# Treelife > A legal, finance & compliance firm focused on the startup ecosystem --- ## Pages - [ESOP & Advisor Equity](https://treelife.in/services/tax-and-regulatory/esop-and-advisor-equity/): Optimize your equity plans with our ESOP & Advisor Equity services. We offer expert guidance on ESOP design, implementation, valuation, and regulatory compliance, alongside strategic advice for advisor equity structures, ensuring fair compensation and alignment with business goals. - [Financial Modeling](https://treelife.in/services/virtual-cfo/financial-modeling/): Unlock growth in India with expert financial modeling services for businesses & startups. Get robust forecasts, valuations, and fundraising models from top financial modeling consulting services. - [Setting up Foreign Business](https://treelife.in/services/setting-up-foreign-business/): Navigate global expansion with our services for setting up foreign business. We offer tailored international market entry strategies, global market entry strategies, offshore company formation, and offshore business registration. Start your global journey today! - [Setup India Business](https://treelife.in/services/setup-india-business/): Looking to setup an India business? Our comprehensive India business setup services include foreign company registration in India and efficient business payroll management. Let us help you establish your presence in the Indian market. - [Global Compliances & Transfer Pricing](https://treelife.in/services/global-compliance-transfer-pricing/): Navigate global expansion with our expert services in Global Compliances and Transfer Pricing for businesses and startups. Ensure seamless international operations and optimize your financial strategies. - [Parent-Subsidiary Structuring and Transfer Pricing](https://treelife.in/services/setting-up-foreign-business/parent-subsidiary-structuring-and-transfer-pricing/): Optimize your global operations with our Parent-Subsidiary Structuring and Transfer Pricing Advisory services. Ensure tax efficiency and compliance across your international entities. - [Finding the Right Jurisdiction for Foreign Business](https://treelife.in/services/setting-up-foreign-business/finding-the-right-jurisdiction-for-foreign-business/): Need help choosing the right jurisdiction for foreign business setup? We offer expert jurisdiction analysis and structuring for flipping. Find the optimal location for your global expansion. - [Foreign Entity Incorporation and Local Setup](https://treelife.in/services/setting-up-foreign-business/foreign-entity-incorporation-and-local-setup/): Simplify your global expansion with our Foreign Entity Incorporation and Local Setup services. We handle Offshore Entity Formation, offshore company formation, offshore business registration, and ensure smooth Cross-Border Compliance Management. - [Entity Incorporation and Setup in India](https://treelife.in/services/setup-india-business/entity-incorporation-and-setup-in-india/): Looking to register a business in India? Our services simplify India Entity Incorporation and foreign business setup in India. Get started with your business registration in India today! - [Tax, Legal, and Accounting Advisory in India](https://treelife.in/services/setup-india-business/tax-legal-and-accounting-advisory-in-india/): Navigate India's regulatory landscape with our expert Tax, Legal, and Accounting Advisory services. Ensure compliance and optimize your business operations in India. - [Ongoing Compliance and Regulatory Support in India](https://treelife.in/services/setup-india-business/ongoing-compliance-and-regulatory-support-in-india/): Ensure seamless operations in India with our Compliance and Regulatory Support services for foreign businesses. Navigate Indian regulations with ease and focus on your growth. - [Transfer Pricing Advisory](https://treelife.in/services/global-compliance-transfer-pricing/transfer-pricing-advisory/): Optimize your global business setup with our expert Transfer Pricing Advisory services. Ensure compliance and tax efficiency across your international operations from the start. - [International Tax Compliance](https://treelife.in/services/global-compliance-transfer-pricing/international-tax-compliance/): Navigate international business taxation with our comprehensive International Tax Compliance Services. Ensure adherence to global tax regulations and optimize your international tax strategy. - [International Regulatory Compliance](https://treelife.in/services/global-compliance-transfer-pricing/international-regulatory-compliance/): Ensure smooth international operations with our Cross-Border Regulatory Compliance services for businesses. Navigate complex global regulations and minimize risks. - [FEMA Compliance](https://treelife.in/services/secretarial-compliance/fema-compliance/): Ensure hassle-free FEMA compliance in India with expert services tailored for businesses, startups, and companies. Stay compliant with RBI regulations and streamline foreign exchange transactions. - [Tax Structuring](https://treelife.in/services/tax-and-regulatory/tax-structuring/): We provide tailored tax solutions to ensure your business remains compliant while optimizing your financial strategies. Our tax structuring services are designed to address critical areas, helping you streamline your financial framework and minimize tax burdens effectively. - [Regulatory Advisory](https://treelife.in/services/tax-and-regulatory/regulatory-advisory/): Treelife provides expert regulatory advisory services, entity structuring, and incorporation solutions to ensure your business complies with all legal requirements. - [Due Diligence Support](https://treelife.in/services/virtual-cfo/due-diligence-services/): Minimize risk and maximize opportunity. Our due diligence services provide comprehensive financial, legal, and commercial analysis for informed business decisions. - [Fund Structuring](https://treelife.in/services/aif-setup/fund-structuring/): Treelife specializes in AIF fund structuring services, offering customized solutions for effective fund structures to meet compliance and maximize operational efficiency. - [AIF Documentation](https://treelife.in/services/aif-setup/documentation/): Treelife provides comprehensive AIF documentation services, including AIF offer documents and compliance-focused solutions to streamline your fund operations - [AIF Application Process](https://treelife.in/services/aif-setup/application-process/): Streamline your AIF application process with Treelife’s expert services. We specialize in AIF formation, setup, and fund structuring to ensure compliance and operational efficiency. - [Due Diligence for Investors](https://treelife.in/services/investment-support/due-diligence/): Ensure informed decisions with Treelife’s comprehensive due diligence services for investors and entrepreneurs. Specializing in commercial, operational, financial, and business due diligence to mitigate risks and optimize investments - [Transaction Agreements](https://treelife.in/services/investment-support/transaction-agreements/): Treelife offers expert Transaction Agreement Services for investors and entrepreneurs. Get seamless assistance in drafting business transaction agreements and transaction broker agreements tailored to your needs - [Investment Transaction Advisory](https://treelife.in/services/investment-support/transaction-advisory/): Treelife provides expert Transaction Advisory Services for businesses, investors, and entrepreneurs. Partner with one of the best transaction advisory firms in Mumbai for tailored corporate and business solutions. - [Tax and Regulatory Compliance & Advisory](https://treelife.in/services/lifecycle-assistance/tax-and-regulatory-compliance-advisory/): Treelife offers Tax & Regulatory Compliance cum Advisory Services for businesses and investors. Get expert investment tax advisory and compliance solutions tailored for seamless operations. - [Governance and Legal Support](https://treelife.in/services/lifecycle-assistance/governance-and-legal-support/): We help you establish and enforce high standards of governance and structured processes, ensuring your fund operates efficiently while adhering to legal and regulatory frameworks. From policy creation to due diligence, we provide the tools for seamless governance. - [Fund Operations and Vendor Management](https://treelife.in/services/lifecycle-assistance/fund-operations-and-vendor-management/): Treelife provides professional Fund Operations and Vendor Management Services for businesses and investors. Streamline your fund operations and vendor processes with expert support tailored to your needs. - [Due Diligence for Exit Support](https://treelife.in/services/exit-support/due-diligence/): Treelife provides comprehensive Due Diligence Services for Business Exit Support, including financial, commercial, and operational due diligence. Ensure seamless and informed exits with expert support. - [Transaction Agreements for Exits](https://treelife.in/services/exit-support/transaction-agreements/): Treelife offers expert Transaction Agreement Services for Business Exit Support, including business transactions agreements, exit support agreements, and tailored exit transaction agreements to ensure smooth transitions. - [Transaction Advisory for Exits](https://treelife.in/services/exit-support/transaction-advisory/): Treelife provides expert Transaction Advisory Services for Business Exit Support, specializing in business exit transactions and exit transaction advisory to ensure seamless transitions and optimal outcomes for businesses. - [Setup Assistance](https://treelife.in/services/gift-ifsc-setup/setup-assistance/): Set up your business in GIFT City with expert assistance from Treelife. Our GIFT setup services simplify the process of starting a business or company in GIFT City, ensuring compliance and efficiency. - [GIFT Regulatory & Tax Advisory](https://treelife.in/services/gift-ifsc-setup/regulatory-tax-advisory/): Navigate GIFT City regulations and taxation with expert advisory from Treelife. Our GIFT regulatory and tax advisory services ensure your business stays compliant and optimized for tax benefits in GIFT City - [GIFT Legal & Compliance Support](https://treelife.in/services/gift-ifsc-setup/gift-legal-compliance-support/): We offer comprehensive legal advice, regulatory compliance, and business registration for businesses in GIFT City. Our GIFT advisory services ensure your business stays compliant and optimized for operations in GIFT City - [Incorporation & Registration](https://treelife.in/services/secretarial-compliance/incorporation-registration/): Streamline your business setup with Treelife's expert incorporation and registration services. We specialize in company and startup registration to help your venture thrive. - [Recurring Compliance](https://treelife.in/services/secretarial-compliance/recurring-compliance/): Recurring and annual compliance services for businesses and startups. Treelife offers expert recurring and annual compliance solutions, ensuring your business stays compliant effortlessly. - [Event Based Compliances](https://treelife.in/services/secretarial-compliance/event-based/): Ensure timely and accurate event-based filing and compliance for your business or startup. We provide reliable event-based filing services to meet your compliance needs and keep your operations smooth and legally sound. - [Accounting & Tax Compliance](https://treelife.in/services/virtual-cfo/accounting-tax-compliance/): Get expert accounting and tax compliance services for businesses and startups. We offer startup accounting solutions and ensure tax compliance with a team of experienced professionals focused on your business's growth and compliance needs. - [Payroll Management](https://treelife.in/services/virtual-cfo/payroll/): Streamline your business with outsourced payroll management services. We offer customized payroll services for startups and businesses, ensuring accuracy, compliance, and efficiency with outsourced payroll solutions. - [MIS and Budgeting](https://treelife.in/services/virtual-cfo/mis-financial-budgeting/): Leading MIS and financial budgeting services for startups and businesses. We provide expert financial planning, budgeting solutions, and management information systems (MIS) for your business needs and informed decision-making and growth. - [Fundraising and M&A](https://treelife.in/services/legal-support/fundraising-mergers-acquisitions/): Get expert fundraising consulting and M&A advisory services for startups and businesses. Our team provides tailored fundraising strategies and M&A consulting to help you achieve your growth goals and maximize value. - [Legal Contracts](https://treelife.in/services/legal-support/contracts/): Streamline your business with expert contract management services. We provide corporate, commercial, and agreement contract services for startups and businesses, ensuring compliance, efficiency, and risk mitigation. - [POSH Compliance](https://treelife.in/services/legal-support/posh-compliance/): We offer end-to-end POSH compliance services along with complete POSH compliance checklist ensuring that your organization implements prevention, protection and redressal mechanisms effectively. - [Intellectual Property Rights (IPR)](https://treelife.in/services/legal-support/intellectual-property-rights/): Protect your business with expert Intellectual Property Rights services. We provide trademark, patent, and copyright registration services to ensure your ideas and innovations are legally protected. - [Careers](https://treelife.in/career/): Our Culture Be part of a thriving culture that fosters collaboration and teamwork. We offer exciting opportunities to work on... - [Blogs](https://treelife.in/blogs/): Find top legal, finance, compliance and taxation blogs by Treelife - [Virtual CFO](https://treelife.in/services/virtual-cfo/): Consult with the top virtual cfo service provider in Mumbai leading a team of cfo. Treelife provides outsourced virtual cfo services, fractional cfo with most compliance oriented team of experts. Treelife is one of the best VCFO firms for startups. - [Legal Support](https://treelife.in/services/legal-support/): Our Legal Support services covers transaction support, contracts, M&A, IPR and disputes, ensuring your startup is legally sound. We are Leading Legal Outsourcing Service Providers from Mumbai. - [Secretarial Compliance](https://treelife.in/services/secretarial-compliance/): Consult with the top secretarial compliance law firm for secretarial services near me. Treelife as a legal secretarial service firm in Mumbai ensures all your compliance related activities are streamlines and followed. - [Tax & Regulatory](https://treelife.in/services/tax-and-regulatory/): Optimize your financial strategy with our expert Tax Advisory, & Regulatory services. We provide support for transfer pricing, tax advisory, equity restructuring, and financial modeling, ensuring your startup remains compliant and financially efficient. - [AIF Setup](https://treelife.in/services/aif-setup/): Efficiently proceed with Alternative Investment Fund Registration with our comprehensive fund setup services. We handle aif registration, PPM, tax structuring, and SEBI applications, ensuring a seamless start. Register AIF in India - [Investment Support](https://treelife.in/services/investment-support/): Enhance your investment strategies & Make investments with expert support in due diligence, transaction documentation, and company liaisoning, facilitating informed decisions. - [Lifecycle Assistance](https://treelife.in/services/lifecycle-assistance/): Maintain smooth operations and strong investor relations with our lifecycle assistance services, including vendor liaisoning and continuous investor support. Lifecycle Investment Strategy - [Exit Support](https://treelife.in/services/exit-support/): Ensure a smooth and profitable exit with our exit support services, providing comprehensive documentation support and strategic tax planning. Business Exit Strategy Consulting for Entrepreneurs - [GIFT IFSC Setup](https://treelife.in/services/gift-ifsc-setup/): Leverage the benefits of GIFT IFSC with our tailored services. We provide evaluation, setup assistance, and post-setup ongoing support to facilitate your entry into this strategic hub. IFSC GIFT CITY - [Terms of Use](https://treelife.in/terms-of-use/): Terms of Use The website www. treelife. in is operated and maintained by Treelife Ventures Services Private Limited and/or its affiliates (“Treelife”),... - [Resources](https://treelife.in/resources/): Articles, Reports, Blogs, Calendar & Other Resources Collection about Legal, Finance, Compliance & Taxation by Treelife - [About Us](https://treelife.in/about/): Providing support to startups, entrepreneurs and investors with access to a team of professionals - [Services](https://treelife.in/services/) - [Privacy Policy](https://treelife.in/privacy-policy/): Privacy Policy Treelife is committed to safeguarding and respecting your privacy and choices. This ‘Privacy Policy’ should be read along... - [Home](https://treelife.in/): Treelife provides legal and financial support to startups, small business, companies and entrepreneurs with access to a team of professionals, including chartered accountants, lawyers, and company secretaries, who have deep domain expertise in the startup industry. --- ## Posts - [Setting up a Business in India for Foreign Company [2025]](https://treelife.in/compliance/setting-up-a-business-in-india-for-foreign-company/): When a foreign company decides to enter the Indian market, choosing the right business structure is critical. India offers several types of business structures, each with its own advantages, challenges, and regulatory requirements. - [Online Gaming Act 2025: Can this trigger Material Adverse Effect(MAE) Clause?](https://treelife.in/quick-takes/online-gaming-act-2025-can-this-trigger-material-adverse-effect-clause/): Introduction This article analyzes Material Adverse Effect (“MAE”) clauses in the transaction documents with specific focus on regulatory changes. What... - [Taxation & Regulatory Framework for Derivatives and Equity Investments in India](https://treelife.in/taxation/taxation-and-regulatory-framework-for-derivatives-and-equity-investments-in-india/): Executive Summary This research note provides a comprehensive analysis of the taxation and regulatory framework governing investments in derivatives (futures... - [Make in India: A Comprehensive Guide to India's Manufacturing Transformation](https://treelife.in/reports/make-in-india/): Launched in 2014, the ‘Make in India’ (MII) initiative represents a cornerstone of the Indian government’s economic strategy, aiming to... - [The Gaming Bill 2025 : Redefining India's Online Gaming Landscape](https://treelife.in/reports/the-gaming-bill-2025/): The Promotion and Regulation of Online Gaming Bill, 2025 (“Gaming Bill 2025”) aims to reshape this sector by banning all forms of real-money gaming while promoting e-sports and social gaming. While the Bill seeks to protect users from risks like addiction and financial losses, it has also sparked debates about economic disruption, constitutional validity, and employment impact. - [iSAFE Notes in India - Funding, Investment & Taxation](https://treelife.in/legal/isafe-notes-in-india/): Understanding iSAFE Notes: A Deep Dive What Are iSAFE Notes in India? India’s startup ecosystem has witnessed the emergence of... - [Indemnity Clause in a Share Subscription Agreement: A Comprehensive Guide](https://treelife.in/legal/indemnity-clause-in-a-share-subscription-agreement/): Introduction Under Section 124 of the Indian Contracts Act, 1872, indemnity is defined as a contract where one party (the... - [Navigating Event of Default Clauses in Shareholders' Agreements: A Lawyer's Perspective](https://treelife.in/legal/navigating-event-of-default-clauses-in-shareholders-agreements/): In the dynamic landscape of startup investments, understanding the intricacies of Event of Default (EoD) clauses in shareholders’ agreements is... - [Investment Transactions in India: Essential Conditions for Successful Deals](https://treelife.in/legal/investment-transactions-in-india/): Investment transactions in India involve a structured approach with specific conditions that must be met at various stages to ensure... - [Test for Determining Conditions Precedent (CP)](https://treelife.in/legal/test-for-determining-conditions-precedent-cp/): This test helps you identify whether a condition should be classified as a Condition Precedent (CP) in a Share Subscription... - [Compliance Calendar – August 2025 (Checklist & Deadlines)](https://treelife.in/calendar/compliance-calendar-august-2025/): August is here, and with it comes a fresh set of compliance deadlines for businesses in India. Staying on top of these dates is crucial to avoid penalties and ensure smooth operations. Treelife, your trusted partner in legal and financial matters, has compiled a comprehensive compliance calendar for August 2025 to help you navigate these requirements. - [Treelife advises Uppercase on its partnership with Akasa Airlines to launch sustainable cabin crew luggage](https://www-fortuneindia-com.cdn.ampproject.org/c/s/www.fortuneindia.com/amp/story/business-news/akasa-air-partners-with-luggage-startup-uppercase-rolls-out-eco-friendly-gear-for-cabin-crew/125189#new_tab) - [Compliance Calendar – July 2025 (Checklist & Deadlines)](https://treelife.in/calendar/compliance-calendar-july-2025/): As we enter the second half of 2025, staying compliant with various financial, tax, and regulatory deadlines is crucial for startups, businesses, and individuals alike. The month of July holds significant compliance deadlines that require your attention. - [Memorandum of Association - MoA Clauses, Format & Types](https://treelife.in/compliance/memorandum-of-association-moa/): The Memorandum of Association (MOA) is one of the most essential documents in the company incorporation process, forming the foundation... - [POSH Compliance Checklist in India - Complete Guide](https://treelife.in/compliance/posh-compliance-checklist/): Introduction to POSH Act Compliance What is POSH? The POSH Act, formally known as the Sexual Harassment of Women at... - [Conversion of Partnership Firm to LLP - Complete Process](https://treelife.in/compliance/conversion-of-partnership-firm-to-llp/): Introduction: Converting a Partnership Firm to LLP in India Converting a Partnership Firm to a Limited Liability Partnership (LLP) is... - [ESOP Taxation in India – A Complete Guide (2025)](https://treelife.in/taxation/esop-taxation-in-india/): Introduction to ESOP Taxation in India Employee Stock Option Plans (ESOPs) have become an essential tool for businesses, especially startups... - [ESOPs in India: Process, Tax Implications, Exercise Price, Benefits](https://treelife.in/taxation/understanding-esops-in-india/): Introduction In the contemporary competitive job market, companies are constantly seeking innovative ways to attract and retain top talent. Employee... - [CBDT Notifies TDS Exemption for Payments to IFSC Units (Effective from July 1, 2025) ](https://treelife.in/news/cbdt-notifies-tds-exemption-for-payments-to-ifsc-units-effective-from-july-1-2025/): In a significant move set to bolster the International Financial Services Centre (IFSC) ecosystem, the Central Board of Direct Taxes... - [IFSCA Approves "Platform Play" for Fund Management Entities at GIFT IFSC](https://treelife.in/news/ifsca-approves-platform-play-for-fund-management-entities-at-gift-ifsc/): In a significant stride towards enhancing the appeal and accessibility of India’s International Financial Services Centre (IFSC) at GIFT City,... - [SEBI Mandates New Certification Norms for AIF Managers](https://treelife.in/news/sebi-mandates-new-certification-norms-for-aif-managers/): The Securities and Exchange Board of India (SEBI) has officially unveiled revised certification requirements for key investment personnel of Alternative... - [SEBI Revamps Angel Fund Framework to Boost Startup Funding](https://treelife.in/news/sebi-revamps-angel-fund-framework-to-boost-startup-funding/): In a significant move to invigorate India’s startup ecosystem, the Securities and Exchange Board of India (SEBI), during its board... - [Tax Exemption for Startups in India (2025)](https://treelife.in/taxation/tax-exemption-for-startups-in-india/): A detailed guide to tax exemptions, concessions, benefits and reliefs for startups in 2024. Indian government initiated the Startup India initiative with the aim of promoting entrepreneurship inside the nation. - [Disclosure of Foreign Assets in ITR - Schedule FA Explained](https://treelife.in/finance/disclosure-of-foreign-assets-in-itr/): Do You Hold Assets in a Foreign Jurisdiction? In today’s globalized economy, it’s increasingly common for Indian residents to hold... - [Common Legal and Compliance Oversights for Startups in Due Diligence](https://treelife.in/startups/common-legal-and-compliance-oversights-for-startups-in-due-diligence/): Starting a company is one of the most exciting and challenging journeys an entrepreneur can undertake. Amidst the excitement of... - [Raising Funds from Friends and Family(F&F) - Early-Stage Startups](https://treelife.in/startups/raising-funds-from-friends-and-family/): Raising funds from friends and family is a common strategy for early-stage startups, particularly during the initial or pre-revenue phase.... - [Understanding Valuation Rules for Share Transfers (Post Angel Tax Removal)](https://treelife.in/compliance/understanding-valuation-rules-for-share-transfers-post-angel-tax-removal/): With the removal of Section 56(2)(viib), commonly known as Angel Tax, the landscape for startup funding and share transfers has... - [Taxation of Virtual Digital Assets(VDA) in India - Complete Guide](https://treelife.in/taxation/taxation-of-virtual-digital-assets/): Introduction Virtual Digital Assets (VDAs) have emerged as a significant investment avenue in India, with cryptocurrencies, non-fungible tokens (NFTs), and... - [SEBI's Cybersecurity Mandate for AIFs - Compliance Deadline: June 30, 2025](https://treelife.in/quick-takes/sebi-cybersecurity-mandate-for-aifs/): The Securities and Exchange Board of India (SEBI) has introduced a new cybersecurity mandate for Alternative Investment Funds (AIFs), making it mandatory for these funds to implement robust cybersecurity measures. This directive is part of SEBI's ongoing efforts to safeguard financial systems, mitigate cybersecurity risks, and enhance investor protection in India’s rapidly evolving financial ecosystem. - [Gujarat Stamp Act Broadens "Conveyance" Definition to Include Change in Control Agreements: Major Implications for M&A and Restructuring](https://treelife.in/news/gujarat-stamp-act-broadens-conveyance-definition-to-include-change-in-control-agreements-major-implications-for-ma-and-restructuring/): Effective April 10, 2025, the Gujarat Stamp (Amendment) Act, 2025, has introduced a significant expansion to the definition of “Conveyance.... - [Alternative Investment Funds(AIFs) in India : Framework, Types, Taxation 2025](https://treelife.in/finance/alternative-investment-funds-in-india/): DOWNLOAD PDF Overview Alternative Investment Funds in India, often abbreviated as AIFs, have become a buzzword among sophisticated investors, especially... - [What is Accounts Receivable? Definition, Example, Uses](https://treelife.in/finance/what-is-accounts-receivable/): Accounts Receivable in India : Meaning and Importance for Indian Businesses What is Accounts Receivable? Definition Accounts receivable refers to... - [What is Accounts Payable? Definition, Example, Uses](https://treelife.in/finance/what-is-accounts-payable/): Accounts Payable in India Accounts Payable Meaning Accounts Payable (AP) refers to the amount of money a business owes to... - [Difference Between Accounts Payable and Accounts Receivable](https://treelife.in/finance/difference-between-accounts-payable-and-accounts-receivable/): What is Accounts Payable (AP)? Definition Accounts Payable (AP) refers to the money a business owes to its suppliers or... - [Bank Reconciliation Statement in India - Meaning, Benefits and Uses](https://treelife.in/finance/bank-reconciliation-statement-in-india/): What is Bank Reconciliation? Meaning Explained Definition of Bank Reconciliation Bank reconciliation is the accounting process of comparing and matching... - [IFSCA Eases Staffing Requirements for GRCTCs in IFSCs](https://treelife.in/news/ifsca-eases-staffing-requirements-for-grctcs-in-ifscs/): The International Financial Services Centres Authority (IFSCA) has introduced significant amendments to its framework for Global/Regional Corporate Treasury Centres (GRCTCs)... - [Understanding Succession Planning: Key Insights and Strategies for Wealth Protection](https://treelife.in/reports/understanding-succession-planning/): Succession planning is the strategic process of managing and distributing your assets both during your lifetime and after your passing. Its primary objective is to ensure a smooth transfer of business ownership, leadership, and family wealth, while proactively maintaining harmony and preventing disputes among beneficiaries. - [RBI’s Final Deadline for Regularizing Overseas Investment Reporting Delays](https://treelife.in/news/rbis-final-deadline-for-regularizing-overseas-investment-reporting-delays/): The Reserve Bank of India (RBI) has instructed Authorised Dealer Banks (AD Banks) to notify their clients (Indian Entities /... - [Treelife Advises Complement 1 in $16M Seed Round](https://www.linkedin.com/feed/update/urn:li:activity:7336274430806929409#new_tab) - [Fractional CFO Services in India - For Startups, Business & MSMEs](https://treelife.in/finance/fractional-cfo-services-in-india/): What is a Fractional CFO? A Fractional CFO, also known as a part-time CFO, is a highly experienced financial consultant... - [Compliance Calendar – June 2025 (Checklist & Deadlines)](https://treelife.in/calendar/compliance-calendar-june-2025/): Compliance management is critical for startups and businesses in India to avoid penalties and ensure smooth operations. At Treelife, we understand the challenges companies face in keeping up with multiple statutory deadlines. To help you stay organized, we have prepared the June 2025 Compliance Calendar - [Treelife Advises Existing Investors in Miraggio $6.5 Million Funding Round](https://economictimes.indiatimes.com/tech/funding/miraggio-raises-6-5-million-in-round-led-by-rpsg-capital-client-associates-alternate-fund/articleshow/121274382.cms?from=mdr#new_tab) - [The "Pe" Predicament: A Trademark Tussle in India’s Fintech Sector — PhonePe vs. BharatPe](https://treelife.in/case-studies/the-pe-predicament-a-trademark-tussle-in-indias-fintech-sector-phonepe-vs-bharatpe/): Introduction: The High Cost of IPR Disputes for Startups and Investors Intellectual Property Rights (IPR) disputes, especially around trademarks, can... - [Family Offices in India – A Complete Guide](https://treelife.in/legal/family-offices-in-india/): Introduction to Family Offices in India What is a Family Office? A family office is a privately controlled advisory and... - [What is a Virtual CFO? Role, Services, and Benefits](https://treelife.in/finance/what-is-a-virtual-cfo/): A virtual CFO, which could be an individual or a service provider, is an outsourced service provider specializing in managing the financial requirements of an organization. - [Foreign Trade Policy of India: A Complete Guide [2025]](https://treelife.in/foreign-trade/foreign-trade-policy-of-india/): Introduction to India’s Foreign Trade Policy (FTP) What is the Foreign Trade Policy (FTP) of India? The Foreign Trade Policy... - [FSSAI Rules & Regulations - FSSAI Standards in India](https://treelife.in/legal/fssai-rules-and-regulations-fssai-standards-in-india/): Introduction to FSSAI: Ensuring Food Safety Standards in India The Food Safety and Standards Authority of India (FSSAI) plays a... - [IFSCA Introduces Co-Investment Framework for Venture Capital and Restricted Schemes in GIFT IFSC](https://treelife.in/news/ifsca-introduces-co-investment-framework-for-venture-capital-and-restricted-schemes-in-gift-ifsc/): GET PDF The International Financial Services Centres Authority (IFSCA) has unveiled a new framework facilitating co-investments by Venture Capital and... - [RBI’s Draft Guidelines on AIF Exposure by Regulated Entities – Key Highlights and Implications](https://treelife.in/news/rbis-draft-guidelines-on-aif-exposure-by-regulated-entities-key-highlights-and-implications/): The Reserve Bank of India (RBI) has released draft directions to regulate investments made by Regulated Entities (REs)—such as banks,... - [Transfer Pricing: A Comprehensive Guide for Founders, CFOs, and Startups](https://treelife.in/reports/transfer-pricing-a-comprehensive-guide-for-founders-cfos-and-startups/): This comprehensive guide demystifies transfer pricing concepts, methods, regulatory frameworks, common challenges, and best practices, helping founders, CFOs, and finance teams navigate this complex terrain with confidence. - [Decoding the Indemnification Clause](https://treelife.in/legal/decoding-the-indemnification-clause/): Indemnification Clause Meaning An indemnification clause or indemnity clause serves as a contractual mechanism for mitigating and re-allocating risk between... - [ESG Compliance in India - Regulations & Framework](https://treelife.in/compliance/esg-compliance-in-india/): Introduction to ESG Compliance in India What is ESG Compliance? 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Both instruments allow startups to raise capital initially structured as debt, with provisions for conversion into equity at a later stage. - [The Debt Market at IFSC: Key Insights & Trends (2024-2025)](https://treelife.in/reports/the-debt-market-at-ifsc/): The debt market at IFSC showed impressive growth in FY 2024-25, with total issuances reaching USD 6.99 billion across 57 listings, underscoring its growing role as a global capital hub. - [Export-Import Bank of India (EXIM Bank) Support for Exporters](https://treelife.in/foreign-trade/export-import-bank-of-india-support-for-exporters/): EXIM Bank Overview: Empowering Indian Exporters What is EXIM Bank? 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From impressive economic fundamentals to a vibrant startup ecosystem, robust infrastructure, and strategic policy reforms, Maharashtra is setting benchmarks for inclusive and sustainable development. - [Treelife advised Piper Serica in its $1.3M Pre-Series Investment Round in Astrogate Labs, a space-tech company](https://economictimes.indiatimes.com/tech/funding/space-tech-firm-astrogate-labs-raises-1-3-million-in-pre-series-round-led-by-piper-serica/articleshow/118601900.cms?from=mdr#new_tab) - [GIFT SEZ Compliances - A Complete List](https://treelife.in/compliance/gift-sez-compliances/): Establishing and operating a unit within the Gujarat International Finance Tec-City (GIFT) International Financial Services Centre (IFSC) offers numerous advantages,... - [Bitcoin ETFs: A Tax-Efficient Gateway for Indian Investors](https://treelife.in/finance/bitcoin-etfs-a-tax-efficient-gateway-for-indian-investors/): Bitcoin continues to dominate financial discussions as a high-growth asset, attracting significant interest from investors worldwide. 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With 660 million attendees from 76 countries, this grand gathering generated ₹3 lakh crore (approximately $36 billion) in transactions, highlighting the intersection of faith and finance. - [What’s in a Name? - A Short Guide on Selecting the Right Name for Your Company](https://treelife.in/quick-takes/whats-in-a-name/): Reserving a name is the first step in the Incorporation process of a Company, allowing entrepreneurs to search for and... - [2025: A year to watch for International Tax Developments](https://treelife.in/news/2025-a-year-to-watch-for-international-tax-developments/): The international tax landscape is off to a dynamic start in 2025. 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Let us dive deep into Difference between OPC (One Person Company) and Sole Proprietorship in India. - [Insights from the Gujarat GCC Policy 2025-30 Launch](https://treelife.in/news/insights-from-the-gujarat-gcc-policy-2025-30/): We had the privilege of attending the launch of the Gujarat Global Capability Centre (GCC) Policy 2025-30, unveiled by Hon’ble... - [Exciting Developments in relation to Foreign Investment Policy in India!](https://treelife.in/news/exciting-developments-in-relation-to-foreign-investment-policy-in-india/): The Reserve Bank of India (RBI) has introduced further liberalizations in Foreign Direct Investment (FDI) rules through its latest Master... - [Rupeeflo Raises $1M from Piper Serica to Improve Financial Access for NRIs](https://viestories.com/funding-alert/rupeeflo-raises-1m-from-piper-serica-to-improve-financial-access-for-nris-8705948#new_tab) - [Sammmm raises INR 10 crore in seed funding led by Fireside Ventures.](https://www.linkedin.com/posts/entrepreneur-media-india_update-teenselfcare-beautyforteens-activity-7291036777618776065-GnNF?utm_medium=ios_app&utm_source=social_share_sheet&utm_campaign=copy_link#new_tab) - [thePack.in Raises USD 125K in Angel Round to Support First-Time Pet Parents](https://www-business--standard-com.cdn.ampproject.org/c/s/www.business-standard.com/amp/content/press-releases-ani/thepack-in-raises-usd-125k-in-angel-round-to-support-first-time-pet-parents-125010800707_1.html#new_tab) - [FinTech–focused VC Fund Cedar-IBSi Capital Announces Second Investment In WonderLend Hubs](https://ibsintelligence.com/ibsi-news/fintech-focused-vc-fund-cedar-ibsi-capital-announces-second-investment-in-wonderlend-hubs/#new_tab) - [Top Government Schemes for Startups in India](https://treelife.in/startups/government-schemes-for-startups-in-india/): DOWNLOAD PDF India is becoming one of the world’s fastest-growing startup ecosystems, with over 1,40,000 registered startups contributing to innovation,... - [Upcoming Compliances for Private Limited Companies in the FY2025-26](https://treelife.in/calendar/upcoming-compliances-for-private-limited-companies-in-the-fy2025-26/): As the financial year progresses, it is crucial for businesses and directors to stay informed about upcoming compliance deadlines to... - [A Snapshot of the Concert Economy: Insights from Coldplay](https://treelife.in/reports/a-snapshot-of-the-concert-economy-insights-from-coldplay/): As Coldplay’s 2025 India tour took the country by storm, we at Treelife took a closer look at the numbers, stakeholders, and economic impact behind this massive event. - [Compliance Calendar 2025 - A Complete Checklist](https://treelife.in/calendar/compliance-calendar-2025/): Think of a compliance calendar as your personalized roadmap to regulatory bliss. It outlines key deadlines for filings, reports, and other obligations mandated by various governing bodies. From taxes and accounting to industry-specific regulations, a comprehensive compliance calendar ensures you meet all your requirements on time, every time. - [Union Budget 2025 - Startups, Investors & GIFT IFSC](https://treelife.in/reports/union-budget-2025/): The Union Budget 2025 presents a reform-driven and growth-focused vision for India's economic trajectory, aligning with the government’s long-term goal of Viksit Bharat 2047. With a strong emphasis on fiscal prudence, policy continuity, and structural transformation, the budget outlines measures to accelerate infrastructure growth, economic stability, and private sector participation. - [Stock Appreciation Rights in India - Meaning & Working](https://treelife.in/legal/stock-appreciation-rights-in-india/): Stock Appreciation Rights (“SARs”) offer a compelling form of employee compensation, allowing beneficiaries to enjoy an increase in the company’s... - [Resident Individuals to open Foreign Currency bank Accounts (FCA) with IBUs in IFSCs](https://treelife.in/news/resident-individuals-to-open-foreign-currency-bank-accounts-fca-with-ibus-in-ifscs/): IFSCA vide circular dated 11 July 2024, allowed Resident Individuals to open Foreign Currency bank Accounts (FCA) with IBUs in... - [Understanding the Draft Digital Personal Data Protection Rules, 2025](https://treelife.in/legal/understanding-the-draft-digital-personal-data-protection-rules-2025/): On January 3, 2025, the Union Government released the draft Digital Personal Data Protection Rules, 2025 1 (“Draft Rules”). Formulated... - [MCA Compliances for Foreign Entities Starting Business in India](https://treelife.in/compliance/mca-compliances-for-foreign-entities-starting-business-in-india/): Introduction India has emerged as a global hub for business and investment, attracting foreign entities eager to tap into its... - [Non Disclosure Agreements in India - NDA Template, Types & Breach](https://treelife.in/legal/non-disclosure-agreements-in-india/): Introduction Security of sensitive business information, protection of intellectual property and trade secrets and trust in collaborations are critical aspects... - [SaaS Blueprint - Unlocking India's Potential with Industry Insights](https://treelife.in/reports/saas-blueprint-report/): The Software as a Service (SaaS) industry is transforming how businesses operate, enabling organizations to scale rapidly, reduce costs, and enhance accessibility. India’s SaaS story is particularly compelling: once a nascent segment, the Indian SaaS market is now projected to reach $50 billion by 2030, - [Mergers & Acquisitions in India - Meaning, Difference, Types, M&A Examples](https://treelife.in/legal/mergers-and-acquisitions-in-india/): Introduction Mergers and Acquisitions (M&A) have emerged as transformative business strategies in the Indian economic landscape, reshaping industries and fostering... - [Compliances for LLP in India - List, Benefits, Penalties](https://treelife.in/compliance/compliances-for-limited-liability-partnership-llp/): Introduction In today’s fast-paced business environment, choosing the right legal structure is pivotal for business owners in India. One such... - [Trademark Registration in India - Meaning, Online Process, Documents](https://treelife.in/legal/trademark-registration-in-india/): Protection of the trademark through trademark registration in India is a crucial step for businesses aiming to protect their brand identity and establish legal ownership, - [Trademark Classification in India - Goods & Service Class Codes](https://treelife.in/legal/trademark-classification-in-india/): Registering your trademark as per trademark classification not only safeguards your brand identity but also prevents third parties from using it without authorization. It is a straightforward process in India, allowing businesses to protect their intellectual property and ensure their products or services stand out in the market. - [What's your Market Size? Understanding TAM, SAM, SOM](https://treelife.in/startups/whats-your-market-size-understanding-tam-sam-som/): Simply put, market size refers to the total number of potential customers/buyers for a product or service and the revenue they may generate. The broad concept of “market sizing” is broken down further into the following sets - [Cross Border Payments in India - Wholesale, Retail & RBI Guidelines](https://treelife.in/finance/cross-border-payments-in-india/): Financial transactions involving two parties with distinct national bases—the payer and the recipient—are referred to as cross border payments. - [The Importance of Trademark Registration in India](https://treelife.in/legal/importance-of-trademark-registration-in-india/): In today’s competitive business landscape, protecting intellectual property is crucial for building a strong brand and maintaining a competitive edge.... - [Cash Flow Statement - Meaning, Structure, How to Make](https://treelife.in/finance/cash-flow-statement/): Introduction to Cash Flow Statement What is a Cash Flow Statement? A cash flow statement (CFS) is a critical financial... - [Buyback of Shares in India - Meaning, Reason, Types, Taxability](https://treelife.in/legal/buyback-of-shares-in-india/): Introduction In the dynamic world of corporate finance, the buyback of shares has emerged as a significant tool for companies... - [Environmental, Social, and Governance (ESG) in India - Handbook](https://treelife.in/reports/environmental-social-and-governance-esg-in-india-handbook/): Environmental, Social, and Governance (ESG) principles have evolved from being a global framework for responsible business practices into a cornerstone of sustainable and ethical growth. - [Forensic Accounting in India - Meaning, Usage & Features](https://treelife.in/finance/forensic-accounting-in-india/): Introduction to Forensic Accounting What is Forensic Accounting? Forensic Accounting is a specialized field of accounting that combines investigative techniques... - [Private Limited vs. LLP vs. OPC - Which to Setup](https://treelife.in/compliance/private-limited-vs-llp-vs-opc/): Introduction Starting a business is an exciting journey, but one of the first critical decisions every entrepreneur faces is choosing... - [GST Compliance Calendar for 2025 (Checklist)](https://treelife.in/calendar/gst-compliance-calendar/): GST, or Goods and Services Tax, has significantly transformed the Indian tax landscape. However, staying compliant with its intricate rules... - [Cash Flow Optimization - Meaning, Techniques, Forecasting](https://treelife.in/finance/cash-flow-optimization/): Introduction What is Cash Flow Optimization? Cash flow optimization refers to the process of efficiently managing the movement of cash... - [Difference between Capital Expenditure and Revenue Expenditure](https://treelife.in/finance/difference-between-capital-expenditure-and-revenue-expenditure/): Introduction: Capital Expenditure vs Revenue Expenditure Understanding the difference between Capital Expenditure (CapEx) and Revenue Expenditure also known as operational... - [MIS Reports - Meaning, Types, Features, Examples](https://treelife.in/finance/mis-report/): Understanding MIS Reports In today’s fast-paced business world, data is king. But raw data alone isn’t enough — organizations need... - [Cap Table for Startups - Overview, Types, How to Create](https://treelife.in/finance/cap-table-for-startups/): What is a Cap Table? A capitalization table, or “cap table,” is more than just a spreadsheet; it’s a strategic... - [What is GST Compliance : Meaning, Benefits & Rating](https://treelife.in/compliance/what-is-gst-compliance/): What is GST Compliance? GST Compliance refers to the adherence to the rules and regulations set under the Goods and... - [Why Convertible Debentures are Investor Friendly - Types & Taxability](https://treelife.in/finance/why-convertible-debentures-are-investor-friendly/): Introduction A convertible debenture is a debt instrument issued by a company that can be converted into equity shares of... - [DesignX raises pre-series A funding from Piper Serica Angel Fund](https://economictimes.indiatimes.com/tech/funding/designx-raises-pre-series-a-funding-from-piper-serica-angel-fund/articleshow/115209145.cms?from=mdr#new_tab) - [Quick Commerce in India: Disruption, Challenges, and Regulatory Crossroad](https://treelife.in/startups/quick-commerce-in-india-disruption-challenges-and-regulatory-crossroad/): India’s fast changing consumer landscape is best represented by the disruption caused by the quick commerce (“QCom”) sector. QCom has... - [FDI in ecommerce under ED Scrutiny ](https://treelife.in/news/fdi-in-ecommerce-under-ed-scrutiny/): The Enforcement Directorate (ED) has uncovered direct links between Amazon, Flipkart, and their preferred sellers, alleging violations of FDI rules.... - [“JioHotstar” - An enterprising case of Cybersquatting](https://treelife.in/legal/jiohotstar-an-enterprising-case-of-cybersquatting/): Introduction One of the most discussed media and entertainment industry developments since early 2023 is the merger of the media... - [India's Fintech Landscape - A Digital Revolution in Motion ](https://treelife.in/reports/india-fintech-landscape-a-digital-revolution-in-motion/): India’s Fintech Report 2024-25 by Treelife provides a data-driven analysis of the fintech industry in India, highlighting key trends, growth drivers, and future opportunities. - [Blinkit 2.0: Can Zomato’s Juggernaut Fight Off Quick Commerce Rivals?](https://inc42.com/features/blinkit-zomato-quick-commerce-competition/#new_tab) - [Treelife featured and authored a chapter in a report, "Funds in GIFT City- Scaling New Heights" by Eleveight](https://www.linkedin.com/posts/treelife-consulting_angelfunds-giftifsc-giftcity-activity-7254680437183160322-n6KN?utm_source=share&utm_medium=member_desktop#new_tab) - [10 Fascinating Facts from the 2024 US Elections](https://treelife.in/reports/10-fascinating-facts-from-the-2024-us-elections/): DOWNLOAD REPORT The 2024 U. S. presidential election was a highly anticipated and fiercely contested affair, with the outcome having... - [Enforceability of Non-compete Clauses in India](https://treelife.in/legal/enforceability-of-non-compete-clauses-in-india/): Introduction In June 2007, tech giant Infosys Ltd. introduced non-compete agreements for its employees1. The clause, which was subsequently made... - [Shutting Down a Startup - A Step by Step Guide](https://treelife.in/compliance/shutting-down-a-startup/): When and Why to Shut Down a Startup? While the startup journey can be exhilarating, as with any business venture,... - [Spacetech in India: A Legal and Regulatory Overview](https://treelife.in/technology/spacetech-in-india/): What is Spacetech and What does it comprise? Space technology, often shortened to spacetech, refers to the application of engineering... - [SME IPO Listing in India - Platforms, Eligibility, Process](https://treelife.in/finance/sme-ipo-listing/): In recent years, the SME IPO listing in India has emerged as a vital avenue for small and medium enterprises... - [Types of Agreements used in SaaS Industry](https://treelife.in/legal/types-of-agreements-used-in-saas-industry/): In the ever-evolving landscape of the SaaS industry, understanding the various types of agreements is crucial for businesses to operate... - [Board Observers: Navigating the Influence Without the Vote](https://treelife.in/legal/board-observers-navigating-the-influence-without-the-vote/): In the complex world of corporate governance, the role of board observers has emerged as a key component, especially in... - [Navigating the CERT-IN Directions: Implications and Challenges for Indian Businesses](https://treelife.in/compliance/navigating-the-cert-in-directions-implications-and-challenges-for-indian-businesses/): Introduction Reason for these Cyber Security Directions In an increasingly digital world, the threats posed by cyberattacks have become a... - [Difference between Internal Audit And Statutory Audit ](https://treelife.in/finance/difference-between-internal-audit-and-statutory-audit/): In the accounting realm, there are two primary types of audits: internal audits and statutory audits. Both audits are essential... - [Navigating GIFT City: A Comprehensive Guide to India’s First International Financial Services Centre (IFSC)](https://treelife.in/reports/navigating-gift-city-a-comprehensive-guide/): DOWNLOAD FULL PDF As India marches towards its goal of becoming a $5 trillion economy, innovation and global connectivity in... - [Deftouch Bags Funding From KRAFTON, Others To Build Mobile Games](https://inc42.com/buzz/exclusive-deftouch-bags-funding-from-krafton-others-to-build-mobile-games/#new_tab) - [Ai Health Highway secures $1M in a Pre-Series](https://entrackr.com/2024/10/ai-health-highway-bags-1-mn-led-by-turbostart/#new_tab) - [Equity Dilution in India - Definition, Working, Causes, Effects](https://treelife.in/legal/equity-dilution-in-india/): Equity dilution is a critical concept in the realm of finance, particularly in the context of corporate structures and investments.... - [Dispute Resolution in the Articles of Association (AOA)](https://treelife.in/legal/dispute-resolution-in-the-articles-of-association/): Introduction As part and parcel of a transaction, companies seeking investment provide their investors with certain rights, which are contractually... - [Vesting in India: Definition, Types, Periods, Options & Schedules](https://treelife.in/legal/vesting-in-india/): What is Vesting? “Vesting” is a contractual structure to facilitate gradual transfer of ownership. 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The case centered around the sale of Tiger Global's shares in Flipkart Singapore to Walmart and the applicability of tax benefits under the India-Mauritius Double Taxation Avoidance Agreement (DTAA). - [Termination Clauses in a Contract - Definition, Types, Implications](https://treelife.in/legal/termination-clauses-in-a-contract/): The cornerstone of any commercial agreement is a contract that has been validly executed in writing. They are critical to... - [NIFTY 50: The Asset Class Killer - A 28-Year Journey of Growth](https://treelife.in/reports/nifty-50-the-asset-class-killer-a-28-year-journey-of-growth/): As we are witnessing NIFTY 50’s 52-week high, it's a moment to reflect on the extraordinary journey this index has taken since its inception in 1996. Launched with an index value of 1000, NIFTY 50 has steadily grown, reaching an impressive 25,940.40 by September 2024—marking a growth of approximately 2,494%. This performance solidifies its place as a cornerstone of the Indian stock market. - [Sovereign Green Bonds in the IFSC](https://treelife.in/news/sovereign-green-bonds-in-the-ifsc/): In recent years, the global investment landscape has shifted dramatically, with sustainability becoming a central theme in financial markets. As... - [SEBI Regulations for Angel Fund Investments in India](https://treelife.in/startups/sebi-regulations-for-angel-fund-investments-in-india/): The Indian startup ecosystem is a vibrant space brimming with innovation and potential. 