What Legal Documents Do Startups Need in India?
Startups in India need a variety of legal documents for incorporation, operations, and protection of their interests. Key documents include incorporation documents, founders’ agreements, employment contracts, intellectual property protection, and various agreements for investments and operations
1. Founders’ Agreement
This is the holy grail for any startup with two or more founders.
Why you need it
It defines the relationship between the founders—who owns what, who does what, and what happens if someone leaves.
What it should include:
- Equity split
- Roles and responsibilities
- Decision-making process
- Exit clauses
- Dispute resolution
- Vesting schedule
2. Non-Disclosure Agreement (NDA)
Startups are all about ideas, innovation, and confidential info. Whether you’re talking to an investor, vendor, or potential hire, NDAs help you protect your secrets.
Why you need it
It legally binds the other party to keep your information confidential.
What it should include
- Definition of confidential information
- Duration of confidentiality
- Permitted disclosures
- Penalties for breach
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3. Employment Contracts
Hiring people? You need contracts. Period.
Why you need it
It lays out the terms of employment, roles, salary, IP ownership, and what happens when someone leaves.
What it should include:
- Job title and responsibilities
- Salary and benefits
- Notice period and termination
- Intellectual property (IP) rights
- Confidentiality clauses
- Non-compete and non-solicit clauses (if needed)
4. Offer Letters
Before the full employment contract, offer letters are the initial commitment to a new hire.
Why you need it
It makes your hiring formal, even before onboarding.
What it should include
- Role and job title
- Starting date
- Compensation structure
- Basic terms and conditions
5. Intellectual Property (IP) Assignment Agreement
Startups are often built on code, designs, or creative assets. If your employees or freelancers make something valuable, who owns it? Without this agreement, not necessarily you.
Why you need it
It transfers ownership of work created by employees, contractors, or co-founders to the company.
What it should include
- Scope of work being assigned
- Confirmation of transfer of all IP rights
- Moral rights waiver (optional but useful)
- Signatures from all parties
6. Incorporation Documents
Before you do anything, you need to decide what kind of legal entity your startup.
Why you need it
Incorporation gives your business legal recognition and limits personal liability.
What it includes (for Private Limited Companies)
- Certificate of Incorporation (issued by the Ministry of Corporate Affairs)
- Memorandum of Association (MOA)
- Articles of Association (AOA)
- PAN & TAN
- Director Identification Numbers (DIN)
- Digital Signature Certificates (DSC)
Registering as a Private Limited Company is most popular for startups seeking funding.
7. Shareholders’ Agreement (SHA)
If you have investors, you’ll need this document. It governs the relationship between the company and its shareholders (especially external ones).
Why you need it
It ensures everyone knows their rights, obligations, and powers when it comes to equity.
What it should include
- Shareholding pattern
- Voting rights
- Exit options
- Tag-along and drag-along clauses
- Dividend policy
- Anti-dilution provisions
8. Term Sheet
This is a non-binding agreement that outlines the key terms before a formal investment deal is signed.
Why you need it:
It sets the tone for negotiations and avoids misunderstandings.
What it should include:
- Valuation
- Investment amount
- Equity to be issued
- Rights and obligations
- Exit conditions
9. Privacy Policy
If your startup collects user data through a website or app (which most do), this document is mandatory under Indian law.
Why you need it
It tells users what data you collect, how you use it, and how you protect it.
What it should include
- Types of data collected
- Purpose of data collection
- Storage and security practices
- Third-party sharing policies
- User rights (access, opt-out, etc.)
10. Terms and Conditions (T&C)
This is your rulebook for users. Whether you’re selling something or running a platform, your T&C outlines what users can and can’t do.
Why you need it
It sets boundaries, limits liability, and helps you enforce your rights.
What it should include
- User responsibilities
- Account usage rules
- Payment terms (if applicable)
- Dispute resolution process
- Limitation of liability
- Governing law
11. Vendor Agreements
Whether it’s your web hosting company, office space provider, or a freelance designer—you need contracts with vendors.
Why you need it
To ensure services are delivered as promised, and payments are made (or received) properly.
What it should include
- Scope of work
- Payment terms
- Delivery timelines
- Liability and indemnity clauses
- Termination conditions
12. Investment Agreements
Once an investor is on board, a detailed investment agreement seals the deal.
Why you need it
To legally define the rights, obligations, and protections of both parties.
What it should include
- Investment amount and equity issued
- Representations and warranties
- Governance rights
- Conditions precedent
- Exit strategies
13. Board Resolutions
As your startup grows, your board will make important decisions: opening a bank account, appointing directors, raising funds, etc.
Why you need it
To formally approve major actions through written records.
What it includes:
- Title of resolution
- Description of action
- Approval and signatories
14. GST Registration and Compliance
If your turnover exceeds ₹20 lakhs (₹10 lakhs for NE states), or you’re dealing in interstate commerce, you need GST registration.
Why you need it
To comply with Indian tax law and avoid penalties.
What it includes
- GSTIN certificate
- Monthly/quarterly GST returns
- Invoices with GST details
15. Trademark Registration (Optional but Wise)
Have a brand name, logo, or tagline you want to protect? File for a trademark with the Indian Trademark Office.
Why you need it:
To prevent others from copying or misusing your brand.
What it includes:
- TM application
- Class selection
- Power of attorney (if using a lawyer)
Final Thoughts
Yes, it’s a lot. But these legal documents aren’t just bureaucratic red tape—they’re business armor. They help build trust with investors, employees, and customers. They prevent future fights. And they show the world that you mean business.
If you’re a first-time founder, don’t worry. You don’t need to figure it all out yourself. Talk to a startup lawyer, use trusted legal templates, and start early. It’s way easier to do it right from day one than to clean up a mess later.
