance issues initially can cause significant problems and expenses later.

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LawQuests Areas of Practice

Areas of Practice Corporate Law Intellectual Property Law Real Estate Law Employment Law Global Work Permits and Business Visas
The U.S. Canada Poland Australia Singapore The U.K. India Mauritius New Zealand The Philippines

About LawQuest

Provides Client Centric Legal Solutions

Member of the NY State Bar Association, the ABA, IBA Member of the American Immigration Lawyers Association Founder Member of the Global Migration Action Group in AILA Former Member of the Alliance of Business Immigration Lawyers (ABIL)

Member of the European Association of Attorneys A Worldwide Network of Lawyers

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Thank You

522 Maker Chambers V 221 Nariman Point Mumbai 400021 Tel: +91 22 6615 6555 Fax: +91 22 2287 2080 Email: info@lawquestinternational.com URL: www.lawquestinternational.com

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