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Since its introduction into the “matrimonials market”, the brand has become a prominent online matchmaking platform with international repute and presence. - [Introducing BHASKAR: Transforming India's Startup Ecosystem](https://treelife.in/news/introducing-bhaskar-transforming-indias-startup-ecosystem/): The Department for Promotion of Industry and Internal Trade (DPIIT), Ministry of Commerce and Industry, is all set to unveil... - [Clean-tech startup ReCircle raises bridge round led by Venture Catalysts and Mumbai Angels](https://economictimes.indiatimes.com/small-biz/sme-sector/clean-tech-startup-recircle-raises-bridge-round-led-by-venture-catalysts-and-mumbai-angels/articleshow/113114426.cms?from=mdr#new_tab) - [Challenges in Overseas Direct Investment (ODI)](https://treelife.in/finance/challenges-in-overseas-direct-investment-odi/): While ODI offers opportunities for persons resident in India to expand their market reach in bona fide businesses, access new... - [Incorporation of a Wholly Owned Subsidiary (WOS) under Companies Act, 2013](https://treelife.in/compliance/incorporation-of-a-wholly-owned-subsidiary-wos-under-companies-act-2013/): DOWNLOAD PDF A Wholly Owned Subsidiary (WOS) is a company whose entire share capital is held by another company, known... - [Key Regulations to help Companies manage Loan requirements](https://treelife.in/compliance/key-regulations-to-help-companies-manage-loan-requirements/): Loan from Directors or Relatives and Compliances involved In urgent situations, companies often seek to quickly augment their working capital... - [Update in Master Directions on Foreign Investment in India](https://treelife.in/compliance/update-in-master-directions-on-foreign-investment-in-india/): The Reserve Bank of India has updated its Master Directions on Foreign Investment in India (FED Master Direction No.11/2017-18) as of August 08, 2024, introducing key definitions and clarifying various provisions. - [IFSCA Informal Guidance Framework](https://treelife.in/news/ifsca-informal-guidance-framework/): The IFSCA issued a consultation paper yesterday proposing an “informal guidance” framework, summarized below: Who can request: Types of guidance:... - [FDI & ODI Swap following Budget 2024](https://treelife.in/finance/fdi-odi-swap-following-budget-2024/): Following the recent budget announcement, which aimed to simplify regulations for Foreign Direct Investment (FDI) and Overseas Investment (ODI), the... - [Refund of Application Monies: A Critical Aspect of Corporate Governance](https://treelife.in/legal/refund-of-application-monies-a-critical-aspect-of-corporate-governance/): The Companies Act, 2013 (the “Act”), has introduced significant changes to the rules governing application monies received by companies through private placement and preferential allotment of shares, aiming at enhanced transparency, protection of investor interests, and ensuring timely utilization of funds. - [Accel invests $9 million in luggage brand Uppercase; 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This impressive surge underscores the expanding scale and acceptance of GIFT-IFSC as a premier fund management hub. - [Understanding Meetings as per the Companies Act, 2013](https://treelife.in/compliance/understanding-meetings-as-per-the-companies-act-2013/): Our latest document provides comprehensive insights into the various types of meetings mandated by the Act, including the crucial first board meeting for private companies. - [Circular Resolution - Understanding Meaning, Process Structure](https://treelife.in/compliance/circular-resolution-understanding-meaning-process-structure/): DOWNLOAD FULL PDF Circular resolutions, as per Section 175 of the Companies Act, 2013, allow the Board of Directors to... - [Informatory Note on Appointment of Company secretary](https://treelife.in/compliance/informatory-note-on-appointment-of-company-secretary/): Who is a Company Secretary? Appointment criteria as per the Companies Act, 2013. Penalties for non-compliance. - [Mapping India’s space-tech industry and regulatory landscape: A launchpad for innovation & growth](https://www.expresscomputer.in/guest-blogs/mapping-indias-space-tech-industry-and-regulatory-landscape-a-launchpad-for-innovation-growth/114972/#new_tab) - [Essential Terms You Need to Know : Startup Ecosystem Edition](https://treelife.in/startups/essential-terms-you-need-to-know-startup-ecosystem-edition/): DOWNLOAD FULL PDF Navigating the startup ecosystem can be a daunting task, especially for new entrepreneurs trying to turn innovative... - [Convening and Holding a General Meeting at a Short Notice](https://treelife.in/compliance/convening-and-holding-a-general-meeting-at-a-short-notice/): Looking at the title above, the meaning of same may not be clear because it includes two technical terms: So,... - [Rights Issue by Way of Renunciation](https://treelife.in/compliance/rights-issue-by-way-of-renunciation/): Rights issue is a process of offering additional shares to the existing equity shareholders (“Shareholders”) of the Company at a... - [Investment Activities By The Limited Liability Partnership](https://treelife.in/compliance/investment-activities-by-the-limited-liability-partnership/): The Limited Liability Partnership Act, 2008 (LLP Act) has truly transformed how businesses operate in India, offering the best of... - [Demystifying the 'Transaction Flow' of VC Deals](https://treelife.in/legal/demystifying-the-transaction-flow-of-vc-deals/): The ‘transaction flow’ refers to the various stages involved in a Company obtaining funding from an Investor. Given that this... - [Treelife Unveils Comprehensive Guide To Labour Laws For Startups](https://bwpeople.in/article/treelife-unveils-comprehensive-guide-to-labour-laws-for-startups-528639#new_tab) - [We streamlined financial operations for an insurance-tech company in record time](https://treelife.in/case-studies/we-streamlined-financial-operations-for-an-insurance-tech-company-in-record-time/): In just a few weeks, Treelife transformed the financial infrastructure of an innovative SaaS company. We set up efficient accounting... - [We facilitated a seamless global expansion for an Indian company](https://treelife.in/case-studies/we-facilitated-a-seamless-global-expansion-for-an-indian-company/): Treelife played a pivotal role in helping an Indian private limited company transition to a US-headquartered structure. By setting up... - [Streamlining Financial Compliance for a Health-Tech Innovator](https://treelife.in/case-studies/streamlining-financial-compliance-for-a-health-tech-innovator/): Business Overview A health-tech company operating a digital clinic under the brand name ‘Proactive For Her’, providing a digital platform... - [Union Budget 2024 : Gearing Up for Viksit Bharat 2047](https://treelife.in/reports/union-budget-2024-gearing-up-for-viksit-bharat-2047/): DOWNLOAD FULL PDF The Union Budget 2024 marks a significant milestone in India’s economic journey. 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In this article we provide a detailed insight on Tax and Returns for a Restaurant in India. - [FinTech vs TechFin - Understanding the Difference in India](https://treelife.in/fintech/fintech-vs-techfin-understanding-the-difference/): The financial industry is expected to see a major impact from emerging fields like Fintech and TechFin. Thus we decide to dive deep in understanding fintech vs techfin. - [Deciphering the Supereme Court’s verdict on Most Favoured Nation (MFN) clause](https://treelife.in/news/deciphering-the-supereme-courts-verdict-on-most-favoured-nation-mfn-clause/): Based on an article published in Economic Times (ET Article Link – https://lnkd. in/dVUdVza8), MNCs might be facing a retro... - [The Nuances of Setting Up an E-commerce Business in India: What One Needs to Know.](https://cxotoday.com/story/the-nuances-of-setting-up-an-e-commerce-business-in-india-what-one-needs-to-know/#new_tab) - [Top 14 Due Diligence mistakes made by Startups in India (Updated List)](https://treelife.in/compliance/common-due-diligence-mistakes-made-by-startups-in-india/): Here are a few common due diligence mistakes we have observed after working with startups for multiple business types - [Exit Rights - A Founder's Perspective (Exit of Investors)](https://treelife.in/legal/exit-rights-a-founders-perspective-detailed/): Introduction Exit provisions determine how, when and at what price investors can sell their stake in a company and procure... - [Women Led Startups’ Contribution To Total Startup Funding Plummets To 5% In 2023](https://inc42.com/buzz/women-tech-startup-funding-tanks-80-in-2023-but-is-all-hope-lost/#new_tab) - [Women Led Startups Contribution To Total Startup Funding Plummets To 5% In 2023](https://startupnews.fyi/2024/02/11/women-led-startups-contribution-to-total-startup-funding-plummets-to-5-in-2023/#new_tab) - [Financial Model for Startups - The Ultimate Guide in 2025](https://treelife.in/finance/financial-model-for-startups/): A financial model is simply a tool to forecast a business financial performance into the future. Explore all about Financial Modeling for Startup in India - [Interim Budget 2024 Highlights](https://treelife.in/news/interim-budget-2024-highlights/): DOWNLOAD FULL PDF Report Highlights Here are some highlights of the Indian Interim Budget 2024: - [Ola on a full charge for its IPO ride](https://www.outlookbusiness.com/markets-5/feature-20/ola-on-full-charge-for-its-ipo-ride-6966#new_tab) - [Will Union Budget 2024 Boost The Startup Ecosystem’s Progress](https://inc42.com/resources/will-union-budget-2024-boost-the-startup-ecosystems-progress/#new_tab) - [Tax Efficiency Strategies For Businesses: How To Save Tax And Maximise Earnings?.](https://www.goodreturns.in/personal-finance/taxes/tax-efficiency-strategies-for-businesses-how-to-save-tax-and-maximise-earnings-1325901.html#new_tab) - [Pre-Budget Expectations Quote 2024](https://cxotoday.com/cxo-bytes/anticipating-the-budget-industrys-roadmap-for-growth/#:~:text=Garima%20Mitra%2C%20Co%2DFounder%2C%20Treelife#new_tab) - [Alt Mobility raises Rs 50 crore in funding led by Shell Ventures, Eurazeo, EV2 Ventures and Twynam](https://www.financialexpress.com/business/express-mobility-alt-mobility-raises-rs-50-crore-in-funding-led-by-shell-ventures-eurazeo-ev2-ventures-and-twynam-3367760/) - [15 Entrepreneurs share insights and advice for building businesses on National Startup Day 2024](https://mediabrief.com/exclusive-national-startup-day-2024/#:~:text=In%202024%2C%20for%20Indian%20startups,instrumental%20in%20driving%20rapid%20expansion#new_tab) - [EV logistics tech startup Evify raises-1.3 million in pre-series A round led by GVFL, Piper Serica & Angel fund](https://cxotoday.com/press-release/ev-logistics-tech-startup-evify-raises-1-3-million-in-pre-series-a-round-led-by-gvfl-piper-serica-angel-fund/) - [2023: A CHALLENGING YEAR FOR INDIAN START-UPS](https://startup.outlookindia.com/analysis/2023-a-challenging-year-for-indian-start-ups-news-10181#new_tab) - [Fashion accessories brand Miraggio raises Rs 10 cr in pre-series A](https://retail.economictimes.indiatimes.com/news/apparel-fashion/accessories/fashion-accessories-brand-miraggio-raises-rs-10-cr-in-pre-series-a/105557970#new_tab) - [Razorpay, Groww & more: Why startups want to shift base to India?](https://www.firstpost.com/explainers/razorpay-groww-reverse-flipping-why-startups-want-to-shift-base-to-india-13568132.html#new_tab) - [Is It Time To Put Your Startup On The Global Stage?](https://inc42.com/resources/is-it-time-to-put-your-startup-on-the-global-stage/#new_tab) - [Navigating The Tax Implications of Out-of-Court Settlements](https://www.goodreturns.in/personal-finance/taxes/navigating-the-tax-implications-of-out-of-court-settlements-1319109.html#new_tab) - [Investor Funds Temporarily Locked as Four IPOs Conclude in India](https://bnnbreaking.com/finance-nav/investor-funds-temporarily-locked-as-four-ipos-conclude-in-india/) - [Tata Tech closes 165% higher on market debut: A look at 5 stocks that beat the Tata Group stock at listing gains](https://www.livemint.com/market/ipo/tata-tech-closes-165-higher-on-market-debut-a-look-at-5-stocks-that-beat-the-tata-group-stock-at-listing-gains-11701335702809.html#new_tab) - [Demystifying POSH: A World of Taboos and Uncertainty](https://treelife.in/legal/demystifying-posh-a-world-of-taboos-and-uncertainty/): In the corporate environment today, you may often come across the term “POSH”. Whether the company you’re working at is... - [The Rise & Fall Of Indian IPO's](https://treelife.in/finance/the-rise-fall-of-indian-ipo/): Critical Factors in Initial Public Offering (IPO) Outcomes: Lessons from Past IPOs Navigating the complexities of an IPO is a... - [EdTech Company – Incorporation to Acquisition Stage](https://treelife.in/case-studies/edtech-company-incorporation-to-acquisition-stage/): We worked with the company right from incorporation through till the acquisition in various engagements of legal, finance, compliance and advisory. We closely reviewed the founders exit, the acquisition and liaised for regulatory of their international expansion. - [Do you think it's time to take your startup global?](https://treelife.in/legal/do-you-think-its-time-to-take-your-startup-global/): Expanding your startup into foreign markets presents a global business expansion opportunity that can be daunting yet rewarding. It’s important... - [Tyke's CSOPs: Bridging Startups with Investors or Crossing Regulatory Boundaries?](https://treelife.in/finance/tykes-csops-bridging-startups-with-investors-or-crossing-regulatory-boundaries/): What is Tyke? Founded in 2021, Tyke claims to be a private investment gateway that enables private capital transactions in... - [How Predictive AI can change the legal game of businesses](https://www.financialexpress.com/business/blockchain-how-predictive-ai-can-change-the-legal-game-of-businesses-3217839/#new_tab) - [Government Policies Lead Indian Startups to Thrive](https://startuptalky.com/govt-policies-lead-indian-startups-to-thrive/#new_tab) - [G20 summit offers unprecedented boost to India's startup ecosystem](https://startupreporter.in/g20-summit-offers-unprecedented-boost-to-indias-startup-ecosystem/#new_tab) - [Embracing Diversity And Inclusion In The Workplace: A Shift From Regulation To Empowerment](https://inc42.com/resources/embracing-diversity-and-inclusion-in-the-workplace-a-shift-from-regulation-to-empowerment/#new_tab) - [Is Homomorphic Encryption the answer to blockchain’s privacy and security woes](https://www.financialexpress.com/business/digital-transformation-is-homomorphic-encryption-the-answer-to-blockchains-privacy-and-security-woes-3247597/#new_tab) - [Is Revenue Based Financing Right For Your Startup](https://startup.outlookindia.com/analysis/is-revenue-based-financing-the-right-option-for-your-start-up-news-9422#new_tab) - [Treelife Expands to GIFT City](https://www.pninews.com/treelife-expands-to-gift-city/#new_tab) - [Revised Valuation Rules for Angel Tax](https://treelife.in/finance/revised-valuation-rules-for-angel-tax/): The Central Board of Direct Taxes (CBDT) notified amendments to Rule 11UA of the Income-tax Rules, 1962 applicable for computing... - [Casual gaming studio QuriousBit bags $2 million funding from Lumikai, General Catalyst](https://www.moneycontrol.com/news/business/startup/casual-gaming-studio-quriousbit-bags-2-million-funding-from-lumikai-general-catalyst-11437971.html) - [Settlements Beyond Courtroom Walls: Tax Impact](https://treelife.in/finance/settlements-beyond-courtroom-walls-tax-impact/): The following article offers an understanding of the funds received and disbursed by involved parties in a settlement outside the... - [How To Create ESOP Pool](https://treelife.in/taxation/how-to-create-esop-pool/): Often founders are confused about creating an ESOP pool on the cap table when investors require them to create one... - [Cirkla Raises $3 Million In A Pre-Seed Funding](https://economictimes.indiatimes.com/tech/funding/eco-friendly-packaging-firm-cirkla-raises-3-million-in-funding-from-matrix-partners-stellaris-venture/articleshow/103380688.cms#new_tab) - [Gaming Law Judgement Summaries](https://treelife.in/legal/gaming-law-judgement-summaries/): 1. Play Games24x7 Private Limited v. Reserve Bank of India & Anr. Factual Matrix Contentions and the question in point... - [Reverse Flipping for Startups: A New Shift Towards India](https://treelife.in/news/reverse-flipping-for-startups-a-new-shift-towards-india/): First Published on 12th September, 2023 In today’s globalized era, the world feels more interconnected than ever. Many companies are... - [Liquidation Preference in Venture Capital Deals](https://treelife.in/legal/liquidation-preference-in-venture-capital-deals/): What is Liquidation Preference? A Liquidation Preference provision sets out the level of priority that an investors’ shares receive for... - [Treelife Consulting strengthens business operations pan India and expands geographical footprint to Delhi and Bengaluru](https://theprint.in/ani-press-releases/treelife-consulting-strengthens-business-operations-pan-india-and-expands-geographical-footprint-to-delhi-and-bengaluru/1036887/#new_tab) - [Treelife Consulting - One Stop Solution for All Your Finance Needs](https://bwdisrupt.businessworld.in/article/Treelife-Consulting-One-Stop-Solution-for-All-Your-FinanceNeeds/14-04-2017-116330/#new_tab) - [Opinion | Validity of WhatsApp Documents as Court Service: A Changing Landscape](https://www.news18.com/opinion/opinion-validity-of-whatsapp-documents-as-court-service-a-changing-landscape-8533728.html#new_tab) - [Data protection bill will compel companies to review their current working ways, make investments in new processes: Experts](https://economictimes.indiatimes.com/tech/technology/data-protection-bill-will-compel-companies-to-review-their-current-working-ways-make-investments-in-new-processes-experts/articleshow/102398957.cms#new_tab) - [Selligion Technologies Raises INR 5 Crore In Pre-Series A Funding](https://www.entrepreneur.com/en-in/news-and-trends/selligion-technologies-raises-inr-5-crore-in-pre-series-a/456569#new_tab) - [WITH THEIR FINANCIAL AND LEGAL AID, TREELIFE CONSULTING SOLVES A BIG PROBLEM FOR STARTUPS](https://yourstory.com/2017/09/treelife-consulting-startups-financial-legal-aid#new_tab) - [Compliance with the Indian Digital Personal Data Protection Act, 2023](https://treelife.in/compliance/compliance-with-the-indian-digital-personal-data-protection-act-2023/): For: B2B SaaS businesses The Digital Personal Data Protection Act, 2023 (“Act”) is intended to safeguard and protect digital personal... - [PhonePe Reverse Flip to India: Unraveling the Strategic Shift and its Impact](https://treelife.in/news/phonepe-reverse-flip-to-india-unraveling-the-strategic-shift-and-its-impact/): First Published on 21st August, 2023 The Reverse Flip What is Reverse Flip? “Reverse flip” or “re-domiciliation” refers to a... - [THE DRAFT NATIONAL DEEP TECH STARTUP POLICY](https://treelife.in/legal/the-draft-national-deep-tech-startup-policy/): The Office of Principal Scientific Advisor to the Government of India published the Draft National Deep Tech Startup Policy (NDTSP)... - [5 Common Legal Blunders Startup Founders Make And How They Can Be Avoided](https://lawbeat.in/articles/5-common-legal-blunders-startup-founders-make-and-how-they-can-be-avoided#new_tab) - [Validity of WhatsApp Documents as Court Service: A Changing Landscape](https://treelife.in/legal/validity-of-whatsapp-documents-as-court-service-a-changing-landscape/): WhatsApp has become a ubiquitous messaging platform, with millions of users worldwide relying on it for personal and professional communication. - [Social networking app for gamers Qlan secures ₹1.7 crore in pre-seed round](https://www-livemint-com.cdn.ampproject.org/c/s/www.livemint.com/companies/start-ups/avocore-technologies-raises-200k-in-pre-seed-funding-for-qlan-a-social-networking-app-for-gamers-in-new-delhi/amp-11687945098489.html#new_tab) - [Merge Ahead: Fast-Track Your Way to Competitive Advantage!](https://treelife.in/legal/merge-ahead-fast-track-your-way-to-competitive-advantage/): Meaning A fast-track merger is a streamlined process for combining two or more companies. It is typically designed to expedite... - [Incorporation of an Indian company](https://treelife.in/legal/incorporation-of-an-indian-company/): Pre-requisites for incorporation Proposed Name •Name to be available and unique. Should contain the nature of business •Minimum 2 names... - [Case Summary: LGBTQ+ Marriage Rights in India](https://treelife.in/legal/case-summary-lgbtq-marriage-rights-in-india/): Supriyo @ Supriya Chaktraborty & Anr. v. Union of India For a presentation view, click here! Factual Matrix • The nature... - [Diversity & Inclusion Policy in India](https://treelife.in/legal/diversity-inclusion-policy-in-india/): Introduction The Constitution of India explicitly prohibits discrimination based on sex, race, religion, or on any other ground, but it... - [Capital 2B, IIFL fintech fund lead $5 million investment round in Castler](https://economictimes.indiatimes.com/small-biz/sme-sector/capital-2b-iifl-fintech-fund-lead-5-million-investment-round-in-castler/articleshow/100126310.cms#new_tab) - [Inside Indian Premier League](https://treelife.in/reports/inside-indian-premier-league/): IPL Business Model. Disney Star – India TV rights Viacom 18 (Jio) – India Digital rights, non-exclusive rights and overseas digital and TV rights - [What is Blockchain Technology ?](https://treelife.in/technology/what-is-blockchain-technology/): With the increasing awareness and hype surrounding Cryptocurrency, NFTs, and other Digital Currencies, understanding the concept of Blockchain Technology has... - [ECB FOR START-UPS](https://treelife.in/legal/ecb-for-start-ups/): Overview What are ECB? External Commercial Borrowings (“ECB”) are commercial loans raised by eligible resident entities from recognized non- resident... - [The Co-Founders’ Questionnaire](https://treelife.in/legal/the-co-founders-questionnaire/): SAMPLE RESPONSES I. GENERAL Particulars Responses Remarks / Examples Name of the Business – – Registered office address (to be... - [Issues faced while seeking Start-up India registration](https://treelife.in/legal/issues-faced-while-seeking-start-up-india-registration/): The Startup India initiative was announced by Hon’ble Prime Minister of India on 15th August, 2015. The Department for Promotion... - [Importance & Applicability Of Labour Laws for Startups](https://treelife.in/legal/importance-applicability-of-labour-laws-for-startups/): Currently in India there are 29 labour laws which needs to be followed by all the entities. To make it... - [Thrive raised a round of funding by Coca-Cola India](https://m.economictimes.com/tech/startups/coca-cola-acquires-15-stake-in-food-delivery-platform-thrive/amp_articleshow/99564727.cms#new_tab) - [Regulating Online Gaming](https://treelife.in/legal/regulating-online-gaming/): 1. Key Takeaways The Ministry of Electronics and Information Technology (“MeiTY”), vide notification dated April 6, 2023 released the Information Technology (Intermediary Guidelines... - [Budget 2023 – Applicability of Angel Tax for foreign investors from April 1, 2023](https://treelife.in/finance/budget-2023-applicability-of-angel-tax-for-foreign-investors-from-april-1-2023/): If you are a foreign investor investing in Indian companies or a startup raising money from foreign investors post April... - [Startup Valuations](https://treelife.in/finance/startup-valuations/): Startups face the challenge of determining their value since they often lack revenue figures or hard facts. Thus, estimation is... - [Branch Offices in India](https://treelife.in/legal/branch-offices-in-india/): What is a Branch Office (“BO”)? A BO is a suitable business model for foreign companies looking to establish a... - [A Founder's Guide To Understanding Liquidation Preference](https://treelife.in/legal/a-founders-guide-to-understanding-liquidation-preference/): Liquidation is the process of closing a business and distributing its assets among stakeholders, creditors, and rightful claimants. In the... - [Convertible Notes under Companies Act, 2013](https://treelife.in/finance/convertible-notes-under-companies-act-2013/): The regulatory landscape for startups in India is a constantly evolving space due to the dynamic and volatile nature of... - [Investment Thumb Rules for Beginners](https://treelife.in/finance/investment-thumb-rules-for-beginners/): In life people want shortcuts, that’s the reason rules of thumb find someplace in one life. There are rules of... - [Basic understanding of SAAS and SAAS Agreements](https://treelife.in/legal/basic-understanding-of-saas-and-saas-agreements/): SAAS Products: An Introduction Software as a Service or SaaS is a cloud-based software delivery model that licenses applications on... - [The TYKE Case](https://treelife.in/reports/the-tyke-case/): Regulators position – primary breach of S 42 (Issue of Shares on Private Placement basis) of CA, 2013 Extract of... - [Whether to set up a Private Limited Company or LLP?](https://treelife.in/compliance/whether-to-set-up-a-private-limited-company-or-llp/): Incorporating a business involves several important decisions, including the choice of a business vehicle. Two popular vehicles are Limited Liability... - [All you need to know about the E-Commerce Industry in India](https://treelife.in/startups/all-you-need-to-know-about-the-e-commerce-industry-in-india/): E-commerce has revolutionized the way businesses operate, not just in India but around the world. It is a business model... - [Special Purpose Acquisition Companies (SPACs)](https://treelife.in/compliance/special-purpose-acquisition-companies-spacs/): What’s the connection between NBA legend Shaquille O Neal, tennis star Serena Williams, former Facebook executive and Silicon Valley investor... - [New Umbrella Entity (NUE) in India: How It Impacts Digital Payments](https://treelife.in/fintech/unraveling-the-concept-of-nue/): Discover how New Umbrella Entities (NUE) are shaping India's digital payments. Learn the key differences from NPCI, benefits, eligibility, and latest RBI updates. - [Tax Efficiency Strategies for Businesses: How to Save Money on Taxes and Maximize Earnings](https://treelife.in/taxation/tax-efficiency-strategies-for-businesses-how-to-save-money-on-taxes-and-maximize-earnings/): Saving tax money is a crucial aspect of running a profitable business. However, not all entrepreneurs are familiar with the... - [Know Your Taxes (Basics)](https://treelife.in/taxation/know-your-taxes-basics/): TAX A tax is a compulsory fee or financial charge levied by the government on the income, profits, occupation, property,... - [Impact of PMLA Amendments on Virtual Digital Asset Transactions](https://treelife.in/legal/impact-of-pmla-amendments-on-virtual-digital-asset-transactions/): Notification Coverage The Ministry of Finance has notified an amendment in Prevention of Money-Laundering Act, 2002 (“Act”) by way of... - [De-Coding the Co-Founders Agreement](https://treelife.in/legal/de-coding-the-co-founders-agreement/): Starting a business involves risks, and it is important to take precautionary steps to safeguard your investment. One of these... - [Understanding IPR relating to Work Products](https://treelife.in/legal/understanding-ipr-relating-to-work-products/): How to Understand Intellectual Property Rights in Employment? Intellectual Property is any creative work or invention of the mind and... - [Why do angel investors and VC funds ask for preference shares in a funding round?](https://treelife.in/legal/why-do-angel-investors-and-vc-funds-ask-for-preference-shares-in-a-funding-round/): In this blog, we will discuss the reasons why investors ask companies to issue preference shares during their funding rounds.... - [5 Things To Keep In Mind While Filing For Trademark](https://treelife.in/legal/5-things-to-keep-in-mind-while-filing-for-trademark/): As the famous quote by Shakespeare goes, “What’s in a name? ” Well, in today’s world, a lot! With businesses... - [Elementary Concepts of “Equity Dilution”](https://treelife.in/finance/elementary-concepts-of-equity-dilution/): In the start-up ecosystem, equity distribution is a crucial aspect of wealth creation and value generation. With such importance on... - [Term Sheet Basics](https://treelife.in/finance/term-sheet-basics/): A Term Sheet is a non-binding document outlining the basic terms and conditions under which an investment will be made.... - [Understanding Tag and Drag Along Rights in a Shareholder’s Agreement](https://treelife.in/legal/understanding-tag-and-drag-along-rights-in-a-shareholders-agreement/): In the dynamic realm of corporate governance and shareholder relations, navigating the intricacies of shareholder agreements (hereinafter, “SHA”) is paramount... - [Fundamentals of Corporate Finance](https://treelife.in/finance/fundamentals-of-corporate-finance/): Corporate finance is a crucial component of any business’s success, as it encompasses the management of a company’s capital structure... - [5 Important Things to Keep in Mind While Taking Strategic Investment](https://treelife.in/legal/5-important-things-to-keep-in-mind-while-taking-strategic-investment/): Strategic investments are made by parties who are not looking for an immediate financial return but instead want to influence... - [Digital Lending Guidelines Issued By The Reserve Bank of India](https://treelife.in/legal/digital-lending-guidelines-issued-by-the-reserve-bank-of-india/): On September 02, 2022, the Reserve Bank of India (RBI) issued guidelines on digital lending to protect the interests of... - [Thrasio Business Model and the Indian Startup Ecosystem](https://treelife.in/startups/thrasio-business-model-and-the-indian-startup-ecosystem/): Introduction Thrasio, a US-based unicorn, has created a lot of buzz in the startup ecosystem because of its unique operations... - [Union Budget 2023: Overview Startups | Founders | Investors](https://treelife.in/news/union-budget-2023-overview-startups-founders-investors/): First Published on 3rd February 2023 KEY MACRO ECONOMIC INDICATORS BUDGET SNAPSHOT FOR STARTUP STAKEHOLDERS KEY HIGHLIGHTS FOR STARTUP ECOSYSTEM... - [The Union Budget 2023: Macro Economic Highlights](https://treelife.in/news/the-union-budget-2023-macro-economic-highlights/): First Published on 3rd February, 2023 Vision for Budget 2023 Amrit Kaal – an empowered and inclusive economy Our nation... - [Studio Sirah bags $2.6 million funding led by Kalaari Capital, Lumikai](https://www-moneycontrol-com.cdn.ampproject.org/c/s/www.moneycontrol.com/news/business/startup/studio-sirah-bags-2-6-million-funding-led-by-kalaari-capital-lumikai-9935011.html/amp#new_tab) - [Do you need an Agreement with your Shareholders?](https://treelife.in/legal/do-you-need-an-agreement-with-your-shareholders/): Business partnerships can be a great endeavor, but when partnerships go bad, things become messy. In such situations, it may... - [Traveltech Firm OnArrival Taps Antler India](https://www.vccircle.com/traveltechfirm-onarrival-taps-antler-india#new_tab) - [Giga Fun Studios bags $2.4 million seed funding to build Indian culture-based casual games](https://www.moneycontrol.com/news/business/giga-fun-studios-bags-2-4-million-seed-funding-to-build-indian-culture-based-casual-games-9845941.html#new_tab) - [Endorsement Know-hows! For Celebrities, Influencers & Virtual Influencers on Social Media platforms](https://treelife.in/news/endorsement-know-hows-for-celebrities-influencers-virtual-influencers-on-social-media-platforms/): First Published on 23rd January, 2023 The Department of Consumer Affairs, Ministry of Consumer Affairs, Food and Public Distribution (vide... - [How to Know if Revenue-Based Financing is Right for Your Startup](https://treelife.in/finance/how-to-know-if-revenue-based-financing-is-right-for-your-startup/): In 2021, the global revenue-based financing market size was valued at $901. 41 million. This market is expected to grow... - [All you need to know about setting up an E-Commerce business in India](https://treelife.in/finance/all-you-need-to-know-about-setting-up-an-e-commerce-business-in-india/): In the previous article we had learnt about what the e-commerce ecosystem is and how it functions in India, the... - [Digital Rupee: A brief introduction](https://treelife.in/finance/digital-rupee-a-brief-introduction/): What is a digital rupee? The Reserve Bank of India has launched the pilot of its Central Bank Digital Currency... - [Why Companies Must Pay Heed to the ID Act During Layoffs?](https://treelife.in/legal/why-companies-must-pay-heed-to-the-id-act-during-layoffs/): As of December 2022, 52 Indian firms, including startups, have laid off over 18,000 employees. The unicorns on this list include prominent startups like BYJU’S, Unacademy, MPL,... - [NeuralGarage raises $1.45 million led by Exfinity Ventures](https://www.exchange4media.com/amp/digital-news/neuralgarage-raises-145-million-in-seed-round-led-by-exfinity-ventures-123747.html#new_tab) - [Dividend Payouts and Significant Dates](https://treelife.in/finance/dividend-payouts-and-significant-dates/): Introduction Dividends are typically paid for a fiscal year when the final accounting are completed and the amount of distributable... - [Do I need terms & conditions, and privacy policy for my business?  ](https://treelife.in/legal/do-i-need-terms-conditions-and-privacy-policy-for-my-business/): You’re working on a lovely website for your company when the developer requests your Terms & Conditions (“T&C”) and Privacy Policy (“PP”) page. - [CELEBRITY ENDORSEMENT AGREEMENT](https://treelife.in/legal/celebrity-endorsement-agreement/): WHAT IS A CELEBRITY ENDORSEMENT AGREEMENT? A celebrity endorsement agreement is a legally binding agreement between a company owning a... - [SaaS Company – Angel Funding Round](https://treelife.in/case-studies/saas-company-angel-funding-round/): Client: SaaS based customer engagement and retention Our Engagement: Legal Advisory-Created a single point window for all legal issues in... - [New Amendment: A Step Towards Making Social Media Intermediaries More Accountable](https://treelife.in/legal/new-amendment-a-step-towards-making-social-media-intermediaries-more-accountable/): On October 28, 2022, the Ministry of Electronics and IT (“MeitY”) notified amendments to the Information Technology (Intermediary Guidelines and... - [Why we Invested in Biotechnology - MyoWorks and D-NOME](https://ankurcapital.medium.com/why-we-invested-in-biotechnology-myoworks-and-d-nome-2b034df071bd#new_tab) - [Chiratae Ventures leads $3 million financing round in Artium Academy](https://economictimes.indiatimes.com/small-biz/entrepreneurship/chiratae-ventures-leads-3-million-financing-round-in-artium-academy/articleshow/94756113.cms?utm_source=whatsapp_pwa&utm_medium=social&utm_campaign=socialsharebuttons&from=mdr) - [What are the benefits of Flipping?](https://treelife.in/finance/what-are-the-benefits-of-flipping/): Global Market Access: Flipping core business operations outside India provides a wider audience to the startup. This enables the startup... - [BimaKavach Secures Funding To Offer Bespoke Insurance Products To Businesses](https://inc42.com/buzz/bimakavach-secures-funding-to-offer-bespoke-insurance-products-to-businesses/#new_tab) - [New Amendment regarding Maintenance of Accounts and Books in Electronic Mode](https://treelife.in/finance/new-amendment-regarding-maintenance-of-accounts-and-books-in-electronic-mode/): 25th August 2022 Ministry of Corporate Affairs (MCA) vide a notification dated 5th August 2022 has amended Rule 3 of... - [New Amendment: Startups need functional registered offices now](https://treelife.in/compliance/new-amendment-startups-need-functional-registered-offices-now/): The Central Government vide its notification dated August 18, 2022 amended the Companies (Incorporation Rules), 2022 to insert a new... - [10 Accounting Tips for Startups](https://treelife.in/startups/10-accounting-tips-for-startups/): No creative thinking and innovative ideas can sustain a startup business when the finances run out, therefore accurate bookkeeping and... - [10 things Startups should Include in their Investment Pitch Deck](https://treelife.in/startups/10-things-startups-should-to-include-in-their-investment-pitch-deck/): A well-designed, comprehensive but crisp pitch deck is vital for convincing investors that a product has massive growth potential and... - [Key differences between SaaS-based model and Licensing Software](https://treelife.in/legal/key-differences-between-saas-based-model-and-licensing-software/): While both SaaS-based and License-based models deal with provision of software, there are certain key distinguishing points between them, viz:... - [Understanding Sustainable Finance by Jitesh Agarwal](https://www.outlookindia.com/outlook-spotlight/understanding-sustainable-finance-news-207775#new_tab) - [Understanding General Data Protection Regulation (GDPR) for Businesses](https://treelife.in/compliance/understanding-general-data-protection-regulation-gdpr-for-businesses/): The implementation of the General Data Protection Regulation (“EU GDPR”) in May 2018 in the European Union (“EU”) brought about... - [8 Simple Hacks to Make Accounting Less Tedious](https://www.tribuneindia.com/news/brand-connect/8-simple-hacks-to-make-accounting-less-tedious-409719#new_tab) - [Taxation of Social Media Influencers](https://treelife.in/taxation/taxation-of-social-media-influencers/): Current Context Social media influencers are individuals who are engaged online in building a community platform via social media channels... - [Gearing up to file your Income Tax Return!](https://treelife.in/taxation/gearing-up-to-file-your-income-tax-return/): Get Ready to File Your Income Tax Return (ITR) – A Comprehensive Guide for AY 2023-2024 As the deadline for... - [Insights on Metaverse](https://treelife.in/technology/insights-on-metaverse/): The word “metaverse” was originally coined by an American writer, Neal Town Stephenson, in his 1992 science fiction novel Snow Crash. In his book, Stephenson described the Metaverse as an all-encompassing digital world that exists parallel to the real world. - [Is Computer Software a Good or a Service?](https://treelife.in/finance/is-computer-software-a-good-or-a-service/): Goods or Services? Understanding the Classification of Computer Software under GST Introduction: The classification of computer software as either a... - [Founder Vesting and Lock-In in a Shareholders’ Agreement](https://treelife.in/legal/founder-vesting-in-a-shareholders-agreement/): Vesting of founder shares in SHA is a concept that signifies founder earning their equity over time. Know about founder vesting SHA in India in 2024 - [Adani-Holcim deal: Tax free deal for Holcim?](https://treelife.in/news/adani-holcim-deal-tax-free-deal-for-holcim/): First Published on 18th May, 2023 The Adani-Holcim deal where the Adani group will acquire Holcim’s Indian assets for $10.... - [Playbook for the startup registration process in India](https://treelife.in/legal/playbook-for-the-startup-registration-process-in-india/): Startup India is a flagship initiative of the Government of India. The campaign was first announced by Prime Minister, Narendra Modi in his speech on August 15, 2015. - [Liaison office in India](https://treelife.in/compliance/liaison-office-in-india/): What Is a Liaison Office? The Foreign Exchange Management Act (FEMA) defines Liaison Office (“LO”) as “a place of business to act... - [Resolutions in a Board Meeting and General Meeting](https://treelife.in/compliance/resolutions-in-a-board-meeting-and-general-meeting/): A company is an artificial person as we all know, having an identity separate from the members or the directors. However, since it is an artificial person it requires the Board of Directors (“BOD”) or the members to take decisions on its behalf. These decisions can be in the form of day to day decisions or bigger decisions such as taking a loan or entering into a merger etc. - [5 Key Pointers required in a SaaS Agreement](https://treelife.in/legal/5-key-pointers-required-in-a-saas-agreement/): In the previous article on Software as a Service (“SaaS”) Products, we understood the meaning of SaaS Products and how... - [ESOP FAQ](https://treelife.in/finance/esop-faq/): Get clear answers to common ESOP FAQs frequently asked questions in this comprehensive FAQ guide. Learn about eligibility, taxation, vesting, and more in simple terms. - [Avoid These 5 Common Legal Mistakes Startup Founders Make](https://treelife.in/legal/avoid-these-5-common-legal-mistakes-startup-founders-make/): Starting a successful startup requires a lot of effort and consideration, especially in terms of legal issues for startups. While... - [E-Mobility Space in India](https://treelife.in/legal/e-mobility-space-in-india/): India’s Growing Focus on Electric Vehicles to Deal with Air Pollution and Oil Dependency The move towards Electric Vehicles (EVs)... - [Budget Review 2022 - Impact on Startups, Founders and Investors](https://treelife.in/finance/budget-review-2022-impact-on-startups-founders-and-investors/): Budget 2022 is here and its focus is on steering the economy over the Amrit Kaal for India for the... - [Digital Payment Systems in India](https://treelife.in/finance/digital-payment-systems-in-india/): Introduction The digital payments ecosystem in India has seen an excellent growth in the past few years. The term “Digital... - [Directors and Officers Liability Insurance](https://treelife.in/legal/directors-and-officers-liability-insurance/): Directors and Officers (“D&O”) play a crucial role in running a company, making important decisions and bearing responsibilities towards various... - [What are NFT's ? Things you need to know.](https://treelife.in/legal/what-are-nfts-things-you-need-to-know/): Non-fungible tokens (“NFTs”) are one-of-a-kind digital tokens that serve as proof of asset ownership and cannot be duplicated. NFTs use blockchain technology, which creates a digital record of all the NFT transactions over an extensive network of computers and cannot be exchanged with other items, unlike cryptocurrency. - [Data Protection Laws in India](https://treelife.in/legal/data-protection-laws-in-india/): India’s Growth Brings Data Privacy and Protection into Focus: Understanding the Current Data Protection and Privacy Laws in India India... - [How can a Foreign Company enter India?](https://treelife.in/compliance/how-can-a-foreign-company-enter-india/): Foreign companies can expand their operations to India by setting up a place of business, either by themselves or through... - [Neo Banks - Disrupting The Traditional Banking Landscape](https://treelife.in/finance/neo-banks-disrupting-the-traditional-banking-landscape/): Recent years have witnessed a massive drift in the financial sector. Indian customers are embracing digital means of transactions and... - [Understanding Pros and Cons for setting up a LLP](https://treelife.in/compliance/understanding-pros-and-cons-for-setting-up-a-llp/): Introduction A Limited Liability Partnership (“LLP”) is an alternative business form that gives the benefits of limited liability of a... - [Reporting under CARO 2020 vs. CARO 2016](https://treelife.in/finance/reporting-under-caro-2020-vs-caro-2016/): CARO 2020 is a new format for the issue of audit reports (attachment to the primary report) in case of... - [Taxation Fouls by E-Commerce Businesses](https://treelife.in/compliance/taxation-fouls-by-e-commerce-businesses/): E-Commerce is India’s fastest growing and most exciting channel for online commercial transactions. It deals with cross-border transactions and eases... - [Intermediary Guidelines 2021](https://treelife.in/legal/intermediary-guidelines-2021/): The Ministry of Electronics and Information Technology (“MeitY”), on 25 February 2021, had notified the Information Technology (Intermediary Guidelines and... - [SaaS Contract Negotiation Checklist: Top Ten Considerations](https://treelife.in/legal/saas-contract-negotiation-checklist-top-ten-considerations/): While SaaS has simplified enterprise software in multiple ways, however, subscribing to an “enterprise-class” system still requires a fairly complex... - [Are Trademark and Brand Name two sides of the same coin?](https://treelife.in/legal/are-trademark-and-brand-name-two-sides-of-the-same-coin/): Importance of Trademarks and Brand Names for Your Business: Understanding the Differences Between a Brand & a Trademark If you... - [B2B SaaS - How Sales can be driven efficiently?](https://treelife.in/startups/b2b-saas-how-sales-can-be-driven-efficiently/): Unlock the Secrets to Efficiently Drive B2B SaaS Sales – Boost Your Revenue Now B2B SaaS or Business to Business... - [How Convertible Notes make fundraising seamless for startups?](https://treelife.in/startups/how-convertible-notes-make-fundraising-seamless-for-startups/): If you’re a seed or early-stage startup in need of funds for hiring and operations, you may find it difficult... - [Determining the exercise price of a stock option](https://treelife.in/finance/determining-the-exercise-price-of-a-stock-option/): Exercise price or strike price is the price at which the holder of stock options has the right, but not... - [Post Incorporation Formalities for PLCs & LLPs](https://treelife.in/compliance/post-incorporation-formalities-for-plcs-llps/): After incorporating a Private Company (“PLC”) or Limited Liability Partnership (LLP), specific regulations in the Companies Act, 2013 and the... - [Implications of a Force Majeure Clause](https://treelife.in/legal/implications-of-a-force-majeure-clause/): Are you worried about force majeure events impacting your contract in India? It’s crucial to understand the force majeure clause’s... - [Understanding SaaS or Software-as-a-Service](https://treelife.in/finance/understanding-saas-or-software-as-a-service/): SaaS or Software-as-a-Service is a software distribution model in which a third-party provider hosts applications centrally and licenses them to... - [What Is An Income Statement?](https://treelife.in/finance/what-is-an-income-statement/): An income statement helps business owners decide whether they can generate profit by increasing revenues, by decreasing costs, or both.... - [Tax Calculator for Tax Regime - Old vs New](https://treelife.in/taxation/tax-calculator-for-tax-regime-old-vs-new/): Are you wondering which tax regime you should opt for? While there is no clear-cut solution to the same, this... - [Data Privacy for Telemedicine Platforms](https://treelife.in/startups/data-privacy-for-telemedicine-platforms/): Telemedicine Platforms are those that provide a technology platform (website or an app) to facilitate online medical care, through audio,... - [Telemedicine Guidelines - Indian Laws for Tech Platforms](https://treelife.in/startups/telemedicine-guidelines-indian-laws-for-tech-platforms/): Telemedicine is changing the way healthcare services are delivered. As more and more patients opt for virtual healthcare, it’s crucial... - [Implementing ‘POSH’ (Policy on Sexual Harassment) at Workplace - Complaints & Compliance](https://treelife.in/compliance/implementing-posh-policy-on-sexual-harassment/): In the workplace, the ultimate responsibility for implementing and enforcing POSH (Prevention of Sexual Harassment) policies falls squarely on the employer’s shoulders. --- ## Faqs - [What is Corporate Regulatory Compliance for Tax Incentives and Exemptions?](https://treelife.in/faq/what-is-corporate-regulatory-compliance-for-tax-incentives-and-exemptions/): Many businesses can benefit from tax incentives and exemptions available under Indian law. Treelife helps you ensure that your business... - [Why Are Customs Duty and Tax Regulatory Compliance Services Essential for Businesses?](https://treelife.in/faq/why-are-customs-duty-and-tax-regulatory-compliance-services-essential-for-businesses/): For businesses involved in imports and exports, staying compliant with customs duties and tax regulations is essential. Treelife provides services... - [What are Tax Compliance Services for Businesses?](https://treelife.in/faq/what-are-tax-compliance-services-for-businesses/): Tax compliance services for businesses are essential to ensure that your company meets all its tax obligations. At Treelife, we... - [How Can Regulatory Compliance Services Help Startups?](https://treelife.in/faq/how-can-regulatory-compliance-services-help-startups/): Startups often face unique regulatory challenges as they grow. Treelife provides regulatory compliance services specifically tailored for startups, helping them... - [What Are Corporate Tax Filing and Advisory Services?](https://treelife.in/faq/what-are-corporate-tax-filing-and-advisory-services/): Corporate tax filing and advisory services involve preparing and filing your business’s tax returns while also providing strategic tax advice... - [Why Are Comprehensive Tax and Regulatory Compliance Services Important for Businesses?](https://treelife.in/faq/why-are-comprehensive-tax-and-regulatory-compliance-services-important-for-businesses/): Comprehensive tax and regulatory compliance services combine tax filing, regulatory reporting, and strategic advice, ensuring your business adheres to all... - [How Can Treelife Help with Company Tax Filing in India?](https://treelife.in/faq/how-can-treelife-help-with-company-tax-filing-in-india/): As company tax filing experts in India, Treelife ensures that your business’s tax returns are filed accurately and on time,... - [What Are Business Tax Services for SMEs in India?](https://treelife.in/faq/what-are-business-tax-services-for-smes-in-india/): SMEs in India often face difficulties with tax compliance due to limited resources. Treelife provides business tax services tailored specifically... - [How Can Tax Advisory Services Benefit Startups in India?](https://treelife.in/faq/how-can-tax-advisory-services-benefit-startups-in-india/): Tax advisory services for startups in India help entrepreneurs structure their businesses in the most tax-efficient way. Treelife offers expert... - [Are There Affordable Tax Service Providers for Companies in India?](https://treelife.in/faq/are-there-affordable-tax-service-providers-for-companies-in-india/): Yes, there are affordable tax service providers for companies in India, and Treelife is one of them. We understand that... - [How Do CA Firms Help with Business Tax Services in India?](https://treelife.in/faq/how-do-ca-firms-help-with-business-tax-services-in-india/): Chartered Accountants (CAs) are essential for businesses in India, offering expertise in tax filing, financial reporting, and compliance. At Treelife,... - [What are Indirect Tax Compliance Services (GST, VAT, etc.)