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Regulatory Updates

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MANDATORY REGISTRATION - ESI

A business entity needs to procure, few of the registrations as per various state and central laws, depending upon the eligibility threshold provided under each act. One of the essential registrations, subject to Employees' State Insurance Act, 1948 (ESI Act),

By Sharda Balaji almost 11 years ago
NEGOTIATING TERM SHEETS - EXIT STRATEGY - PART 4

The most critical aspect in any investment deal for the investors is the exit clause, which is when they get to see the return on investment. In a typical early stage investment deal, the options are initial public offering (IPO),

By Sharda Balaji almost 11 years ago
DUE DILIGENCE

Today’s competitive forces have brought a paradigm shift in the mindsets of the investor community, that focuses more on business ground rules than ever before. Profitability is not the only parameter which plays a role. Preferably, the product/business must also

By Sharda Balaji almost 11 years ago
NEGOTIATING TERMSHEETS: BOARD REPRESENTATION - PART 3

We covered interesting tips on negotiating the ‘commercials’ of a termsheeet - http://novojuris.wordpress.com/2013/08/27/term-sheets-negotiation-and-tips-part-1/ and http://novojuris.wordpress.com/2013/09/03/term-sheets-negotiation-and-tips-part-2/. Negotiating commercial aspects of the termsheet is kind of expected unlike ‘controls’ (please see Part I of this series). Most investors would give a standard response of ‘style of investment’

By Sharda Balaji almost 11 years ago
Term Sheets – Negotiation and Tips – Part 2

NEGOTIATING FOUNDER VESTING CLAUSE IN EARLY STAGE TERMSHEETS In Part 1(refer to https://www.novojuris.com/thought-leadership/term-sheets-negotiation-and-tips-part-1), we pointed out on negotiating a few ‘commercial’ aspects. In this post we detail Founder Vesting. Please note, that Founder Vesting is a clause one would see in

By Sharda Balaji almost 11 years ago
TRAI NON-COMPLIANCE BY INSURANCE COMPANIES

The NATIONAL DO NOT CALL REGISTRY (“NDNC”) is an initiative of the Telecom Regulatory Authority of India (TRAI), introduced to prevent consumers from being harassed by promotional calls and text messages from various telemarketers. In lines with the same, TRAI

By Sharda Balaji almost 11 years ago
Term Sheets - Negotiation and Tips - Part 1

So, you have found someone (a VC) who wants to back you with the money you so desperately need. Just sign above the dotted line. Well, not so fast… A term sheet is a non-binding document that lays out the

By Sharda Balaji almost 11 years ago
Investment Advisory through SMS

Securities and Exchange Board of India (SEBI) in a recent ad-interim ex-parte order, debarred two individuals - Mr. Imtiyaz Hanif Khanda and Mr. Vali Mamad Habib Ghaniwala, from providing unauthorized investment advisory and portfolio management services (PMS) via SMS. SEBI

By Sharda Balaji almost 11 years ago
TAX TREATMENT OF ESOP DISCOUNT – BIOCON CASE

Income Tax Appellate Tribunal in a recent order (Dy. Commissioner of Income-tax (LTU), Bangalore Vs M/s. Biocon Limited) (“Case”) held that “discounts under the ESOP are an employee cost and should be allowed as a deduction over the vesting period, in the hands

By Sharda Balaji about 11 years ago
India conserving its forex

Reserve Bank of India has today announced following measures to aim at rationalizing the Foreign Exchange outflows by Resident Indians. a) Reduced the limit for Overseas Direct Investment under automatic route from 400% of the net worth of an Indian Party to 100% of its net

By Sharda Balaji about 11 years ago
Confused about ESOP versus Sweat Equity versus Shares against services?

Founders have this question and here is a comparative: ESOP AND TAX IMPACT An Employee Stock Option Plan (ESOP) is an option given to the employees to buy the shares of the Company. Until the option is exercised and converts

By Sharda Balaji over 11 years ago
Deal structuring with the startup tax

The Finance Act 2012 brought in an amendment to tax the share premium which is above the fair value of investment by the resident angel investors and not proven satisfactorily to the tax assessing officer. This amendment is effective 1

By Sharda Balaji over 11 years ago