?](https://treelife.in/faq/what-are-indirect-tax-compliance-services-gst-vat-etc/): Indirect tax compliance services are essential for businesses to stay on top of taxes like GST, VAT, and similar indirect... - [Why Do Businesses Need Income Tax Compliance Services?](https://treelife.in/faq/why-do-businesses-need-income-tax-compliance-services/): Income tax compliance can be complex and time-consuming, but it’s critical for every business. Treelife provides expert services to help... - [How Can Tax Return Filing Services Benefit My Company?](https://treelife.in/faq/how-can-tax-return-filing-services-benefit-my-company/): Filing tax returns can be overwhelming, but it’s a key part of maintaining a healthy business. With Treelife’s tax return... - [What Are Tax Planning and Compliance Services for Entrepreneurs?](https://treelife.in/faq/what-are-tax-planning-and-compliance-services-for-entrepreneurs/): Entrepreneurs often face unique challenges when it comes to taxes. At Treelife, we offer tailored tax planning and compliance services... - [What is Direct and Indirect Tax Compliance Outsourcing?](https://treelife.in/faq/what-is-direct-and-indirect-tax-compliance-outsourcing/): Outsourcing direct and indirect tax compliance allows you to focus on growing your business while we handle your tax obligations.... - [How Does Transfer Pricing and Tax Regulatory Compliance Work?](https://treelife.in/faq/how-does-transfer-pricing-and-tax-regulatory-compliance-work/): For businesses with international operations, ensuring that intercompany transactions are priced correctly is essential. Treelife provides comprehensive transfer pricing and... - [What Are Customs and Excise Tax Compliance Services?](https://treelife.in/faq/what-are-customs-and-excise-tax-compliance-services/): Customs and excise taxes can complicate cross-border trade, but with Treelife’s compliance services, we ensure that your business follows all... - [How Can Treelife Help with Regulatory Compliance for FDI and Foreign Companies in India?](https://treelife.in/faq/how-can-treelife-help-with-regulatory-compliance-for-fdi-and-foreign-companies-in-india/): If you’re a foreign investor or company looking to set up in India, navigating regulatory compliance can be tricky. Treelife... - [What Are Tax Regulatory Services for Cross-Border Transactions?](https://treelife.in/faq/what-are-tax-regulatory-services-for-cross-border-transactions/): Cross-border transactions come with their own set of tax challenges. Treelife provides tax regulatory services to ensure that your international... - [How Can Tax and Regulatory Advisory for IPO and Fundraising Benefit My Company?](https://treelife.in/faq/how-can-tax-and-regulatory-advisory-for-ipo-and-fundraising-benefit-my-company/): Planning for an IPO or fundraising? Treelife’s tax and regulatory advisory services help you structure your company’s finances in a... - [What Are Indirect Tax and Customs Compliance Services for Imports and Exports?](https://treelife.in/faq/what-are-indirect-tax-and-customs-compliance-services-for-imports-and-exports/): If your business deals with imports and exports, compliance with indirect taxes and customs regulations is critical. Treelife provides specialized... - [How Can FEMA and Tax Compliance Advisory Services Benefit Foreign Investors?](https://treelife.in/faq/how-can-fema-and-tax-compliance-advisory-services-benefit-foreign-investors/): For foreign investors in India, complying with FEMA and tax regulations is crucial. Treelife offers expert advisory services to help... - [How Does Treelife Leverage AI to Provide Exceptional Quality of Services?](https://treelife.in/faq/how-does-treelife-leverage-ai-to-provide-exceptional-quality-of-services/): Treelife leverages AI to improve the efficiency and accuracy of its legal, financial, and compliance services. By utilizing advanced AI... - [What is the role of the Internal Committees (IC) [formerly Internal Complaints Committee (ICC)]?](https://treelife.in/faq/what-is-the-role-of-the-internal-committees-ic-formerly-internal-complaints-committee-icc/): The IC / ICC is responsible for receiving, investigating, and resolving complaints of sexual harassment. It must be constituted with... - [Who should be appointed on the Internal Complaints Committee (ICC)?](https://treelife.in/faq/who-should-be-appointed-on-the-internal-complaints-committee-icc/): The IC / ICC should have a minimum of four members, with at least half of them being women. The... - [How soon must a complaint be resolved?](https://treelife.in/faq/how-soon-must-a-complaint-be-resolved/): The Act recommends completion of the inquiry within 90 days from the date of receipt of the complaint. - [What are the penalties for non-compliance?](https://treelife.in/faq/what-are-the-penalties-for-non-compliance/): Organizations failing to comply with the POSH Act can face fines starting from INR 50,000, with repeated non-compliance attracting higher... - [What are the compliance requirements under POSH?](https://treelife.in/faq/what-are-the-compliance-requirements-under-posh/): Every organisation employees needs to, inter alia, ensure that (i) To appoint an Internal Complaints Committee (ICC), including the appointment... - [Why is financial due diligence important?](https://treelife.in/faq/why-is-financial-due-diligence-important/): Financial due diligence is more than just validating numbers—it’s about assessing sustainability, scalability, and credibility. Our financial due diligence services... - [Why is legal due diligence important?](https://treelife.in/faq/why-is-legal-due-diligence-important/): Legal due diligence is essential for uncovering legal risks that can impact the deal or post-investment operations. It ensures the... - [What do you get in our due diligence report?](https://treelife.in/faq/what-do-you-get-in-our-due-diligence-report/): Our investor-focused due diligence report provides: - [What is due diligence ?](https://treelife.in/faq/what-is-due-diligence/): Due diligence refers to a structured and thorough review of a business prior to an investment, acquisition, or partnership. It... - [Why is due diligence important ?](https://treelife.in/faq/why-is-due-diligence-important/): Clarity : Risk Identification: Informed Decisions : - [What key red flags do you typically uncover during Due Diligence?](https://treelife.in/faq/what-key-red-flags-do-you-typically-uncover-during-due-diligence/): Common red flags include: - [How do you interact with the target company during due diligence?](https://treelife.in/faq/how-do-you-interact-with-the-target-company-during-due-diligence/): We share a detailed Information Request List (IRL), set up a secure data room, and coordinate calls with management to... - [What if red flags are found—do you assist in resolving them?](https://treelife.in/faq/what-if-red-flags-are-found-do-you-assist-in-resolving-them/): Absolutely. We not only identify red flags but also support in drafting conditions precedent (CPs) or post-deal clean-up plans, enabling... - [What is due diligence and why does it matter?](https://treelife.in/faq/what-is-due-diligence-and-why-does-it-matter/): Due diligence is a deep review of your business—financials, tax, legal and compliance, done before a major transaction like fundraising,... - [Why do you need due diligence support?](https://treelife.in/faq/why-do-you-need-due-diligence-support/): Doing it yourself or waiting for investors to find the gaps—can cost you the deal. With our support, you: - [What do you gain from our due diligence support ?](https://treelife.in/faq/what-do-you-gain-from-our-due-diligence-support/): When done right, due diligence becomes a tool for building trust and accelerating transactions. Key outcomes include: - [What is the best financial model for startups?](https://treelife.in/faq/what-is-the-best-financial-model-for-startups/): There is no one-size-fits-all. Popular models include the DCF, three-statement and custom revenue models based on your business type. - [How is financial modeling used in startup valuation?](https://treelife.in/faq/how-is-financial-modeling-used-in-startup-valuation/): It projects future cash flows and applies valuation techniques like DCF to determine your startup’s worth and valuation and guide... - [What should a startup financial model include?](https://treelife.in/faq/what-should-a-startup-financial-model-include/): Revenue projections, operating expenses, unit economics (CAC, LTV), cash flows and scenario testing. - [Why is financial modeling important for startups?](https://treelife.in/faq/why-is-financial-modeling-important-for-startups/): Financial modeling for startups goes far beyond spreadsheets. It’s a structured approach to forecasting revenue, costs, and cash flow while... - [What do we deliver financial models?](https://treelife.in/faq/what-do-we-deliver-financial-models/): We design custom, flexible, and dynamic models—not cookie-cutter templates. Every model is tailored to your business’s unique drivers and growth... - [What is financial modelling for startups ?](https://treelife.in/faq/what-is-financial-modelling-for-startups/): Financial modeling for startups involves forecasting revenue, expenses, and key financial metrics to evaluate a business’s profitability and feasibility. It... - [Why use a financial model?](https://treelife.in/faq/why-use-a-financial-model/): A financial model is more than just a planning tool—it’s an essential part of building and scaling a successful startup. - [What is the process for filing a trademark online?](https://treelife.in/faq/what-is-the-process-for-filing-a-trademark-online/): Identify the appropriate class for your goods/services. Conduct a trademark search for similar marks. File your application on the official... - [For how long is trademark protection valid?](https://treelife.in/faq/for-how-long-is-trademark-protection-valid/): Trademarks are valid for 10 years from the date of registration and need to be renewed. - [For how long is copyright protection valid?](https://treelife.in/faq/for-how-long-is-copyright-protection-valid/): Copyrights are valid for the lifetime of the creator + 60 years. - [When is the right time to apply for trademark or copyright registration?](https://treelife.in/faq/when-is-the-right-time-to-apply-for-trademark-or-copyright-registration/): The right time to apply for a trademark is when the brand is crystallised. The name and the logo are... - [How much time to register a trademark in India?](https://treelife.in/faq/how-much-time-to-register-a-trademark-in-india/): Trademark registration typically takes 8-15 months in straightforward cases without objections or oppositions. Cases involving disputes may take longer as... - [How long does it take to register a copyright?](https://treelife.in/faq/how-long-does-it-take-to-register-a-copyright/): Typically, 3–6 months, depending on workload and objections (if any). Cases involving disputes may take longer as they go through... - [Which organizations are required to comply with the POSH Act?](https://treelife.in/faq/which-organizations-are-required-to-comply-with-the-posh-act/): All workplaces in India (including private companies, public sector units, NGOs, and government bodies) with 10 or more employees must... - [Who can file a complaint under the POSH Act?](https://treelife.in/faq/who-can-file-a-complaint-under-the-posh-act/): Any employee, including full-time, part-time, contractual, temporary, interns, or even clients and customers, can file a complaint if they face... - [What is the difference between trademark & copyright? ](https://treelife.in/faq/what-is-the-difference-between-trademark-copyright/): Simply put, a trademark protects a brand name while a copyright protects any kind of publishable content. For example: A... - [Is registration of trademark or copyright compulsory?](https://treelife.in/faq/is-registration-of-trademark-or-copyright-compulsory/): No, it is not mandatory to register a trademark or copyright in India. However, it is advisable to register your... - [When do I use ™ or ® in my brand name?](https://treelife.in/faq/when-do-i-use-or-in-my-brand-name/): When a trademark registration application is filed, ™ can be used with the name or logo applied for and ®... - [What documents are typically involved in a fundraising transaction?](https://treelife.in/faq/what-documents-are-typically-involved-in-a-fundraising-transaction/): A fundraising transaction usually involves documents such as the term sheet, Share Subscription Agreement (SSA), and Shareholders’ Agreement (SHA). If... - [What is the typical process in an investment round?](https://treelife.in/faq/what-is-the-typical-process-in-an-investment-round/): The process generally begins with signing a term sheet between the investor and the company, followed by investor due diligence.... - [What types of securities can a company issue to incoming investors?](https://treelife.in/faq/what-types-of-securities-can-a-company-issue-to-incoming-investors/): Companies typically issue Convertible Notes (CNs), Equity Shares, Compulsorily Convertible Preference Shares (CCPS), or Compulsorily Convertible Debentures (CCD) to investors. - [Are there any compliances required during an investment round?](https://treelife.in/faq/are-there-any-compliances-required-during-an-investment-round/): Yes, compliances include board and shareholder resolutions, filing forms with the Registrar of Companies (RoC) such as Form MGT-14, PAS-3,... - [What is a cap table?](https://treelife.in/faq/what-is-a-cap-table/): A cap table is a detailed record of all shareholders, their shareholding amounts, and percentage ownership on a fully diluted... - [Is a term sheet legally binding?](https://treelife.in/faq/is-a-term-sheet-legally-binding/): Typically, a term sheet is non-binding except for specific clauses like validity, exclusivity, confidentiality, and governing law. It is advisable... - [Is signing a term sheet mandatory before investment?](https://treelife.in/faq/is-signing-a-term-sheet-mandatory-before-investment/): No, signing a term sheet is not mandatory but recommended to ensure both parties are aligned on key investment terms. - [What terms are generally included in a term sheet?](https://treelife.in/faq/what-terms-are-generally-included-in-a-term-sheet/): Terms include investor and promoter details, investment amount, securities to be issued, management rights, transfer restrictions, shareholder rights, and exit... - [Can the Shareholders’ Agreement (SHA) include terms that differ from the term sheet?](https://treelife.in/faq/can-the-shareholders-agreement-sha-include-terms-that-differ-from-the-term-sheet/): Yes, parties can mutually agree to modify terms post-term sheet execution in the SHA. - [What is the difference between pre-money and post-money valuation?](https://treelife.in/faq/what-is-the-difference-between-pre-money-and-post-money-valuation/): Pre-money valuation is the company’s value before investment, and post-money valuation is after factoring in the investment amount:Pre-money valuation +... - [Does the term sheet need to be on stamp paper?](https://treelife.in/faq/does-the-term-sheet-need-to-be-on-stamp-paper/): No, a term sheet does not require stamp paper. - [Who are the typical parties to a SHA?](https://treelife.in/faq/who-are-the-typical-parties-to-a-sha/): Usually, the company, promoters, incoming investors, and existing shareholders execute the SHA. - [Do all shareholders need to be parties to the SHA?](https://treelife.in/faq/do-all-shareholders-need-to-be-parties-to-the-sha/): Ideally, all shareholders should be parties to the SHA for enforceability. Alternatively, in cases of many shareholders, authority to execute... - [What rights do investors commonly seek in a SHA?](https://treelife.in/faq/what-rights-do-investors-commonly-seek-in-a-sha/): Investors often seek information rights, pre-emptive rights for future rounds, transfer rights, exit rights, and liquidation preferences. - [What exit mechanisms can a company offer investors?](https://treelife.in/faq/what-exit-mechanisms-can-a-company-offer-investors/): Common exit routes include initial public offerings (IPO), third-party sales, strategic sales, or buybacks. - [Can the SHA be signed digitally?](https://treelife.in/faq/can-the-sha-be-signed-digitally/): Yes, digital signatures on SHA are legally valid. - [Does the SHA need to be on stamp paper?](https://treelife.in/faq/does-the-sha-need-to-be-on-stamp-paper/): Yes, SHA should be executed on stamp paper with appropriate stamp duty paid as per the respective state’s laws. - [How do I register an Alternative Investment Fund (AIF) in India?](https://treelife.in/faq/how-do-i-register-an-alternative-investment-fund-aif-in-india/): To register an Alternative Investment Fund (AIF) in India, applicants must comply with SEBI’s AIF Regulations, 2012. The process includes... - [Who is a Virtual CFO?](https://treelife.in/faq/who-is-a-virtual-cfo/): A Virtual CFO (Chief Financial Officer) is an outsourced service provider who offers high-level financial strategy, planning, and management to... - [Does a contract need to be mandatorily in written format?](https://treelife.in/faq/does-a-contract-need-to-be-mandatorily-in-written-format/): Written contracts are always recommended, although oral contracts are valid in India. However, certain agreements (e. g. , property sales)... - [Do I have to get a stamp paper for every contract?](https://treelife.in/faq/do-i-have-to-get-a-stamp-paper-for-every-contract/): It’s advisable to use stamp paper. While an unstamped contract isn’t invalid, it cannot be used as evidence in court... - [Can a contract be signed electronically in India?](https://treelife.in/faq/can-a-contract-be-signed-electronically-in-india/): Yes, under the Information Technology Act, 2000, electronic signatures are legally recognized in India. As long as the signature is... - [What happens if one party breaches a contract?](https://treelife.in/faq/what-happens-if-one-party-breaches-a-contract/): The non-breaching party can seek remedies such as specific performance (fulfilling the contract), monetary damages, or injunctions, depending on the... - [Is a contract valid if it’s signed digitally or by scanning signatures?](https://treelife.in/faq/is-a-contract-valid-if-its-signed-digitally-or-by-scanning-signatures/): Generally, yes—digitally signed contracts are valid under Indian law if they meet requirements of the IT Act. Scanned signatures may... - [What exactly is a Master Service Agreement (MSA), and why is it so crucial for businesses?](https://treelife.in/faq/what-exactly-is-a-master-service-agreement-msa-and-why-is-it-so-crucial-for-businesses/): An MSA acts as the main framework for an ongoing business relationship. It sets out general terms for current and... - [What are the core components of an MSA?](https://treelife.in/faq/what-are-the-core-components-of-an-msa/): Key components typically include the scope of services, payment terms, confidentiality, intellectual property rights, term and termination conditions, liability limitations,... - [When do you need an MSA?](https://treelife.in/faq/when-do-you-need-an-msa/): Businesses should consider using MSAs when you anticipate ongoing or long-term business relationships involving multiple projects, services, or transactions with... - [How does an MSA differ from a Statement of Work (SOW)?](https://treelife.in/faq/how-does-an-msa-differ-from-a-statement-of-work-sow/): An MSA provides the overarching, general terms and conditions for the entire business relationship. A Statement of Work (SOW), conversely,... - [Can an MSA be changed after it's signed?](https://treelife.in/faq/can-an-msa-be-changed-after-its-signed/): Yes, however, amending or changing an MSA typically requires mutual agreement from all parties involved, formalized and signed through a... - [What are essential clauses in an Indian Employment Agreement?](https://treelife.in/faq/what-are-essential-clauses-in-an-indian-employment-agreement/): Important clauses cover job description, salary and benefits (including PF/gratuity), employment duration, leave policy, confidentiality, intellectual property ownership, termination notice... - [Do I need employment agreements with all my permanent and part-time employees, consultants, interns, etc.?](https://treelife.in/faq/do-i-need-employment-agreements-with-all-my-permanent-and-part-time-employees-consultants-interns-etc/): It’s highly recommended to enter into detailed employment agreements with permanent and part-time employees, which clarify terms, roles, and statutory... - [Are employment agreements different from offer or appointment letters?](https://treelife.in/faq/are-employment-agreements-different-from-offer-or-appointment-letters/): Yes, these vary in their scope, timing, and/or purpose. An Offer Letter expresses the mere intent to hire and outlines... - [Can I sign an employment agreement between a foreign company and a citizen / resident of India?](https://treelife.in/faq/can-i-sign-an-employment-agreement-between-a-foreign-company-and-a-citizen-resident-of-india/): While direct employment relationships are not advisable, foreign companies can open branch offices, Indian subsidiaries, or engage employees through a... - [Is non compete and non solicitation in an employment contract enforceable?](https://treelife.in/faq/is-non-compete-and-non-solicitation-in-an-employment-contract-enforceable/): Both types of clauses are generally enforceable during employment. However, in India, (a) post-employment non-compete clauses are generally not enforceable... - [When is an NDA used?](https://treelife.in/faq/when-is-an-nda-used/): A Non-Disclosure Agreement (NDA) is a legal contract that obligates a party to protect sensitive, confidential information. It’s used during... - [What are some clauses essential for an NDA?](https://treelife.in/faq/what-are-some-clauses-essential-for-an-nda/): An effective NDA defines confidential information (and its exclusions), specifies the purpose of disclosure, outlines the receiving party’s obligations, sets... - [How do I decide between a mutual or non-mutual NDA?](https://treelife.in/faq/how-do-i-decide-between-a-mutual-or-non-mutual-nda/): Choose a non-mutual (unilateral) NDA when only one party is disclosing confidential information (e. g. , hiring an employee, pitching... - [Are NDAs enforceable in India?](https://treelife.in/faq/are-ndas-enforceable-in-india/): Yes, an NDA is legally enforceable under the Indian Contract Act, 1872. - [How long should my NDA be enforceable?](https://treelife.in/faq/how-long-should-my-nda-be-enforceable/): The enforceability term of an NDA varies with the information’s nature. For trade secrets or highly sensitive data, it can... - [What remedies are typically available if an NDA is breached?](https://treelife.in/faq/what-remedies-are-typically-available-if-an-nda-is-breached/): If an NDA is breached, typical remedies include seeking monetary damages for losses incurred, including indirect and foreseeable damages in... - [What is a Co-Founders' Agreement and why is it crucial for startups?](https://treelife.in/faq/what-is-a-co-founders-agreement-and-why-is-it-crucial-for-startups/): This vital legal document outlines the roles, responsibilities, ownership, rights, and liabilities of startup co-founders. It’s essential for defining equity... - [Is a Co-Founders' Agreement legally binding in India?](https://treelife.in/faq/is-a-co-founders-agreement-legally-binding-in-india/): Yes, when properly executed on stamp paper, it’s a legally enforceable contract under Indian law, though not legally mandated for... - [When should I enter into a Co-Founders’ Agreement in my start-up?](https://treelife.in/faq/when-should-i-enter-into-a-co-founders-agreement-in-my-start-up/): You should enter into a Co-Founders’ Agreement as early as possible, ideally before formally commencing material business operations or making... - [What is “vesting” for a co-founder?](https://treelife.in/faq/what-is-vesting-for-a-co-founder/): “Vesting” is the process by which a co-founder’s ownership of their equity (shares) in the startup becomes absolute over a... - [What happens if a co-founder leaves the company and how can a co-founders’ agreement help?](https://treelife.in/faq/what-happens-if-a-co-founder-leaves-the-company-and-how-can-a-co-founders-agreement-help/): Without an agreement, a co-founder’s departure can lead to messy disputes over equity, valuation, and intellectual property. A Co-Founders’ Agreement... - [What are Website T&Cs?](https://treelife.in/faq/what-are-website-tcs/): Website Terms and Conditions are a legal agreement between the website owner and users, setting rules for website usage, defining... - [What is a Website Privacy Policy and its key requirements in India?](https://treelife.in/faq/what-is-a-website-privacy-policy-and-its-key-requirements-in-india/): A Privacy Policy informs users how their personal data is collected, used, stored, and protected. - [Does a privacy policy need to be compliant with GDPR?](https://treelife.in/faq/does-a-privacy-policy-need-to-be-compliant-with-gdpr/): In India, a privacy policy should primarily comply with laws like the Digital Personal Data Protection Act, 2023 (DPDP Act),... - [Do I need to regularly check and update my website terms and conditions and privacy policy?](https://treelife.in/faq/do-i-need-to-regularly-check-and-update-my-website-terms-and-conditions-and-privacy-policy/): Yes, regular review and updates are crucial. Laws and regulations (like India’s Digital Personal Data Protection Act, 2023 and laws... - [Are terms & conditions and privacy policy mandatory in India?](https://treelife.in/faq/are-terms-conditions-and-privacy-policy-mandatory-in-india/): Yes, for most entities operating online in India, both are mandatory. A Privacy Policy is explicitly required for “data fiduciaries”... - [What is the difference between accounts payable and accounts receivable?](https://treelife.in/faq/what-is-the-difference-between-accounts-payable-and-accounts-receivable/): Accounts payable refers to the money your business owes to suppliers and vendors, while accounts receivable is the money owed... - [What payroll consultancy and payroll outsourcing services do you offer?](https://treelife.in/faq/what-payroll-consultancy-and-payroll-outsourcing-services-do-you-offer/): At Treelife, all payroll services—including payroll processing, payroll outsourcing, payroll consulting, and payroll software management—are handled entirely in-house by our... - [Can you explain the difference between Form 16 and Form 16A?](https://treelife.in/faq/can-you-explain-the-difference-between-form-16-and-form-16a/): Form 16 is the certificate issued by employers detailing the income tax deducted at source (TDS) on salary income, whereas... - [How do I hire a CA for tax filing through Treelife?](https://treelife.in/faq/how-do-i-hire-a-ca-for-tax-filing-through-treelife/): You can fully outsource your tax filing and compliance to Treelife. We have an expert team of Chartered Accountants (CAs),... - [How can Treelife’s accounting and bookkeeping services benefit my business?](https://treelife.in/faq/how-can-treelifes-accounting-and-bookkeeping-services-benefit-my-business/): Our comprehensive accounting and bookkeeping services ensure your financial records are accurate, compliant, and up to date. This includes accounting... - [Do you provide accounting services in India and specifically in Mumbai?](https://treelife.in/faq/do-you-provide-accounting-services-in-india-and-specifically-in-mumbai/): Yes. Treelife offers specialized accounting services in India, including accounting services in Mumbai and other major cities. Whether you need... - [Can Treelife help with income tax filing and compliance?](https://treelife.in/faq/can-treelife-help-with-income-tax-filing-and-compliance/): Absolutely. We provide end-to-end income tax compliance services, including income tax filing and return filing with experienced Chartered Accountants for... - [Do you offer accounting services for small businesses?](https://treelife.in/faq/do-you-offer-accounting-services-for-small-businesses/): Yes, Treelife specializes in accounting services India-wide, providing small business accounting services that include bookkeeping, accounting consultancy services, GST filing,... - [How does Treelife’s Virtual CFO service assist with foreign remittances and tax regulations?](https://treelife.in/faq/how-does-treelifes-virtual-cfo-service-assist-with-foreign-remittances-and-tax-regulations/): Treelife’s VCFO team helps you navigate complex tax and regulatory requirements related to foreign inward remittances. We ensure compliance with... - [What kind of fundraising support does Treelife provide for startups and businesses in India?](https://treelife.in/faq/what-kind-of-fundraising-support-does-treelife-provide-for-startups-and-businesses-in-india/): Treelife offers end-to-end fundraising support tailored to startups and businesses in India. We assist with structuring fundraising rounds, preparing term... - [How can Treelife assist with mergers and acquisitions (M&A) in India?](https://treelife.in/faq/how-can-treelife-assist-with-mergers-and-acquisitions-ma-in-india/): Our legal team specializes in mergers and acquisitions, guiding companies through deal structuring, due diligence, drafting of transactional agreements, and... - [Why is patent registration important for startups and businesses?](https://treelife.in/faq/why-is-patent-registration-important-for-startups-and-businesses/): Patent registration safeguards your inventions and grants exclusive rights, preventing unauthorized use by others. Treelife assists you through the patent... - [What types of contracts does Treelife help startups and businesses draft and review?](https://treelife.in/faq/what-types-of-contracts-does-treelife-help-startups-and-businesses-draft-and-review/): We assist with a wide range of contracts including investment agreements, shareholder agreements, employment contracts, non-disclosure agreements (NDAs), service agreements,... - [Where does Treelife offer its legal support services?](https://treelife.in/faq/where-does-treelife-offer-its-legal-support-services/): Trellife provides legal support services across India, including major hubs like Mumbai, Delhi, Bangalore, and GIFT City. We offer comprehensive... - [What services do you offer for intellectual property (IP) protection, including patents and copyrights?](https://treelife.in/faq/what-services-do-you-offer-for-intellectual-property-ip-protection-including-patents-and-copyrights/): We provide comprehensive IP services including copyright registration and patent registration. Our experts help you understand how to register a... - [Can Treelife help with copyright registration?](https://treelife.in/faq/can-treelife-help-with-copyright-registration/): Yes, we offer full copyright registration services to protect your creative works, software, branding, and content. Our legal experts guide... - [How does Treelife support dispute resolution for startups?](https://treelife.in/faq/how-does-treelife-support-dispute-resolution-for-startups/): We help startups and businesses resolve disputes efficiently through negotiation, mediation, and litigation support. Our team handles employment disputes, founder... - [Can Treelife help negotiate contract terms with investors, partners, or vendors?](https://treelife.in/faq/can-treelife-help-negotiate-contract-terms-with-investors-partners-or-vendors/): Yes. We provide end-to-end contract negotiation support, working on your behalf to secure favorable terms with investors, business partners, and... - [How does Treelife ensure that contracts comply with Indian laws and regulations?](https://treelife.in/faq/how-does-treelife-ensure-that-contracts-comply-with-indian-laws-and-regulations/): Our in-house legal team stays updated with the latest laws and regulations applicable to startups and businesses in India. We... - [How can I check my MCA annual filing status?](https://treelife.in/faq/how-can-i-check-my-mca-annual-filing-status/): You can check your MCA annual filing status online through the MCA portal. Treelife also assists clients by monitoring and... - [What is the process for annual property return online filing?](https://treelife.in/faq/what-is-the-process-for-annual-property-return-online-filing/): Annual property return filing is required under the Companies Act for certain companies to report their immovable property holdings. Treelife... - [How do I check the MCA strike off list?](https://treelife.in/faq/how-do-i-check-the-mca-strike-off-list/): The MCA strike off list is publicly available on the MCA website. Treelife can help you verify if your company... - [How can I register my startup in India?](https://treelife.in/faq/how-can-i-register-my-startup-in-india/): Treelife guides you through the entire process of registering a startup in India, from selecting the appropriate business structure, preparing... - [What is the difference between a private limited company and LLP?](https://treelife.in/faq/what-is-the-difference-between-a-private-limited-company-and-llp/): A private limited company is a separate legal entity governed by the Companies Act, with shareholders and directors, limited liability,... - [Can Treelife help with LLP company registration?](https://treelife.in/faq/can-treelife-help-with-llp-company-registration/): Yes, Treelife offers LLP company registration services, guiding you through the LLP registration process, documentation, and compliance requirements. - [What is company registration and how can Treelife assist?](https://treelife.in/faq/what-is-company-registration-and-how-can-treelife-assist/): Company registration is the process of legally incorporating a business entity with the Registrar of Companies (ROC) in India. Treelife... - [Do you provide company registration services specifically in Mumbai?](https://treelife.in/faq/do-you-provide-company-registration-services-specifically-in-mumbai/): No, Treelife offers dedicated company registration services in Mumbai, along with other major Indian cities. We assist startups and businesses... - [What documents are needed for company incorporation?](https://treelife.in/faq/what-documents-are-needed-for-company-incorporation/): The documents required depend on the business structure. For private limited companies, these include identity and address proofs of directors... - [Can Treelife assist with GST registration and compliance?](https://treelife.in/faq/can-treelife-assist-with-gst-registration-and-compliance/): Yes. We assist with registering GST, including registering HSN codes and GST rates, understanding the threshold for GST registration, and... - [How can startups benefit from tax exemptions under the Startup India scheme?](https://treelife.in/faq/how-can-startups-benefit-from-tax-exemptions-under-the-startup-india-scheme/): Under the Startup India scheme, eligible startups can avail various tax exemptions, including a three-year income tax holiday. Treelife assists... - [Can I access tax advisory services online?](https://treelife.in/faq/can-i-access-tax-advisory-services-online/): Yes, Treelife offers tax advisory services online, allowing you to consult with our experts remotely. This ensures that you receive... - [How do I find a tax advisor near me?](https://treelife.in/faq/how-do-i-find-a-tax-advisor-near-me/): If you’re looking for a tax advisor near you, Treelife’s extensive network across Mumbai, Delhi, Bangalore, and GIFT City ensures... - [What is the difference between tax advisory and tax compliance?](https://treelife.in/faq/what-is-the-difference-between-tax-advisory-and-tax-compliance/): Tax advisory focuses on strategic planning to optimize tax liabilities, while tax compliance involves adhering to tax laws, filing returns,... - [How can Treelife help with due diligence and financial modeling?](https://treelife.in/faq/how-can-treelife-help-with-due-diligence-and-financial-modeling/): We assist businesses with comprehensive due diligence and financial modeling to identify potential risks and evaluate financial viability. Our services... - [What are tax advisory services, and how can Treelife help?](https://treelife.in/faq/what-are-tax-advisory-services-and-how-can-treelife-help/): Tax advisory services involve providing expert guidance on tax planning, compliance, and optimization. Treelife offers comprehensive tax advisory services to... - [Does Treelife offer accounting and taxation services?](https://treelife.in/faq/does-treelife-offer-accounting-and-taxation-services/): Yes, Treelife provides end-to-end accounting & taxation services, including financial reporting, GST compliance, and income tax filing. Our accounting taxation... - [Do you provide income tax advisory services?](https://treelife.in/faq/do-you-provide-income-tax-advisory-services/): Yes, Treelife’s income tax advisory services include tax planning, filing of returns, and compliance with changing regulations. Our team of... - [How can Treelife assist with GST compliance?](https://treelife.in/faq/how-can-treelife-assist-with-gst-compliance/): Our GST advisory services include GST registration, filing, and compliance management. We assist businesses with GST invoicing, input tax credit... - [Where does Treelife provide tax and regulatory services?](https://treelife.in/faq/where-does-treelife-provide-tax-and-regulatory-services/): Treelife provides tax advisory and accounting services PAN India through virtual consultations. Our experts are accessible from anywhere in the... - [What is an Alternative Investment Fund (AIF)?](https://treelife.in/faq/what-is-an-alternative-investment-fund-aif/): An Alternative Investment Fund (AIF) is a privately pooled investment vehicle that collects funds from investors to invest in assets... - [What are the different categories of AIFs in India?](https://treelife.in/faq/what-are-the-different-categories-of-aifs-in-india/): AIFs are categorized into three types based on investment strategy: Treelife assists in setting up all types of AIFs as... - [What is the difference between equity funds and debt funds in AIFs?](https://treelife.in/faq/what-is-the-difference-between-equity-funds-and-debt-funds-in-aifs/): Equity funds primarily invest in equity or equity-linked instruments, aiming for capital appreciation. Debt funds focus on fixed-income instruments, generating... - [What are the key regulations under SEBI AIF Regulations, 2012?](https://treelife.in/faq/what-are-the-key-regulations-under-sebi-aif-regulations-2012/): SEBI AIF Regulations, 2012, mandate registration, disclosure norms, fund reporting, and compliance with investment and leverage limits. Treelife assists with... - [How do I register a trust in India for setting up an AIF?](https://treelife.in/faq/how-do-i-register-a-trust-in-india-for-setting-up-an-aif/): To register a trust in India, you need to prepare a trust deed, file it with the local sub-registrar, and... - [What is the difference between AIF and PMS (Portfolio Management Services)?](https://treelife.in/faq/what-is-the-difference-between-aif-and-pms-portfolio-management-services/): AIFs pool investments from multiple investors and invest based on a defined strategy, while PMS manages individual portfolios on a... - [How can Treelife help with AIF setup and registration?](https://treelife.in/faq/how-can-treelife-help-with-aif-setup-and-registration/): Treelife provides comprehensive AIF setup services, including fund structuring, documentation, and application processing with SEBI. We help you navigate the... - [Can Treelife help with the SEBI registration process for AIFs?](https://treelife.in/faq/can-treelife-help-with-the-sebi-registration-process-for-aifs/): Yes, Treelife assists with the entire SEBI registration process for AIFs, including application submission, PPM preparation, compliance checks, and ensuring... - [Do you assist with AIF documentation and compliance?](https://treelife.in/faq/do-you-assist-with-aif-documentation-and-compliance/): Yes, Treelife provides end-to-end support for AIF documentation, including drafting the PPM, trust deed, and other mandatory filings. We ensure... - [How can Treelife support investment management for AIFs?](https://treelife.in/faq/how-can-treelife-support-investment-management-for-aifs/): Treelife’s team offers investment management support, including fund administration, investor relations, financial reporting, and adherence to regulatory requirements. We help... - [Where does Treelife provide AIF setup and regulatory support?](https://treelife.in/faq/where-does-treelife-provide-aif-setup-and-regulatory-support/): We offer our AIF setup services PAN India through virtual consultations. Our team operates from major cities like Mumbai, Delhi,... - [What is due diligence, and why is it important in investment support?](https://treelife.in/faq/what-is-due-diligence-and-why-is-it-important-in-investment-support/): Due diligence is the comprehensive process of evaluating a company’s financial, legal, commercial, and operational aspects before making an investment... - [What are the different types of due diligence?](https://treelife.in/faq/what-are-the-different-types-of-due-diligence/): The main types of due diligence include: Treelife conducts comprehensive due diligence covering all these aspects to minimize risks. - [How can Treelife assist with transaction advisory services?](https://treelife.in/faq/how-can-treelife-assist-with-transaction-advisory-services/): Treelife provides end-to-end transaction advisory services, including deal structuring, negotiations, transactional agreements, and strategic advisory. Our team ensures that transactions... - [What does the due diligence process involve?](https://treelife.in/faq/what-does-the-due-diligence-process-involve/): The due diligence process typically includes collecting and analyzing financial data, legal documents, operational records, and business strategies. It also... - [What is a due diligence report?](https://treelife.in/faq/what-is-a-due-diligence-report/): A due diligence report is a comprehensive document that outlines the findings from the due diligence process. It covers financial... - [How does Treelife tailor due diligence for investor exits?](https://treelife.in/faq/how-does-treelife-tailor-due-diligence-for-investor-exits/): At the time of an investor’s exit, Treelife conducts focused due diligence to verify the financial, legal, tax, and compliance... - [What types of transactions does Treelife provide advisory support for?](https://treelife.in/faq/what-types-of-transactions-does-treelife-provide-advisory-support-for/): Treelife provides transaction advisory support for a wide range of deals, including mergers and acquisitions (M&A), private equity and venture... - [How can Treelife assist with transaction advisory services?](https://treelife.in/faq/how-can-treelife-assist-with-transaction-advisory-services-2/): Treelife provides end-to-end transaction advisory services, including deal structuring, negotiations, transactional agreements, and strategic advisory. Our team ensures that transactions... - [Can Treelife assist with transaction documentation?](https://treelife.in/faq/can-treelife-assist-with-transaction-documentation/): Yes, Treelife offers end-to-end support with transaction documentation, including drafting and reviewing investment agreements, shareholder agreements, joint venture contracts, and... - [Who does Treelife represent in transaction advisory services - investors or startups?](https://treelife.in/faq/who-does-treelife-represent-in-transaction-advisory-services-investors-or-startups/): Treelife represents both investors and startups, depending on the specific transaction and client engagement. Our team has extensive experience in... - [Does Treelife assist with international transactions?](https://treelife.in/faq/does-treelife-assist-with-international-transactions/): Yes, Treelife provides comprehensive support for international transactions, including cross-border mergers and acquisitions, foreign investment structuring, and compliance with international... - [Can Treelife help with M&A due diligence?](https://treelife.in/faq/can-treelife-help-with-ma-due-diligence/): Yes, Treelife specializes in M&A due diligence, assessing financial, legal, and operational factors before mergers or acquisitions. We ensure a... - [How does Treelife ensure accuracy in transaction documentation?](https://treelife.in/faq/how-does-treelife-ensure-accuracy-in-transaction-documentation/): We draft and review transaction agreements with precision, ensuring that terms are legally sound and aligned with investor interests. Our... - [Where does Treelife provide investment support services?](https://treelife.in/faq/where-does-treelife-provide-investment-support-services/): Treelife offers investment support PAN India through virtual consultations, ensuring accessibility to startups and businesses across the country. Our teams... - [What is corporate governance, and why is it important?](https://treelife.in/faq/what-is-corporate-governance-and-why-is-it-important/): Corporate governance refers to the system by which companies are directed and controlled. It encompasses policies, regulations, and practices that... - [What is fund accounting, and why is it essential for investors?](https://treelife.in/faq/what-is-fund-accounting-and-why-is-it-essential-for-investors/): Fund accounting is a system that tracks and reports on assets and liabilities specific to investment funds, ensuring clarity and... - [What is the role of a registrar and transfer agent (RTA)?](https://treelife.in/faq/what-is-the-role-of-a-registrar-and-transfer-agent-rta/): An RTA manages investor records, tracks transactions, and handles transfer and dematerialization of securities. Treelife collaborates with RTAs to facilitate... - [What is dematerialization, and how does Treelife assist with it?](https://treelife.in/faq/what-is-dematerialization-and-how-does-treelife-assist-with-it/): Dematerialization is the process of converting physical securities into electronic format, making them easier to manage and transfer. Treelife assists... - [What is the importance of payroll management in lifecycle assistance?](https://treelife.in/faq/what-is-the-importance-of-payroll-management-in-lifecycle-assistance/): Payroll management involves processing employee salaries, tax deductions, and compliance with statutory regulations. Treelife offers payroll management systems and support,... - [What is the role of corporate governance in strategic management?](https://treelife.in/faq/what-is-the-role-of-corporate-governance-in-strategic-management/): Corporate governance ensures that strategic decisions align with the organization’s values and legal requirements. It also establishes accountability structures for... - [How does Treelife help with corporate governance and legal support?](https://treelife.in/faq/how-does-treelife-help-with-corporate-governance-and-legal-support/): We assist businesses in establishing high standards of governance through drafting policies, conducting governance audits, and offering guidance on compliance... - [How can Treelife help investors with vendor and fund operations management?](https://treelife.in/faq/how-can-treelife-help-investors-with-vendor-and-fund-operations-management/): Treelife acts as a Single Point of Contact (SPOC) for managing vendor contracts, compliance, and performance monitoring. For fund operations,... - [Can Treelife help with ITR filing and tax compliance?](https://treelife.in/faq/can-treelife-help-with-itr-filing-and-tax-compliance/): Yes, Treelife provides comprehensive tax compliance services, including ITR filing, GST compliance, lower TDS deduction certificate applications, and FATCA reporting.... - [How does Treelife support fund-based accounting?](https://treelife.in/faq/how-does-treelife-support-fund-based-accounting/): Fund-based accounting involves managing financial transactions according to specific funds or purposes. Treelife assists in setting up accurate accounting frameworks,... - [How can Treelife help with compliance frameworks, including SEBI and RBI compliance?](https://treelife.in/faq/how-can-treelife-help-with-compliance-frameworks-including-sebi-and-rbi-compliance/): We assist businesses in complying with regulatory frameworks set by SEBI, RBI, and other authorities, including SEBI cyber security requirements... - [Can Treelife help with performance benchmarking and portfolio valuation?](https://treelife.in/faq/can-treelife-help-with-performance-benchmarking-and-portfolio-valuation/): Yes, we provide performance benchmarking to evaluate business efficiency against industry standards and offer portfolio valuation services, including NAV calculation... - [Where does Treelife provide lifecycle assistance services?](https://treelife.in/faq/where-does-treelife-provide-lifecycle-assistance-services/): Treelife provides lifecycle assistance services PAN India through virtual consultations, ensuring that businesses across the country can access expert support.... - [What is a business exit strategy, and why is it important for investors?](https://treelife.in/faq/what-is-a-business-exit-strategy-and-why-is-it-important-for-investors/): A business exit strategy outlines how investors plan to liquidate their investment in a company, maximizing returns while minimizing risks.... - [What types of due diligence are involved in the exit process?](https://treelife.in/faq/what-types-of-due-diligence-are-involved-in-the-exit-process/): The exit process involves multiple due diligence types, such as financial due diligence, legal due diligence, tax due diligence, complaince... - [What is financial due diligence, and why is it critical during exits?](https://treelife.in/faq/what-is-financial-due-diligence-and-why-is-it-critical-during-exits/): Financial due diligence evaluates the financial health of the target company, verifying assets, liabilities, revenues, and cash flows. This process... - [What are common exit strategies for investors in startups?](https://treelife.in/faq/what-are-common-exit-strategies-for-investors-in-startups/): Common exit strategies include Initial Public Offerings (IPOs), mergers and acquisitions (M&A), secondary sales, buybacks, and liquidation. Treelife advises investors... - [What is the scope of due diligence in mergers and acquisitions?](https://treelife.in/faq/what-is-the-scope-of-due-diligence-in-mergers-and-acquisitions/): Due diligence in M&A covers financial audits, legal compliance, operational reviews, commercial viability, and risk assessments. Treelife ensures thorough due... - [What is the typical timeline for an investor exit process?](https://treelife.in/faq/what-is-the-typical-timeline-for-an-investor-exit-process/): The exit timeline varies based on the chosen exit route, complexity of the transaction, and regulatory requirements. Treelife provides project... - [How does Treelife support investors with exit planning?](https://treelife.in/faq/how-does-treelife-support-investors-with-exit-planning/): Treelife provides end-to-end exit planning services, including strategic advisory, due diligence, transaction documentation, and tax planning. Our experts guide investors... - [How does Treelife handle enhanced due diligence and vendor due diligence?](https://treelife.in/faq/how-does-treelife-handle-enhanced-due-diligence-and-vendor-due-diligence/): Enhanced due diligence involves deeper analysis of compliance, risk, and governance factors, especially in sensitive or complex transactions. Vendor due... - [How does Treelife assist with tax planning during exits?](https://treelife.in/faq/how-does-treelife-assist-with-tax-planning-during-exits/): Exit transactions have significant tax implications. Treelife’s tax advisors develop customized tax-efficient exit plans, including strategies for capital gains tax,... - [Does Treelife support exit-related legal due diligence?](https://treelife.in/faq/does-treelife-support-exit-related-legal-due-diligence/): Yes, our legal team conducts exit-related legal due diligence, reviewing contracts, intellectual property rights, regulatory approvals, and litigation risks. This... - [Where does Treelife offer exit support services?](https://treelife.in/faq/where-does-treelife-offer-exit-support-services/): Treelife provides exit support services PAN India. Our teams in Mumbai, Delhi, Bangalore, and GIFT City offer localized expertise with... - [What is involved in global expansion for startups and businesses?](https://treelife.in/faq/what-is-involved-in-global-expansion-for-startups-and-businesses/): Global expansion involves entering new international markets, setting up legal entities, complying with local regulations, and structuring tax-efficient operations. Treelife... - [What are the key limitations of tax planning in international business setups?](https://treelife.in/faq/what-are-the-key-limitations-of-tax-planning-in-international-business-setups/): Limitations of tax planning include dealing with multiple tax jurisdictions, risks of double taxation, complex transfer pricing rules, and evolving... - [What is transfer pricing, and why is it important for international companies?](https://treelife.in/faq/what-is-transfer-pricing-and-why-is-it-important-for-international-companies/): Transfer pricing is the pricing of transactions between related entities in different countries. It is crucial to comply with transfer... - [How does transfer pricing applicability affect my foreign business operations?](https://treelife.in/faq/how-does-transfer-pricing-applicability-affect-my-foreign-business-operations/): Transfer pricing rules apply when transactions occur between related parties across borders. Compliance with transfer pricing applicability ensures proper documentation... - [What are the OECD transfer pricing guidelines, and how do they impact business?](https://treelife.in/faq/what-are-the-oecd-transfer-pricing-guidelines-and-how-do-they-impact-business/): The OECD transfer pricing guidelines provide internationally accepted standards for transfer pricing compliance. Treelife helps businesses align their transfer pricing... - [What are the advantages and disadvantages of transfer pricing for multinational companies?](https://treelife.in/faq/what-are-the-advantages-and-disadvantages-of-transfer-pricing-for-multinational-companies/): Advantages include tax optimization and regulatory compliance, while disadvantages involve increased documentation burden and audit risk. Treelife supports you in... - [How can Treelife assist with US company registration and US-based companies operating in India?](https://treelife.in/faq/how-can-treelife-assist-with-us-company-registration-and-us-based-companies-operating-in-india/): Trellife provides end-to-end support for US company registration and advises US-based companies looking to establish operations in India, ensuring compliance... - [How does Treelife support parent-subsidiary structuring and transfer pricing for global companies?](https://treelife.in/faq/how-does-treelife-support-parent-subsidiary-structuring-and-transfer-pricing-for-global-companies/): We assist in designing optimal parent-subsidiary models, implementing compliant transfer pricing mechanisms, and preparing necessary documentation to minimize tax risks... - [What is the process for company formation in Dubai and offshore company formation in Dubai?](https://treelife.in/faq/what-is-the-process-for-company-formation-in-dubai-and-offshore-company-formation-in-dubai/): We assist with selecting the appropriate free zone or mainland entity in Dubai, preparing documentation, and handling regulatory filings to... - [How do I register a company in Singapore, and what is the cost of registering a company in Singapore?](https://treelife.in/faq/how-do-i-register-a-company-in-singapore-and-what-is-the-cost-of-registering-a-company-in-singapore/): Trellife helps with company registration in Singapore by managing all statutory requirements and filings. We also provide transparent cost estimates... - [What is transfer pricing and why is it important?](https://treelife.in/faq/what-is-transfer-pricing-and-why-is-it-important/): Transfer pricing refers to the pricing of transactions between related entities across different tax jurisdictions. It is important to comply... - [What are the common transfer pricing methods used by businesses?](https://treelife.in/faq/what-are-the-common-transfer-pricing-methods-used-by-businesses/): Common transfer pricing methods include the Comparable Uncontrolled Price (CUP) method, Resale Price Method, Cost Plus Method, Transactional Net Margin... - [How does transfer pricing applicability affect multinational companies?](https://treelife.in/faq/how-does-transfer-pricing-applicability-affect-multinational-companies/): Transfer pricing rules apply when transactions occur between related entities across borders. Ensuring transfer pricing applicability means documenting and pricing... - [What is involved in a transfer pricing audit?](https://treelife.in/faq/what-is-involved-in-a-transfer-pricing-audit/): A transfer pricing audit reviews the pricing and documentation of related-party transactions to verify compliance with applicable tax laws. Treelife... - [What are the OECD transfer pricing guidelines and how do they impact businesses?](https://treelife.in/faq/what-are-the-oecd-transfer-pricing-guidelines-and-how-do-they-impact-businesses/): The OECD transfer pricing guidelines provide internationally accepted principles for setting and documenting transfer prices to prevent tax avoidance. Treelife... - [How can Treelife assist with offshore company formation and registration?](https://treelife.in/faq/how-can-treelife-assist-with-offshore-company-formation-and-registration/): Trelife provides end-to-end support for offshore company formation, including offshore company registration in Dubai and other jurisdictions. We assist with... - [What are the steps to register an offshore company in Dubai?](https://treelife.in/faq/what-are-the-steps-to-register-an-offshore-company-in-dubai/): Registering an offshore company in Dubai involves selecting the appropriate free zone, submitting required documentation, obtaining regulatory approvals, and fulfilling... - [How does Treelife support company registration in Singapore and the US?](https://treelife.in/faq/how-does-treelife-support-company-registration-in-singapore-and-the-us/): We assist with company registration in Singapore, managing filings, fees, and compliance. Similarly, Treelife helps with US company registration, including... - [How does tax on foreign remittance affect international business operations?](https://treelife.in/faq/how-does-tax-on-foreign-remittance-affect-international-business-operations/): Tax on foreign remittance involves regulations governing taxes on cross-border payments, including withholding taxes and reporting obligations. Treelife advises clients... - [What is the guidance note on transfer pricing issued by tax authorities?](https://treelife.in/faq/what-is-the-guidance-note-on-transfer-pricing-issued-by-tax-authorities/): The guidance note provides clarifications and detailed instructions on implementing transfer pricing laws. Treelife helps clients interpret these notes and... - [What types of business entities can I register in India?](https://treelife.in/faq/what-types-of-business-entities-can-i-register-in-india/): You can register various entities such as Private Limited Company, Limited Liability Partnership (LLP), branch office, liaison office, or a... - [What is the process for company incorporation in India?](https://treelife.in/faq/what-is-the-process-for-company-incorporation-in-india/): The incorporation process includes name approval, preparation of incorporation documents, filing with the Registrar of Companies (RoC), obtaining Digital Signature... - [Can foreign companies set up operations in India?](https://treelife.in/faq/can-foreign-companies-set-up-operations-in-india/): Yes, foreign companies can enter India via subsidiaries, branch offices, or liaison offices. Treelife assists with RBI and FEMA compliance,... - [What ongoing regulatory compliance should a company in India follow?](https://treelife.in/faq/what-ongoing-regulatory-compliance-should-a-company-in-india-follow/): Companies must comply with annual RoC filings, tax returns, labor laws, GST filings, RBI and FEMA regulations (for foreign investments),... - [What documents are required for company registration in India?](https://treelife.in/faq/what-documents-are-required-for-company-registration-in-india/): Required documents include identity and address proofs of directors and shareholders, proof of registered office address, and digital signatures. Treelife... - [What are the benefits of registering a Private Limited Company in India?](https://treelife.in/faq/what-are-the-benefits-of-registering-a-private-limited-company-in-india/): Private Limited Companies enjoy limited liability, easier access to funding, separate legal identity, and better credibility with customers and investors.... - [What does setting up a business in India involve?](https://treelife.in/faq/what-does-setting-up-a-business-in-india-involve/): Setting up a business in India involves selecting the right legal structure (private limited company, LLP, branch office, liaison office),... - [How can Treelife assist with company incorporation and registration in India?](https://treelife.in/faq/how-can-treelife-assist-with-company-incorporation-and-registration-in-india/): We provide end-to-end support for company incorporation, including drafting incorporation documents, filing with the Registrar of Companies (RoC), obtaining Digital... - [How does Treelife assist with tax registration and compliance in India?](https://treelife.in/faq/how-does-treelife-assist-with-tax-registration-and-compliance-in-india/): We support GST registration, Income Tax Permanent Account Number (PAN) and Tax Deduction and Collection Account Number (TAN) registration, and... - [How does Treelife help with tax, legal, and accounting advisory in India?](https://treelife.in/faq/how-does-treelife-help-with-tax-legal-and-accounting-advisory-in-india/): Our experts provide tax planning, GST registration and compliance, income tax filing, and legal advisory tailored for your Indian operations.... - [What ongoing compliance and regulatory support does Treelife offer?](https://treelife.in/faq/what-ongoing-compliance-and-regulatory-support-does-treelife-offer/): We assist with annual filings, RBI/FEMA compliance, labor laws, accounting standards, and corporate governance requirements. Treelife’s continuous compliance support keeps... - [Does Treelife help with setting up branch or liaison offices in India?](https://treelife.in/faq/does-treelife-help-with-setting-up-branch-or-liaison-offices-in-india/): Yes, we assist foreign companies in setting up branch and liaison offices, including necessary registrations, licenses, and compliance with RBI... - [Can Treelife help with post-incorporation services like secretarial and accounting compliance?](https://treelife.in/faq/can-treelife-help-with-post-incorporation-services-like-secretarial-and-accounting-compliance/): Absolutely. After incorporation, we provide secretarial compliance, annual filings, bookkeeping, tax compliance, and other regulatory services to keep your business... - [What is GIFT IFSC and why is it important for businesses?](https://treelife.in/faq/what-is-gift-ifsc-and-why-is-it-important-for-businesses/): Gujarat International Finance Tec-City (GIFT) International Financial Services Centre (IFSC) is a designated financial hub offering global business advantages such... - [What regulatory and tax advisory services do you offer for GIFT IFSC businesses?](https://treelife.in/faq/what-regulatory-and-tax-advisory-services-do-you-offer-for-gift-ifsc-businesses/): We guide clients through the complex regulatory landscape, including compliance with IFSCA regulations, GST, income tax, and other applicable laws... - [What types of businesses can be set up in GIFT IFSC?](https://treelife.in/faq/what-types-of-businesses-can-be-set-up-in-gift-ifsc/): GIFT IFSC supports a wide range of businesses including banking, fund management, insurance, capital markets, and financial advisory services. Treelife... - [How long does it take to set up a business in GIFT IFSC?](https://treelife.in/faq/how-long-does-it-take-to-set-up-a-business-in-gift-ifsc/): Setup timelines vary based on the complexity of the business and regulatory approvals required. Treelife expedites the process through proactive... - [Are there tax benefits to operating in GIFT IFSC?](https://treelife.in/faq/are-there-tax-benefits-to-operating-in-gift-ifsc/): Yes, GIFT IFSC offers multiple tax incentives including exemptions or reduced rates on income tax, GST, stamp duty, and other... - [How can Treelife assist with setting up a business in GIFT IFSC?](https://treelife.in/faq/how-can-treelife-assist-with-setting-up-a-business-in-gift-ifsc/): Treelife provides comprehensive support, including feasibility analysis, entity incorporation, regulatory approvals, tax structuring, and post-setup compliance to ensure your business... - [What ancillary services does Treelife provide for ongoing GIFT IFSC operations?](https://treelife.in/faq/what-ancillary-services-does-treelife-provide-for-ongoing-gift-ifsc-operations/): Our ancillary services include managing compliance filings, liaison with regulators, handling accounting and reporting requirements, and supporting operational needs to... - [Does Treelife provide ongoing compliance support after GIFT IFSC setup?](https://treelife.in/faq/does-treelife-provide-ongoing-compliance-support-after-gift-ifsc-setup/): Yes, we provide continuous regulatory and tax compliance support, ensuring your business stays aligned with changing regulations and operates without... - [Can Treelife assist foreign companies interested in establishing a presence in GIFT IFSC?](https://treelife.in/faq/can-treelife-assist-foreign-companies-interested-in-establishing-a-presence-in-gift-ifsc/): Absolutely. We help foreign companies with jurisdictional analysis, entity incorporation, regulatory approvals, and tax planning to facilitate their entry into... - [How does Treelife ensure a smooth GIFT IFSC setup experience?](https://treelife.in/faq/how-does-treelife-ensure-a-smooth-gift-ifsc-setup-experience/): Our expert team offers end-to-end project management, thorough feasibility studies, regulatory navigation, and post-setup assistance, making your GIFT IFSC journey... - [What are Virtual CFO (VCFO) services?](https://treelife.in/faq/what-are-virtual-cfo-vcfo-services/): Virtual CFO services provide outsourced financial leadership and management for startups and small businesses. Treelife’s VCFO offerings include accounting and... - [How is your pricing model?](https://treelife.in/faq/how-is-your-pricing-model/): Treelife offers a flexible and transparent pricing model tailored to the specific needs of your business. Our pricing is structured... - [Are there any hidden fees or additional costs?](https://treelife.in/faq/are-there-any-hidden-fees-or-additional-costs/): No, Treelife believes in transparency and ensures there are no hidden fees or unexpected charges. All costs are clearly outlined... - [What is the typical turnaround time for your services?](https://treelife.in/faq/what-is-the-typical-turnaround-time-for-your-services/): The turnaround time for our services depends on the complexity and scope of the project. During the initial consultation, we... - [What is your payment schedule?](https://treelife.in/faq/what-is-your-payment-schedule/): Our payment schedule is designed to be convenient and flexible. Typically, we operate on a milestone-based payment system, where payments... - [How can I pay you?](https://treelife.in/faq/how-can-i-pay-you/): Treelife accepts various payment methods to ensure ease and convenience for our clients. You can pay us via bank transfer,... - [Can Treelife assist with international market entry?](https://treelife.in/faq/can-treelife-assist-with-international-market-entry/): Yes, Treelife offers extensive support for businesses looking to expand globally. Our services include jurisdiction evaluation, regulatory assessment, and execution... - [Can Treelife assist with setting up a business in India?](https://treelife.in/faq/can-treelife-assist-with-setting-up-a-business-in-india/): Yes, Treelife provides end-to-end support for setting up a business in India. Our services include market entry strategy, company registration,... - [I am based out of a location where Treelife doesn't have an office, how do we work?](https://treelife.in/faq/i-am-based-out-of-a-location-where-treelife-does-not-have-an-office/): Treelife operates seamlessly with clients across various locations whether domestic or international through virtual communication and collaboration tools. We conduct... - [What tools or technologies are you equipped with?](https://treelife.in/faq/what-tools-or-technologies-are-you-equipped-with/): Treelife is equipped with a comprehensive technology stack to ensure effective and efficent way to deliver our services. For bookkeeping,... - [Who will manage my account?](https://treelife.in/faq/who-will-manage-my-account/): Your account will be managed by a dedicated SPOC who will be your primary point of contact. This person will... - [Do I need to physically sign any documents?](https://treelife.in/faq/do-i-need-to-physically-sign-any-documents/): No, physical signatures are generally not required. Treelife uses secure electronic signature platforms to facilitate the signing of documents, making... - [How do you ensure data security and confidentiality?](https://treelife.in/faq/how-do-you-ensure-data-security-and-confidentiality/): Treelife prioritizes the security and confidentiality of your data. We use secure servers, encryption, and access controls to protect your... - [What is transaction services?](https://treelife.in/faq/what-is-transaction-services/): Our transaction services encompass advisory and documentation support for various financial transactions, including private equity/venture capital (PE/VC) deals, mergers and... - [Do you help in raising funds?](https://treelife.in/faq/do-you-help-in-raising-funds/): Yes, Treelife supports startups and businesses during their fundraising process. While we are not an investor or fund, we offer... - [What sets Treelife apart from other service providers?](https://treelife.in/faq/what-sets-treelife-apart-from-other-service-providers/): Treelife stands out due to our integrated approach, combining legal, financial, and compliance expertise under one roof. Our personalized service... - [What is your experience of working with investors and AIFs?](https://treelife.in/faq/what-is-your-experience-of-working-with-investors-and-aifs/): Treelife has a robust track record of working with investors and Alternative Investment Funds (AIFs). We offer comprehensive support for... - [Have you worked with startups before?](https://treelife.in/faq/have-you-worked-with-startups-before/): Yes, we have extensive experience working with startups across various industries. We understand the unique challenges faced by startups and... - [What is the profile of the members working at Treelife?](https://treelife.in/faq/what-is-the-profile-of-the-members-working-at-treelife/): Our team at Treelife is made up of experienced professionals, including lawyers, Chartered Accountants (CAs), and Company Secretaries (CS), with... - [What does Treelife do?](https://treelife.in/faq/what-does-treelife-do/): Treelife provides comprehensive legal, financial, and compliance services tailored to the needs of startups, investors, and businesses. Our services include... - [I am just a startup, I need all services, can you help me?](https://treelife.in/faq/i-am-just-a-startup-i-need-all-services-can-you-help-me/): Absolutely! Treelife specializes in supporting startups with a wide range of services. From legal support and virtual CFO services to... --- # # Detailed Content ## Pages - Published: 2024-10-02 - Modified: 2025-07-25 - URL: https://treelife.in/career/ Our Culture Be part of a thriving culture that fosters collaboration and teamwork. We offer exciting opportunities to work on comprehensive services tailored to the unique needs of the startup ecosystem, driving impactful innovation. Experience a supportive environment where your contributions are valued, and together, we can make a real difference in shaping the future of the startup ecosystem. --- - Published: 2024-08-21 - Modified: 2024-08-21 - URL: https://treelife.in/terms-of-use/ Terms of Use The website www. treelife. in is operated and maintained by Treelife Ventures Services Private Limited and/or its affiliates (“Treelife”), and its access and use is subject to these terms of use (“Terms”) and the privacy policy available at https://treelife. in/privacy-policy/ (“Privacy Policy”). 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Contact Us: If there are any questions regarding these Terms, you may contact us using the information below: support@treelife. in; with a copy to koustubh. a@treelife. in --- - Published: 2024-08-06 - Modified: 2024-08-21 - URL: https://treelife.in/privacy-policy/ Privacy Policy Treelife is committed to safeguarding and respecting your privacy and choices. This ‘Privacy Policy’ should be read along with the https://treelife. in/terms-of-use/, and explains how we treat your data and privacy when you access and/or use our website, “www. treelife. in”. You agree and acknowledge that we may access, collect, use, treat and disseminate your data according to this Policy. Applicability:  This Privacy Policy applies to you when you access and/or browse our website and/or register any query or make a communication through the website. 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To ensure that your Data receives an adequate level of protection, we have put in place appropriate safeguards and procedures with the third parties we share your Data with. This ensures your Data is treated by those third parties in a way that is consistent with the Data Protection Laws. Cookies Cookie is a small data file that is sent to or accessed from your device when you use the website (“Cookies”). We may use Information from Cookies for the following purposes: Traffic monitoring; IP address from which you access the website; Type of device and operating system used to access the website; Date and time of access to the website; Pages that you visit. Revisions to Privacy Policy We reserve the right to update and revise this Privacy Policy at any time, and you should review this Privacy Policy regularly. Use of the website constitutes acceptance of the terms of the Privacy Policy as amended or revised. Rights in your Data You have the following rights in relation to your Data and shall be duly notified of the completion of the following, should you opt to choose one or more of the following: Right to access – the right to request (i) copies of the information we hold about you at any time; (ii) the processing activities undertaken by us with respect to your Personal Information; (iii) the data controller’s identity (i. e. , information about persons who control the manner in which your Personal Information is processed); (iv) the entities or categories of entities to whom your Personal Information may be transferred, or (v) that we modify, update or delete such information. Right... --- --- ## Posts > When a foreign company decides to enter the Indian market, choosing the right business structure is critical. India offers several types of business structures, each with its own advantages, challenges, and regulatory requirements. - Published: 2025-08-26 - Modified: 2025-08-29 - URL: https://treelife.in/compliance/setting-up-a-business-in-india-for-foreign-company/ - Categories: Compliance - Tags: foreign company registration in india, Foreign Company Set Up its Business in India, How Can a Foreign Company Set Up its Business in India, India business setup, setting up a foreign business in india, setup business in india, setup india business What is the Process for Setting Up a Foreign Business in India? Setting up a foreign business in India involves a systematic process with legal, financial, and regulatory requirements. India offers multiple entry options for foreign companies, including wholly-owned subsidiaries, joint ventures, branch offices, liaison offices, and project offices. Understanding the Foreign Direct Investment (FDI) policy, sector-specific regulations, and the overall business environment is crucial for smooth establishment and operation. India’s large consumer market, strategic location, and government policies aimed at encouraging FDI make it an attractive destination for foreign investments. Foreign businesses can enter most sectors under the automatic FDI route, but certain sectors like defense, media, and retail may require prior government approval. Key Regulatory Considerations for Setting Up a Business in India: Foreign Direct Investment (FDI) Policy India allows up to 100% FDI in most sectors under the automatic route. This means foreign companies can establish fully owned subsidiaries without needing government approval in most cases. However, some sectors, such as defense, agriculture, and news media, have restrictions or require prior government approval. Business Structures Available for Foreign Entities Wholly Owned Subsidiary (WOS): Foreign companies can set up a WOS where they retain full control. No minimum capital requirement exists, but they must comply with FEMA (Foreign Exchange Management Act) and other Indian regulations. Joint Venture (JV): A JV involves a partnership with an Indian entity. This structure is often used to mitigate risk while accessing local market knowledge. Branch Office: A branch office allows foreign businesses to operate in India but has limitations in terms of income generation and activities. RBI approval is required. Liaison Office: Primarily for communication purposes, liaison offices cannot engage in direct income-generating activities. Project Office: A foreign company executing a specific project in India can set up a project office under certain conditions. Key Regulatory Frameworks The Companies Act, 2013: This governs the incorporation and functioning of companies in India, covering WOS and JVs. The Foreign Exchange Management Act (FEMA): FEMA regulations govern cross-border transactions and foreign investment in India. Reserve Bank of India (RBI): RBI approval is required for foreign companies setting up branch offices, liaison offices, and project offices. Compliance Requirements Once the business entity is established, it must comply with various Indian laws, including: GST Registration: Required for companies engaging in goods or service transactions above the threshold limit. Income Tax Registration (PAN): The company must apply for a Permanent Account Number (PAN) to comply with tax regulations. Employment Laws: Compliance with Indian labor laws is essential, including registering employees for provident fund (PF), employee state insurance (ESI), and other benefits. What is a Foreign Company in India? A foreign company is a business entity established outside of India but seeking to conduct business within the country. It can be a parent company, a branch office, or a subsidiary operating in India. As per Indian law, a foreign company is defined under the Companies Act, 2013, and Foreign Exchange Management Act (FEMA). Why Set Up a Business in India? What Are the Benefits of Starting a Business in India? India offers numerous advantages for foreign businesses looking to expand. As one of the fastest-growing economies in the world, India provides a strategic market for international companies to tap into. Below are the key benefits that make India a prime destination for setting up a business: 1. Market Potential and Size: India is the 3rd Largest Economy in Asia India is the third-largest economy in Asia and the fifth-largest in the world by nominal GDP. With a population of over 1. 4 billion people, India is home to a vast and diverse consumer base, providing businesses with ample growth opportunities. GDP Growth: India’s GDP is projected to grow at a robust rate, driven by sectors like manufacturing, technology, and services. Consumer Spending: As disposable incomes rise, India's middle class is expanding, resulting in increased domestic consumption. This makes India a major market for foreign companies, providing potential for expansion in nearly every sector. 2. Access to a Large, Diverse Consumer Base India is a melting pot of diverse cultures, languages, and traditions. This diversity presents businesses with the opportunity to cater to a wide range of consumer needs and preferences. Companies can innovate by offering products and services that are tailored to meet the specific demands of regional markets. Large Population: India’s population is young, with approximately 50% under the age of 25, creating a dynamic and future-oriented market. Emerging Middle Class: India’s middle class is expected to grow exponentially, increasing demand for consumer goods, services, and technology. The large consumer base is one of the biggest attractions for foreign companies, offering businesses a chance to capture diverse market segments. 3. Strategic Geographical Position and Trade Agreements India’s geographical location in South Asia makes it a strategic hub for trade and business. It offers easy access to markets in Asia, the Middle East, Africa, and beyond. India’s trade agreements with countries like the U. S. , EU, ASEAN, and others create additional opportunities for foreign businesses. Access to Key Markets: India’s location provides proximity to key emerging markets in Asia, Africa, and the Middle East. Trade Agreements: India has several bilateral and multilateral trade agreements, such as the Comprehensive Economic Partnership Agreement (CEPA) with Japan and South Korea. This strategic positioning allows foreign businesses to establish a foothold in India while benefiting from preferential trade terms with various regions. 4. FDI Growth and Government Support Initiatives Like "Make in India" The Indian government has introduced several initiatives to encourage foreign direct investment (FDI). The Make in India program, launched in 2014, is aimed at turning India into a global manufacturing hub. It offers incentives and promotes sectors such as defense, aerospace, and electronics for foreign investment. Government Initiatives: Programs like Make in India, Startup India, and Atmanirbhar Bharat encourage FDI, especially in sectors like manufacturing, technology, and infrastructure. FDI Reforms: India has liberalized FDI policies in several sectors, making it easier for foreign companies to establish businesses and repatriate... --- - Published: 2025-08-26 - Modified: 2025-08-26 - URL: https://treelife.in/quick-takes/online-gaming-act-2025-can-this-trigger-material-adverse-effect-clause/ - Categories: Quick Takes - Tags: MAE Introduction This article analyzes Material Adverse Effect (“MAE”) clauses in the transaction documents with specific focus on regulatory changes. What is Material Adverse Effect? A Material Adverse Effect means occurrence of events or circumstances that affect: (a) substantially and adversely the business, operations, assets, liabilities, or financial condition of the target company; (b) the status and validity of any material consents or approvals required for the company to carry on its business; (c) the validity or enforceability of any of the documents or of the rights or remedies of the investors; (d) the ability of the company and/or the founders to consummate the transactions or to perform their obligations, etc. Can enforcement of Online Gaming Act, 2025 be treated as an MAE Event? How can a change in law trigger MAE? One of the recent examples of events or circumstances that can substantially and adversely affect the business is the introduction of the Online Gaming Act, 2025 (“Act”) in the online gaming sector. This Act represents a significant change in law that could possibly trigger MAE clauses for companies in the online real money gaming sector. Impact of regulatory change on business For companies primarily engaged in online money gaming, this prohibition directly eliminates their core business model therefore affecting their operations, financial condition, validity of consents and approvals, also in some cases, consummation of transaction. This categorical prohibition would fundamentally undermine the business premise upon which investors may have valued the company, potentially reducing its value to near zero if no alternative business model exists. What does the Act explicitly prohibit? Offering online money gaming services Revenue elimination: Companies can no longer offer their core service, immediately cutting off revenue streams. Advertising or promoting online money games Marketing prohibition: Even if a company wanted to pivot to offshore operations, they cannot advertise to the Indian market Facilitating financial transactions for online money games Payment blockade: The prohibition on financial institutions from processing related payments creates a complete operational blockade. This three-pronged approach means that companies cannot operate, market, or monetize online money games in any capacity within India, fundamentally altering the business case that investors relied upon. The Act specifically targets business operations "from outside the territory of India" as well, closing potential loopholes. Penalties and Enforcement Mechanisms The other provisions of the Act that could potentially trigger MAE are penalties and enforcement mechanisms which include imprisonment up to three years and fines up to one crore rupees for offering online money gaming services. These penalties create material risks for key employees of the target companies in several ways: Operational disruption: The Act makes related offenses cognizable and non-bailable, meaning executives could be detained during legal proceedings Criminal liability for leadership: Directors and officers face personal criminal liability, potentially triggering key person provisions (if applicable) in MAE clause Significant financial penalties: Fines of up to one crore rupees (with enhanced penalties for repeat offenders) represent material financial exposure Reputational Damage: Any company engaging in such activities can be seen as engaging in activities that can cause serious social, financial and psychological harm to public health. Further, the Act states that the unchecked expansion of online money gaming services has been linked to unlawful activities including financial fraud, money-laundering, tax evasion, and in some cases, the financing of terrorism, thereby posing threats to national security, public order and the integrity of the State. The companies engaged in such activities can be exposed to reputational damage for such reasons. The collective impact of these enforcement provisions creates both immediate financial liability and operational continuity risks that would likely meet materiality thresholds in the MAE clauses. How to safeguard the Company in such situations? Building exceptions and carve outs: Industry-Wide Effects: Many MAE clauses exclude industry-wide changes that affect all market participants equally. Since the Online Gaming Act 2025 impacts the entire online money gaming sector uniformly, companies could argue this falls within standard carve-outs for industry-wide effects. Counter-argument for MAE trigger: However, the Act creates a bifurcated impact on the gaming industry, explicitly promoting e-sports and social gaming while prohibiting money gaming. Companies exclusively focused on money gaming would be disproportionately affected compared to diversified gaming companies, potentially overcoming industry-wide effect exceptions if the MAE clause contains "disproportionate impact" language. Changes in Law Exception: Building a carve out that provides exclusion of general changes in law or government policy from triggering an MAE. If the agreement contains such an exception without qualification, the target company could argue that the Act is merely a change in law that falls within this standard carve-out. Counter-argument for MAE trigger: The Act is not a general regulatory change but specifically targets and prohibits a narrowly defined business activity. The Act explicitly states it aims to "prohibit the offering, operation, facilitation, advertisement, promotion and participation in online money games. " This targeted prohibition, rather than general regulation, may overcome typical changes-in-law exceptions, especially if the MAE clause contains language addressing laws that specifically target the company's industry or core business. Foreseeability: If regulatory changes were foreseeable at the time of entering the agreement, it could be argued that such changes cannot trigger an MAE. The Act's preamble acknowledges longstanding concerns about "deleterious and negative impact of online money games" and their association with "financial fraud, money-laundering, tax evasion. " If these concerns were public knowledge, target companies could argue investors assumed this regulatory risk. Counter-argument for MAE trigger: While some regulation might have been foreseeable, the Act’s approach of complete prohibition rather than regulation represents a more extreme position that might not have been reasonably anticipated. The Act explicitly states it is "expedient... to completely prohibit the activity of online money gaming, rather than attempts to regulate. " This total prohibition approach, rather than a regulatory framework, may exceed what was reasonably foreseeable. Drafting Considerations for MAE Clauses When drafting or negotiating MAE clauses in the online gaming sector, parties should consider: Specificity regarding regulatory changes: Explicitly address whether prohibition of core business activities constitutes an... --- - Published: 2025-08-25 - Modified: 2025-08-25 - URL: https://treelife.in/taxation/taxation-and-regulatory-framework-for-derivatives-and-equity-investments-in-india/ - Categories: Taxation - Tags: Derivatives and Equity Investments Executive Summary This research note provides a comprehensive analysis of the taxation and regulatory framework governing investments in derivatives (futures and options) and listed equity shares in India as of August 2025. The analysis covers both resident Indian investors and non-resident investors, highlighting the distinct treatment under tax laws, securities regulations, and foreign exchange management rules. Recent legislative changes, including modifications to Securities Transaction Tax (STT) rates and capital gains tax provisions introduced in Budget 2024, have significantly altered the investment landscape. This note serves as a reference guide for understanding the comparative framework applicable to different categories of investors in the Indian securities market. Taxation Framework for Derivatives (Futures and Options) Classification of Income from Derivatives 1. For Resident Indian Investors Income derived from trading in derivatives (futures and options) on recognized stock exchanges in India is classified as non-speculative business income under Section 43(5) of the Income Tax Act, 1961. Specifically, clause (d) of Section 43(5) excludes eligible transactions in derivatives referred to in Section 2(ac) of the Securities Contracts (Regulation) Act, 1956, carried out on recognized stock exchanges from being considered as speculative transactions . The classification of derivative transactions as non-speculative business income offers significant tax advantages: Losses from derivatives trading can be set off against any other income of the same year Any excess loss can be carried forward for up to eight assessment years Such losses can be set off against any other income (except salary) in subsequent years This classification is particularly important when contrasted with intraday equity trading, which is considered speculative business income. Unlike intraday equity trading losses that can only be set off against other speculative income, derivative losses enjoy more flexible set-off provisions . 2. For Non-Resident Investors For non-resident investors, including NRIs, the income classification from derivatives follows similar principles as residents. However, there are important restrictions and considerations: NRIs can invest in futures and options segments only on a non-repatriation basis using funds held in India Such investments must be made out of Rupee funds held in India, typically through Non-Resident Ordinary (NRO) accounts Foreign Portfolio Investors (FPIs), particularly Category I FPIs, are permitted to invest in exchange-traded derivatives approved by SEBI For taxation purposes, non-residents' income from derivatives is subject to the general provisions applicable to business income under the Income Tax Act, but may also benefit from reduced rates under applicable Double Taxation Avoidance Agreements (DTAAs) . Tax Rates and Recent Changes 1. Securities Transaction Tax (STT) Budget 2024 introduced significant changes to the STT rates for derivatives trading, effective from October 1, 2024 : Transaction TypeOld Rate (Until Sept 30, 2024)New Rate (From Oct 1, 2024)Payable BySale of futures in securities0. 0125% of the price at which futures are traded0. 02% of the price at which futures are tradedSellerSale of options in securities0. 0625% of the option premium0. 1% of the option premiumSellerSale of options when exercised0. 125% of the settlement price0. 125% of the settlement pricePurchaser These STT increases were aimed at curbing excessive speculation in derivatives markets and have reportedly reduced market liquidity by 30-40% . 2. Income Tax Rates For resident individuals, income from derivatives trading is taxed as business income at applicable slab rates : New Tax Regime (post-Budget 2024): Up to ₹4 lakhs: Nil ₹4 lakhs to ₹8 lakhs: 5% ₹8 lakhs to ₹12 lakhs: 10% (and higher slabs accordingly) For non-resident investors, standard tax rates for business income apply, subject to the provisions of applicable Double Taxation Avoidance Agreements . 3. Accounting and Audit Requirements Given that derivatives income is classified as business income, traders must: File ITR-3 (or ITR-4 if under presumptive taxation scheme) Maintain books of accounts as per Section 44AA Get accounts audited if turnover exceeds ₹10 crores (for fully digital transactions) Turnover for derivatives trading is calculated as the sum of absolute amounts of profits and losses, not just the net trading value . Taxation Framework for Listed Equity Shares Classification of Income from Equity Investments 1. For Resident Indian Investors Income from equity investments can be classified either as: Capital Gains: When shares are held as investments with the primary intention of earning dividends and long-term appreciation Business Income: When shares are frequently traded as part of regular business activity The classification depends on the investor's intent, frequency of transactions, holding period, and other factors. However, in practice, listed equity shares held for more than 12 months are typically treated as capital assets . 2. For Non-Resident Investors For non-resident investors, income from equity investments is generally classified as capital gains unless the non-resident is engaged in the business of trading securities. NRIs can invest in listed equity shares through the Portfolio Investment Scheme (PIS) on both repatriation and non-repatriation basis . Foreign Portfolio Investors (FPIs) registered with SEBI are specifically authorized to invest in listed shares, and their income is taxed under special provisions including Section 115AD of the Income Tax Act . Tax Rates and Recent Changes 1. Securities Transaction Tax (STT) STT rates applicable for equity transactions (unchanged in Budget 2024) : Transaction TypeRatePayable ByPurchase of equity shares (delivery-based)0. 1% of the valuePurchaserSale of equity shares (delivery-based)0. 1% of the valueSellerSale of equity shares (intraday/non-delivery)0. 025% of the valueSeller 2. Capital Gains Tax Budget 2024 introduced significant changes to capital gains tax rates for equity investments, effective from July 23, 2024 : Type of Capital GainPre-July 23, 2024Post-July 23, 2024Short-Term Capital Gains (held ≤ 12 months)15%20%Long-Term Capital Gains (held > 12 months)10% (above ₹1 lakh exemption)12. 5% (above ₹1. 25 lakh exemption) These rates apply to both resident and non-resident investors, including FPIs. However, non-residents may be eligible for beneficial rates under applicable Double Taxation Avoidance Agreements . 3. Grandfathering Provisions The grandfathering provisions introduced in Budget 2018 continue to apply. For listed shares acquired before February 1, 2018, the cost of acquisition for computing long-term capital gains is deemed to be the higher of: Actual cost of acquisition Lower of: Fair Market Value (FMV) as of January 31, 2018... --- - Published: 2025-08-25 - Modified: 2025-08-26 - URL: https://treelife.in/reports/make-in-india/ - Categories: Reports - Tags: make in india Launched in 2014, the 'Make in India' (MII) initiative represents a cornerstone of the Indian government's economic strategy, aiming to transform the nation into a global hub for manufacturing, design, and innovation. The initiative seeks to increase the manufacturing sector's contribution to the Gross Domestic Product (GDP), attract significant foreign and domestic investment, foster innovation, build world-class infrastructure, and create large-scale employment opportunities. Key components of the MII framework include a focus on improving the Ease of Doing Business (EoDB), liberalizing Foreign Direct Investment (FDI) policies, developing robust physical and digital infrastructure through programs like PM GatiShakti and the National Logistics Policy, and implementing targeted interventions such as the Production Linked Incentive (PLI) scheme across strategic sectors. The initiative is further supported by an interconnected ecosystem encompassing Skill India, Startup India, Digital India, taxation reforms (like the Goods and Services Tax - GST), and efforts towards harmonizing labor laws. Over the past decade, MII has contributed to a significant rise in FDI inflows, notable improvements in India's EoDB rankings, and substantial growth in specific manufacturing sectors, particularly electronics, defence, and pharmaceuticals, often catalyzed by the PLI scheme. However, challenges persist, including the unmet target of increasing manufacturing's share in GDP to 25%, ensuring broad-based job creation commensurate with initial ambitions, bridging persistent skill gaps, and ensuring consistent implementation of reforms across states and sectors. This report provides a comprehensive analysis of the Make in India initiative, detailing its origins, objectives, framework, focus sectors, and key schemes like PLI. It examines the procedures for investment, the legal and regulatory landscape, the role of supporting ecosystem initiatives, and assesses the overall impact through statistical data and sector-specific case studies. The report concludes with an outlook on the future trajectory of India's manufacturing ambitions and potential considerations for stakeholders. Introduction: The Genesis and Vision of Make in India Context: India's Economic Landscape Pre-2014 The launch of the Make in India initiative occurred during a period of considerable economic concern for India. After years of robust growth averaging around 7. 7% between 2002 and 2011, India's GNP growth rate had decelerated significantly, hovering around 5% in 2013 and 2014. 1 The optimism surrounding emerging markets had waned, and India found itself labelled as one of the 'Fragile Five' economies, perceived as vulnerable to global economic shocks. 2 This slowdown raised questions among global investors about India's potential and prompted domestic concerns about sustaining the country's development trajectory. 3 The lagging manufacturing sector was identified as a key area needing revitalization to spur broader economic growth and create employment. 4 India seemed poised on the brink of economic challenges, necessitating a significant policy push. 3 The timing and stated goals of MII suggest it was not merely a promotional campaign but a strategic response aimed at addressing these perceived economic vulnerabilities. The ambitious targets set for manufacturing's GDP contribution and job creation point towards an intention to engineer a structural shift in the economy, reducing over-reliance on the services sector and building greater industrial resilience. 5 Launch and Core Objectives Against this critical backdrop, the Make in India initiative was formally launched by Prime Minister Narendra Modi on September 25, 2014. 1 Its overarching vision was to transform India into a leading global destination for design and manufacturing. 2 The core objectives articulated were multi-fold: Facilitate Investment: Attract both domestic capital and Foreign Direct Investment (FDI) into the manufacturing sector. 1 Foster Innovation: Encourage research, development, and the adoption of new technologies within Indian industries. 2 Build Best-in-Class Infrastructure: Develop modern physical and digital infrastructure to support manufacturing and logistics. 2 Create Employment: Generate substantial job opportunities, particularly in the manufacturing sector, with an initial target of creating 100 million additional manufacturing jobs by 2022. 2 Increase Manufacturing's GDP Share: Raise the contribution of the manufacturing sector to India's GDP to 25% by 2022 (a target later revised to 2025). 5 Enhance Skill Development: Upgrade the skills of the Indian workforce to meet the demands of modern manufacturing. 11 Protect Intellectual Property: Strengthen the framework for protecting intellectual property rights. 13 The 'Make in India' Philosophy Beyond being an economic program or a marketing slogan ('Goodbye red tape, hello red carpet' 1), Make in India was presented as representing a fundamental shift in the government's approach towards industry. 3 It signified a move away from a purely regulatory role towards becoming a facilitator and partner in economic development, embodying the principle of 'Minimum Government, Maximum Governance'. 3 This involved a comprehensive overhaul of outdated policies and processes. 3 The emphasis on changing the governmental mindset suggests an official acknowledgment that previous administrative and policy environments were perceived as impediments to industrial growth, necessitating internal process re-engineering alongside external promotion efforts. 3 MII was positioned as a pioneering 'Vocal for Local' initiative, aimed at showcasing India's industrial potential globally while boosting domestic capabilities. 2 It served as a galvanizing call to action for India's citizens, business leaders, and potential international partners. 3 An underlying theme was the pursuit of quality and environmental consciousness, encapsulated in the slogan 'Zero Defect, Zero Effect', aiming for products manufactured without defects and without adverse environmental impact. 29 Decoding the Make in India Framework The Make in India initiative is structured around four key pillars, designed to create a synergistic effect boosting entrepreneurship and manufacturing. 13 The Four Pillars New Processes: This pillar emphasizes 'Ease of Doing Business' (EoDB) as the paramount factor for promoting entrepreneurship. 2 The core idea is to simplify, de-license, and de-regulate industrial processes throughout the entire lifecycle of a business, from setup to operation and closure. 12 This involves streamlining approvals, reducing compliance burdens, and making the regulatory environment more predictable and investor-friendly. New Infrastructure: Recognizing that modern, facilitating infrastructure is crucial for industrial growth, this pillar focuses on its development. 12 The government articulated its intent to develop dedicated Industrial Corridors and Smart Cities equipped with state-of-the-art technology, high-speed communication networks, and integrated logistics arrangements. 12 The plan also included strengthening existing infrastructure within industrial... --- > The Promotion and Regulation of Online Gaming Bill, 2025 (“Gaming Bill 2025”) aims to reshape this sector by banning all forms of real-money gaming while promoting e-sports and social gaming. While the Bill seeks to protect users from risks like addiction and financial losses, it has also sparked debates about economic disruption, constitutional validity, and employment impact. - Published: 2025-08-22 - Modified: 2025-08-25 - URL: https://treelife.in/reports/the-gaming-bill-2025/ - Categories: Reports - Tags: gaming bill 2025, india gaming bill 2025, indian gaming bill 2025, online gaming bill india 2025 DOWNLOAD PDF Promotion and Regulation of Online Gaming Bill, 2025 India’s online gaming industry is at a decisive turning point. With over 500 million users and revenues crossing ₹25,000–31,000 crore in 2024, gaming has been one of the fastest-growing segments of the digital economy. Real-Money Gaming (RMG) including fantasy sports, rummy, and poker contributed nearly 85% of industry revenues, with projections of reaching ₹50,000 crore by 2028. The Promotion and Regulation of Online Gaming Bill, 2025 (“Gaming Bill 2025”) aims to reshape this sector by banning all forms of real-money gaming while promoting e-sports and social gaming. While the Bill seeks to protect users from risks like addiction and financial losses, it has also sparked debates about economic disruption, constitutional validity, and employment impact. What Does the Gaming Bill 2025 Propose? 1. Ban on Real-Money Gaming (RMG) All online games involving user deposits, fees, or stakes for monetary gain are prohibited. This removes the long-standing “skill vs. chance” distinction treating games like poker, rummy, and fantasy sports as gambling. Advertising, payment facilitation, and transfers related to RMG are also banned. 2. Classification of Games The Bill introduces three key categories: Online Money Games (Banned): Dream11, MPL, Junglee Rummy, PokerBaazi, Zupee, WinZO, etc. E-Sports (Allowed): Games recognized under the National Sports Governance Act, 2025 — such as BGMI, Dota 2, CS:GO. Online Social & Educational Games (Allowed): Minecraft, Clash of Clans, Pokémon Go, learning-based games. 3. Enforcement & Penalties The Bill sets up a Central Gaming Authority with powers to classify games, regulate platforms, and conduct searches in virtual digital spaces. Penalties include: Creation of a Central Online Gaming Authority (COGA) with powers to classify, license, and regulate platforms. Penalties: Up to 3 years imprisonment or ₹1 crore fine for first-time violations. Repeat offenders face 2–5 years imprisonment and fines up to ₹2 crore. Authorities may order app blocking, payment gateway suspension, and even conduct searches in digital spaces without warrants. What Are the Impacts of the Gaming Bill 2025? Impact AreaDetailsIndustry LossRMG (USD 2. 2B in 2023, projected USD 8. 6B by 2028) faces elimination. Tax RevenuePotential loss of ₹20,000 crore; GST collections of ₹75,000+ crore at risk. Startups & InvestmentOver 400 startups and ₹22,931 crore of funding endangered. EmploymentOver 100,000 jobs directly at risk; sector had potential to create 250,000 more. User SafetyBan could push 568 million gamers to offshore platforms with no consumer protection. InnovationSector employing 200,000+ professionals and attracting ₹25,000 crore FDI could stagnate. What Are the Legal & Constitutional Challenges? Article 19(1)(g) – Right to Trade & Profession Indian courts have upheld skill-based games (like fantasy sports and poker) as legitimate businesses, not gambling. A blanket ban may be struck down as disproportionate under Article 19(1)(g), which protects the right to carry on business. Article 21 – Right to Liberty & Privacy The Bill allows warrantless searches, arrests, and digital surveillance. Critics argue this violates privacy rights under the Puttaswamy judgment (2017) and could be seen as excessive and unconstitutional. Industry Fallout: Who’s Hit the Hardest? Dream11 paused contests and is reportedly in talks with BCCI to end its ₹358 crore sponsorship deal. MPL, Games24x7, WinZO, Zupee, GamesKraft have shut down RMG operations, processing withdrawals for users. WinZO is pivoting globally entering the U. S. market and adding short-video formats. Employees across companies like Paytm First Games report mass layoffs, with one describing the crash as: “Everything you built collapsed within hours with no prior warning. ” Key Contentious Issues Ambiguity in e-sports recognition – criteria remain unclear. Skill-based game precedent ignored – decades of legal recognition overturned. Implementation challenges – ban may only redirect users to unregulated foreign platforms. Government’s Clarification The government insists that the law is not against gaming as a whole: E-sports, casual games, and educational platforms will be encouraged with investments in infrastructure, training, and regulation. IT Secretary S. Krishnan stated the sector’s broader ecosystem outside of RMG remains welcome in India and will be supported with clear guidelines. Conclusion The Gaming Bill 2025 is a watershed moment for India’s digital economy. While it attempts to regulate harmful practices, its blanket prohibition on real-money games risks: destroying a ₹25,000 crore industry, eliminating jobs and investments, and creating constitutional conflicts. The future of India’s gaming sector will depend on judicial review of the Bill and the government’s ability to balance user protection with economic growth. Want to Know More? Treelife helps entrepreneurs and investors navigate legal and financial complexities in emerging sectors like gaming, technology, and digital platforms. Write to us: support@treelife. in Book A Consult --- - Published: 2025-08-22 - Modified: 2025-08-22 - URL: https://treelife.in/legal/isafe-notes-in-india/ - Categories: Legal - Tags: iSAFE Notes in India Understanding iSAFE Notes: A Deep Dive What Are iSAFE Notes in India? India's startup ecosystem has witnessed the emergence of various funding tools designed to address the challenges of early-stage fundraising. Among these, the India Simple Agreement for Future Equity (“iSAFE”) notes have gained traction as an innovative funding mechanism tailored specifically for the Indian market. iSAFE (India Simple Agreement for Future Equity) notes are an innovative funding instrument designed to address the challenges faced by early-stage startups in India, particularly in securing funding without having to immediately establish a company valuation. iSAFE notes are agreements to purchase equity shares of a company at a future date. They allow investors to put money into startups in an ‘unpriced round’ where the startup is pre-revenue and cannot be easily valued in exchange for equity shares that will be issued later. Unlike traditional funding instruments, iSAFE notes defer valuation to a future date, typically when a priced round occurs. Why are iSAFE Notes used? Unpriced Funding: iSAFE notes eliminate the need for a precise valuation of the startup, making them ideal for early-stage companies still in their ideation or prototype phase. Quick Funding: They streamline the fundraising process, enabling startups to secure capital faster compared to traditional funding routes. By deferring valuation to a future date, iSAFE notes help startups avoid over or under-valuing their company early on, which could hinder future fundraising or result in investor dissatisfaction. How Do iSAFE Notes Work in India? iSAFE notes operate on a simple premise: investors inject capital into a startup without determining its valuation at the time of investment. Instead, the capital is convertible into equity in a future round of funding or upon a liquidity event. Here’s how iSAFE notes work in practice: Investment without a fixed price: Investors contribute capital to the startup without agreeing on the price per share. The terms of the iSAFE note include a trigger event that will determine the conversion of the capital into equity at a later stage. Conversion of the investment: When a specified event occurs, such as the startup raising a priced funding round or achieving a liquidity event (e. g. , merger or acquisition), the investment in iSAFE notes is automatically converted into equity shares. Valuation at the next funding round: The conversion price is determined by the valuation of the company at the next funding round. Investors typically receive a discount on the share price to compensate for their early-stage risk. When do iSAFE Notes Convert into Equity? Next Funding Round: The most common trigger for conversion is the next priced round of funding. Liquidity Events: If the startup is sold, merged, or undergoes another significant event, iSAFE notes may convert into equity before the next round of funding. Set Time Limit: iSAFE notes must be converted into equity within a specific period, typically 20 years, as per Indian regulations. Key characteristics of iSAFE notes include: They are structured as Compulsorily Convertible Preference Shares (“CCPS”) in India. They automatically convert into equity shares upon specified liquidity events (next pricing round, dissolution, merger, acquisition) or at the end of a specific number of years from issuance (not more than 20 years), whichever is earlier. They do not accrue interest as they are not debt instruments but do have a nominal dividend percentage attached to them. Key Features of iSAFE Notes in India iSAFE notes have several unique characteristics that make them attractive to both investors and startups. These features differentiate iSAFE from other traditional funding mechanisms and offer a more flexible approach for early-stage fundraising. 1. No Interest but Nominal Dividend Percentage Unlike debt instruments, iSAFE notes do not accrue interest. However, they often come with a nominal dividend attached, typically around 1-2%. This feature makes them an attractive option for investors who want equity exposure without the complexities of traditional equity funding or debt. 2. Deferred Valuation One of the defining characteristics of iSAFE notes is the deferred valuation. This means that investors do not need to agree on the valuation of the company at the time of investment. Instead, the valuation is determined during the next funding round when the company is better positioned to assess its worth. This approach benefits startups by allowing them to focus on growth instead of negotiating valuation early on. Key Benefits of Deferred Valuation: Flexibility for Startups: No need to fix a valuation, which could be challenging for pre-revenue startups. Better Terms for Investors: They are rewarded with a discount when the startup raises a priced round in the future. 3. Conversion Triggers iSAFE notes convert into equity upon specific triggers that can be tied to future funding rounds or major business events. These events include: Next Funding Round: The most common trigger where iSAFE notes are converted into equity shares at a discounted price, based on the valuation in the next funding round. Liquidity Events: If the startup is acquired, merged, or undergoes a similar liquidity event, iSAFE notes convert into equity at a pre-agreed price or discount. Time-based Conversion: If no funding round or liquidity event occurs within a set timeframe (usually 20 years), the iSAFE notes will convert into equity automatically, subject to the terms agreed upon at issuance. Legal Framework of iSAFE Notes in India Governing Laws & Regulations for iSAFE Notes The legal framework governing iSAFE Notes in India operates under the provisions of the Companies Act, 2013, with specific sections addressing the issuance, compliance, and conversion of financial instruments like Compulsorily Convertible Preference Shares (CCPS), which iSAFE notes are structured as. In India, iSAFE Notes represent a convergence of modern funding mechanisms with existing laws on convertible instruments. The legal framework ensures that these funding tools are valid and structured within established compliance requirements, providing clarity for investors and startups alike. Section 42: Private Placement Provisions for iSAFE Notes Section 42 of the Companies Act, 2013 lays down the process for private placements, including the issuance of iSAFE Notes. It specifically allows companies to raise capital through private placements,... --- - Published: 2025-08-13 - Modified: 2025-08-13 - URL: https://treelife.in/legal/indemnity-clause-in-a-share-subscription-agreement/ - Categories: Legal - Tags: Indemnity Clause in a Share Subscription Agreement Introduction Under Section 124 of the Indian Contracts Act, 1872, indemnity is defined as a contract where one party (the "Indemnifying Party") agrees to compensate another party (the "Indemnified Party") for any loss incurred due to the actions of the indemnifying party or the conduct of any other person. In the context of a Share Subscription Agreement (“SSA”), the indemnity clause serves as a critical risk allocation mechanism that protects one party, typically the investor, from financial losses or liabilities arising from various events such as contractual breaches, third-party claims, misrepresentations, fraud, regulatory non-compliance, tax liabilities, intellectual property issues, or post-closing liabilities. Understanding Indemnity in Relation to Damages and Specific Relief Indemnity: Designed to protect the Indemnified Party from financial losses due to specific issues like contract breaches or third-party claims. When a loss occurs, the Indemnified Party can claim compensation from the Warrantors, who must either accept or dispute the claim within a specified timeframe. Damages: Monetary compensation awarded to a party who has suffered loss or injury due to another party's wrongful act or breach of contract. The primary purpose is to restore the injured party to the position they would have been in had the breach not occurred. Specific Relief: Involves remedies that compel a party to perform or refrain from performing a specific act, such as enforcing the performance of an agreement, rather than providing monetary compensation. Key Distinction: While indemnity covers a broader scope including third-party claims and indirect losses, damages typically address direct losses caused by contract breaches. Specific relief, unlike both indemnity and damages, is non-monetary and demands performance according to contractual terms. Framework for Drafting or Reviewing an Indemnity Clause When drafting or reviewing an indemnity clause in an SSA, it's essential to approach it using a structured framework comprising three key components: What, When, and How. What is Definition of Loss The definition of "loss" is paramount as it outlines the scope of indemnification obligations. A comprehensive definition prevents future disputes regarding covered losses. Investor's Perspective: Prefer a broad definition covering all losses or liabilities arising from breaches of representations and warranties Include both financial losses (e. g. , reduction in share value) and non-financial losses (reputational damage, legal expenses) Encompass direct, indirect, and consequential damages Company's Perspective: Seek to exclude certain types of losses such as consequential or punitive damages Consider excluding losses arising from force majeure events or regulatory changes Limit indemnity to losses that directly relate to the company's core obligations Practical Tips: Temporal Limitation: When representing the Indemnifying Party (typically the company or promoters), include the phrase "on and from the Closing Date" in the indemnity clause. This important qualifier limits the indemnification obligation to losses that occur before the transaction closes, protecting the Indemnifying Party from historical liabilities that precede their involvement. Expanding Liability: When representing the Indemnified Party (typically investors), explicitly include language stating that "the Indemnifying Parties agree to jointly and severally indemnify, defend and hold harmless the Indemnified Party and its affiliates. " This joint and several liability provisions ensures that each Indemnifying Party is fully responsible for the entire indemnification obligation, giving the Indemnified Party multiple sources of recovery and strengthening their protection. When: Triggering the Indemnity Obligation The "when" component specifies the events that activate the indemnity obligation. Investor's Perspective: Indemnity should be triggered by any breach or inaccuracy of representations and warranties, non-compliance with applicable laws, failure to perform obligations under the transaction documents (which includes the Shareholders Agreement, SSA, or SPA), actions arising from the company or promoters' acts/omissions, and any fraud, gross negligence, or wilful misconduct by the promoters. Company's Perspective: Materiality Threshold: Limit indemnification to material breaches only. Minor or technical breaches should not trigger indemnity unless they result in significant losses. How: The Procedure for Indemnity Claims This component addresses the procedural aspects of initiating and handling indemnity claims, ensuring clarity and minimizing disputes. The indemnity clause is designed to protect the Indemnified Party from financial losses arising due to specific issues, such as breaches of contract or third-party claims. Under this clause, if the Indemnified Party suffers a loss, they can claim compensation from the Indemnifying Party. The Indemnifying Party must either accept or dispute the claim within a specified time frame. If the claim is accepted, the Indemnifying Party are obligated to cover the loss. In situations involving third parties, the Indemnifying Party have the option to assume control of the defense but are still responsible for covering the associated costs. Essentially, this indemnity clause ensures that the Indemnified Party is not financially burdened by losses resulting from these specified issues. Note: If the Indemnified Party chooses to control the defence when the Indemnifying Party has elected to defend them, they should not be indemnified for those costs by the Indemnifying Party. Key Protective Mechanisms in Indemnity Clauses MechanismInvestor PerspectiveCompany/Promoter PerspectiveLimitation/CapNo Limitation or Cap: Investors typically demand no cap on indemnity to ensure full recovery of losses. Limitation: The company should restrict indemnity claims to the amount invested by the Indemnified Party. Minimum ThresholdNo De Minimis: Investors prefer no minimum threshold for claims. De Minimis: Sets a minimum limit for claims to avoid dealing with small or insignificant issues. Grossed-up IndemnityNormal Gross Up: X = (Y × (Z/(1-Z))) where Y = Loss and Z = Shareholding in decimalTax Gross-Up: Tax Gross-Up refers to the additional amount an indemnifying party must pay to cover any taxes that may be deducted from the indemnity payment. If the indemnified party is subject to tax on the indemnity amount, the indemnifying party must pay an extra amount to ensure that after tax, the indemnified party still receives the full amount they are entitled to. Example: If a party is entitled to ₹100 but has to pay taxes of 20%, the indemnifying party must pay ₹125 so that the indemnified party receives ₹100 after taxes. The additional ₹25 compensates for the tax deduction. Avoid gross-up provisions that inflate indemnity amounts. Liability StructureJoint & Several Liability: All Indemnifying Parties are... --- - Published: 2025-08-13 - Modified: 2025-08-13 - URL: https://treelife.in/legal/navigating-event-of-default-clauses-in-shareholders-agreements/ - Categories: Legal - Tags: Default Clauses in Shareholders' Agreements In the dynamic landscape of startup investments, understanding the intricacies of Event of Default (EoD) clauses in shareholders' agreements is crucial for both companies and investors. Having recently reviewed several such agreements, I've gained valuable insights that I'd like to share with the legal community. What is an Event of Default? An Event of Default is a specific set of circumstances that, when they occur, trigger certain rights for non-defaulting parties. In a typical shareholders' agreement, these events can range from material breaches of the agreement to more serious issues like fraudulent conduct or bankruptcy proceedings. From a recent shareholders' agreement we reviewed, Events of Default typically include: Occurrence of "Cause" events such as fraud or misconduct Taking actions on Reserved Matters without proper investor consent Material breaches of key provisions like anti-dilution rights, information rights, and non-compete obligations Bankruptcy or insolvency proceedings Criminal convictions or findings of fraudulent conduct Consequences of an Event of Default When an Event of Default occurs, the non-defaulting party (typically investors) gains significant leverage. The remedies available to investors can be far-reaching and potentially devastating for founders and the company. Common consequences we’ve observed in shareholders' agreements include: Removal of founders' rights to appoint directors Investors gaining the right to reconstitute the Board Acceleration of exit rights, including drag-along rights Removal of transfer restrictions on investors' shares These consequences can fundamentally alter the control and direction of the company, which is why careful drafting of these provisions is essential. Drafting Considerations for Companies When representing a company or founders, we typically advise focusing on the following aspects: 1. Clear Definition of Default Events Ensure that events constituting defaults are clearly defined and limited to genuinely material breaches. Vague language can lead to disputes and potential misuse of these provisions. 2. Cure Periods Negotiate for adequate cure periods. In the agreement we reviewed, a 60-day cure period was provided for breaches that are capable of remedy. This gives the company a reasonable opportunity to address issues before severe consequences are triggered. 3. Proportionate Remedies Push for remedies that are proportionate to the nature of the default. For instance, if a default is attributable to an individual founder, only that founder's rights should be affected, not all founders' rights. 4. Independent Determination For subjective matters like misconduct or negligence, include provisions for determination by an independent third party rather than leaving it solely to investor discretion. Considerations for Investors When representing investors, we focus on the following: 1. Comprehensive Default Triggers Ensure all potential scenarios that could materially affect investment value are covered, including operational defaults, financial defaults, and governance breaches. 2. Effective Remedies Include remedies that provide real protection, such as board reconstitution rights and accelerated exit mechanisms. 3. Notice and Verification Mechanisms Include clear procedures for how defaults are notified and verified. The agreement we reviewed included an "EoD Notice" procedure that initiates the process. 4. Preservation of Rights Include language clarifying that the remedies for Events of Default are without prejudice to other claims or rights of action available under the agreement. Balanced Approach The most effective Event of Default clauses strike a balance between protecting investor interests and not unduly hampering company operations. A well-drafted clause should: Focus on material issues that genuinely threaten investor value Provide reasonable opportunities to remedy defaults where possible Include escalating consequences proportionate to the severity of the default Ensure clear procedures for determination and enforcement Conclusion Event of Default clauses are powerful tools in shareholders' agreements that can significantly impact the balance of power between founders and investors. As legal professionals, our role is to ensure these provisions are drafted with precision and fairness, reflecting the legitimate interests of all parties while providing clear guidance on processes and consequences. Whether you're representing a startup or an investor, paying careful attention to these clauses during negotiations can help avoid disputes and provide clarity should challenging situations arise. Disclaimer: This blog is for informational purposes only and does not constitute legal advice. Always consult with a qualified attorney for advice specific to your situation. --- - Published: 2025-08-13 - Modified: 2025-08-13 - URL: https://treelife.in/legal/investment-transactions-in-india/ - Categories: Legal - Tags: Investment Transactions in India Investment transactions in India involve a structured approach with specific conditions that must be met at various stages to ensure legal compliance and protect the interests of all parties involved. Understanding these conditions is crucial for investors, entrepreneurs, and legal professionals navigating the investment landscape. This guide outlines the key conditions precedent, closing conditions, and conditions subsequent that typically govern investment transactions in the Indian context. Whether you're a founder seeking investment or an investor looking to deploy capital, familiarity with these conditions will help you navigate the transaction process more effectively and avoid potential pitfalls. The following comprehensive tables break down these conditions into digestible components, explaining their relevance and importance in the investment journey. What are Investment Transactions in India? Investment transactions in India refer to structured financial deals where capital is infused into a business in exchange for equity, debt instruments, or other financial interests. These include equity funding, venture debt, mergers & acquisitions, joint ventures, and private equity deals, governed by Indian laws such as the Companies Act, 2013, FEMA regulations, and SEBI guidelines. Why are they Important? They are essential for business growth, scaling operations, attracting strategic partners, and enabling exits. For investors, they offer an opportunity to gain equity ownership, secure returns, or participate in India’s expanding market. A well-structured transaction ensures compliance, protects rights, and reduces financial and legal risks. Usage in Practice Startups raising seed or Series A funding through Share Subscription Agreements (SSA) and Shareholders’ Agreements (SHA). Foreign investors entering India under the FDI policy, ensuring FEMA compliance. M&A transactions for strategic acquisitions or consolidations. Venture debt deals for cash flow support without equity dilution. 1. Conditions Precedent (CPs) Conditions Precedent are requirements that must be satisfied before the main transaction can proceed. These conditions protect investors by ensuring that the company meets certain standards before funds are transferred. StageCondition PrecedentDescriptionRelevance in Transactions1Due DiligenceThe investor shall complete financial, tax, legal, regulatory, intellectual property, and other due diligence of the Company. This involves a thorough investigation of the company's legal, financial, tax, and operational standing to ensure no hidden liabilities or risks exist before proceeding with the investment. 1Ensures that the investor is fully aware of the company's health and risk factors before finalizing the deal. 32Execution of Transaction DocumentsThe parties shall have executed the Transaction Documents to the satisfaction of the investors and the company. This involves formal signing of key documents like Share Purchase Agreement (SPA), Shareholders' Agreement (SHA), Subscription Agreement (SSA), and other relevant agreements. 1Ensures that both the company and investors are legally bound by the transaction terms. 33Material Adverse Effect (MAE)No event(s) or condition(s) constituting a Material Adverse Effect shall occur on or prior to the Closing Date. This ensures that no adverse changes in the company's business or financial condition occur between signing and closing, which could significantly affect the value of the investment. 2Protects the investor from any unforeseen negative impacts that could arise between the agreement signing and closing. 34Accuracy of RepresentationsThe representations of the company shall be true, correct, and complete as of the Execution Date and Closing Date. The company guarantees that all representations made in the transaction documents (such as financial statements, legal standing, and tax filings) are accurate and truthful. 2Ensures that the investor is not misled by inaccurate or incomplete disclosures by the company. 35Governmental ActionNo Governmental Authority shall have taken action that could restrain, prohibit, or delay the investment or company operations. 3Ensures the transaction is not impacted by unforeseen regulatory or governmental intervention. 36Increase in Share CapitalThe company shall have increased or reclassified its authorised share capital to facilitate the issue and allotment of Subscription Shares. This is a corporate action required to ensure that the company has enough authorised share capital to issue new shares as part of the transaction. 4Necessary when issuing new shares to investors as part of the investment. 47Registrar FilingsThe company shall have delivered copies of all filings made with the Registrar of Companies (RoC) related to the issuance of Subscription Shares. These filings confirm that the necessary documents (e. g. , MGT-14, PAS-4) have been submitted to RoC for approval. 4Ensures that the investment is properly documented and recorded with the Indian authorities. 58Board & Shareholder ResolutionsCertified true copies of Board and Shareholder resolutions for executing the Transaction Documents, approving the private placement, and valuation reports. These resolutions demonstrate that the necessary corporate approvals have been obtained from the company's Board of Directors and Shareholders. 5Ensures that the company's corporate governance processes are followed, protecting the investor's rights. 69Issuance of Shares for SubscriptionThe company shall have issued shares for subscription in accordance with the private placement offer. The company must initiate the issuance of shares for subscription as per the Subscription Agreement and in compliance with the terms agreed upon in the transaction documents. 6Protects the investor by ensuring that the shares are issued as per the agreed terms at the closing stage of the transaction. 610Filing of Form MGT-14The company shall have filed Form MGT-14 with RoC, approving the board resolution and special resolution regarding the Subscription Shares. Filing Form MGT-14 is required under the Companies Act, 2013 to record the approval of the share issuance in a formal, legally binding manner. 7Ensures compliance with Indian corporate law, which is essential for the legitimacy of the transaction. 711Issuance of PAS-4The company shall have issued a private placement offer letter (Form PAS-4) to the investor with supporting documents. The company must issue a formal offer for the subscription of shares to the investor under Form PAS-4, which is required for private placements in India. 7Ensures that the offer is made in compliance with SEBI and FEMA guidelines, protecting both parties legally. 1012Record of Offer (PAS-5)The company shall have maintained a record of offer in PAS-5 and delivered a copy to the investor. Form PAS-5 is the official record of the offer made by the company to investors, confirming the shares offered and the terms of the transaction. 8Ensures that the offer... --- - Published: 2025-08-13 - Modified: 2025-08-13 - URL: https://treelife.in/legal/test-for-determining-conditions-precedent-cp/ - Categories: Legal - Tags: Conditions Precedent This test helps you identify whether a condition should be classified as a Condition Precedent (CP) in a Share Subscription Agreement (SSA). Conditions Precedent must be fulfilled before the transaction can close or shares can be issued. Step 1: Does this condition need to be fulfilled before the transaction can proceed or be completed? If Yes: It is a Condition Precedent (CP). Why? CPs are conditions that must be satisfied before the deal can close. If they are not met, the transaction cannot proceed. Example: Obtaining regulatory approval for the transaction before the subscription can happen. If No: Move to Step 2. Step 2: Does failing to fulfil this condition prevent the transaction or deal from going forward? If Yes: It is a Condition Precedent (CP). Why? A CP addresses risks or requirements that are essential for the completion of the transaction. If not met, the deal cannot proceed. Example: Shareholder approval must be obtained before closing, or the deal cannot proceed. If No: Move to Step 3. Step 3: Is this condition required to ensure the legality or validity of the transaction? If Yes: It is a Condition Precedent (CP). Why? CPs are typically required to meet legal or regulatory requirements before the transaction can close. Example: Completing required filings with regulatory authorities to ensure the transaction is legally valid. If No: Move to Step 4. Step 4: Does this condition relate to obtaining necessary approvals, consents, or clearances before the deal can close? If Yes: It is a Condition Precedent (CP). Why? A CP typically involves obtaining any approvals or consents that must be in place before the deal proceeds. Example: Regulatory or third-party consents required before closing. If No: Move to Step 5. Step 5: Is this condition necessary to mitigate risks or resolve issues that could affect the deal before it closes? If Yes: It is a Condition Precedent (CP). Why? A CP helps mitigate risks or issues that would affect the value or integrity of the deal. Example: Satisfactory completion of due diligence before the deal can proceed. If No: Reevaluate the condition, as it may not be a CP. Key Guidelines for Conditions Precedent (CP): Timing: Must be fulfilled before the remittance of funds can be made by the investor. Impact: If not fulfilled, the deal cannot proceed. Risk Mitigation: CPs address issues that would affect the deal's completion or integrity. Examples: Regulatory approvals, due diligence completion, shareholder consents. Example Walkthrough: Condition: The company must receive regulatory approval form Competition Commission of India before the subscription can proceed. Step 1: Does this condition need to be fulfilled before the transaction can close? Answer: Yes, the deal cannot proceed without regulatory approval. Conclusion: This is a Condition Precedent (CP). Condition: After executing the agreement, the investor must pay the subscription amount before shares are issued. Step 1: Does this condition need to be fulfilled before closing? Answer: No, this happens at closing. Conclusion: This is not a Condition Precedent (CP) but part of the closing action. Condition: The company must complete due diligence and resolve any issues identified before the deal can proceed. Step 1: Will failing to complete due diligence stop the deal? Answer: Yes, the deal cannot proceed without satisfactory due diligence. Conclusion: This is a Condition Precedent (CP). Note: This test provides a general framework to determine whether a condition is a Condition Precedent (CP). For more complex transactions or unique conditions, it is always recommended to consult with a legal professional to ensure that conditions are properly classified and compliant with applicable laws. --- > August is here, and with it comes a fresh set of compliance deadlines for businesses in India. Staying on top of these dates is crucial to avoid penalties and ensure smooth operations. Treelife, your trusted partner in legal and financial matters, has compiled a comprehensive compliance calendar for August 2025 to help you navigate these requirements. - Published: 2025-07-31 - Modified: 2025-07-31 - URL: https://treelife.in/calendar/compliance-calendar-august-2025/ - Categories: Calendar - Tags: compliance calendar august August 2025 Compliance Calendar for Startups, Businesses and Individuals  Sync with Google Calendar Sync with Apple Calendar August is here, and with it comes a fresh set of compliance deadlines for businesses in India. Staying on top of these dates is crucial to avoid penalties and ensure smooth operations. Treelife, your trusted partner in legal and financial matters, has compiled a comprehensive compliance calendar for August 2025 to help you navigate these requirements. Early August Deadlines August 7th (Thursday): TDS/TCS Deposit Don't miss the deadline for depositing TDS (Tax Deducted at Source) and TCS (Tax Collected at Source) for August 2025. August 10th (Sunday): GST Returns (GSTR-7 & GSTR-8) Ensure timely filing of your GSTR-7 and GSTR-8 forms for August 2025. August 11th (Monday): GSTR-1 Filing (Monthly) The due date for monthly GSTR-1 filing for August 2025 is August 11th. August 13th (Wednesday): GSTR-1 IFF, GSTR-5, GSTR-6 Filing This date is for GSTR-1 IFF (optional for QRMP scheme), GSTR-5, and GSTR-6 filings for August 2025. Mid-August Deadlines August 15th (Friday): Issuance of TDS Certificates (Form 16A & 27D) This is an important date for issuing TDS Certificates (Form 16A & 27D) for the June-July 2025 period. August 20th (Wednesday): GSTR-3B & GSTR-5A Filing Complete your monthly GSTR-3B and GSTR-5A filings for August 2025 by this date. End of August Deadlines August 30th (Saturday): Furnishing Challan-cum-Statement for Specific TDS Sections The deadline for furnishing Challan-cum-Statement for TDS under sections 194-IA, 194-IB, 194M, and 194S for August 2025 is August 30th. This includes Forms 26QB, 26QC, 26QD, and 26QE for specific TDS sections. Ongoing Monthly Compliances Professional Tax Payment/Return (Monthly) Remember to complete your Professional Tax payment/return for August 2025. The due date for this varies by state (e. g. , Maharashtra). PF & ESI Payments/Return (Monthly) Ensure your Provident Fund (PF) and Employee State Insurance (ESI) payments/returns for August 2025 are made on time. Why Choose Treelife? Treelife has been one of India's most trusted legal and financial firms for over 10 years. We are proud to be trusted by over 1000 startups and investors for solving their problems and taking accountability. Need Assistance? Navigating compliance can be complex. If you have any queries or require assistance with your August 2025 compliances, don't hesitate to contact Treelife: Phone: +91 22 68525768 | +91 9930156000 Email: support@treelife. in Book A Meeting --- > As we enter the second half of 2025, staying compliant with various financial, tax, and regulatory deadlines is crucial for startups, businesses, and individuals alike. The month of July holds significant compliance deadlines that require your attention. - Published: 2025-07-07 - Modified: 2025-07-07 - URL: https://treelife.in/calendar/compliance-calendar-july-2025/ - Categories: Calendar July 2025 Compliance Calendar for Startups, Businesses and Individuals Sync with Google CalendarSync with Apple Calendar As we enter the second half of 2025, staying compliant with various financial, tax, and regulatory deadlines is crucial for startups, businesses, and individuals alike. The month of July holds significant compliance deadlines that require your attention. This detailed blog will serve as your ultimate guide to ensure you meet these deadlines on time and avoid any penalties. Whether you're a business owner, a professional, or an individual taxpayer, this checklist will help streamline your compliance process. Key Deadlines and Compliance Tasks for July 2025 1. TDS/TCS Deposit for June 2025 – 7th July, Monday The 7th of July marks the due date for depositing Tax Deducted at Source (TDS) and Tax Collected at Source (TCS) for June 2025. Timely deposit of TDS and TCS is essential for companies and individuals alike to avoid any penalties. For companies, non-payment can lead to a default surcharge and interest. 2. GST Returns (GSTR-7 & GSTR-8) for June 2025 – 10th July, Thursday For businesses that deal with TDS and TCS on GST, the filing of GSTR-7 and GSTR-8 is mandatory. These returns are due on the 10th of July. Failing to submit them on time could result in late fees, penalties, and restrictions on future filings. 3. GSTR-1 IFF Filing (Optional for QRMP) & GSTR-5, GSTR-6 for June 2025 – 13th July, Sunday On the 13th of July, taxpayers should focus on filing GSTR-1 for those in the Quarterly Return Monthly Payment (QRMP) scheme. Additionally, foreign non-resident taxpayers should file GSTR-5, and input service distributors should submit GSTR-6. These filings are crucial for maintaining smooth GST compliance. 4. Issuance of TDS Certificates (Form 16A & 27D) for April-June 2025 – 15th July, Tuesday If you're an employer or an entity responsible for deducting tax at source, the issuance of TDS certificates (Form 16A & 27D) is a must by 15th July. These certificates detail the TDS deducted from employees or contractors and are required for the annual tax filing. 5. PF & ESI Payments/Returns for June 2025 – 15th July, Tuesday All companies with employees need to ensure the timely payment of Provident Fund (PF) and Employee State Insurance (ESI) contributions. Both payments and returns are due by the 15th of July for June 2025. Missing this deadline may lead to hefty fines and penalties. 6. Professional Tax Payment/Return for June 2025 – 15th July, Tuesday (Varying by State) The professional tax payment deadline varies by state. For states like Maharashtra, ensure that your professional tax is paid by the 15th of July. This is a state-level requirement, so businesses must be aware of their state's specific deadlines. 7. Annual Return on Foreign Liabilities and Assets (FLA) for FY 2024-25 – 15th July, Tuesday Foreign investors, Indian companies with foreign investments, and individuals holding foreign assets must submit the FLA return by the 15th of July. This filing provides details about the foreign assets and liabilities held by Indian entities. 8. GSTR-1 Filing (Monthly) for June 2025 – 11th July, Friday On the 11th of July, businesses need to submit their GSTR-1 if they are registered under the regular GST scheme. This return should include all details related to outward supplies, ensuring tax compliance for the month of June. 9. GSTR-3B Filing (Monthly) for June 2025 – 20th July, Sunday For businesses that fall under the regular GST filing category, GSTR-3B filing is due on the 20th of July. This return is essential as it provides a summary of the GST liabilities and input tax credit claims. 10. GSTR-5A Filing for June 2025 – 20th July, Sunday This filing is applicable to non-resident foreign taxpayers who are doing business in India. It is due by the 20th of July and ensures the accurate reporting of services provided in India by foreign companies. 11. CMP-08 Filing for April-June 2025 – 18th July, Friday Businesses under the Composition Scheme are required to file CMP-08, which summarizes their tax liabilities for the quarter. This filing is due by the 18th of July. 12. GSTR-3B Filing (Quarterly) for April-June 2025 – 22nd July, Tuesday For businesses under the QRMP scheme, GSTR-3B filing for the quarter is due on the 22nd of July. Businesses must ensure that all returns are filed promptly to avoid any late fees or penalties. 13. TDS Return Filing (Form 24Q, 26Q, 27Q, 27EQ) for Q1 FY 2025-26 – 31st July, Thursday The final deadline for the quarterly TDS/TCS returns (Form 24Q, 26Q, 27Q, 27EQ) for Q1 FY 2025-26 is on the 31st of July. This is one of the most critical deadlines for companies to ensure compliance with TDS regulations and avoid penalties. 14. Furnishing Challan-cum-Statement for TDS (Forms 26QB, 26QC, 26QD, 26QE) for June 2025 – 30th July, Wednesday For businesses involved in real estate transactions, the filing of forms like 26QB, 26QC, 26QD, and 26QE is essential for reporting TDS deductions related to property transactions. This filing is due on the 30th of July. State-Specific Notes Professional Tax deadlines may vary by state – ensure compliance with your state’s specific regulations. Andhra Pradesh, Madhya Pradesh, Manipur, Meghalaya, and Telangana may have different due dates for some filings. GST payments by QRMP taxpayers are applicable if there is insufficient Input Tax Credit. How Treelife Can Help At Treelife, we understand the importance of maintaining compliance with various statutory deadlines and obligations. Whether you're a startup or an established business, our expert team of legal and financial advisors is here to help you navigate through complex compliance processes. We offer: Tax and GST compliance services for startups and businesses. TDS and TCS filing support to ensure you meet deadlines with ease. Annual return and filing support for foreign liabilities and assets. Professional tax filing assistance to comply with state-specific requirements. Our goal is to ensure you focus on what you do best—growing your business—while we take care of all your compliance needs. Call: +91 22 6852... --- - Published: 2025-07-03 - Modified: 2025-07-21 - URL: https://treelife.in/compliance/memorandum-of-association-moa/ - Categories: Compliance - Tags: alteration of memorandum of association, clauses of memorandum of association, contents of memorandum of association, memorandum of association, memorandum of association in company law, memorandum of association meaning, MOA, what is memorandum of association The Memorandum of Association (MOA) is one of the most essential documents in the company incorporation process, forming the foundation for a company's legal existence and governance. Just as the Constitution is the bedrock of a nation, the MOA acts as the charter document for a business entity. It not only outlines the scope of the company’s objectives but also governs its operations, ensuring compliance with the Companies Act of 2013. Incorporating a company in India requires submission of several key documents, and the MOA is among the most important. It provides transparency, defines the company’s operations, and protects the interests of stakeholders, including shareholders, creditors, and potential investors. What is the Memorandum of Association (MOA)? The full form of MOA is Memorandum of Association, and it is the foundational legal document that specifies the scope of the company’s operations. It outlines the company’s objectives, powers, and the rights and obligations of its members. Without a properly drafted MOA, a company cannot perform beyond the boundaries set by this document, and any act outside of these boundaries is considered ultra vires (beyond the powers) and therefore invalid. The contents of memorandum of association serve as a guide for all external dealings of the company, making it crucial for anyone wishing to engage with the company to understand its terms. It is a public document, accessible to all, and is required for registering a company with the Registrar of Companies (ROC). Key Clauses of the Memorandum of Association (MOA) Mandated by Section 4 of the Companies Act, 2013, every company is legally required to frame and register a Memorandum of Association (MOA) upon its incorporation. This crucial document forms an integral part of the corporate registration process for any newly formed company in India. The MOA acts as the company's charter, defining its fundamental constitution and the scope of its operations. It establishes the relationship between the company and the outside world. As per the Companies Act, 2013, there are six fundamental and mandatory clauses that must be meticulously captured in the MOA: 1. Name Clause: This clause unequivocally specifies the full and official name of the company. It is paramount that the chosen name is unique and does not bear any resemblance to the name of any existing company or a registered trademark, as per the provisions of the Companies (Incorporation) Rules, 2014. For private limited companies, the name must invariably end with the suffix "Private Limited", signifying their restricted transferability of shares and limited liability. Conversely, for public limited companies, the name must conclude with the term "Limited", indicating their ability to invite public subscription for shares. This clause also dictates that the name must not be undesirable in the opinion of the Central Government. 2. Registered Office Clause (Situation Clause): This clause precisely mentions the state in which the company’s registered office is to be located. While it initially only specifies the state, the exact address of the registered office must be communicated to the Registrar of Companies (ROC) within 30 days of incorporation or commencement of business. The state mentioned in this clause is crucial as it determines the geographical jurisdiction of the Registrar of Companies (ROC) under which the company will fall. This dictates where all statutory filings and legal proceedings related to the company will occur. The registered office serves as the official address for all communications from regulatory authorities and the public. 3. Object Clause: One of the most expansive and important sections, the Object Clause meticulously defines the entire scope of the company's operations. It is segregated into three distinct categories to provide granular clarity: Main Objectives: These explicitly state the primary business activities the company intends to undertake upon its incorporation. They represent the core purpose for which the company is established. For instance, a technology company might have a main objective "to develop, market, and sell innovative software solutions and digital platforms. " Incidental or Ancillary Objectives: These are activities that are directly related to, necessary for, or naturally flow from the attainment of the main objectives. They support and facilitate the core business without being the primary business themselves. Examples include "to acquire, construct, or lease land and buildings necessary for the company's operations," "to borrow or raise money to finance business activities," "to enter into contracts and agreements incidental to the company's business," or "to engage in research and development related to its products. " Other Objectives (Optional): This section allows for the inclusion of activities that, while not directly connected to the main business at the time of incorporation, the company may wish to pursue in the future for diversification or expansion. These objectives must also be lawful and clearly defined. For example, an "other objective" could be "to invest in shares, debentures, or other securities of any other company or body corporate. " It is critical that any business activity undertaken by the company that falls outside the ambit of these clearly stipulated objectives is considered ultra vires (beyond the powers) and, therefore, legally unauthorized and invalid, potentially leading to significant legal repercussions for the company and its directors. 4. Liability Clause: This clause precisely specifies the extent of liability of the company’s members (shareholders). Its phrasing depends on the type of company: Companies Limited by Shares: This is the most common type, where the liability of members is strictly limited to the unpaid amount on their shares. For example, if a shareholder holds shares worth ₹100 each and has paid ₹60, their maximum liability is ₹40 per share in the event of liquidation. Their personal assets beyond this unpaid amount are protected. The clause typically states: "The liability of the members is limited. " Companies Limited by Guarantee: In this case, the liability of members is limited to the amount they undertake to contribute to the assets of the company in the event of its winding up. This amount is specified in the MOA. This type of company is often formed for non-profit purposes. Unlimited Companies:... --- - Published: 2025-07-03 - Modified: 2025-07-22 - URL: https://treelife.in/compliance/posh-compliance-checklist/ - Categories: Compliance - Tags: POSH Compliance Checklist, POSH Compliance Checklist for Company, POSH Compliance Checklist for Private Limited Company, POSH Compliance Checklist in India Introduction to POSH Act Compliance What is POSH? The POSH Act, formally known as the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, is a critical piece of legislation in India aimed at creating a safe working environment for women by preventing sexual harassment in the workplace. The Act mandates all employers to address issues related to sexual harassment and provides a comprehensive framework for grievance redressal. In this blog we provide a Complete POSH Compliance Checklist for various organizations in India. Definition of the POSH Act 2013 (Prevention of Sexual Harassment at Workplace) The POSH Act, enacted in 2013, was introduced to safeguard women against sexual harassment at their workplace and ensure that employers take necessary actions to create a safe and respectful working environment. The Act defines sexual harassment as any unwelcome behavior of a sexual nature, which creates a hostile, intimidating, or offensive work environment. The Act lays down clear guidelines for the prevention, prohibition, and redressal of sexual harassment in the workplace, focusing on: Preventing sexual harassment through policies, training, and awareness Prohibiting such behavior in the workplace Redressing grievances with the help of an Internal Complaints Committee (ICC) Why is POSH Compliance Important? Legal Obligations for Businesses The POSH Act imposes several legal obligations on employers to safeguard against sexual harassment, including: Setting up an Internal Complaints Committee (ICC): For organizations with 10 or more employees, it is mandatory to form an ICC to address complaints. Creating a Written Policy: Employers must draft and implement a clear anti-sexual harassment policy that is made accessible to all employees. Conducting Regular Sensitization Workshops: Employers are required to conduct training and awareness programs for employees to ensure they understand what constitutes sexual harassment. Annual Reporting: Companies must file annual reports detailing the complaints, their resolution status, and actions taken in compliance with the Act. Ensuring a Safe Workplace and Preventing Sexual Harassment Complying with the POSH Act is not only about legal adherence, but it’s also about fostering a workplace culture of respect and dignity for all employees. POSH compliance ensures that: Employees feel safe and respected, which is crucial for their mental well-being and productivity. Preventive Measures are taken proactively to stop any form of harassment from occurring, rather than just responding after the fact. Effective Redressal Mechanisms are in place, providing employees with a clear path to report grievances. Penalties for Non-Compliance with the POSH Act Failure to comply with the POSH Act can have severe legal and financial consequences for companies. The penalties include: Monetary Fines: Companies that do not form an ICC or fail to implement an anti-sexual harassment policy could face fines of up to ₹50,000. License Suspension: For repeated offenses, a company could face the suspension or revocation of its business licenses. Reputational Damage: Non-compliance may result in publicized legal actions, leading to long-term damage to the company's reputation. Penalty TypeAmount/FineMonetary Fine₹50,000 for non-complianceRepeated Non-ComplianceSuspension of business license Benefits of Complying with the POSH Act for Employers and Employees For Employers: Legal Protection: Compliance ensures that businesses avoid penalties and legal action. Improved Brand Image: A company with strong POSH policies is seen as responsible, trustworthy, and employee-centric. Attracting Talent: Top talent prefers working in environments that prioritize safety and inclusivity. Enhanced Productivity: A harassment-free workplace promotes focus, innovation, and job satisfaction. For Employees: Safe and Respectful Environment: Employees are more likely to thrive in workplaces where they feel safe and supported. Clear Grievance Mechanisms: Employees have an accessible platform to raise concerns and seek justice. Empowerment: A transparent POSH policy empowers employees to speak out against harassment without fear of retaliation. Job Satisfaction: Employees are more satisfied when they know that their employer is committed to maintaining a harassment-free workplace. Detailed POSH Compliance Checklist for Employers The POSH Act requires employers to take proactive measures to ensure a safe workplace for all employees. Below is a POSH Compliance Checklist with actionable steps to help employers meet the legal requirements of the Prevention of Sexual Harassment at Workplace (POSH Act, 2013). Creation of Anti-Sexual Harassment Policy Ensure Clarity and Transparency in the Policy Creating a clear and transparent Anti-Sexual Harassment Policy is the first step toward POSH compliance. The policy should: Define what constitutes sexual harassment in a detailed manner, covering physical, verbal, and non-verbal harassment. Ensure that the policy is unambiguous, leaving no room for misinterpretation. Outline preventive measures, grievance redressal mechanisms, and the disciplinary actions to be taken. Make it Accessible to All Employees The policy should be made easily accessible to all employees in the organization. This can be achieved by: Distributing hard copies of the policy to each employee during their onboarding process. Uploading the policy on the company's internal website or document-sharing platform for easy access. Ensuring that all employees sign an acknowledgment form confirming they have read and understood the policy. Set up Internal Complaints Committee (ICC) Composition and Training of ICC Members The Internal Complaints Committee (ICC) is the backbone of POSH compliance. To ensure its effectiveness: The ICC must consist of at least 4 members, including: A Chairperson, typically a senior female employee or external member. Two employees from the organization, one of whom should be a woman. One external member with expertise in issues related to sexual harassment (e. g. , a lawyer, counselor, or social worker). Training for ICC members should include: Legal knowledge of the POSH Act and how to handle complaints. Sensitivity training to ensure members approach each case with empathy and respect. Procedural training on how to investigate complaints while maintaining confidentiality and neutrality. Assign Roles to Committee Members Each member of the ICC should have clearly defined roles, including: Chairperson: Oversees the committee’s operations, ensures fairness in investigations, and provides final recommendations. Committee Members: Handle investigations, listen to complaints, and assist in the decision-making process. External Member: Provides independent oversight to ensure that the committee’s decisions are fair and just. Annual Reporting & Disclosures Filing the Report with the District Officer and Employer Under... --- - Published: 2025-07-03 - Modified: 2025-07-22 - URL: https://treelife.in/compliance/conversion-of-partnership-firm-to-llp/ - Categories: Compliance - Tags: conversion of partnership firm to llp, conversion of partnership firm to llp in india, procedure for conversion of partnership firm to llp Introduction: Converting a Partnership Firm to LLP in India Converting a Partnership Firm to a Limited Liability Partnership (LLP) is a strategic decision that offers several advantages for businesses in India. The process allows business owners to shift from a traditional partnership model to a more structured and protected business format, which offers a range of legal and financial benefits. What is a Partnership Firm? A Partnership Firm is a business structure where two or more individuals come together to carry on a business with a shared goal of making a profit. In this structure, the partners are personally liable for the firm's debts, meaning their personal assets are at risk in the event of financial failure or legal disputes. Key Characteristics of a Partnership Firm: Partners share responsibilities, profits, and liabilities. Personal liability for business debts. Governed by the Partnership Act, 1932, which sets the guidelines for operations, dispute resolution, and dissolution. What is an LLP (Limited Liability Partnership)? An LLP (Limited Liability Partnership) is a hybrid business structure that combines the flexibility of a partnership with the benefits of limited liability. In an LLP, partners are not personally liable for the business's debts or liabilities, protecting their personal assets. Key Characteristics of an LLP: Offers limited liability to all partners. It is a separate legal entity from its partners, meaning it can own property, enter contracts, and sue or be sued in its name. Provides flexibility in terms of management and decision-making. Governed by the Limited Liability Partnership Act, 2008, which outlines compliance requirements and rights of partners. Key Benefits of Converting a Partnership Firm to LLP Limited Liability Protection: Partners' personal assets are shielded from business liabilities. Tax Efficiency: LLPs enjoy pass-through taxation, which ensures a tax-efficient structure. Better Credibility: LLPs are seen as more formal and reliable than partnership firms, which can help in attracting investors, customers, and business partners. Business Growth: The LLP structure supports business scalability and expansion with greater legal protections and access to funding. Why Convert a Partnership Firm to an LLP? Converting a Partnership Firm to an LLP (Limited Liability Partnership) offers numerous advantages for businesses in India, especially in terms of liability protection, tax efficiency, ownership flexibility, and compliance. Below are the key reasons why a partnership firm should consider converting to an LLP. 1. Enhanced Liability Protection One of the biggest advantages of converting a Partnership Firm to an LLP is the limited liability protection it offers to its partners. Partnership Firm: Partners in a partnership firm have unlimited liability, meaning they are personally liable for any debts or legal obligations of the business. If the firm faces financial difficulties or legal claims, the personal assets of the partners—such as their homes and savings—are at risk. LLP (Limited Liability Partnership): An LLP offers limited liability to all its partners. This means that partners’ personal assets are protected from the liabilities of the business, and their financial risk is confined to their investment in the LLP. Example: If a partnership firm faces a lawsuit, all partners may be held personally liable for the debt. In contrast, in an LLP, only the LLP’s assets are at risk, and the partners' personal property is safeguarded. 2. Ease of Ownership Transfer In a Partnership Firm, ownership is typically tied to the partners themselves. If a partner wants to exit or transfer their share of the business, it can be a complicated process requiring a major restructuring of the firm. Partnership Firm: When a partner exits or retires, the partnership may need to be dissolved or renegotiated. This can disrupt business operations, customer relations, and other vital aspects of the business. LLP: In contrast, LLPs offer more flexibility in ownership transfer. Partners in an LLP can transfer their ownership shares easily, provided the LLP agreement allows for it. This flexibility ensures that business operations can continue smoothly without major disruptions. Key Benefit: LLPs make it easier for partners to join or exit, providing stability and continuity to the business without causing a major disruption. 3. Tax Advantages An LLP structure comes with significant tax advantages, especially when compared to a partnership firm or a private limited company. Partnership Firm: In a partnership, profits are typically taxed at the individual tax rates of the partners, leading to higher tax burdens, especially if profits are substantial. LLP: One of the primary benefits of an LLP is pass-through taxation. This means that the LLP itself is not taxed on its income. Instead, profits and losses are passed through to the partners and taxed at their individual rates. This avoids double taxation, which is common in private limited companies. Additionally, the tax rate for LLPs is typically lower than for companies (30% on taxable income). Key Benefit: Pass-through taxation allows LLPs to maintain a tax-efficient structure while providing partners with greater control over how their income is taxed. 4. Continuity of Business The continuity of business operations is another significant advantage of converting from a partnership to an LLP. Partnership Firm: In a partnership, the business can be disrupted if a partner decides to leave, retires, or passes away. This requires restructuring, updating contracts, and potentially even winding up the firm. LLP: An LLP is a separate legal entity, which means that the business can continue operating seamlessly even in the event of a partner's death, retirement, or exit. This ensures business continuity without the need for major restructuring or legal complexities. Example: In a partnership firm, a partner’s departure could require a complete dissolution of the business. However, an LLP will continue its operations, ensuring uninterrupted service to clients and stakeholders. 5. Fewer Compliance Requirements Compared to other business structures like private limited companies, LLPs offer significantly fewer compliance requirements. This makes them an attractive choice for entrepreneurs and small businesses that seek a simpler, more cost-effective structure. Partnership Firm: Partnerships typically face minimal formal compliance, but they do require regular updates to agreements and are subject to the terms of the Partnership Act, 1932. However, the... --- - Published: 2025-06-30 - Modified: 2025-07-22 - URL: https://treelife.in/taxation/esop-taxation-in-india/ - Categories: Taxation - Tags: double taxation, double taxation of ESOPs, esop, esop tax, esop taxation, esop taxation in india, esops, espp, tax Introduction to ESOP Taxation in India Employee Stock Option Plans (ESOPs) have become an essential tool for businesses, especially startups and growth-stage companies, to attract, retain, and motivate talent. Understanding the taxation of ESOPs in India is crucial for both employees and employers to ensure compliance with tax laws and make informed financial decisions. What is ESOP? Employee Stock Option Plans (ESOPs) are programs that allow employees to purchase company stock at a predetermined price, typically lower than the market value, after a certain period or upon achieving specific milestones. ESOPs serve as a form of compensation, providing employees with the opportunity to benefit from the company's growth and success. Key Features of ESOPs: Eligibility: Usually granted to key employees, directors, and senior management. Vesting Period: A specified period during which employees must be associated with the company before they can exercise their options. Exercise Price: The price at which employees can buy the shares, which is often lower than the market price. Market Price: The current market value of the shares when employees choose to sell. Importance of ESOPs in Compensation Structures, Especially for Startups and Growth-Stage Companies ESOPs play a vital role in startup and growth-stage companies’ compensation strategies. Since startups typically cannot afford to pay competitive salaries, they use ESOPs as an alternative form of compensation to attract top talent. These plans align the interests of employees with those of the company, fostering long-term commitment and performance. Benefits of ESOPs for Startups and Growth-Stage Companies: Attracts Talent: ESOPs make compensation packages more attractive, helping startups compete with larger companies. Employee Motivation: Employees are more likely to be motivated and work towards the company's success, knowing they have a stake in its future. Retention: The vesting period ensures that employees stay with the company for a specified time, which reduces turnover and enhances long-term stability. Why Understanding ESOP Taxation in India is Important? Relevance of Taxation for Employees and Employers The taxation of ESOPs can significantly impact both employees and employers in India. Employees may not realize the full tax liability associated with their stock options, especially at the time of exercise or sale. Understanding ESOP taxation ensures that they are not caught off guard by high tax bills. For employers, properly structuring and communicating the tax implications of ESOPs helps in managing the company's payroll, compliance, and accounting processes. Employers also need to ensure that TDS (Tax Deducted at Source) is accurately calculated and deposited. Key Tax Considerations: Employee’s Responsibility: Employees must understand how ESOPs will be taxed at the time of exercise and sale. Employer’s Responsibility: Employers must withhold TDS at the time of exercise and ensure compliance with the tax laws to avoid penalties. Implications of ESOP Taxation on Financial Planning ESOP taxation in India has significant implications on an individual’s and company’s financial planning. For employees, understanding the tax implications can help them optimize the timing of when they exercise their options or sell their shares to minimize their tax burden. Key Points for Employees: Tax at Exercise: Employees must account for perquisite taxation, which is treated as salary income and taxed according to the applicable income tax slabs. Tax at Sale: The sale of ESOP shares in future is subject to capital gains tax, either as Short-Term Capital Gains (STCG) or Long-Term Capital Gains (LTCG), depending on the holding period. Tax Planning: Employees should consider the timing of both exercising and selling their options to optimize tax outcomes, potentially deferring tax liability until a more favorable time. Key Points for Employers: Compliance with Tax Regulations: Employers should ensure the correct TDS is withheld on ESOP benefits and that the proper documentation is maintained. Tax Liabilities and Reporting: ESOPs need to be reported under the company's books as part of compensation, which can affect profit-sharing and other financial strategies. ESOP Taxability in India: A Detailed Overview Employee Stock Option Plans (ESOPs) provide employees with an opportunity to purchase company shares at a preferential price. However, ESOPs are subject to taxation at various stages under the Indian Income Tax Act. It is essential for both employees and employers to understand how ESOPs are taxed in India to effectively plan for tax liabilities and ensure compliance. ESOP Taxation under the Income Tax Act Under the Indian Income Tax Act, ESOPs are taxed as perquisites when they are granted or exercised, and the tax treatment may vary depending on the stage of the ESOP lifecycle. The taxation of ESOPs falls under Section 17(2) of the Income Tax Act, which deals with perquisites provided to employees. Taxability of ESOP under Income Tax Act: Grant Stage: There is no tax at the time of granting the options. Employees only pay tax when they exercise the options or sell the shares. Exercise Stage: ESOPs are taxed as perquisites at the time of exercise, based on the difference between the exercise price and the market value (Fair Market Value / FMV) of the shares on the date of exercise. Sale Stage: When ESOP shares are sold, the difference between the sale price and the FMV at the time of exercise is subject to capital gains tax. The perquisite value of ESOPs (which is treated as income) is calculated based on the FMV of shares as on date of exercise, and employees are required to pay income tax on this value. Tax on ESOPs in India: Key Considerations Understanding the taxability of ESOPs in India requires a clear distinction between the tax events that occur at different stages: the grant, exercise, and sale of ESOPs. Below is a detailed breakdown of these stages: Taxation at the Time of Grant When is tax applied? There is no immediate tax liability at the time of granting ESOPs in India. Employees are not required to pay tax when the options are granted, as there is no transfer of shares or money involved at this stage. Valuation Impact The valuation of the shares only comes into play at the exercise stage. However, the difference between exercise... --- - Published: 2025-06-30 - Modified: 2025-07-21 - URL: https://treelife.in/taxation/understanding-esops-in-india/ - Categories: Taxation - Tags: Employee Stock Option Plans India, ESOP Exercise Price India, ESOP Taxation India, ESOP Vesting Period India, ESOPs in Indian Startups, ESOPs India Introduction In the contemporary competitive job market, companies are constantly seeking innovative ways to attract and retain top talent. Employee Stock Option Plans (hereinafter ESOPs) have emerged as a popular tool, offering employees a stake in the company’s success and fostering a sense of ownership. ESOPs have become a game-changer, offering employees a chance to foster a sense of ownership in the company and to partake in its success. But ESOPs are more than just a fancy perk in a landscape where talent reigns supreme; understanding how the process flow works, the tax implications involved in India, and the factors that influence the exercise price – the price employees pay for the stock – is crucial for both employers and employees. What Are ESOPs (Employee Stock Ownership Plans)? An Employee Stock Ownership Plan (ESOP) is a powerful financial tool that enables employees to purchase shares of the company they work for at a predetermined price, known as the exercise price, within a specific time frame, referred to as the vesting period. This structured program is often used by companies, particularly startups, to offer equity-based compensation to their employees. ESOPs are not just financial incentives; they are designed to create a strong sense of ownership among employees, aligning their goals with those of the company's shareholders. This alignment can significantly enhance employee engagement, productivity, and overall company performance. In addition to fostering a high-performance culture, ESOPs serve as an effective strategy for attracting top talent and retaining employees by providing long-term financial benefits. By offering stock options as part of a compensation package, ESOPs can incentivize employees to contribute to the company’s growth and success. Moreover, these plans help companies build a committed workforce with a shared vision of the organization’s future. Benefits of ESOPs Employee Stock Ownership Plans (ESOPs) offer numerous advantages for both employees and companies. One of the primary benefits of ESOPs is their ability to align the interests of employees with the company’s shareholders. By granting employees ownership stakes in the company, ESOPs incentivize them to focus on the long-term success and growth of the organization. Key Benefits of ESOPs Boosts Company Culture and LoyaltyBy empowering employees with equity, ESOPs build a stronger company culture rooted in collaboration and loyalty. Employees who are invested in the company's future are more likely to contribute to a positive work environment and align with the company’s mission. Enhanced Employee EngagementESOPs help foster a sense of ownership and accountability among employees. When employees have a direct stake in the company's success, they are more likely to stay motivated, work efficiently, and contribute to achieving company goals. Increased Productivity and Company PerformanceEmployees with stock options are more inclined to go above and beyond in their roles. By tying their compensation to company performance, ESOPs encourage employees to take initiatives that directly benefit the company's profitability, leading to sustained growth. Attract and Retain Top TalentAs one of the most effective tools for employee retention, ESOPs provide valuable financial incentives. They serve as a competitive edge for businesses looking to attract skilled talent, especially in industries where top candidates are highly sought after. ESOPs also encourage long-term commitment, reducing employee turnover. Tax Advantages for Employees and EmployersESOPs can offer tax benefits for both employees and employers. Employees may benefit from tax deferrals on the appreciation of stock, and companies can often deduct the cost of stock contributions, making ESOPs an efficient tool for both parties. Why Companies Choose ESOPs Companies leverage ESOPs not only as an employee incentive but also as a strategy for succession planning and ownership transition. ESOPs can help business owners transfer ownership gradually, ensuring continuity and stability within the organization. How do ESOPs Work? An Employee Stock Ownership Plan (ESOP) is a powerful financial tool that provides employees with an opportunity to own a part of the company they work for. The ESOP implementation process involves several well-defined stages, from the initial agreement on terms to the final allotment of shares. Here’s a detailed breakdown of how ESOPs work: 1. Finalizing ESOP Terms The first step in implementing an ESOP is defining the terms of the ESOP policy. This includes: Granting Conditions: Determining the total number of options to be issued and the eligibility criteria (who can receive options). Vesting Schedule: Setting the timeline for when employees can begin exercising their options (often based on years of service or performance milestones). Exercise Price: Deciding on the price at which employees can purchase the shares (this is typically set at the fair market value at the time of granting). These terms must be carefully negotiated and finalized, ensuring they align with company goals and legal requirements. 2. Adoption of ESOP Policy Once the terms are finalized, the company must adopt the ESOP policy. This involves: Board Approval: The company’s board of directors reviews and approves the ESOP policy. Shareholder Resolution: A resolution must be passed by the shareholders to formally adopt the policy. Legal Compliance: Ensure that the ESOP policy complies with regulatory requirements, such as those laid out by SEBI and other governing bodies. This step ensures that the ESOP structure is legally binding and officially approved by the company’s governing bodies. 3. Granting of ESOPs Eligible employees (as per the policy) are granted stock options. This is done through the issuance of grant letters, which clearly outline: The number of options granted. The vesting schedule. The exercise price. Any additional terms and conditions. This stage marks the formal beginning of the ESOP process for each employee. 4. Vesting of ESOPs Vesting refers to the process by which employees become eligible to exercise their ESOP options. The vesting schedule determines when and how employees can unlock their stock options. Vesting can occur based on: Time-based criteria: Employees earn stock options over a period (e. g. , 4 years with a 1-year cliff). Performance-based criteria: Vesting is tied to meeting specific company or individual performance goals. The vesting schedule helps retain employees by encouraging long-term commitment to the company. 5. Exercising... --- - Published: 2025-06-30 - Modified: 2025-07-22 - URL: https://treelife.in/news/cbdt-notifies-tds-exemption-for-payments-to-ifsc-units-effective-from-july-1-2025/ - Categories: News In a significant move set to bolster the International Financial Services Centre (IFSC) ecosystem, the Central Board of Direct Taxes (CBDT) has issued Notification No. 67/2025 on June 20, 2025. This notification, effective from July 1, 2025, exempts certain payments made by mainland entities to eligible units in GIFT City IFSC from Tax Deducted at Source (TDS). This initiative aims to enhance the ease of doing business, attract foreign capital, and improve liquidity within the IFSC. The exemption, however, is not unconditional and comes with specific regulatory requirements for both the payee (IFSC unit) and the payer. What the IFSC Unit (Payee) Must Do: To avail of this crucial TDS exemption, an IFSC unit must adhere to the following conditions: Submit Form 1 Annually: The IFSC unit must submit a statement-cum-declaration in Form 1 to each payer. This form serves as a declaration that the unit has opted for the tax holiday benefits available under Section 80LA of the Income-tax Act. Annual Verification: This Form 1 must be filed and verified every year throughout the opted 10-year tax holiday window. Income from Approved Activity: Crucially, the exemption applies only to business income derived from activities explicitly approved for the IFSC unit. What the Payer Must Do: Mainland entities making payments to IFSC units must also follow specific guidelines to ensure compliance: Receipt of Form 1 is Key: Payers should cease deducting TDS only after receiving a duly filled and verified Form 1 from the concerned IFSC unit. Report Exempt Payments: All such payments, on which TDS has not been deducted due to this exemption, must be reported in the quarterly TDS returns. This reporting is to be done as per Section 200(3) read with Rule 31A of the Income-tax Rules. Retain Form 1: It is imperative for payers to properly retain the received Form 1 for audit and compliance purposes. Important Considerations: Non-Compliance by IFSC Unit: If an IFSC unit fails to submit Form 1, or if the exemption is claimed beyond its eligible 10-year period, TDS must be deducted as per the normal provisions of the Income-tax Act. Scope of Exemption: The notification specifies the nature of payments and the categories of IFSC units that qualify for this exemption. While the full table outlines these details, it generally covers payments like professional, consulting, and advisory fees; commission incentives; interest on leases; freight or hire charges; portfolio management fees; advisory and management fees; professional and technical service fees; rent for data centers; and penalties levied by exchanges. This move is a welcome development for the Indian financial landscape, reinforcing the government's commitment to developing GIFT City as a globally competitive financial hub by reducing compliance burdens and enhancing operational efficiency for IFSC units. --- - Published: 2025-06-30 - Modified: 2025-07-21 - URL: https://treelife.in/news/ifsca-approves-platform-play-for-fund-management-entities-at-gift-ifsc/ - Categories: News In a significant stride towards enhancing the appeal and accessibility of India's International Financial Services Centre (IFSC) at GIFT City, the International Financial Services Centres Authority (IFSCA) has approved a groundbreaking "Platform Play" model for Fund Management Entities (FMEs). This pivotal decision was made during the 24th IFSCA Authority Meeting held on June 24, 2025. The newly approved framework for Third-Party Fund Management Services is designed to facilitate greater participation and flexibility within the IFSC's fund management ecosystem. Under this innovative model, registered FMEs at GIFT IFSC will now be able to manage restricted schemes on behalf of third-party fund managers. Crucially, this eliminates the prior requirement for these third-party fund managers to establish a physical presence within the IFSC, thereby reducing operational overheads and streamlining market entry. Key Conditions Under the New Framework: While offering unprecedented flexibility, the "Platform Play" model is subject to specific conditions to ensure robust governance and financial stability: Additional Net Worth Requirement: FMEs opting for the "Platform Play" model must maintain an additional net worth of USD 500,000 over and above their existing net worth thresholds as stipulated under the prevailing FME regulations. This ensures that participating entities possess sufficient financial capacity to manage the increased responsibilities. Mandatory Principal Officer: For each scheme managed under the "Platform Play" framework, the FME is required to appoint a dedicated Principal Officer (PO). This ensures direct accountability and dedicated oversight for every scheme. Transition to Dedicated FME Model: To ensure scalability and appropriate regulatory oversight, if the fund corpus of a scheme managed under this model exceeds USD 50 million, it will be mandatory for the scheme to transition to a dedicated FME model. This provision is designed to encourage the establishment of a full-fledged presence as the fund grows, further solidifying the IFSC's ecosystem. This progressive move by the IFSCA is anticipated to significantly strengthen GIFT IFSC’s position as a globally competitive and innovation-driven fund management hub. By lowering barriers to entry and offering flexible operational models, the "Platform Play" framework is expected to attract a wider array of fund managers and schemes, fostering growth and diversification within the IFSC. Interested in exploring or planning to set up a scheme under the Platform Play model? For further discussion, please reach out to gift@treelife. in. --- - Published: 2025-06-30 - Modified: 2025-06-30 - URL: https://treelife.in/news/sebi-mandates-new-certification-norms-for-aif-managers/ - Categories: News The Securities and Exchange Board of India (SEBI) has officially unveiled revised certification requirements for key investment personnel of Alternative Investment Fund (AIF) managers. This crucial update, detailed in SEBI circular F. No. SEBI/LAD-NRO/GN/2025/249 dated June 25, 2025, aims to enhance professional standards and ensure a higher level of expertise within the burgeoning AIF industry. The new regulations introduce a category-wise mandatory certification framework through the National Institute of Securities Markets (NISM). This move clarifies the certification pathway for AIF professionals and replaces SEBI's earlier notification dated May 10, 2024. Category-Wise Certification Now Mandatory: The updated norms specify different NISM certification requirements based on the AIF category: Category I & II AIFs: Key personnel associated with the management of Category I and Category II AIFs are now required to pass either the NISM Series-XIX-C: Alternative Investment Fund Managers Certification Examination or the newly introduced NISM Series-XIX-D: Category I and II Alternative Investment Fund Managers Certification Examination. This ensures that professionals managing these AIFs possess a common minimum knowledge benchmark covering regulatory, operational, and fiduciary aspects. Category III AIFs: For key personnel of Category III AIFs, the mandate requires passing either the NISM Series-XIX-C: Alternative Investment Fund Managers Certification Examination or the newly introduced NISM Series-XIX-E: Category III Alternative Investment Fund Managers Certification Examination. This specific certification for Category III AIFs caters to the distinct complexities and strategies often associated with these funds, which may involve higher leverage and more complex investment approaches. Deadline and Industry Impact: All existing AIFs are required to comply with these updated certification requirements on or before July 31, 2025. With this approaching deadline, AIF managers are actively preparing their teams to meet the new standards. This regulatory change is poised to have a significant impact on the AIF landscape. Beyond enhancing professionalism and accountability, it raises questions about potential shifts in hiring strategies for funds. Managers might prioritize candidates who already hold the required certifications or invest heavily in training existing personnel. The emphasis on standardized knowledge is expected to foster greater investor confidence and promote best practices across the alternative investment sector in India. --- - Published: 2025-06-30 - Modified: 2025-07-21 - URL: https://treelife.in/news/sebi-revamps-angel-fund-framework-to-boost-startup-funding/ - Categories: News In a significant move to invigorate India's startup ecosystem, the Securities and Exchange Board of India (SEBI), during its board meeting on June 19, 2025, approved substantial changes to the Angel Fund Framework. These revisions are designed to unlock more capital for early-stage companies while simultaneously ensuring enhanced investor suitability and a more streamlined investment process. The updated framework addresses several long-standing points of discussion and aims to align angel investing with global best practices. Key Changes to the Angel Fund Framework: Mandatory Accredited Investor Status: A crucial change is the mandate that all Angel Fund investors must now be Accredited Investors (AI). This ensures that only verified and risk-aware individuals or entities participate, given the high-risk nature of early-stage investments. As of now, India reportedly has only 649 Accredited Investors, underscoring the exclusivity and rigorous verification process for this investor class. Revised Investment Thresholds: The per-investee company investment thresholds have been significantly revised. Angel Funds can now invest between INR 10 lakh and INR 25 crore in a single startup. This is a substantial increase from the previous range of INR 25 lakh to INR 10 crore, allowing for larger and more impactful angel rounds. Removal of Concentration Cap: SEBI has removed the 25% investment concentration cap for a single startup. This change provides Angel Funds with greater flexibility to allocate more capital to high-potential ventures, enabling them to double down on promising investments. Expanded Investor Base: Angel Funds are now permitted to pool contributions from more than 200 Accredited Investors in a single deal. This move significantly broadens the potential investor base for startups, as the previous limit often restricted larger syndication. Follow-on Investments Permitted: In a practical amendment, Angel Funds can now make follow-on investments in an investee company even if it no longer qualifies as a "startup" as per the official definition. This ensures continued support for companies through their growth journey. Transparent Investment Allocation: Every investment opportunity presented by an Angel Fund must now be offered to all eligible investors. The allocation process for such investments will strictly follow the method disclosed in the fund’s Private Placement Memorandum (PPM), ensuring fairness and transparency. "Skin in the Game" for Managers: To foster greater alignment of interest and responsibility, the fund sponsor or manager must now contribute the higher of 0. 5% of the investment amount or ₹50,000 in each investment made by the fund. This "skin in the game" requirement aims to ensure that fund managers share a direct financial stake in the success of the investee companies. Grandfathering Provisions: Existing Angel Funds and investments made by non-Accredited Investors will be grandfathered, with a one-year glide path provided for compliance with the new regulations. This allows for a smooth transition without disrupting ongoing investments. These comprehensive measures are expected to significantly boost capital inflow into Indian startups, making the angel investing landscape more robust, transparent, and attractive for sophisticated investors. The focus on Accredited Investors also highlights SEBI's commitment to protecting less experienced investors while fostering growth in the early-stage funding ecosystem. What are your thoughts on these new regulations and their potential impact on startup funding in India? For a deeper discussion, please reach out to priya. k@treelife. in. --- > A detailed guide to tax exemptions, concessions, benefits and reliefs for startups in 2024. Indian government initiated the Startup India initiative with the aim of promoting entrepreneurship inside the nation. - Published: 2025-06-30 - Modified: 2025-07-21 - URL: https://treelife.in/taxation/tax-exemption-for-startups-in-india/ - Categories: Taxation - Tags: dpiit tax exemption, exemption for startup companies, gst exemption for startups, income tax exemption for startup companies, income tax exemption for startups, start up company tax exemption, start up exemption, start up exemption income tax, start up tax benefits, start up tax concessions, start up tax relief, startup tax exemption, tax exemption for startups In India, tax exemptions for startups are crucial for encouraging innovation and promoting the growth of new businesses. These exemptions are part of various government schemes and tax laws designed to help startups reduce their financial burden, especially during the initial years of operation. By offering tax relief, the government aims to create an environment that fosters entrepreneurship, investment, and job creation. In 2025, several tax exemptions are available to startups in India, including those under Section 80-IAC of the Income Tax Act and the Startup India program. These provisions offer startups the opportunity to receive substantial tax benefits, enabling them to reinvest their savings into business development, technology, and talent acquisition. In this section, we’ll explore what tax exemptions are available, how they benefit startups, and why they are so essential for the startup ecosystem in India. What is Tax Exemption for Startups in India? Tax exemption for startups in India refers to the financial benefits provided by the government to encourage the growth and development of new businesses. These exemptions are designed to reduce the tax burden, especially during the initial years of operation, allowing startups to reinvest savings into business expansion, research, and innovation. India offers various tax exemptions under schemes like Startup India and tax provisions within the Income Tax Act. These exemptions are available to eligible startups in the form of tax holidays, capital gains exemptions, and exemptions on angel tax. By providing these incentives, the government aims to create an ecosystem that supports the success of startups, fostering an environment where entrepreneurship can thrive. Key tax exemptions for startups in India include: Section 80-IAC: Tax holiday for startups, exempting them from income tax for the first three years. Section 54GB: Capital gains exemption for reinvestment in eligible startups. These provisions allow startups to direct more of their resources into scaling their business rather than spending on taxes. Why Are Tax Exemptions Important for Startups? Tax exemptions play a crucial role in the development and sustainability of startups in India. Here’s why these exemptions are vital: Financial Relief for StartupsTax exemptions help startups manage high operating costs and reinvest savings in product development, marketing, and hiring, easing early financial challenges. Encouragement for InvestmentTax exemptions attract investors by reducing risks, with Section 80-IAC offering relief to angel investors and the Startup India initiative incentivizing investments in innovative businesses. Fostering InnovationWith reduced financial pressure, startups can focus on R&D, leading to innovations that fuel growth and benefit the economy. Promoting Job CreationAs startups grow, tax savings allow them to hire more talent, reducing unemployment and fostering career opportunities. Boosting the EconomyStartups drive economic growth by creating jobs, attracting investments, and enhancing productivity, supported by tax exemptions that nurture the ecosystem. Eligibility Criteria for Startup Tax Exemptions To qualify for startup tax exemptions in India, businesses must meet certain criteria outlined under the Startup India program and relevant tax provisions like Section 80-IAC of the Income Tax Act. These exemptions are designed to support early-stage companies by reducing their tax liabilities, thereby helping them focus on growth, innovation, and development. Who is Eligible for Startup Tax Exemption in India? The Indian government provides startup tax exemptions under the Startup India initiative. To avail of these exemptions, businesses must fulfill the following eligibility criteria: 1. DPIIT Recognition DPIIT (Department for Promotion of Industry and Internal Trade) recognition is a mandatory requirement for startups to claim tax exemptions under the Startup India program. The startup must apply for DPIIT recognition, which is a certification that validates the business as an eligible startup. DPIIT Recognition is crucial because it allows startups to access various benefits, including tax exemptions, funding opportunities, and other government initiatives aimed at supporting business growth. 2. Business Type and Nature Startups must be engaged in innovation, development, or improvement of products or services that provide a scalable business model. The nature of the business should not include infrastructural activities, real estate, or other excluded sectors. The business should focus on technology, manufacturing, e-commerce, agriculture, and other sectors that contribute to economic growth. 3. Age of the Business To be recognized as a startup, the business should not be more than 10 years old from its date of incorporation or registration. This age limit ensures that only newly established companies can avail of the tax exemptions aimed at providing support during their early growth phase. 4. Annual Turnover Startups must have an annual turnover that does not exceed INR 100 Crores in any financial year to be eligible for tax exemptions. This condition ensures that the exemption benefits are provided to smaller, high-potential companies, rather than well-established businesses. Key Criteria for Section 80-IAC Eligibility Section 80-IAC of the Income Tax Act offers significant tax exemptions to eligible startups, allowing them to enjoy a tax holiday for the first three years. To qualify for this exemption, startups must meet the following specific criteria: 1. DPIIT Recognition for Section 80-IAC As mentioned earlier, obtaining DPIIT recognition is a prerequisite for claiming benefits under Section 80-IAC. Without this recognition, a startup cannot claim the tax holiday or other tax exemptions available under the provision. 2. Nature of the Business The startup must be engaged in innovative and scalable businesses that provide solutions to existing problems or gaps in the market. The business should aim to scale rapidly and contribute to the Indian economy, providing job opportunities, technological advancements, or solutions to societal problems. 3. Age of the Business For Section 80-IAC benefits, startups should be less than 10 years old at the time of claiming the exemption. This ensures that the relief is targeted at young, high-growth businesses. 4. Ownership Structure The startup must be a private limited company or a limited liability partnership (LLP). The startup must not be formed by splitting up or reconstruction of an existing business. 5. Indian and Foreign-Funded Startups  Section 80-IAC applies to both Indian-funded and foreign-funded startups. Startups can be fully funded by Indian investors or have foreign backing through venture capital, angel investors,... --- - Published: 2025-06-20 - Modified: 2025-07-21 - URL: https://treelife.in/finance/disclosure-of-foreign-assets-in-itr/ - Categories: Finance - Tags: Foreign Assets, Foreign Assets in ITR Do You Hold Assets in a Foreign Jurisdiction? In today’s globalized economy, it’s increasingly common for Indian residents to hold assets overseas whether it's foreign bank accounts, shares, mutual funds, or property. However, with global holdings come domestic tax responsibilities. If you're a Resident and Ordinarily Resident (R&OR) individual or HUF in India and filing ITR-2 or ITR-3, you are legally required to report these foreign assets under Schedule FA (Foreign Assets), irrespective of whether any income from such assets is taxable in India. Failing to disclose these details can invite scrutiny, penalties, and compliance risk under Indian tax laws. This blog outlines what Schedule FA is, why it matters, and who needs to file it. Here is Everything You Need to Know About Schedule FA in Your Income Tax Return. What is Schedule FA? Schedule FA is a section in the Income Tax Return (ITR) forms where Indian taxpayers must declare their foreign assets and income. The requirement is part of the government's broader efforts to ensure tax transparency and detect unreported foreign wealth. Foreign Assets Include: Foreign bank accounts (held solely or jointly) Foreign shares and mutual funds Financial interest in entities registered outside India Immovable property outside India (such as apartments, land) Any other foreign asset or authority over such assets (e. g. , signing authority) Why is Schedule FA Important? 1. Promotes Transparency Schedule FA enables the Income Tax Department to keep an accurate and updated record of the global financial footprint of Indian residents. 2. Helps Curb Black Money Post landmark events like the Panama Papers and Paradise Papers leaks, Schedule FA serves as a vital tool in uncovering undisclosed offshore income and assets. 3. Enables Tax Relief via DTAA By disclosing overseas income accurately, taxpayers can claim relief under Double Taxation Avoidance Agreements (DTAA), thereby avoiding being taxed twice on the same income. Who Needs to File Schedule FA? The requirement to file Schedule FA applies to: Individuals classified as Residents and Ordinarily Residents (R&OR) under the Income Tax Act Hindu Undivided Families (HUFs) who are R&OR Those filing ITR-2 or ITR-3 where foreign asset reporting is relevant You must report if you: Hold financial interest in a foreign entity (whether direct or beneficial) Possess signing authority in any foreign bank account Are a legal or beneficial owner of any foreign asset Receive income from foreign sources (including dividends, capital gains, rental income) Owning foreign assets isn't illegal but failing to report them is. Even if your overseas income is exempt from taxation in India, disclosure under Schedule FA remains mandatory for resident taxpayers. Non-compliance may result in substantial penalties under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015. Need Help with Foreign Asset Disclosure? If you're unsure about how to correctly disclose your foreign assets in your Income Tax Return or need assistance with filing Schedule FA, our experts are here to guide you. Get in touch with us today for personalized advice and ensure compliance with the latest tax regulations. Contact Us Now --- - Published: 2025-06-20 - Modified: 2025-07-22 - URL: https://treelife.in/startups/common-legal-and-compliance-oversights-for-startups-in-due-diligence/ - Categories: Startups - Tags: Legal and Compliance mistakes, Legal and Compliance Mistakes in Due Diligence Starting a company is one of the most exciting and challenging journeys an entrepreneur can undertake. Amidst the excitement of building a product, acquiring customers, and pitching to investors, one crucial area is often overlooked legal and compliance readiness. Whether you're preparing for your first funding round, onboarding co-founders, or expanding your team, ensuring your startup is legally compliant is essential to minimize risks, maintain investor confidence, and scale sustainably. Below are a few points which founders and startups should keep in mind: 1. Missing or Inadequate Legal Documentation Lack of proper documentation—including employment contracts, NDAs, or investment agreements—is one of the most common red flags investors uncover during due diligence. Why it matters:Ambiguity in roles, compensation, or IP ownership can lead to internal disputes and loss of investor trust. What you should do:Ensure every key relationship—employee, advisor, vendor, or investor—is governed by a clearly drafted and executed agreement, reviewed periodically for updates. 2. Unpaid or Underpaid Stamp Duty All transaction documents—Shareholders’ Agreements (SHA), Share Subscription Agreements (SSA), property agreements—are subject to mandatory stamp duty under applicable laws. Why it matters:Failure to pay stamp duty can invalidate contracts, reduce enforceability in court, and result in penalties or delays in future funding rounds. What you should do:Engage legal counsel to accurately calculate and pay stamp duty on time for all relevant agreements. 3. Equity Promises Without Written Records Founders often make informal equity promises—especially in the early stages—to co-founders, employees, or advisors, with no legal backing. Why it matters:Undocumented equity commitments can lead to disputes or unexpected dilution, particularly during fundraising or exits. What you should do:All equity arrangements should be documented formally through mechanisms like ESOPs, SAFEs, or written agreements approved by the board and shareholders. 4. Inadequate Protection of Intellectual Property (IP) Intellectual property is one of a startup's most valuable assets—yet it is often poorly protected or left unassigned. Why it matters:If IP created by employees, consultants, or developers is not assigned to the company, the company may not own it—leading to legal vulnerabilities during investment or acquisition. What you should do:Implement IP assignment clauses in employment and contractor agreements, register key IP assets, and conduct regular IP audits. 5. Non-Maintenance of Statutory Registers and Board Minutes As per the Companies Act, 2013, private limited companies are required to maintain: Statutory registers (of members, directors, charges, etc. ) Proper minutes of board and shareholder meetings Why it matters:Failure to maintain statutory records can result in penalties, scrutiny from regulators, and poor investor perception. What you should do:Outsource compliance or engage an in-house Company Secretary to ensure records are updated and aligned with statutory requirements. 6. Non-Issuance or Dematerialization of Share Certificates Startups must issue share certificates to shareholders and comply with dematerialization norms within regulatory timelines. Why it matters:Delays or lapses in share issuance or conversion into demat format can create hurdles in share transfers, exits, and fundraising. What you should do:Issue share certificates within 60 days of allotment and coordinate with a registered depository for dematerialization. 7. Failure to Secure Mandatory Government Registrations Startups operating in regulated industries—such as fintech, healthtech, insurance, or food delivery—often forget to obtain sector-specific licenses or approvals. Why it matters:Non-compliance can lead to business license suspensions, fines and other penal implications. What you should do:Assess applicable local and sectoral regulations early and complete all statutory registrations before commencing operations. Ensure Your Startup’s Legal and Compliance Readiness Avoid costly mistakes and ensure your startup is legally sound. If you're unsure about your current compliance status or need assistance in addressing legal oversights, our experts are here to help. Get in touch with us today to ensure your startup is fully compliant and prepared for growth and investment. Contact Us Now --- - Published: 2025-06-20 - Modified: 2025-07-22 - URL: https://treelife.in/startups/raising-funds-from-friends-and-family/ - Categories: Startups - Tags: F&F, Friends and Family Raising funds from friends and family is a common strategy for early-stage startups, particularly during the initial or pre-revenue phase. These funding rounds, although informal in nature, are subject to legal and regulatory frameworks under Indian corporate law. To help founders navigate this process seamlessly, we’ve outlined some key legal considerations and compliance steps you should follow to raise capital responsibly and avoid future complications. Valuation Reports When raising funds through private placement, one of the most crucial aspects is determining and justifying the price at which shares are being offered. This price must reflect the Fair Market Value (FMV) of the shares. Key Legal Requirements: Under the Companies Act, 2013, a valuation report from a Registered Valuer is required to justify the pricing of shares during private placement. If funds are being raised from non-resident investors, compliance with FEMA (Foreign Exchange Management Act) mandates that the valuation report be issued by a SEBI-registered Merchant Banker or a Chartered Accountant. Why this matters: Issuing shares below or above FMV without proper valuation can result in tax implications, non-compliance with regulatory norms, and challenges in future funding rounds. Secretarial Compliance Raising capital through private placement is governed by a set of specific secretarial compliance obligations that must be met to maintain the legality of the transaction. Mandatory Filings and Documents: 𝐅𝐨𝐫𝐦 𝐒𝐇-7 To be filed when increasing the authorized share capital of the company—a necessary step before issuing additional shares. 𝐌𝐆𝐓-14 FilingThis form must be filed with the Registrar of Companies (RoC) when a private placement is approved. It provides legal backing to the offer and includes the Offer Letter to investors. 𝐏𝐀𝐒-4 This is the Offer Letter for private placement and must be provided to all prospective investors. It includes the terms of the offer and is required to be maintained in company records. 𝐏𝐀𝐒-3Once shares are allotted, this form is filed to inform the RoC of the allotment. It is critical to note that funds received through private placement cannot be utilized until PAS-3 is filed, ensuring transparency in the flow of investment. Why this matters: Missing or delaying these filings can invalidate the funding round, attract penalties, and disrupt future compliance and audit processes. Investment Agreements When raising capital from friends and family, it is easy to assume that formal agreements are unnecessary. However, this is a common pitfall that can lead to misunderstandings or legal disputes. What Should the Agreement Cover? A well-structured Investment Agreement must clearly articulate: Terms and nature of the investment (e. g. , equity, preference shares) Equity distribution and shareholding structure Voting rights and investor protections Exit mechanisms and timelines Dispute resolution clauses and jurisdiction Restrictions on share transfer or dilution Why this matters:Documenting these terms helps establish clear expectations and protects both the founder and investors, especially as the company grows or brings in institutional investors. Raising funds from friends and family is a valuable and often necessary step for early-stage startups. However, even these seemingly informal transactions must comply with legal frameworks to ensure smooth growth and investor confidence. Ensure Your Startup’s Legal and Compliance Readiness Avoid costly mistakes and ensure your startup is legally sound. If you're unsure about your current compliance status or need assistance in addressing legal oversights, our experts are here to help. Get in touch with us today to ensure your startup is fully compliant and prepared for growth and investment. Contact Us Now --- - Published: 2025-06-20 - Modified: 2025-07-21 - URL: https://treelife.in/compliance/understanding-valuation-rules-for-share-transfers-post-angel-tax-removal/ - Categories: Compliance - Tags: Valuation Rules for Share Transfers With the removal of Section 56(2)(viib), commonly known as Angel Tax, the landscape for startup funding and share transfers has significantly evolved. This update brings relief but also re-emphasizes the importance of complying with valuation norms under various regulatory frameworks. Here's a simplified yet comprehensive guide to the valuation rules applicable for both primary and secondary share transfers in India. Primary vs Secondary Share Transfers: What's the Difference? AspectPrimary Share IssuanceSecondary Share TransferWhat it meansNew shares issued by a company to raise fundsSale of existing shares between investorsKey ComplianceGoverned by Companies Act, FEMA, and Income Tax ActGoverned by FEMA and Income Tax ActValuation RequirementRegistered Valuer (RV) report mandatoryNo RV required, but FMV must be justified Key Compliance Overview AspectPrimary Share Issuance (Fresh Issue by Company)Secondary Transfer (Sale of Existing Shares)Companies Act ComplianceSection 62 of Companies Act, 2013 – Valuation by Registered Valuer (RV) for preferential allotmentNo RV requirement for private transfers, but FMV should be maintainedFEMA ComplianceRule 21 of FEMA (Non-Debt Instruments) Rules, 2019 – Price must be at or above FMV for foreign investorsRule 21 of FEMA (Non-Debt Instruments) Rules, 2019 – Price cannot be below FMV when transferring to a non-residentIncome Tax ComplianceFMV determined as per Rule 11UA (NAV, DCF, and internationally accepted methods)FMV as per Rule 11UA; Capital Gains Tax applies (Short-Term or Long-Term)Valuation MethodRegistered Valuer Report based on:- Discounted Cash Flow (DCF): Projects future cash flows and discounts them to present value. - Net Asset Value (NAV): Determines share value based on net assets of the company. - Market Price Method: Applicable if shares are listed on a recognized stock exchange. FMV based on:- Rule 11UA Methods: Includes NAV, DCF, Comparable Company Multiple, Option Pricing Method, and other internationally accepted methods.  Fair Market Value (FMV)FMV is based on Registered Valuer Report as per Companies Act and FEMAFMV is based on transaction price, Rule 11UA, and FEMA guidelinesTaxationNo Angel Tax post Section 56(2)(viib) removalFuture sales attract capital gains taxCapital Gains Tax:- Short-term (STCG) @20%* if held < 24 months- Long-term (LTCG) @12. 5%* if held ≥ 24 months (Indexation available)*plus applicable surcharge and cess Need Help Navigating Share Transfer Valuation Rules? With the removal of Angel Tax, the rules around share transfers have evolved. If you're unsure about how to value shares or ensure compliance with the latest regulatory frameworks, our experts are here to guide you. Get in touch with us today to navigate the complexities of share transfer valuation and stay compliant with the latest tax regulations. Contact Us Now --- - Published: 2025-06-20 - Modified: 2025-08-25 - URL: https://treelife.in/taxation/taxation-of-virtual-digital-assets/ - Categories: Taxation - Tags: taxation, Virtual Digital Assets Introduction Virtual Digital Assets (VDAs) have emerged as a significant investment avenue in India, with cryptocurrencies, non-fungible tokens (NFTs), and other digital assets gaining substantial traction among investors. To regulate this burgeoning sector, the Indian government introduced a comprehensive taxation framework through the Finance Act, 2022, which came into effect from April 1, 2022. With India’s growing adoption of cryptocurrencies, NFTs, and tokens, it’s critical for investors and traders to understand how these Virtual Digital Assets (VDAs) are taxed and reported. Since FY 2022-23, the Income Tax Department has rolled out strict guidelines, leaving no room for guesswork. This blog provides an in-depth analysis of the taxation provisions applicable to VDAs in India, examining various investor scenarios based on residency status and investment platforms. Understanding Virtual Digital Assets (VDAs) Definition and Scope The Finance Act, 2022 introduced Section 2(47A) to the Income Tax Act, 1961, which defines VDAs broadly to include: Any information, code, number, or token (not being Indian or foreign currency) generated through cryptographic means or otherwise, providing a digital representation of value Non-fungible tokens (NFTs) or any other token of similar nature Any other digital asset notified by the Central Government This expansive definition encompasses cryptocurrencies like Bitcoin and Ethereum, NFTs, and potentially other digital tokens that may emerge in the future. The government has also explicitly excluded certain items from the VDA definition, including gift cards, vouchers, reward points, and airline miles. Types of VDAs Covered The Indian taxation regime for VDAs applies to: Cryptocurrencies: Including Bitcoin, Ethereum, Litecoin, Dogecoin, Ripple, Matic, etc. Non-Fungible Tokens (NFTs): Digital assets representing ownership of unique items Other Digital Tokens: Any token that provides a digital representation of value However, where an NFT involves the transfer of an underlying tangible property, such NFTs are excluded from the scope of VDAs. General Taxation Framework for VDAs Income Tax Provisions Section 115BBH of the Income Tax Act imposes a flat 30% tax on income derived from the transfer of VDAs, effective from April 1, 2022. Key aspects of this provision include: Tax Rate: A flat 30% tax (plus applicable surcharge and cess) on gains from the transfer of VDAs Limited Deductions: No deduction is allowed for any expenditure or allowance except for the cost of acquisition. No Set-Off of Losses: Losses arising from the transfer of VDAs cannot be set off against any other income, nor can they be carried forward to subsequent assessment years. Individual Asset Class: Each VDA is considered a separate asset class, meaning losses from one VDA cannot offset gains from another VDA. Tax on VDAs – Section 115BBH Tax TreatmentDetailsTax RateFlat 30% on gains from VDAsDeductionsOnly cost of acquisition allowed (No deduction for gas fees, brokerage, etc. )LossesCannot be set off or carried forwardEffective FromFY 2022–23 (AY 2023–24 onwards) Tax Deducted at Source (TDS) Provisions Section 194S, introduced by the Finance Act, 2022 and effective from July 1, 2022, requires a 1% TDS on the transfer value of VDAs above specified thresholds: TDS Rate: 1% of the transaction value Threshold Limits: Rs. 50,000 during a financial year for specified persons (individuals/HUFs not subject to tax audit) Rs. 10,000 during a financial year for other persons. TDS Collection Method: For transactions through Indian exchanges, the exchange is responsible for deducting TDS. Application to In-Kind Payments: TDS applies even when consideration is paid in another VDA, with the acquirer responsible for TDS. If the deductee fails to provide a PAN, TDS is deducted at a higher rate of 20%. eg. If you’ve bought or sold crypto above certain thresholds, TDS at 1% kicks in: ThresholdWho is Liable? TDS Required? INR 50,000/yearIndividuals or HUFs with business turnover > INR 1 Cr or professional receipts > INR 50LYesINR 10,000/yearAll other usersYes Indian Exchanges auto-deduct TDS. On foreign exchanges, you must deduct and deposit TDS. Tip: Check Form 26AS or AIS to confirm TDS has been credited properly. Gift Tax Implications The Finance Act, 2022 also amended Section 56(2)(x) to include VDAs within the definition of "property. " Consequently, receiving VDAs as a gift valued above Rs. 50,000 can trigger tax implications for the recipient. Resident Indian Investors: Taxation Scenarios Investment Through Indian Exchanges For resident Indians investing in VDAs through Indian cryptocurrency exchanges, the taxation framework operates as follows: Income Tax: Gains from the transfer of VDAs are taxed at a flat rate of 30% (plus applicable surcharge and cess). Only the cost of acquisition can be deducted when calculating gains. TDS Mechanism: The Indian exchange is responsible for deducting 1% TDS on each sale transaction. This applies to both cryptocurrency-to-fiat and cryptocurrency-to-cryptocurrency transactions. Reporting Requirements: From the financial year 2023-2024, Income Tax Return (ITR) forms include a separate section called "Schedule - Virtual Digital Assets" for reporting any gains from VDAs. Investment Through Foreign Exchanges When resident Indians invest in VDAs through foreign exchanges, additional complexities arise: TDS Applicability: Section 194S applies only when purchasing VDAs from an Indian tax resident. When trading on international exchanges, the TDS requirements may be different: For direct crypto purchases on foreign exchanges, no TDS under Section 194S may apply if the seller is not an Indian resident. For P2P transactions on international platforms where the counterparty is an Indian resident, the buyer needs to collect the PAN from each seller and file a TDS return. Income Tax Liability: Despite potential TDS exemptions, resident Indians are taxable on their global income, including gains from VDAs purchased on foreign exchanges. The 30% tax rate applies regardless of where the transaction occurs. Non-Resident Indian (NRI) Investors: Taxation Scenarios NRIs Investing Through Indian Exchanges For NRIs investing in VDAs through Indian exchanges, the tax implications are as follows: Applicability of Section 115BBH: The VDA taxation provisions do not distinguish between tax residents and non-residents. Therefore, NRIs are subject to the same 30% tax rate on gains from VDAs acquired through Indian exchanges. TDS Provisions: The 1% TDS under Section 194S applies to transactions with Indian residents. For NRIs, this would apply when they sell VDAs on Indian... --- > The Securities and Exchange Board of India (SEBI) has introduced a new cybersecurity mandate for Alternative Investment Funds (AIFs), making it mandatory for these funds to implement robust cybersecurity measures. This directive is part of SEBI's ongoing efforts to safeguard financial systems, mitigate cybersecurity risks, and enhance investor protection in India’s rapidly evolving financial ecosystem. - Published: 2025-06-19 - Modified: 2025-07-21 - URL: https://treelife.in/quick-takes/sebi-cybersecurity-mandate-for-aifs/ - Categories: Quick Takes GET PDF The Securities and Exchange Board of India (SEBI) has introduced a new cybersecurity mandate for Alternative Investment Funds (AIFs), making it mandatory for these funds to implement robust cybersecurity measures. This directive is part of SEBI's ongoing efforts to safeguard financial systems, mitigate cybersecurity risks, and enhance investor protection in India’s rapidly evolving financial ecosystem. The deadline to comply with SEBI’s new mandate is June 30, 2025, and it applies to all AIFs, regardless of their size or category. It is critical that AIFs begin taking the necessary steps to meet these requirements to avoid potential regulatory actions or penalties. Key Requirements of SEBI's Cybersecurity Mandate The following are the key measures that AIFs must implement: Appointment of a Full-Time CISOAIFs must appoint a dedicated, full-time Chief Information Security Officer (CISO) or a group-level CISO who will oversee the cybersecurity framework of the fund. This role cannot be part-time, reflecting the growing importance of cybersecurity in the financial sector. Cloud Usage ComplianceAIFs must ensure that they are using only MeitY-empanelled and STQC-certified platforms for their cloud-based services. This is to ensure compliance with the government's standards for cloud security. Platforms like personal Dropbox or Google Drive are prohibited for official use. Maintenance of Software Bill of Materials (SBOM)AIFs must maintain a Software Bill of Materials for all critical systems. This will help track and manage the software components used across various platforms, ensuring that all parts of the system are secure and up to date. Annual VAPT (Vulnerability Assessment and Penetration Testing) & Cybersecurity AuditsTo identify vulnerabilities and mitigate risks, AIFs must conduct annual VAPT and cybersecurity audits. These audits should be done by CERT-In certified agencies, which will assess the fund’s cybersecurity infrastructure and protocols. SOC Reporting (Security Operations Center)AIFs that are self-certified or have fewer than 100 clients may be exempted from this requirement. However, for others, regular SOC reporting is mandatory to ensure real-time monitoring of security incidents and vulnerabilities. Incident Response ReadinessAIFs must develop an incident response plan, which includes regular drills and forensic audits. This ensures that they are prepared to respond quickly and efficiently to any cyberattack or security breach. How Can AIFs Prepare for SEBI's Mandate? As the deadline approaches, AIFs should take immediate action to ensure compliance with these new requirements. Here are some steps that funds can take to get started: Conduct a Gap AssessmentEvaluate your current cybersecurity measures and identify any gaps. A thorough gap assessment will help you understand what needs to be updated or implemented to meet SEBI’s requirements. Appoint a Full-Time CISOIf you don’t already have a CISO in place, start the hiring process. A skilled and experienced CISO will play a pivotal role in ensuring your cybersecurity protocols are up to standard. Ensure Cloud ComplianceMake sure all cloud platforms used by your AIF are MeitY-empanelled and STQC-certified. Transition from any non-compliant platforms well before the deadline. Schedule VAPT and Cybersecurity AuditsArrange for a VAPT and cybersecurity audit to be conducted. It is advisable to begin these processes early to avoid any last-minute rush and ensure adequate time for any remediation. Develop Incident Response PlansStart preparing your incident response plan if you haven’t already. Include measures for drills, forensic audits, and data recovery plans to ensure business continuity in the event of a cyber incident. Conclusion Compliance with SEBI’s cybersecurity mandate is not just a regulatory requirement; it is a vital step in safeguarding the integrity of your AIF’s operations and protecting investors’ assets. By acting proactively and taking the necessary steps now, AIFs can ensure they are fully compliant by the June 30, 2025 deadline. For further assistance in preparing for SEBI’s cybersecurity requirements or conducting gap assessments, contact us at aif@treelife. in. Our team of experts is ready to guide you through every step of the compliance process. --- - Published: 2025-06-12 - Modified: 2025-07-21 - URL: https://treelife.in/news/gujarat-stamp-act-broadens-conveyance-definition-to-include-change-in-control-agreements-major-implications-for-ma-and-restructuring/ - Categories: News Effective April 10, 2025, the Gujarat Stamp (Amendment) Act, 2025, has introduced a significant expansion to the definition of "Conveyance. " This amendment now explicitly includes "any agreement for takeover of management or control of a company through transfer or purchase of shares. " This represents a major shift in the state's stamp duty regime, with far-reaching implications for mergers and acquisitions (M&A), private equity, and corporate restructuring deals. Historically, stamp duty in Gujarat was predominantly levied on the transfer of physical assets or formal court-approved merger orders. The revised definition means that even a share purchase agreement (SPA), if it leads to a change in the management or control of a company, could now attract stamp duty under the Gujarat Stamp Act. Key Implications for Businesses and Dealmakers This expanded scope of "Conveyance" carries several critical implications: Increased Transaction Costs: Depending on the asset composition of the company (movable versus immovable assets), stamp duty ranging from 2% to 4. 9% may now be applicable. This could significantly increase the overall transaction costs for M&A, private equity, and buyout deals involving companies with a nexus to Gujarat. Influence on Deal Structuring: The new provisions may compel dealmakers to re-evaluate how share-based acquisitions and corporate restructurings are structured. There will be a greater need for meticulous planning to assess and potentially mitigate stamp duty liabilities. Broader Legal Widening: This change is part of a broader trend of widening the application of stamp duty law in Gujarat. The Act now also covers NCLT orders under Sections 230–234 (relating to compromises, arrangements, and amalgamations), Insolvency and Bankruptcy Code (IBC) resolution plans, and fast-track mergers under Section 233 of the Companies Act, 2013. Navigating the Complexities Given the broadened scope, it is now imperative for dealmakers, corporate advisors, and legal professionals to carefully assess how stamp duty liabilities might be triggered, especially in transactions where Gujarat has a jurisdictional nexus. The amendment raises interesting questions regarding its interplay with complex multi-state or cross-border restructurings. For instance, scenarios where either the transferor or transferee entity is situated in Gujarat, or where a change in the shareholding of an offshore or out-of-state holding company results in a consequential change in control of a Gujarat-based company, will require careful examination under the new provisions. Understanding these nuances will be critical for effective deal execution and compliance. --- - Published: 2025-06-12 - Modified: 2025-07-21 - URL: https://treelife.in/finance/alternative-investment-funds-in-india/ - Categories: Finance, Reports - Tags: AIF, AIF 2025, aif in india, AIF India, aif stocks, alternative investment, alternative investment fund, best alternative investments, passive income investments, sebi DOWNLOAD PDF Overview Alternative Investment Funds in India, often abbreviated as AIFs, have become a buzzword among sophisticated investors, especially High Net Worth Individuals (HNIs). HNIs hold a growing share of the global wealth, with 48% of global wealth controlled by HNIs in 2023, expected to rise to 55% in the near future. HNI AUM (Assets Under Management) invested in AIFs is expected to increase, with HNIs’ AIF allocation expected to double to 25% over the next decade. As of May 2025, there are 1,550 registered AIFs in India1. This domain has witnessed remarkable growth, underscored by an almost 110% surge in commitments which escalated to Rs. 13. 49 trillion in the fiscal year 2024-25 from Rs. 6. 41 trillion in 2021-222. This growth translated to a substantial Rs. 7. 07 trillion jump within three years. AIFs have shown superior IRRs (Internal Rate of Returns) compared to traditional Asset Management Companies (AMCs). This higher performance has led to a higher valuation premium for AIFs over traditional AMCs. The total assets under management (AUM) of AIFs have grown at a CAGR (Compound Annual Growth Rate) of 28% between June FY19 and June FY24s3. 75% of AIFs have successfully generated positive alpha, compared to a lower alpha generation in equity AMCs, where 51% of large-cap funds and 26% of mid-cap funds were unable to deliver alpha over the past year4. Equity AIFs have outperformed the BSE Sensex TRI index PME+ for five consecutive years. 80% of registered AIFs fall under Category I & II (venture capital, private equity, debt funds). ~₹4. 4Tn invested, with ~70% allocated to unlisted securities. 44% of new schemes (2022–2024) were launched by first-time fund managers, highlighting strong market confidence5. The breakdown of the alternatives market is dominated by Private Equity (PE) and Real Assets, which are USD 250 billion and USD 125 billion, respectively. Private Credit, a growing segment, stands at USD 25 billion in the Indian market. AIFs are projected to represent 15% of the total AUM in India’s wealth management industry by 2027.   In light of the burgeoning AIF industry, its regulatory authority, the Securities and Exchange Board of India (SEBI), hasn't remained a silent observer. SEBI has proactively been fortifying protocols to guarantee investor safety, heighten transparency, and ensure fair practices within the AIF guidelines.   So, the question arises, what exactly are AIFs? And how do they function within the Indian regulatory landscape? What are Alternative Investment Funds (AIFs)? An Alternative Investment Fund (AIF) is a privately pooled investment vehicle that gathers funds from investors, whether Indian or foreign, for investment as per a defined investment policy to benefit its investors. Explicitly regulated by the Securities and Exchange Board of India (SEBI) under the SEBI (Alternative Investment Funds) Regulations, 2012, AIFs can be established in India as a trust, company, Limited Liability Partnership (LLP), or a body corporate. AIFs are becoming a favoured choice for discerning investors, including High Net Worth Individuals (HNIs). With their promise of high returns across diverse asset classes, AIFs are attractive for those aiming to diversify and enhance their portfolios. Some key terms used in AIFs CarryCarry or carried interest in AIF is akin to performance fees which is paid to the investment manager as a share of the AIF’s profits which the investment manager is entitled to if they exceed a specific threshold return. Carry is typically in the range of 15-20% of the profits earned by the AIF in excess of the specified threshold. Hurdle / Preferred rate of returnMinimum percentage of returns that an investor earns before the Investment Manager can catch-up and charge carry to investor. Catch-upCatch-up allows the investment manager to earn the hurdle rate of return on its investment in the AIF but only after the investors have received their investment along with the hurdle rate of return on such investment. Distribution waterfallProvides for an order of specified priority in which the distributions are made by AIF which includes the capital contributions, fees, hurdle, catch up (if any), carry, etc. ClosingClosing is the date fixed by the Investment Manager as a cut-off date to obtain capital commitment from investors. Regulatory Framework for AIFs In India, AIFs operate under the purview of the Securities and Exchange Board of India (SEBI).   Since their establishment in the late 1980s, Venture Capital Funds (VCFs) have been a significant focus for the government to bolster the growth of specific sectors and early-stage companies. However, the desired outcomes in supporting emerging sectors and startups were not realized, largely due to regulatory uncertainties. Recognizing this challenge, in 2012, the Securities and Exchange Board of India unveiled the SEBI (Alternative Investment Funds) Regulations. This was done to categorize AIFs as a unique asset class, similar to Private Equities (PEs) and VCFs. Any entity wishing to function as an AIF must seek registration with SEBI. While there are various legal structures under which an AIF can be established - such as a trust, a company, an LLP, or a body corporate - trusts are the most commonly chosen form in India. A typical AIF structure looks like the following - The entities are: Settlor - Person who settles the trust with a nominal initial settlement  Trustee - Person in charge of the overall administration and management of the Trust. In practice, this responsibility is then outsourced to the investment manager. Contributor - Investor to the Trust (AIF) and makes a capital commitment to the AIF Sponsor - Face of the AIF i. e. Person who sets up the AIF  Investment Manager - Brain of the AIF i. e. Person who is appointed to manage the investments  Custodian – Safeguards the securities and assets of the AIF and facilitates settlement of transactions. Merchant Banker – Assists with due diligence certification for PPM. Registrar and Transfer Agent (RTA) – Maintains investor records, processes capital calls and distributions, and handles investor communications and reporting. It's noteworthy that the roles of the Sponsor and Investment Manager can be unified, with one entity performing... --- - Published: 2025-06-10 - Modified: 2025-07-22 - URL: https://treelife.in/finance/what-is-accounts-receivable/ - Categories: Finance - Tags: accounts receivable, accounts receivable examples, accounts receivable meaning, accounts receivable outsourcing services, accounts receivable process, importance of accounts receivable management, what is accounts receivable process Accounts Receivable in India : Meaning and Importance for Indian Businesses What is Accounts Receivable? Definition Accounts receivable refers to the outstanding payments a business is owed by its customers for goods or services delivered on credit. Simply put, when a company sells products or services without immediate payment, the amount due from the customer is recorded as accounts receivable (AR). This amount is classified as a current asset on the company’s balance sheet because it represents cash expected to be received within the normal operating cycle usually within 30 to 90 days. In accounting terms, accounts receivable means: Money owed by customers to the business Unpaid invoices or bills issued on credit sales A vital component of working capital management Why Understanding Accounts Receivable is Crucial for Indian Businesses For businesses operating in India whether startups, SMEs, or large enterprises grasping the concept of accounts receivable is essential due to the following reasons: 1. Cash Flow Management and Liquidity Accounts receivable directly impact a business’s cash flow. Efficient collection of receivables ensures that companies have enough liquidity to meet operational expenses, pay suppliers, and invest in growth. Poor AR management can lead to cash crunches, slowing down business operations. 2. Working Capital Optimization Since AR forms a significant part of working capital, delays in receivables can disrupt the balance between current assets and liabilities. For Indian businesses, optimizing AR means better control over working capital, which is critical in sectors with tight margins and competitive markets. 3. Credit Risk and Bad Debts Prevention Understanding AR helps companies assess credit risk evaluating which customers are likely to delay or default on payments. Proper management mitigates the risk of bad debts, protecting the company’s profitability and financial health. 4. Improved Customer Relationships Clear policies and timely invoicing improve transparency and customer trust. Indian businesses often face challenges with delayed payments due to informal credit terms. Strong AR systems encourage prompt payment while maintaining good customer relations. 5. Compliance and Financial Reporting For compliance with Indian accounting standards (Ind AS) and taxation (GST implications on invoices and payments), maintaining accurate AR records is mandatory. Proper accounts receivable management ensures financial statements reflect the true financial position and comply with statutory audits. Difference Between Accounts Receivable and Other Receivables Type of ReceivableDefinitionTypical Examples in IndiaClassificationAccounts ReceivableAmounts owed by customers for credit salesOutstanding invoices from clientsCurrent AssetNotes ReceivableFormal, written promises to pay, often with interestPromissory notes, IOUsCurrent or Non-currentOther ReceivablesNon-trade receivables such as advances or refundsEmployee loans, advances to vendorsCurrent or Non-current Note: Accounts receivable specifically relates to trade-related debts, while other receivables cover miscellaneous claims. Key Terms Related to Accounts Receivable Invoice: A document issued by a seller to a buyer detailing the sale, price, and payment terms; it triggers the creation of accounts receivable. Credit Sales: Sales where payment is deferred, allowing the customer to pay at a later date as agreed. Payment Terms: Conditions agreed upon regarding when and how payments should be made, including due dates and any discounts or penalties. How Does Accounts Receivable Work? (Process Explanation) Understanding the accounts receivable process is crucial for Indian businesses to manage cash flow efficiently and maintain healthy customer relationships. Here’s a step-by-step overview of how accounts receivable operates from the point of sale to payment collection. Stepwise Accounts Receivable Process from Sale to Payment Step No. AR Process StepDescription1Sale on CreditThe business sells goods or services to the customer on credit, allowing deferred payment instead of immediate cash receipt. 2Issuing InvoiceAn invoice is generated detailing the products or services, amount due, and payment terms. This acts as the formal request for payment. 3Payment Terms & Due DateThe invoice specifies payment terms such as net 30, net 60 days, or any customized timeline agreed upon with the customer. 4Payment CollectionThe customer makes the payment within the stipulated time frame via cheque, electronic transfer, or other accepted modes. 5Recording & ReconciliationThe payment is recorded in the accounting system and matched against the corresponding invoice to update accounts receivable balances. Accounts Receivable Examples: Real-Life Applications in Indian Businesses Understanding accounts receivable examples helps Indian businesses visualize how credit sales translate into financial transactions and impact cash flow. Below are practical examples tailored for various industries in India. Simple Accounts Receivable Example in an Indian Business Context Example: A Mumbai-based IT services company completes a software development project for a client and issues an invoice of ₹5,00,000 with payment terms of 45 days. The client is expected to pay the amount within 45 days. Until the payment is received, ₹5,00,000 is recorded as accounts receivable on the IT company’s balance sheet. Transaction: Credit sale of software services Invoice amount: ₹5,00,000 Payment terms: 45 days AR status: Outstanding until payment collection This example illustrates how AR represents money owed by customers and forms part of the company’s current assets. Accounts Receivable Across Different Indian Industries IndustryAccounts Receivable ScenarioTypical Payment TermsAR Management FocusManufacturingGoods sold to distributors with 30-60 days credit period30 to 60 daysManaging large volume invoices, credit risk assessmentsServicesConsultancy firms invoicing clients post-project completion30 to 90 daysTimely invoicing, follow-up on overdue paymentsRetailWholesale goods supplied on credit to retailers15 to 45 daysFrequent reconciliation, managing multiple small invoicesConstructionBilling based on project milestones, with extended payment terms60 to 120 daysMonitoring long receivable cycles, dispute resolutionHealthcareMedical equipment suppliers providing devices on credit30 to 60 daysStrict documentation and invoice verification Each sector’s AR process varies based on industry norms and customer relationships, impacting cash flow differently. Importance of Accounts Receivable Management for Indian Businesses Effective management of accounts receivable (AR) is vital for maintaining the financial health and sustainability of businesses in India. Proper AR management ensures timely cash inflows, reduces risks, and strengthens overall business operations. Why Effective Accounts Receivable Management Matters Ensures Consistent Cash Flow: AR represents expected cash inflows; managing it well guarantees that the business has the funds needed to cover expenses and invest in growth. Optimizes Working Capital: Efficient collection of receivables shortens the cash conversion cycle, freeing up capital for day-to-day operations. Supports Business Sustainability:... --- - Published: 2025-06-10 - Modified: 2025-06-10 - URL: https://treelife.in/finance/what-is-accounts-payable/ - Categories: Finance - Tags: account payable meaning, Accounts Payable, accounts payable examples, accounts payable outsourcing services, what is accounts payable process Accounts Payable in India Accounts Payable Meaning Accounts Payable (AP) refers to the amount of money a business owes to its suppliers or vendors for goods and services received but not yet paid for. In simpler terms, it is the company's outstanding bills or short-term debts that must be settled within a specified period, usually 30 to 90 days. In India, accounts payable is a crucial part of a company’s day-to-day financial management. It reflects all pending payments that a business needs to make to external parties, such as raw material suppliers, utility providers, service contractors, and vendors. Managing AP effectively helps Indian businesses maintain strong supplier relationships and optimize cash flow. Accounts Payable as a Current Liability On a company’s balance sheet, accounts payable is classified as a current liability because it represents financial obligations payable within one year. This classification indicates the company’s responsibility to pay off these debts soon, impacting its liquidity and working capital management. Key Characteristics of Accounts PayableExplanationType of LiabilityCurrent liability (due within 12 months)NatureShort-term debt or outstanding billsCommon PayeesSuppliers, vendors, service providersTypical Payment Terms in India30 to 90 days, depending on contractAccounting TreatmentRecorded as a credit in the ledger; reduces cash upon payment How Does Accounts Payable Work?   Understanding how accounts payable works is essential for businesses to manage their financial obligations efficiently. The accounts payable process involves a series of steps that ensure accurate recording, verification, and timely payment of invoices to suppliers and vendors. Below is a detailed, step-by-step explanation tailored for Indian businesses. Step-by-Step Accounts Payable Process Purchase Order (PO) Creation The process begins when a company issues a purchase order to a supplier. This document specifies the quantity, description, and agreed price of goods or services required. The PO acts as an official request and contract between the buyer and supplier. Goods or Services Receipt Upon delivery, the company receives the goods or services. The receipt is verified to confirm that the quantity and quality match the PO specifications. This step often involves generating a goods receipt note (GRN) or service acceptance document. Invoice Receipt and Verification The supplier sends an invoice requesting payment. The accounts payable team verifies the invoice details such as supplier name, invoice number, amount, and date. Any discrepancies must be resolved before proceeding. Invoice Matching (PO vs Invoice vs Goods Receipt) A critical control step where the invoice is matched against the original PO and the goods receipt. This three-way matching ensures the company only pays for the goods or services actually ordered and received. Approval Workflow Once the invoice matches, it is routed for internal approval based on the company's authorization matrix. This may involve department heads or finance controllers confirming the payment. Payment Processing After approval, the finance team schedules payment as per agreed payment terms (commonly 30 to 90 days in India). Payment methods include electronic fund transfers (NEFT/RTGS), cheques, or online payment gateways. Recording in Accounting System Finally, the payment transaction is recorded in the company’s accounting software, updating the ledger to reflect the reduction in accounts payable and cash balance. Examples of Accounts Payable Understanding accounts payable examples helps Indian businesses grasp the variety of financial obligations they need to manage regularly. Accounts payable covers any short-term debts owed to external parties for goods or services received. Here are practical examples commonly seen across Indian companies: Common Accounts Payable Examples Payment to Suppliers for Raw Materials Manufacturing and retail businesses often purchase raw materials or inventory on credit. The unpaid amount owed to these suppliers is recorded as accounts payable until settled. Payment for Office Rent or Utilities Monthly expenses such as office rent, electricity, water, and internet bills are typical AP entries. Companies receive invoices and pay them as per agreed terms. Outsourced Service Payments Payments due for outsourced services like cleaning, security, logistics, and consulting fall under accounts payable until cleared. Vendor Invoices for Software Licenses or Subscriptions Many Indian companies subscribe to software tools (e. g. , Tally, Zoho, Microsoft 365). Outstanding subscription fees are recorded as AP until paid. Sample Accounting Entries for Accounts Payable When recording accounts payable in accounting books, businesses typically use journal entries that recognize the liability when the invoice is received and clear it upon payment. Transaction DescriptionDebit AccountCredit AccountExplanationPurchase of raw materials on creditInventory/Raw MaterialsAccounts PayableRecognizes liability to supplierReceipt of office rent invoiceRent ExpenseAccounts PayableRent payable recorded on receipt of invoicePayment made to supplier to clear outstanding APAccounts PayableCash/BankLiability cleared by paymentReceipt of invoice for outsourced servicesService ExpenseAccounts PayableRecognizes amount payable for servicesPayment for software subscriptionAccounts PayableCash/BankPayment against vendor invoice Importance and Uses of Accounts Payable in Indian Businesses Effective accounts payable (AP) management is vital for the financial health and operational efficiency of businesses in India. Proper handling of AP impacts multiple aspects of business performance, from cash flow optimization to compliance. Here’s why managing accounts payable effectively matters: 1. Maintaining Healthy Vendor Relationships Timely Payments Build Trust: Prompt payment of supplier invoices fosters strong, long-term partnerships with vendors. Better Credit Terms: Reliable payment history often results in favorable credit terms such as extended payment cycles or early payment discounts. Improved Negotiation Power: Strong vendor relations allow businesses to negotiate prices, delivery schedules, and services more effectively. 2. Managing Cash Flow and Working Capital Optimizing Cash Outflows: Careful scheduling of payments helps avoid cash shortages and ensures funds are available for operational needs. Balancing Payables and Receivables: Strategic management of AP alongside accounts receivable ensures positive working capital and financial stability. Avoiding Overpayments: Accurate tracking of liabilities prevents duplicate or incorrect payments, preserving valuable cash reserves. 3. Avoiding Late Payment Penalties Penalty Costs: Late payments to suppliers can result in fines, interest charges, or legal disputes, adding to business expenses. Reputational Risks: Consistently delayed payments may damage reputation and lead to loss of supplier goodwill or service disruptions. Compliance with Payment Terms: Following agreed payment terms helps avoid penalties and maintain smooth supply chain operations. 4. Compliance with Accounting Standards and Tax Regulations (GST Implications in India)... --- - Published: 2025-06-10 - Modified: 2025-07-22 - URL: https://treelife.in/finance/difference-between-accounts-payable-and-accounts-receivable/ - Categories: Finance - Tags: Accounts Payable vs Accounts Receivable, AP vs AR, AR vs AP, Difference Between Accounts Payable and Accounts Receivable, what are accounts payable and accounts receivable, what is accounts payable and receivable What is Accounts Payable (AP)? Definition Accounts Payable (AP) refers to the money a business owes to its suppliers or vendors for goods and services purchased on credit. It represents a company's short-term financial obligations that must be settled within an agreed timeframe, usually 30 to 90 days. Typical Examples of Accounts Payable Supplier invoices for raw materials or inventory Utility bills awaiting payment Vendor payments for services such as marketing, IT support, or logistics Purchase of office supplies on credit Position on the Balance Sheet Accounts Payable is classified as a current liability on the balance sheet. It reflects the company's obligation to pay off short-term debts and is crucial for understanding the company's liquidity and cash flow commitments. What is Accounts Receivable (AR)? Definition Accounts Receivable (AR) represents the money owed to a business by its customers for goods or services sold on credit. It indicates amounts that are expected to be collected within a short period, contributing to the company's incoming cash flow. Typical Examples of Accounts Receivable Customer invoices for products delivered but not yet paid Credit sales made to clients with agreed payment terms Receipts due from clients for services rendered Advances or deposits to be adjusted against future invoices Position on the Balance Sheet Accounts Receivable is recorded as a current asset on the balance sheet. It shows the funds the company expects to receive soon, playing a key role in assessing working capital and overall financial health. Key Differences Between Accounts Payable and Accounts Receivable For Indian businesses, understanding the difference between Accounts Payable (AP) and Accounts Receivable (AR) is fundamental to managing cash flow, maintaining supplier and customer relationships, and ensuring regulatory compliance like GST. Both represent crucial but opposite sides of a company’s finances. Accounts Payable vs Accounts Receivable (AP vs AR) AspectAccounts Payable (AP)Accounts Receivable (AR)DefinitionAmounts a company owes to its suppliers/vendors for purchases made on creditAmounts owed to the company by customers/clients for sales made on creditFinancial StatementRecorded as a Current Liability on the Balance SheetRecorded as a Current Asset on the Balance SheetCash Flow ImpactRepresents cash outflows when payments are made to creditorsRepresents cash inflows when payments are collected from customersAccounting EntryCredit AP and Debit Expense or Asset (depending on purchase)Debit AR and Credit RevenueTypical Payment TermsPayment terms generally range from 30 to 90 days depending on vendor agreementsCredit terms offered to customers, usually 30 to 90 daysBusiness FunctionManaging liabilities and supplier relationshipsManaging receivables and customer creditRisk InvolvedRisk of late payments leading to penalties, loss of supplier trust, or supply disruptionRisk of delayed payments, bad debts, and impact on cash inflowsImpact on Working CapitalIncreases short-term liabilities, thereby decreasing working capitalIncreases current assets, thereby increasing working capitalGST Considerations (India)Input tax credit can be claimed on valid purchase invoicesOutput GST must be collected and paid on sales invoices issuedAutomation Tools UsedERP software like Tally, QuickBooks, NetSuite for invoice processing and paymentsSame ERP tools for invoicing, collections, and reconciliationExample TransactionsPaying a supplier for raw materials received on creditIssuing an invoice to a customer for products deliveredEffect on Business RelationshipsTimely payments build vendor trust and ensure smooth supply chainTimely collection maintains customer trust and reduces credit riskFinancial Metrics ImpactedDays Payable Outstanding (DPO) measures average payment periodDays Sales Outstanding (DSO) measures average collection period Expanded Explanation of Core Differences 1. Nature and Role Accounts Payable reflects money a business owes to suppliers for goods or services received but not yet paid for. It is a liability that must be settled, often within short credit terms. Accounts Receivable represents money owed to a business by its customers for goods or services delivered on credit. It is an asset expected to convert into cash soon. 2. Cash Flow Impact AP causes cash outflow when payments are made, affecting liquidity negatively in the short term. AR leads to cash inflow upon receipt of payments, improving liquidity and enabling further business activities. 3. Accounting Treatment In bookkeeping, recording an AP involves crediting the liability account and debiting the related expense or asset account. For AR, the business debits the receivable account and credits revenue, recognizing the expected income. 4. Payment and Credit Terms AP terms are negotiated with suppliers and typically allow 30–90 days for payment, balancing cash conservation and supplier relations. AR terms are set by the company for customers, balancing competitiveness and risk of default. 5. Risk Management Late AP payments can result in penalties, damaged vendor relations, or supply disruptions. AR faces risks from customer defaults, delayed payments, and bad debts that reduce cash availability. 6. Working Capital and Business Health High AP can strain liquidity but can also improve cash flow if managed to optimize payment timing (DPO). High AR without timely collections can signal cash flow problems and impact day-to-day operations (DSO). 7. GST and Compliance in India AP involves input tax credit claims based on supplier invoices compliant with GST norms. AR requires proper invoicing and GST collection from customers to comply with tax regulations. 8. Impact on Business Relationships Timely payments through AP management foster strong supplier partnerships essential in Indian supply chains. Effective AR collection supports customer satisfaction and minimizes credit risk. Importance of AP and AR in Business Finance Efficient management of Accounts Payable (AP) and Accounts Receivable (AR) is critical for Indian businesses to maintain healthy finances, ensure smooth operations, and optimize cash flow. Here's how AP and AR play distinct but complementary roles in business finance. Role of Accounts Payable in Business Operations Managing Supplier Relationships Timely payments to vendors build trust and secure reliable supply chains. Strong supplier relationships may lead to better credit terms and discounts. Delayed payments can damage reputations and disrupt business continuity. Impact on Cash Outflows and Liquidity AP directly controls when and how much cash leaves the business. Strategic scheduling of payments helps optimize cash reserves without risking penalties. Poor AP management can cause cash crunches, affecting operational efficiency. Role of Accounts Receivable in Business Operations Managing Customer Credit Setting clear credit policies minimizes risk of defaults and late payments.... --- - Published: 2025-06-10 - Modified: 2025-07-21 - URL: https://treelife.in/finance/bank-reconciliation-statement-in-india/ - Categories: Finance - Tags: bank reconciliation statement is prepared by, bank reconciliation statement meaning, types of reconciliation, what do you mean by bank reconciliation statement, what is bank reconciliation, what is bank reconciliation statement, who prepare bank reconciliation statement What is Bank Reconciliation? Meaning Explained Definition of Bank Reconciliation Bank reconciliation is the accounting process of comparing and matching the entries in a company’s internal cash records (cash book or ledger) with the transactions recorded in the bank statement. The goal is to identify and resolve any differences, ensuring that the financial records accurately reflect the actual cash available. This process helps maintain the integrity and accuracy of a company’s financial information. Purpose of Bank Reconciliation The primary purposes of bank reconciliation include: Detecting discrepancies such as errors, omissions, or fraudulent transactions between company books and bank statements. Ensuring accurate cash balance reporting in the company’s financial records. Correcting mistakes in either the company’s accounts or bank records, including unrecorded bank charges, interest, or deposits in transit. Facilitating cash flow management by providing an up-to-date picture of available funds. Supporting regulatory compliance and audit readiness by maintaining transparent and reconciled financial data. How Bank Reconciliation Works in Practice Bank reconciliation involves the following practical steps: Gather bank statements and cash book records for the reconciliation period. Compare each transaction recorded in the bank statement with those in the company’s cash book. Identify unmatched transactions such as: Outstanding checks not yet cleared by the bank Deposits in transit not yet recorded by the bank Bank fees, service charges, or interest not recorded in company books Adjust the cash book by recording missing transactions or correcting errors. Calculate the adjusted cash book balance and confirm it matches the bank statement’s closing balance. Document the reconciliation report for audit trail and management review. What is a Bank Reconciliation Statement? Bank Reconciliation Statement Meaning A Bank Reconciliation Statement (BRS) is a financial document prepared by businesses to compare and reconcile the balance shown in their internal cash book with the balance reflected in the bank statement. Simply put, it helps match the company's recorded bank transactions with those recorded by the bank, highlighting any differences. In everyday terms, bank reconciliation means verifying that the money you think you have in your books matches what the bank says you have. It serves as a checkpoint ensuring your financial records are accurate, reliable, and consistent with actual bank activity. How Does Bank Reconciliation Work? The company’s cash book records all deposits, withdrawals, and bank-related transactions from the business side. The bank statement is a monthly or periodic record from the bank showing all transactions processed by the bank. Differences arise due to timing lags, bank charges, unpresented checks, or errors. The BRS adjusts for these differences and arrives at a true picture of cash balance. Purpose of Bank Reconciliation Statement The primary purpose of a BRS is to ensure the accuracy and integrity of a company’s financial records. Below are the key reasons why businesses prepare a BRS: Ensures Accuracy in Financial Records The BRS identifies discrepancies between the cash book and bank statement, helping correct errors or omissions on either side, thereby maintaining clean and reliable accounts. Identifies Errors, Omissions, or Fraud Discrepancies may reveal unrecorded transactions, bank errors, or unauthorized activities. Detecting such issues early safeguards against financial loss or fraud. Accounts for Timing Differences Transactions like cheques issued but not yet cleared or deposits made but not yet reflected by the bank cause timing differences. BRS adjusts for these to reflect the true balance. Improves Cash Flow Management By knowing the exact reconciled bank balance, businesses can plan their payments and collections effectively. Facilitates Regulatory Compliance In India, accurate reconciliation is critical for GST filings, Income Tax audits, and complying with the Companies Act, 2013 bookkeeping requirements. Why is a Bank Reconciliation Statement Important? BRS plays a critical role in maintaining the financial health and transparency of a business. Understanding its importance helps Indian businesses of all sizes—from startups to large enterprises—manage their finances effectively and comply with legal requirements. Ensures Financial Accuracy and Integrity Corrects Discrepancies: A BRS identifies and resolves differences between the company’s cash book and bank statement, ensuring records reflect the actual cash position. Prevents Accounting Errors: Regular reconciliation reduces mistakes caused by missed entries, duplicated transactions, or incorrect amounts. Builds Trustworthy Financial Data: Accurate records support reliable financial reporting and decision-making. Helps Detect Fraudulent or Unauthorized Transactions Early Fraud Detection: By comparing internal records with bank data, unusual or unauthorized withdrawals, payments, or deposits are flagged quickly. Safeguards Business Assets: This vigilance protects businesses from potential financial losses caused by fraud or cyber theft. Improves Internal Controls: Frequent reconciliation enforces accountability within financial teams. Aids in Cash Flow Management and Financial Planning Real-Time Cash Position: Knowing the reconciled bank balance helps businesses plan payments, investments, and operational expenses without surprises. Prevents Overdrafts and Penalties: Detecting outstanding checks or pending deposits avoids overdrawing accounts and incurring bank charges. Supports Budgeting: Accurate cash flow data leads to better forecasting and resource allocation. Necessary for Regulatory Compliance in India Compliance with Companies Act, 2013: Indian companies must maintain proper books of accounts, which include bank reconciliations, to meet audit standards. Income Tax Act Requirements: Accurate reconciliation helps substantiate financial statements during Income Tax assessments. GST Filing Accuracy: Bank reconciliation ensures that payments and receipts related to Goods and Services Tax (GST) are correctly recorded. Reserve Bank of India (RBI) Guidelines: Banks and regulated entities emphasize reconciliation to maintain sound financial practices. Components of Bank Reconciliation Statement A clear understanding of the components that cause differences between the company’s cash book and the bank statement is essential for accurate bank reconciliation. This section explains the common items causing these differences and provides a standard format for the reconciliation statement. Common Items Causing Differences in Bank Reconciliation When preparing a Bank Reconciliation Statement, businesses often encounter various items that lead to discrepancies between their books and the bank’s records. The most frequent causes include: Outstanding Cheques (Checks) Cheques issued by the company but not yet cleared or presented to the bank for payment. These reduce the cash book balance but may not appear in the bank statement immediately. Deposits in Transit Deposits... --- - Published: 2025-06-10 - Modified: 2025-07-22 - URL: https://treelife.in/news/ifsca-eases-staffing-requirements-for-grctcs-in-ifscs/ - Categories: News The International Financial Services Centres Authority (IFSCA) has introduced significant amendments to its framework for Global/Regional Corporate Treasury Centres (GRCTCs) operating within India's International Financial Services Centres (IFSCs). These changes aim to enhance operational flexibility and attract global financial institutions to establish their treasury operations in GIFT City. Key Amendments: Staffing Flexibility: Effective June 9, 2025, IFSCA has relaxed the mandatory requirement for GRCTCs to appoint at least five qualified professionals, including a Head of Treasury and a Compliance Officer, before commencing operations. This relaxation allows entities to operate with a leaner team during the initial phase. Conditional Approval for Indian Contract Transfers: Previously, GRCTCs were prohibited from receiving or transferring existing contracts from Indian service recipients. The new amendment permits such transfers, subject to approval from the IFSCA Chairperson, for a period not exceeding one year from the commencement of operations. This provision facilitates a phased entry for multinational corporations into the Indian market. Implications for International Firms: Phased Expansion: International firms can now pilot their treasury operations in IFSCs with reduced initial staffing, enabling a phased approach to expansion. Operational Flexibility: The amendments provide greater flexibility in staffing and operational setup, aligning with international best practices and easing the entry process for foreign entities. Regulatory Alignment: These changes reflect IFSCA's commitment to fostering a conducive business environment while maintaining regulatory standards. Industry Impact: The revised framework is expected to attract a diverse range of financial institutions to establish their treasury operations in IFSCs, thereby contributing to the growth and development of India's financial sector. By aligning with global standards and offering operational flexibility, IFSCA aims to position IFSCs as a competitive hub for international financial services. Interested in setting up operations in IFSCs or seeking guidance on navigating the updated regulatory framework? Treelife offers expert advisory services and preparing necessary documentation, and ensuring compliance with IFSCA regulations. Speak to Us --- > Succession planning is the strategic process of managing and distributing your assets both during your lifetime and after your passing. Its primary objective is to ensure a smooth transfer of business ownership, leadership, and family wealth, while proactively maintaining harmony and preventing disputes among beneficiaries. - Published: 2025-06-06 - Modified: 2025-07-21 - URL: https://treelife.in/reports/understanding-succession-planning/ - Categories: Reports - Tags: Succession Planning, Trust, Will DOWNLOAD PDF India is experiencing a significant surge in wealth, with the Hurun India Rich List 2024 reporting a total of 1,539 Ultra High Net-Worth Individuals (UHNWI), a substantial increase from 140 in 2013. The country's billionaire count has also reached a record 334, marking a 29 percent increase from the previous year, with a new billionaire emerging every five days in 2024. This growth isn't limited to established tycoons; a new generation of wealth creators, including Harshil Mathur & Shashank Kumar (Razorpay) and Kaivalya Vohra (Zepto), are also contributing to this rise. Alongside this, the HNI (High Net-Worth Individual) population, defined as individuals with investable assets exceeding $1 million, saw a 4. 5% year-on-year growth in 2022. This era of burgeoning wealth underscores the critical importance of robust succession planning. At Treelife, we have developed an in-depth guide to help UHNWIs and families understand the need for succession planning and how it can be used to secure and transfer wealth efficiently. What is Succession Planning? Succession planning is the strategic process of managing and distributing your assets both during your lifetime and after your passing. Its primary objective is to ensure a smooth transfer of business ownership, leadership, and family wealth, while proactively maintaining harmony and preventing disputes among beneficiaries. Key Goals of Succession Planning Protect Assets: Safeguard your wealth from potential risks. Provide for Loved Ones: Ensure financial security for your family. Safeguard Against Estate Duty Levy: Reduce the impact of potential estate taxes and other associated costs, ensuring your wealth isn’t eroded unnecessarily. Fulfill Personal Wishes: Ensure that your assets are distributed according to your desires, maintaining control over how your wealth is shared. Ringfencing: Protect personal assets from business liabilities, ensuring they are kept separate and safe. Ensure Seamless Wealth Transfer: Facilitate intergenerational asset migration with minimal administrative hurdles. Why is Succession Planning Necessary? With an increasing number of High Net-Worth Individuals (HNIs) and families in India, succession planning has never been more crucial. Below are the reasons why it is needed: Protecting Family Assets: Succession planning safeguards family assets from external risks, including creditors and legal challenges. Preventing Family Disputes: It helps ensure that there are clear guidelines in place to prevent conflicts over inheritance. Establishing Governance Structures: Clear succession and governance structures define roles and responsibilities for family members and ensure the long-term management of family wealth. Tax Efficiency: Succession planning ensures that wealth transfer is managed in a tax-efficient manner, optimizing the potential tax benefits for heirs. Shielding Wealth from Inheritance Tax: A well-structured succession plan can help minimize inheritance tax and other potential levies. Typical Modes of Succession Planning: Will vs. Trust When it comes to succession planning, two common legal instruments are used: Wills and Trusts. Will A Will is a legal document that dictates how assets are to be distributed after death. It offers straightforward benefits for individuals with simple estates or those who wish to maintain control of their assets posthumously. Who it works for: Individuals with straightforward estates and clear heirs, and those who desire immediate, direct legal control over their estate after death. Process Flow: Drafting of the will. Executing and notarizing the will. Appointment of an executor. Probate of the will (if required) upon demise. Distribution of assets by the executor. Important Note: If a person dies without a will, their wealth is distributed to legal heirs as per the applicable succession law based on their faith. Trust A Trust, on the other hand, is a legal arrangement where assets are transferred to a trustee for the benefit of designated beneficiaries. Trusts are effective in maintaining privacy, protecting assets from creditors, and ensuring long-term control. Typical Structure: Settlor/Contributor: The person who initially contributes money or assets to the Trust. The settlor may also be a trustee or beneficiary, and once the trust is established, any subsequent contributors are considered contributors. Trustee(s): Individuals entrusted with managing the trust's assets and exercising rights and powers for wealth distribution. A trustee can be a family member, an external advisor, or a professional trustee company. Beneficiary: The individuals for whose benefit the trust has been settled. Investments & Assets: The wealth held within the trust. Income & Distribution: The flow of income and assets from the trust to the beneficiaries. Types of Trusts Discretionary Trust: The trustee has the discretion to determine the distribution amount for each beneficiary. This is preferred when the share of beneficiaries is not decided upfront. Specific Trust: The list of beneficiaries and their beneficial interests are clearly defined in the trust deed. This is preferred when the share of beneficiaries is decided upfront. Revocable Trust: The settlor retains the right to cancel or revoke the transfer of assets or property to the trust during their lifetime. This is used when the settlor wishes to retain control and the option to reclaim ownership. Irrevocable Trust: Once assets are transferred, the transfer cannot be altered, amended, or revoked. This is useful when the settlor desires to permanently transfer ownership and control of assets to the trust. Pros and Cons of Trusts Pros of a Trust: Hassle-free wealth transition to future generations. Opportunity to document family philosophy, guiding future generations. Segregation of ownership and control. Planning for proposed estate duty taxes. Cons of a Trust: Families may not be familiar with the concept. Possibility of the trust's validity being challenged by a dissenting family member. Difficult to manage if a professional trustee company is desired. Generally, no upfront wealth distribution is done. Stamp duty implications need to be evaluated for real estate transfers to the trust. Practical difficulties may arise in transferring mutual fund units with lock-in from individuals to a trust. Taxation of Trusts Understanding how trusts are taxed is essential for effective succession planning. The type of trust and its setup can significantly affect the tax liabilities of the trust and its beneficiaries. Discretionary Trust: Income is taxable at the Trust level, subject to the maximum marginal tax (MMR) rate of approximately 39% (assuming the Trust... --- - Published: 2025-06-05 - Modified: 2025-07-21 - URL: https://treelife.in/news/rbis-final-deadline-for-regularizing-overseas-investment-reporting-delays/ - Categories: News The Reserve Bank of India (RBI) has instructed Authorised Dealer Banks (AD Banks) to notify their clients (Indian Entities / Persons Resident in India) to regularize delays in reporting of Overseas Investment (OI) transactions executed prior to August 22, 2022. This includes filing of Annual Performance Report (APR) which were due for filing as on said date. The window for regularization, allowing payment of a Late Submission Fee (LSF) instead of undergoing the lengthy compounding process, will close on August 21, 2025. This initiative, introduced under Regulation 11(2) of the FEMA (Overseas Investment) Regulations, 2022, has offered a three-year period for Indian entities to address any past non-compliance concerning OI transactions. After the deadline, any delays in reporting OI transactions before August 22, 2022, will require either compounding or adjudication. Key Objectives of the Regularization Window: Facilitate Accurate Reporting: Encourage entities to report past OI transactions accurately, promoting greater transparency in India’s cross-border financial dealings. Reduce Regulatory Backlog: Help address outstanding reporting delays, reducing the overall workload for regulators. What You Need to Do If your organization has any pending OI transactions to be reported, including filing of Form APR, ensure that you act before August 21, 2025.   Reach out to your AD Bank to settle any outstanding reporting issues and avoid the complexities of the compounding process.   --- - Published: 2025-06-03 - Modified: 2025-07-21 - URL: https://treelife.in/finance/fractional-cfo-services-in-india/ - Categories: Finance - Tags: benefits of fractional cfo, fractional cfo, fractional cfo definition, fractional cfo for startups, fractional cfo india, fractional cfo services, fractional cfo services agreement, part time cfo, part-time cfo, what is a fractional cfo What is a Fractional CFO?   A Fractional CFO, also known as a part-time CFO, is a highly experienced financial consultant and senior financial executive who provides high-level financial leadership and strategic guidance to businesses on a part-time, contract, or outsourced basis. They are typically engaged by small to medium-sized businesses, startups, or fast-growing companies that require senior financial expertise but are not yet ready for the commitment or expense of a full-time hire. Unlike a full-time Chief Financial Officer, who is a permanent in-house employee overseeing all general financial strategy, a Fractional CFO works with multiple clients simultaneously, dedicating only a portion of their time to each organization. This model allows businesses to access top-tier financial management without the associated in-house costs, such as salary, health benefits, and bonuses. Furthermore, a Fractional CFO differs from an interim CFO, who typically steps in temporarily to perform duties before or between permanent hires; a Fractional CFO's engagement is often project-based and tailored to specific challenges or ongoing strategic financial needs rather than a temporary full-time replacement. Definition of Fractional CFO / Part-Time CFO A fractional CFO is a seasoned financial professional who delivers CFO-level expertise, including financial planning, risk management, fundraising, and compliance oversight, without the cost or commitment of a full-time hire. They typically work on flexible terms—monthly retainers, project basis, or hourly engagements making top-tier financial management accessible to startups, SMEs, and fast-growing companies. This model enables businesses to access experienced CFO skills tailored to their current needs, budget, and growth stage. Core Value Proposition of Fractional CFO Services The core value proposition of a Fractional CFO lies in providing businesses with seasoned, CFO-level expertise, including financial planning, risk management, fundraising, and compliance oversight, without the significant cost or long-term commitment of a full-time executive. They typically work on flexible terms—such as monthly retainers, a project basis, or hourly engagements—making sophisticated financial management accessible and affordable. This model empowers businesses to: Overcome Financial Challenges: Address specific issues like cash flow management problems, optimize low gross margins, and improve profitability. Enhance Financial Visibility: Focus on future financial planning, develop robust financial models, and provide clearer insights into financial performance. Drive Strategic Growth: Assist in scaling the business by reinventing financial tools, optimizing processes, and improving vendor relationships for profitable expansion. Achieve Financial Goals: Provide expert guidance for significant financial events, including raising capital, preparing for a company sale, or navigating mergers and acquisitions. Difference Between Full-Time CFO and Fractional CFO AspectFull-Time CFOFractional CFO (Part-Time CFO)Employment StatusPermanent employeeContractual or outsourced consultantTime Commitment40+ hours per weekPart-time, usually 10–20 hours per week or as agreedCostHigh fixed salary + incentivesPay-as-you-go; lower fixed costs and no incentivesScope of WorkBroad, company-wide financial managementFocused on specific priorities and projectsAvailabilityAlways on-site or fully dedicatedRemote or on-site; availability depends on contractSuitabilityLarge enterprises or companies needing constant CFO presenceStartups, SMEs, or companies requiring flexible CFO support How Does a Part-Time CFO Fit Into the Business? A part-time CFO fulfills many of the same responsibilities as a full-time CFO but works fewer hours, providing financial leadership tailored to the business's evolving needs. This role fits perfectly for startups and growing businesses in India that require expert financial oversight but are not yet ready to bear the cost or commitment of hiring a full-time CFO. Part-time CFOs bring strategic insights on budgeting, cash flow, fundraising, compliance, and risk management, helping businesses make informed decisions without the overhead of a full-time executive. They can seamlessly integrate into the leadership team, providing flexible financial stewardship during key growth phases or transitions. The part-time CFO model promotes cost-efficiency while ensuring access to experienced financial management, essential for Indian startups navigating dynamic markets and regulatory environments. Why Do Indian Startups Need Fractional CFO Services? Indian startups operate in a dynamic and often complex financial environment. Navigating rapid growth, regulatory compliance, and capital management requires experienced financial leadership but hiring a full-time CFO may not always be feasible or cost-effective. This is where fractional CFO services become essential. Specific Financial Challenges Faced by Indian Startups Startups in India commonly encounter the following financial and operational hurdles: Limited Budget for Senior Financial Talent: Early-stage startups often lack the funds to hire a full-time CFO with the requisite experience. Complex Regulatory Compliance: Frequent updates in tax laws, GST regulations, and foreign exchange controls demand expert guidance to avoid penalties. Cash Flow Management: Balancing operational costs with irregular revenues makes cash flow forecasting critical. Fundraising and Investor Relations: Preparing accurate financial models and reports to attract and satisfy investors can be challenging without professional oversight. Rapid Scaling: Managing financial controls and systems while scaling operations requires strategic planning and risk management expertise. Cost-Effectiveness of Hiring a Fractional CFO vs. Full-Time CFO Hiring a full-time CFO in India can cost anywhere between ₹25 lakhs to ₹60 lakhs per annum, including salary, benefits, and overheads a significant burden for startups. In contrast, fractional CFO services offer: Lower Fixed Costs: Pay only for the time and expertise you need, typically through monthly retainers or hourly fees. No Employee Benefits or Overheads: Eliminate expenses like bonuses, health insurance, and retirement benefits. Access to Senior-Level Expertise Without Full-Time Commitment: Obtain CFO-level guidance without long-term contracts or employment liabilities. Flexibility and Scalability Offered by Fractional CFO Services Startups experience fluctuating financial needs depending on growth stage, fundraising cycles, and market conditions. Fractional CFOs provide: Diverse Expertise: Fractional CFOs bring cross-industry experience, offering tailored financial strategies suited to startup growth challenges in India. Quick Onboarding: Fractional CFOs integrate swiftly with existing teams, minimizing downtime and delivering immediate impact. Remote and Hybrid Support: Flexible work models align with evolving startup work cultures and geographical preferences. Engaging a fractional CFO for startups in India is a strategic decision that balances expert financial leadership with budget-conscious flexibility. The benefits of fractional CFO services include optimized financial management, risk mitigation, and a trusted partner for navigating India’s complex startup ecosystem all while controlling costs and adapting to growth. How to Engage a Fractional CFO with Treelife? Engaging a fractional CFO involves... --- > Compliance management is critical for startups and businesses in India to avoid penalties and ensure smooth operations. At Treelife, we understand the challenges companies face in keeping up with multiple statutory deadlines. To help you stay organized, we have prepared the June 2025 Compliance Calendar - Published: 2025-06-02 - Modified: 2025-07-21 - URL: https://treelife.in/calendar/compliance-calendar-june-2025/ - Categories: Calendar - Tags: compliance calendar june June 2025 Compliance Calendar for Startups, Businesses and Individuals Sync with Google CalendarSync with Apple Calendar Compliance management is critical for startups and businesses in India to avoid penalties and ensure smooth operations. At Treelife, we understand the challenges companies face in keeping up with multiple statutory deadlines. To help you stay organized, we have prepared the June 2025 Compliance Calendar that covers important statutory deadlines applicable across startups, companies and individual taxpayers in India. It includes key tax filings, company law compliances, and other regulatory obligations relevant for a wide range of taxpayers and entities. Key Compliance Dates to Remember in June 2025 TDS/TCS Deposits and Declarations: Due on 7th June for May 2025. Professional Tax Payments and Returns: Due on 10th June in applicable states. GST Filings: Including GSTR-1, GSTR-3B, GSTR-7, GSTR-8, GSTR-5, and GSTR-6, spread throughout the month. Issuance of TDS Certificates (Forms 16, 16A, 16B, 16C, 16D): By 15th June. First Instalment of Advance Tax for FY 2025-26: Due 15th June if your tax liability exceeds ₹10,000. Annual Filings for Nidhi Companies and Deposit Returns: Due 29th and 30th June respectively. Professional Tax Remittances: Due by 30th June in states like Assam, Maharashtra, Mizoram, Odisha, Punjab, Sikkim, Karnataka, and Tripura. State-Specific Notes Professional Tax deadlines may vary by state – ensure compliance with your state’s specific regulations. Andhra Pradesh, Madhya Pradesh, Manipur, Meghalaya, and Telangana may have different due dates for some filings. GST payments by QRMP taxpayers are applicable if there is insufficient Input Tax Credit. Sync These Important Dates Directly to Your Calendar To make compliance easier, you can sync these important deadlines directly with your personal or office calendar: Add to Google Calendar Need Help With Compliance? At Treelife, we assist 1000+ startups and investors with comprehensive compliance management – from GST filings and MCA returns to STPI, SEZ, and FEMA advisory. Our expert legal and financial teams ensure you never miss a regulatory deadline while staying audit-ready year-round, providing: Zero penalty exposure On-time submissions Accurate reporting aligned with the latest updates Contact us today for expert support and peace of mind. Call: +91 22 6852 5768 | +91 99301 56000Email: support@treelife. inBook a meeting --- - Published: 2025-05-29 - Modified: 2025-05-29 - URL: https://treelife.in/case-studies/the-pe-predicament-a-trademark-tussle-in-indias-fintech-sector-phonepe-vs-bharatpe/ - Categories: Case Studies Introduction: The High Cost of IPR Disputes for Startups and Investors Intellectual Property Rights (IPR) disputes, especially around trademarks, can impose substantial direct and indirect costs on startups, companies, and investors alike. Beyond legal fees, these disputes often drain management attention, delay market strategies, and impact brand value—sometimes running into crores of rupees and years of lost opportunity. The trademark dispute between two fintech giants — PhonePe and BharatPe — over the suffix “Pe” highlights these risks vividly. This case study illustrates why startups must prioritize early, strategic trademark management to safeguard their brand identity and business prospects. Background: The Roots of the Dispute PhonePe, founded in 2015, quickly became a major UPI player with a brand name emphasizing mobile payments. BharatPe, launched in 2018, focused on merchant payments with a similarly styled name incorporating the "Pe" suffix. PhonePe alleged that BharatPe’s use of the “Pe” suffix infringed its registered trademark, potentially causing consumer confusion and diluting its brand goodwill. BharatPe countered that “Pe” was descriptive, generic to the payments industry, and not monopolizable. Key Legal Insights from the Case Descriptive Elements Are Hard to Protect Exclusively: “Pe,” as a shorthand for “pay,” was ruled largely descriptive. Trademark law in India does not grant exclusivity over generic or descriptive terms without strong evidence of secondary meaning and distinctiveness, which is costly to prove. Whole Mark vs. Part Mark Analysis (Anti-Dissection Rule): Courts emphasized viewing trademarks holistically. Despite sharing a suffix, “PhonePe” and “BharatPe” had distinct prefixes that helped differentiate the brands in consumers’ minds. The Importance of Acquired Distinctiveness: While descriptive marks can gain exclusivity through long-term exclusive use, establishing this requires significant investment in marketing and legal battles, often making it a high-risk strategy. Strategic Value of Early Trademark Registration: Registering a trademark provides significant legal advantages, including a presumption of ownership and the exclusive right to use the mark. Continuous Monitoring and Enforcement: After registration, it's vital to monitor the market for infringing uses and take timely action. Legal Battle & Cost Implications The dispute stretched across multiple courts (Delhi High Court, Bombay High Court), lasting nearly 5 years. Direct costs: Legal fees for prolonged litigation in India for such commercial trademark disputes can range from INR 50 lakhs to over INR 2 crores ($70,000–$270,000) depending on complexity and duration. Indirect costs: Loss of management focus, delayed marketing and product rollout, reputational uncertainty, and lost investor confidence can easily translate into crores in missed business opportunities. Market uncertainty during litigation often affects fundraising valuations and strategic partnerships. Key Legal Points and Court Observations Courts emphasized the “anti-dissection” rule, requiring trademarks to be viewed holistically rather than by parts. The suffix “Pe” was held to be descriptive, representing “pay,” making exclusive rights difficult to enforce without clear evidence of secondary meaning. Courts declined interim injunctions against BharatPe, acknowledging the descriptive nature and distinctiveness of the respective marks in totality. Resolution and Aftermath In May 2024, the companies settled amicably, withdrawing trademark oppositions and agreeing on coexistence terms. This resolution enabled both to refocus on business growth rather than costly litigation. However, the 5-year legal battle underscores the strategic drain and risks of unresolved IPR issues. Broader Lessons for Startups, Companies, and Investors Trademark disputes can be expensive, time-consuming, and deeply distracting—often costing startups crores in legal fees and years in resolution. Beyond the financial toll, they pull leadership away from core business priorities and may introduce reputational risk that affects investor confidence and deal terms. Startups should prioritize selecting distinctive, non-descriptive brand names from the outset—terms that are unique, not generic or commonly used (like “Pe” for pay)—to ensure stronger legal protection and easier enforcement. Conducting a thorough trademark search and clearance early in the branding process is not just best practice, but a strategic cost-saving move that reduces the chance of future conflict. Securing trademark registration strengthens legal rights, adds credibility with stakeholders, and improves leverage in any dispute or negotiation. Active monitoring and timely action are key to preserving brand value. And when disputes do arise, founders should stay open to practical resolutions like coexistence agreements can often save more value than drawn-out litigation. Conclusion: Proactive IPR Management is a Business Imperative The PhonePe vs. BharatPe trademark saga is a cautionary tale for startups, companies, and investors in fast-evolving sectors like fintech. It underscores that: Selecting strong, distinctive trademarks early on, Conducting comprehensive searches, Registering marks strategically and Monitoring market use continuously are essential steps to avoid costly, prolonged disputes that threaten brand equity and business momentum. How Treelife Helps You Avoid Costly IPR Battles At Treelife, we understand that intellectual property is not just a legal formality — it’s a strategic business asset. Our end-to-end trademark services include: Comprehensive clearance and risk assessment to prevent costly conflicts before you launch. Robust registration strategies aligned with your business goals and market presence. Ongoing monitoring and enforcement to safeguard your brand equity from infringement. Dispute resolution support to navigate negotiations, settlements, or litigation efficiently. Our expertise helps startups, established companies, and investors protect their brands and avoid costly, resource-draining trademark battles like PhonePe vs. BharatPe. Don’t let avoidable trademark issues cost you crores and years of growth.   Contact Treelife today to safeguard your brand and build investor confidence. --- - Published: 2025-05-29 - Modified: 2025-07-21 - URL: https://treelife.in/legal/family-offices-in-india/ - Categories: Legal - Tags: family office in india, family offices in india Introduction to Family Offices in India What is a Family Office? A family office is a privately controlled advisory and investment entity set up by a high-net-worth individual (HNI) or ultra-high-net-worth individual (UHNIs) to manage their financial and personal wealth. Unlike traditional wealth management services, a family office in India offers a holistic approach handling everything from investment management, estate planning, tax advisory, to succession strategies under one roof. Key Functions of a Family Office in India Managing multi-generational wealth Investment and portfolio management Tax structuring and legal compliance Philanthropy and impact investing Governance and legacy planning Evolution of Family Offices Globally and in India Globally, family offices have existed for decades, with roots tracing back to European aristocracy and American industrialists like the Rockefellers. These structures were established to provide long-term financial stewardship and preserve intergenerational wealth. In India, however, the concept of family offices began gaining serious traction only in the last decade. Historically, Indian promoter-led families preferred informal management of wealth, often bundled within the operating business. But with growing complexities in compliance, globalization, and aspirations of the NextGen, a structured family office in India has become not just a luxury but a necessity. Global Benchmark Estimated 10,000+ family offices globally $6 trillion+ in assets under management (AUM) India’s Growth Story 2015: ~45 family offices 2023: 300+ family offices with over $30 billion in AUM1 Growing Relevance for Indian HNIs and UHNIs Several factors are driving the rising relevance of family offices in India, especially for HNIs and UHNIs: Formalization of Wealth Post-COVID, there’s a strong shift towards formal structures to manage personal and business capital efficiently. NextGen Involvement Younger family members seek diversification, ESG investing, and access to global opportunities. Family offices offer them a sandbox to experiment with capital safely. Startup Investment Opportunities India’s booming startup ecosystem has positioned family offices as a patient capital alternative to traditional VCs. Their flexibility and long-term horizon are appealing for founders. Need for Succession Planning As family businesses mature, seamless intergenerational wealth transfer has become a priority necessitating professionalized support. Increased Global Exposure Indian UHNIs are increasingly exploring offshore investments, philanthropy, and alternative assets all of which require structured oversight best delivered by a family office model. Surge in Billionaires According to the Hurun India Rich List 2023, India now has 1,454 billionaires, up from 140 in 20132. The country's billionaire count has crossed the 300 mark for the first time, reaching a record 334, a 29 per cent increase from last year. India added a Billionaire Every 5 Days In 2024, shows Hurun rich list New Generation of Wealth Creators As per Hurun Rich List 2024 - 11 billionaires born in the 1990s, including Harshil Mathur & Shashank Kumar (Razorpay) and Kaivalya Vohra (Zepto). HNWIs on the Rise Knight Frank reports a 4. 5% year-on-year growth in the HNI population in 2022. The number of HNWIs, individuals with investable assets exceeding $1 million, has also been on the rise Why Indian HNIs are Choosing Family Offices Control over wealth management Customized risk and investment strategies Better governance and privacy Strategic philanthropy and legacy building By 2028, family offices in India are expected to play an even more significant role in shaping investment flows, supporting innovation, and acting as a bridge between traditional business practices and modern financial ecosystems. Their strategic relevance continues to grow as wealth becomes more global, regulated, and purpose-driven. Types of Family Offices in India In India, the concept of Family Offices is evolving rapidly as high-net-worth individuals (HNIs) and ultra-high-net-worth individuals (UHNIs) seek professional and comprehensive wealth management solutions. Presently, the Indian wealth ecosystem predominantly features Single Family Offices (SFOs) dedicated entities established exclusively to manage the financial and personal affairs of a single family. These SFOs are tailored to address the unique needs, values, and long-term goals of their respective families, ensuring complete control and confidentiality. Single Family Offices (SFO) in India A Single Family Office is a privately owned organization created to manage the wealth, investments, taxation, philanthropy, and governance of one family. It offers bespoke solutions and in-house expertise to meet complex and multi-generational wealth management requirements. Key Features of Single Family Offices in India: Exclusively serve one family’s financial and personal affairs Highly customized strategies aligned with the family’s values and objectives Full control over investment decisions, risk management, and legacy planning Often include dedicated teams of legal, finance, and investment professionals Typically suited for ultra-HNIs with significant wealth, generally ₹500 crore and above The Growing Need for Multi-Family Offices (MFO) in India While Single Family Offices currently dominate India’s family wealth management landscape, there is a rising demand for Multi-Family Offices (MFOs). MFOs offer a collaborative and cost-efficient alternative by servicing multiple unrelated families through a shared platform. This model democratizes access to expert advisory, investment opportunities, and sophisticated financial tools that may otherwise be beyond reach for individual families. According to available insights Multi-Family Offices3 can fill a crucial gap in India by providing affordable, professional wealth oversight and governance solutions to families that do not have the scale or resources to establish their own Single Family Office. Key Advantages of Multi-Family Offices: Serve multiple families with standardized yet high-quality wealth management services Cost-sharing model reduces individual family expenses Access to vetted investments, estate planning, due diligence, and reporting services Ideal for HNIs seeking professional oversight without the complexities and costs of running a dedicated office In India, families predominantly establish Single Family Offices to comprehensively manage their unique wealth and legacy needs. However, as wealth spreads and becomes more complex, Multi-Family Offices are increasingly recognized as a practical and efficient solution to extend expert wealth management services to a broader set of families. Exploring MFOs can help Indian families optimize costs and gain access to institutional-grade advisory and investment solutions. Comparison: Single Family Office vs Multi-Family Office FeatureSingle Family Office (SFO)Multi Family Office (MFO)OwnershipOne familyMultiple familiesCustomizationHighModerateCostHigh (exclusive infrastructure)Shared (pooled services)ControlFull control over operationsShared control with standardized servicesTeam SetupInternal team (dedicated staff)External advisors (on retainer or shared)Ideal... --- > A virtual CFO, which could be an individual or a service provider, is an outsourced service provider specializing in managing the financial requirements of an organization. - Published: 2025-05-28 - Modified: 2025-07-22 - URL: https://treelife.in/finance/what-is-a-virtual-cfo/ - Categories: Finance - Tags: cfo virtual services, remote cfo services, role of a virtual cfo, vcfo meaning, Virtual CFO, virtual cfo for business startups, virtual cfo for startups, virtual cfo meaning, virtual cfo pricing, virtual cfo services, virtual cfo services india, virtual cfo support, virtual chief financial officer What is a Virtual CFO? Role and Meaning of a Virtual CFO Definition of Virtual CFO (VCFO) A Virtual CFO (VCFO) is a seasoned financial expert who provides high-level CFO services remotely on a part-time or contract basis. Unlike traditional CFOs who are full-time executives within an organization, Virtual CFOs deliver strategic financial leadership, planning, and advisory services tailored to the specific needs of startups, small businesses, and growing companies—without the overhead of hiring a full-time employee. Key aspects of a Virtual CFO include: Remote Financial Leadership: Utilizing digital tools and cloud-based platforms to manage finances without being physically present. Strategic Advisory: Helping businesses make data-driven financial decisions, optimize cash flow, and plan for growth. Flexible Engagement: Services are offered on-demand, allowing businesses to scale CFO involvement according to their current needs. Cost Efficiency: Access to expert CFO-level insights at a fraction of the cost of a full-time CFO. The virtual CFO has gained prominence with the rise of remote work and technological advancements, making expert financial management accessible to startups and SMEs globally. Why Businesses Prefer a Virtual CFO: Cost, Flexibility, and Expertise 1. Cost-Effective Financial LeadershipHiring a full-time CFO can be financially challenging, especially for startups and small businesses with limited budgets. A Virtual CFO provides access to top-tier financial expertise at a fraction of the cost, typically through monthly retainers or project-based fees, making it a highly cost-efficient solution. 2. Flexible Engagement and ScalabilityVirtual CFO services are adaptable — businesses can scale the level of CFO involvement up or down depending on growth stages, projects, or seasonal needs. This flexibility is invaluable for startups navigating fluctuating financial demands. 3. Access to Diverse Expertise Virtual CFOs often work with multiple clients across industries, bringing broad insights, best practices, and innovative financial strategies. This diversity enables businesses to benefit from expert advice tailored to their unique sector challenges. 4. Focus on Core Business Functions By outsourcing financial leadership, founders and management teams can concentrate on product development, sales, and operations, confident that strategic financial planning and compliance are in expert hands. 5. Technology-Driven Efficiency Virtual CFOs utilize advanced financial management software, cloud accounting, and real-time data dashboards to deliver timely and accurate financial insights, enhancing decision-making and transparency. Role of a Virtual CFO for Startups & Business  A Virtual CFO (vCFO) plays a crucial role in guiding a company’s financial strategy, offering expert leadership without the financial burden of employing a full-time Chief Financial Officer. This flexible approach delivers high-impact financial management, enabling startups and growing businesses to make smarter decisions, optimize resources, and scale efficiently. Key Responsibilities of a Virtual CFO A Virtual CFO performs a wide range of strategic and operational financial functions essential for business growth and sustainability: 1. Financial Planning and Analysis Develops comprehensive financial models and forecasts Analyzes financial data to identify trends and opportunities Supports decision-making through scenario planning and profitability analysis 2. Cash Flow Management Monitors and optimizes cash inflows and outflows Ensures liquidity to meet operational needs and avoid shortfalls Implements cash management strategies to maximize working capital 3. Budgeting and Forecasting Prepares detailed budgets aligned with business goals Continuously updates forecasts to reflect market changes and business performance Tracks variances and recommends corrective actions to stay on target 4. Risk Management and Compliance Identifies financial, operational, and regulatory risks Ensures compliance with tax laws, accounting standards, and industry regulations Develops internal controls and risk mitigation policies 5. Fundraising and Investor Relations Prepares financial documents and business plans for funding rounds Engages with investors, lenders, and stakeholders to secure capital Provides transparent reporting and builds investor confidence Traditional CFO vs Virtual CFO – Key Role Differences Function / AspectTraditional (Full-Time) CFOVirtual CFOEmployment Type / StatusFull-time employeePart-time, contract-based, or outsourcedLocationOn-site, corporate office or company premisesRemote, leveraging cloud-based financial toolsCost StructureFixed salary, benefits, and overhead expensesPay-as-you-go, project-based or retainer feesScope of Involvement / WorkIn-depth, day-to-day financial control and full ownership of operationsStrategic, advisory, flexible involvement including planning, compliance, fundraising supportReporting StructureReports regularly to CEO and BoardProvides periodic reports and updatesTeam ManagementManages finance department staffMay or may not manage internal teamsFlexibilityFixed role with consistent daily responsibilitiesScalable engagement tailored to evolving business needsIdeal Business SizeLarge enterprises with complex financial needsStartups, SMEs, and scaling businesses This comparison highlights why many startups and small businesses opt for a Virtual CFO to access expert financial guidance without the long-term financial commitment of a full-time CFO. Ready to take control of your company’s finances with expert guidance? Partner with Treelife for Virtual CFO services tailored to startups, SMEs, and scaling businesses. Schedule a Consultation Today What Are Virtual CFO Services?   Virtual CFO services encompass a broad range of high-level financial functions designed to help startups, SMEs and growing businesses manage their finances strategically and efficiently. Delivered remotely and flexibly, these services provide expert guidance tailored to your company’s specific needs—without the expense of a full-time CFO. Core Services Offered by Virtual CFOs 1. Financial Strategy and Advisory Develops long-term financial roadmaps aligned with business goals Advises on cost optimization, revenue growth, and profitability enhancement Conducts scenario analysis to prepare for market fluctuations and investment opportunities Supports strategic decision-making with data-driven insights 2. Management Reporting and KPIs Designs and implements key performance indicators (KPIs) relevant to your business model Prepares customized financial reports, dashboards, and visual analytics Enables real-time monitoring of business health and operational efficiency Facilitates transparent communication with stakeholders and board members 3. Tax Planning and Regulatory Compliance Ensures adherence to local and international tax laws and regulations Identifies tax-saving opportunities through structured planning Coordinates with auditors and tax consultants for smooth compliance Keeps the business updated on evolving financial regulations to avoid penalties 4. Cash Flow Optimization Monitors cash inflows and outflows to maintain adequate liquidity Implements cash management techniques to reduce working capital gaps Forecasts short-term and long-term cash requirements Advises on payment terms, credit policies, and collections to improve cash cycles 5. Fundraising Assistance and Capital Structuring Prepares financial models and pitch decks for investor presentations Advises on capital raising options, including equity, debt,... --- - Published: 2025-05-27 - Modified: 2025-07-21 - URL: https://treelife.in/foreign-trade/foreign-trade-policy-of-india/ - Categories: Foreign Trade - Tags: Foreign Trade Policy, FTP, India's Foreign Trade Policy, Indian Foreign Trade Policy Introduction to India’s Foreign Trade Policy (FTP) What is the Foreign Trade Policy (FTP) of India? The Foreign Trade Policy (FTP) of India is a strategic framework formulated by the Government of India to regulate, promote, and facilitate the country’s international trade activities. It sets the guidelines, incentives, and regulatory mechanisms that govern exports and imports, aiming to enhance India’s global trade competitiveness. Purpose of FTP: Boost India’s export potential and global market share Simplify trade procedures to promote ease of doing business Provide export promotion schemes and incentives for various sectors Foster balanced regional development through export hubs Align India’s trade policies with global standards and agreements Historical Evolution of India’s Foreign Trade Policy India’s FTP has evolved significantly over decades, reflecting changing economic priorities and global trade environments. PeriodPolicy CharacteristicKey FeaturesPre-1991Protectionist and Fixed-TermFocus on import substitution and limited exports with fixed policy periods. 1991-2015Liberalization & Fixed 5-Year PlansIntroduction of export incentives and trade liberalization in five-year blocks. 2015-2023Flexible & Incentive-BasedFocus on export promotion schemes like MEIS and RoSCTL with simplified compliance. 2023 onwards (FTP 2025)Dynamic, Open-Ended FrameworkShift to continuous, adaptive policies emphasizing digitization, ease of doing business, and sustainability. This dynamic shift allows the policy to respond swiftly to global market changes and support India’s ambitious export targets. Role of Directorate General of Foreign Trade (DGFT) The DGFT, operating under the Ministry of Commerce and Industry, is the primary agency responsible for implementing and monitoring the Foreign Trade Policy. Key Functions: Policy Formulation & Implementation: Drafts FTP guidelines and executes them nationwide. Licensing Authority: Issues Importer Exporter Codes (IEC), Advance Authorisations, and other trade licenses. Monitoring & Compliance: Ensures exporters and importers comply with policy regulations. Facilitating Trade: Provides helpdesk and advisory services for exporters, enabling smooth trade operations. Digital Platforms: Manages e-governance portals for application processing, reducing turnaround time. DGFT’s proactive digitalization efforts have significantly enhanced transparency and ease of access for trade stakeholders. Impact of FTP on India’s International Trade and Economic Growth Since its inception, FTP has been instrumental in shaping India’s trade landscape: Export Growth: FTP initiatives have helped increase India’s merchandise exports to over $450 billion in recent years, targeting $2 trillion by 2030. Diversification: Encouraged exports beyond traditional sectors, including services, e-commerce, and high-value goods. MSME Empowerment: Provided tailored incentives enabling Micro, Small & Medium Enterprises to enter global markets competitively. Regional Development: District export hubs and towns of export excellence have promoted inclusive growth. Foreign Exchange Earnings: FTP policies have strengthened India’s forex reserves and improved trade balance. Global Trade Integration: Harmonized Indian trade practices with WTO norms and Free Trade Agreements, boosting market access. Overall, the FTP remains a critical policy tool driving India’s ambitions to become a major global trading powerhouse while fostering sustainable economic development. FTP 2025 Highlights and Key Changes Transition from FTP 2015-20 and FTP 2023 to FTP 2025 The Foreign Trade Policy (FTP) 2025 marks a significant evolution from the previous fixed-term policies of FTP 2015-20 and the interim FTP 2023. Unlike the earlier time-bound policies, FTP 2025 adopts a dynamic, open-ended framework that allows continuous updates aligned with global trade shifts and domestic economic priorities. Policy PeriodKey FeaturesTransition FocusFTP 2015-20Fixed 5-year policy, export incentivesEmphasis on broad export supportFTP 2023Interim policy, simplification effortsIntroduction of digital approvals, amnesty schemesFTP 2025Dynamic framework, continuous updatesEnhanced digitization, streamlined processes, sustainability focus This transition supports India’s ambitious export target of $2 trillion by 2030, offering exporters a more flexible and responsive policy environment. Key Strategic Pillars of FTP 2025 FTP 2025 is structured around four core strategic pillars designed to transform India’s trade ecosystem: Incentive to Remission Shifting focus from traditional export incentives to remission of duties and taxes, reducing the cost burden on exporters. Implementation of schemes like RoDTEP (Remission of Duties and Taxes on Exported Products) to refund embedded taxes. Ease of Doing Business Simplifying export-import procedures through automation and digitization. Faster clearances with automatic approvals for Advance Authorisation and EPCG schemes. Reduced paperwork and streamlined compliance via e-governance platforms. Collaboration for Export Promotion Strengthening coordination among exporters, state governments, district administrations, and Indian missions abroad. Facilitating localized solutions via District Export Hubs and Towns of Export Excellence. Focus on Emerging Areas Prioritizing growth sectors like e-commerce exports, digital trade, and green/sustainable exports. Revamping export controls such as the SCOMET policy to balance trade facilitation and security. Emphasis on Digitization, Automation, and Transparent Processes FTP 2025 places digital innovation at its core to enhance transparency and efficiency: Digital Portals: Enhanced DGFT online systems for filing licenses, permissions, and tracking applications. Automation: Automatic approvals for export promotion schemes reduce delays significantly. Real-Time Monitoring: Dashboards provide exporters with live updates on application status and scheme utilization. Transparency: Online grievance redressal and policy updates ensure clear communication with stakeholders. This digital shift drastically lowers compliance costs and turnaround times, fostering a more investor-friendly trade environment. Introduction and Expansion of Key Export Promotion Schemes FTP 2025 strengthens and broadens export incentive schemes to boost competitiveness: SchemePurposeUpdates in FTP 2025RoDTEPRefunds embedded central, state taxes on exportsExpanded product coverage and simplified claims processAdvance AuthorisationDuty-free import of inputs for export productionAutomatic approvals, extended validityEPCG (Export Promotion Capital Goods)Import capital goods at zero customs duty with export obligationsFaster approvals and increased export obligation flexibility These schemes are designed to reduce the effective cost of exports, encouraging exporters, especially MSMEs, to scale up production. Focus on Sustainability and Global Compliance Alignment Recognizing global trends, FTP 2025 integrates sustainability and compliance: Green Exports: Incentives for environmentally sustainable products and technologies. Global Standards: Alignment with WTO rules, environmental protocols, and labor standards to ensure smooth market access. Trade Security: Strengthening export controls (e. g. , SCOMET) to prevent misuse of sensitive technologies without hindering legitimate trade. This approach positions India as a responsible and competitive player in the global market. Understanding Indian Exports in 2025 Overview of India’s Major Export Sectors India’s export basket in 2025 remains diverse, with key sectors driving growth: Textiles & Apparel: Largest export contributor, known for cotton, silk, and synthetic fabrics. Pharmaceuticals: Leading global... --- - Published: 2025-05-22 - Modified: 2025-07-21 - URL: https://treelife.in/legal/fssai-rules-and-regulations-fssai-standards-in-india/ - Categories: Legal - Tags: Food business compliance under FSSAI, Food safety rules for restaurants in India, FSSAI certification benefits, FSSAI food safety regulations, FSSAI labeling guidelines 2025, FSSAI registration process online, FSSAI Standards India, How to get an FSSAI license in India Introduction to FSSAI: Ensuring Food Safety Standards in India The Food Safety and Standards Authority of India (FSSAI) plays a crucial role in regulating food safety standards across the country. Established under the Food Safety and Standards Act, 2006, FSSAI’s primary responsibility is to ensure that all food products are safe for consumption and meet the required standards of quality and hygiene. As we step into 2025, FSSAI continues to adapt its regulations to meet global standards and address emerging challenges in food safety. FSSAI’s Role in Food Safety FSSAI operates as the central authority overseeing food safety laws in India, regulating every aspect from food production to food consumption. With the growing food industry and expanding consumer awareness, FSSAI’s role has become even more pivotal in safeguarding public health. The authority’s regulations aim to ensure that food businesses maintain safe food handling practices, provide accurate labelling, and meet hygiene standards across various food sectors, including manufacturing, distribution, and retail. The Evolution of FSSAI Regulations in 2025 As of 2025, FSSAI’s food safety regulations are evolving to accommodate the dynamic needs of the food industry. The guidelines are constantly updated to incorporate international best practices and advancements in food safety. In 2025, FSSAI has introduced several new policies and amendments aimed at enhancing food safety in India. These updates reflect the growing importance of consumer transparency, innovation in food products, and the increasing complexity of the global food supply chain. FSSAI’s 2025 guidelines emphasize key areas such as: Food Product Standards: Regular updates to the standards governing food additives, ingredients, and contaminants. Packaging and Labeling Requirements: Stricter rules for nutritional information and clearer labels to ensure consumers can make informed choices. Food Safety Audits and Inspections: Enhanced audit procedures to ensure compliance with the regulations. The authority's efforts are aligned with India’s goal of enhancing food safety practices and elevating its food industry to global standards, ensuring that Indian food products remain competitive and safe for both domestic and international markets. The Impact of FSSAI on Food Businesses in India For food businesses, understanding and adhering to FSSAI rules and regulations is not just a legal obligation but also an opportunity to build consumer trust. With a growing focus on food safety standards in India, businesses are required to meet FSSAI guidelines to continue operating legally and avoid penalties. Obtaining an FSSAI license has become a mark of quality, indicating that the food products adhere to the highest standards of hygiene and safety. FSSAI Standards in India – Overview FSSAI standards form the cornerstone of food safety regulations in India, ensuring that food products meet essential quality, safety, and hygiene requirements. These regulations are regularly updated to keep pace with global developments in food safety and to address emerging concerns. By adhering to FSSAI standards, businesses contribute to public health protection and build consumer trust in their products. Key Components of FSSAI Standards FSSAI regulations cover multiple aspects of food safety, ranging from food product specifications to packaging, labeling, hygiene standards, and the importation of food products into India. These regulations are designed to ensure that food businesses provide safe, high-quality products to consumers. 1. Food Product Specifications FSSAI sets clear guidelines for the composition of food products, detailing which ingredients are permissible, the use of food additives, and acceptable levels of contaminants. These standards ensure that food products are safe for consumption and meet the required quality expectations. Composition Guidelines: Food products must adhere to defined standards regarding the ingredients used and their proportions. Additives: FSSAI regulates the use of food additives to ensure they are safe and do not pose health risks. Contaminants: Standards are in place to limit the presence of harmful substances, such as pesticides or heavy metals, in food. These guidelines protect consumers from unsafe food and help maintain food quality in the market. 2. Packaging and Labeling Requirements FSSAI's packaging and labelling guidelines are designed to ensure that food products provide consumers with the necessary information to make informed choices. These regulations help prevent food contamination and promote transparency in food labelling. Nutritional Information: Food labels must clearly display the nutritional content, such as calories, fats, sugar, and proteins. Ingredient List: Ingredients must be listed in descending order of weight to provide transparency. Expiration Dates: Clear display of the manufacturing and expiration dates to ensure food products are consumed within safe periods. Country of Origin: For imported food, labels must include the country of origin to inform consumers about where the product comes from. These packaging and labelling rules help consumers understand the nutritional content of food products and make safer purchasing decisions. 3. Hygiene Standards Hygiene is a critical aspect of food safety, and FSSAI’s hygiene standards apply to all food establishments, ensuring that food handling, preparation, and storage are done safely to prevent contamination. Food Handling: Food handlers are required to maintain high standards of personal hygiene to prevent contamination. Sanitation Practices: Regular cleaning and disinfecting of food contact surfaces are mandatory to avoid cross-contamination. Temperature Control: Proper storage temperatures are essential to keeping food safe. Hot foods should remain above 60°C, while cold foods should be stored below 5°C. Maintaining high hygiene standards in food establishments prevents foodborne illnesses and ensures consumer safety. 4. Import Standards FSSAI has established regulations governing the importation of food products to ensure that food items entering India meet the required safety standards. These standards help maintain the integrity of the food supply chain and protect consumers from unsafe imported foods. Import Certifications: All imported food products must meet FSSAI’s safety standards and be accompanied by appropriate certifications. Testing and Inspection: FSSAI conducts tests on imported food to verify compliance with Indian food safety standards. Import Control: Only food products that pass these tests are allowed into the market, ensuring that substandard or harmful products do not enter India. These import regulations protect the Indian market from unsafe food products and ensure that imported goods are in line with local safety standards. FSSAI Food Safety Regulations... --- - Published: 2025-05-22 - Modified: 2025-07-22 - URL: https://treelife.in/news/ifsca-introduces-co-investment-framework-for-venture-capital-and-restricted-schemes-in-gift-ifsc/ - Categories: News GET PDF The International Financial Services Centres Authority (IFSCA) has unveiled a new framework facilitating co-investments by Venture Capital and Restricted Schemes (classified as Category I, II, or III Alternative Investment Funds - AIFs) through Special Purpose Vehicles (SPVs) under the recently updated Fund Management Regulations, 2025. This move aims to provide greater flexibility and structure for fund managers and investors operating within the GIFT IFSC. The framework outlines a clear co-investment structure where a Fund Management Entity (FME) can establish a "Special Scheme" to co-invest alongside an existing Venture Capital Scheme or Restricted Scheme (referred to as "Existing Scheme"). Investment by the FME in the Special Scheme is optional. Permissible Co-investment Structure The co-investment structure involves an AIF (the Existing Scheme) and a Special Scheme, which is also to be registered as the same category of AIF. The Special Scheme then invests in an Investee Company. Key Conditions and Provisions of the Framework Who can launch a Special Scheme? Only FMEs registered with IFSCA that currently manage an operational Venture Capital Scheme or Restricted Scheme are eligible to launch a Special Scheme. Structure of Special Scheme: The Special Scheme can be constituted as a Company, Limited Liability Partnership (LLP), or Trust. AIF Category Classification: The Special Scheme must be classified under the same AIF category (I, II, or III) as that of its Existing Scheme. Minimum Contribution by Existing Scheme: The Existing Scheme must contribute at least 25% of the equity share capital, interest, or capital contribution (as applicable) in the Special Scheme. Investment Objective: The co-investment strategy of the Special Scheme must be aligned with the investment strategy of the Existing Scheme. Importantly, the Special Scheme can invest only in one portfolio company, with exceptions allowed for restructuring purposes. Tenure: The tenure of the Special Scheme will be co-terminus with that of the Existing Scheme, or earlier if the Existing Scheme is liquidated. Eligible Investors: Any person is eligible to invest in the Special Scheme, subject to the minimum contribution norms stipulated under the FME Regulations. Leverage Conditions: Any leverage undertaken by the Special Scheme must remain within the overall limits specified in the Placement Memorandum of the Existing Scheme. Encumbrances are permitted for the purpose of leverage. FME Contribution: The FME has the discretion to contribute to the Special Scheme. Control and Decision-making: The sole control and decision-making authority for the Special Scheme rests with the FME. Investors in the Special Scheme cannot interfere with the regulatory compliance of the Existing Scheme. KYC Requirements: For existing investors, no fresh Know Your Customer (KYC) procedures are required. However, new investors must undergo KYC as per IFSCA's AML-CTF & KYC Guidelines, 2022. Term Sheet Filing: A term sheet must be filed within 45 days of the investment. This term sheet will be treated as a constitutional document for the purpose of bank account opening. Investor Disclosures: Investors in the Existing Scheme must be informed before capital is raised for the Special Scheme. The term sheet itself must include all necessary disclosures as per the FME Regulations. Reporting to IFSCA: Reporting requirements for the Special Scheme are to be consolidated with those of the Existing Scheme. SEZ Approval Requirement: The Special Scheme must obtain a separate SEZ (Special Economic Zone) approval under the SEZ Act, 2005, before filing the term sheet. Fee Payment: Applicable fees will be payable as per the IFSCA Circular dated April 8, 2025. This new co-investment framework is expected to provide greater operational flexibility and attract more fund management activity to GIFT IFSC, solidifying its position as a competitive global financial hub. --- - Published: 2025-05-21 - Modified: 2025-07-22 - URL: https://treelife.in/news/rbis-draft-guidelines-on-aif-exposure-by-regulated-entities-key-highlights-and-implications/ - Categories: News The Reserve Bank of India (RBI) has released draft directions to regulate investments made by Regulated Entities (REs)—such as banks, NBFCs, and other financial institutions—into Alternative Investment Funds (AIFs). A key proposal is the introduction of exposure caps aimed at limiting interconnected risks within the financial system: A single regulated entity will be allowed to invest up to 10% of the corpus of an AIF scheme. Aggregate exposure by all regulated entities to the same AIF scheme is proposed to be capped at 15%. These changes are aimed at curbing practices like evergreening of loans and circular financing arrangements, where lenders indirectly fund borrower companies via AIF routes. At the same time, this move could significantly reshape the domestic fundraising landscape—especially for AIFs that rely on Indian institutional capital as anchor investors. The proposal introduces a more cautious, risk-sensitive framework that fund managers will need to consider while structuring their capital sources. Key Exemptions from Provisioning Requirements: The draft outlines certain carve-outs where REs would not be subject to provisioning norms: If the RE holds less than 5% of the AIF scheme’s corpus; If the AIF’s investment in a borrower is only in equity instruments (such as equity shares, CCPS, or CCDs); If the AIF is a strategic Fund of Funds (FoF) backed by the Government. As SEBI tightens its due diligence norms for AIFs and the RBI refines exposure limits for REs, alignment between fundraising and deployment strategies is becoming increasingly important. These regulatory shifts may also influence the perception of risk and confidence for global Limited Partners (LPs) looking at India-focused funds, especially where domestic institutions are key participants. Curious how these guidelines may affect your AIF strategy or structure? Let’s talk – write to us at dhairya. c@treelife. in --- > This comprehensive guide demystifies transfer pricing concepts, methods, regulatory frameworks, common challenges, and best practices, helping founders, CFOs, and finance teams navigate this complex terrain with confidence. - Published: 2025-05-20 - Modified: 2025-07-21 - URL: https://treelife.in/reports/transfer-pricing-a-comprehensive-guide-for-founders-cfos-and-startups/ - Categories: Reports - Tags: transfer pricing DOWNLOAD PDF In an increasingly interconnected global economy, startups and growing companies face the challenge of managing cross-border operations efficiently while complying with complex tax regulations. One critical area demanding attention is transfer pricing the pricing of transactions between related companies operating in different jurisdictions. This comprehensive guide demystifies transfer pricing concepts, methods, regulatory frameworks, common challenges, and best practices, helping founders, CFOs, and finance teams navigate this complex terrain with confidence. What is Transfer Pricing and Why Is It Important? Transfer pricing refers to the price charged for goods, services, or intangible assets (like intellectual property) exchanged between related entities within the same multinational group. For example, when a U. S. -based startup sells software licenses to its Indian subsidiary, the price charged is a transfer price. Why does this matter? Transfer pricing directly affects how profits are allocated among the entities and, consequently, how much tax is paid in each jurisdiction. Incorrect transfer prices can trigger tax audits, adjustments, penalties, and in some cases, double taxation where the same income is taxed in more than one country. With estimates showing that over 60% of global trade occurs between related parties, governments worldwide prioritize transfer pricing enforcement to protect their tax base. For startups scaling internationally, understanding and managing transfer pricing is crucial to avoid costly disputes and maintain investor confidence. Fundamentals of Transfer Pricing: The Arm’s Length Principle The Arm’s Length Principle (ALP) is the foundation of transfer pricing globally. It requires that transactions between related parties be priced as if they were conducted between independent, unrelated parties under similar circumstances. This principle ensures fairness and prevents multinational companies from shifting profits artificially to minimize taxes. For startups, this means intercompany transactions—whether for goods, services, royalties, or loans—must be priced at fair market value. Applying ALP involves comparing related-party transactions with similar transactions between independent parties, often through benchmarking studies and economic analyses. Transfer Pricing Methods: How to Set the Right Price Several internationally recognized methods exist to determine arm’s length prices, each with specific applications: Comparable Uncontrolled Price (CUP) Method: Compares the price charged in a related-party transaction to that charged between independent parties for comparable goods or services. CUP is preferred when exact comparables exist but is often challenging due to differences in terms or products. Resale Price Method (RPM): Starts from the price at which a related party resells goods to independent customers, subtracting an appropriate gross margin. Useful for distributors or resellers who add limited value. Cost Plus Method (CPM): Adds an appropriate markup to the costs incurred by a supplier in a related-party transaction. Commonly applied for manufacturing or service transactions. Transactional Net Margin Method (TNMM): Examines the net profit margin relative to a suitable base (e. g. , costs or sales) of a related party compared to independent firms. TNMM is flexible and widely used when exact price comparables are unavailable. Profit Split Method (PSM): Allocates combined profits from related-party transactions among entities based on their relative contributions. Applied in highly integrated operations or where unique intangibles are involved. Choosing the right method requires careful consideration of the transaction type, data availability, and functional analysis. Global and India-Specific Transfer Pricing Regulations OECD Guidelines and BEPS The Organisation for Economic Co-operation and Development (OECD) provides internationally accepted transfer pricing guidelines adopted by over 120 countries. Its Base Erosion and Profit Shifting (BEPS) project strengthened rules on transparency and documentation, introducing mandatory country-by-country reporting and master/local file documentation. Indian Transfer Pricing Framework India’s transfer pricing laws, under the Income Tax Act, 1961, align closely with OECD standards but have unique features: Applicability: Transfer pricing applies to international transactions and certain specified domestic transactions (SDT), particularly when entities claim tax holidays or other benefits. Documentation: Companies must maintain contemporaneous documentation including a Local File, Master File, and, where applicable, Country-by-Country Reports. Compliance: Filing an accountant’s report (Form 3CEB) is mandatory for entities engaged in international transactions. Penalties: Non-compliance or inadequate documentation can lead to penalties amounting to a percentage of the transaction value, alongside interest and additional tax demands. Advance Pricing Agreements (APA): India’s APA program allows taxpayers to pre-agree transfer pricing methods with authorities, reducing audit risk. Challenges in Transfer Pricing Compliance Finding Comparables: Identifying reliable independent comparables is difficult, especially for unique intangibles or services. Documentation Burden: Preparing and maintaining extensive, contemporaneous documentation requires resources and expertise. Risk of Tax Adjustments: Tax authorities globally scrutinize transfer pricing aggressively, leading to adjustments, interest, and penalties. Double Taxation Risk: Disputes over transfer pricing can result in the same income being taxed in multiple jurisdictions, requiring costly resolution mechanisms. Changing Regulations: Businesses must keep up with evolving rules, reporting requirements, and safe harbor provisions. Best Practices for Startups and CFOs Develop a Clear Transfer Pricing Policy: Establish a well-defined policy detailing how intercompany prices are set, the rationale behind decisions, and procedures for regular review. Adhere to the Arm’s Length Principle: Ensure all transfer prices reflect what independent parties would agree upon under similar circumstances. Clearly Define Roles and Responsibilities (FAR Analysis): Conduct a thorough analysis of Functions, Assets, and Risks (FAR) for each related entity and document them precisely. Maintain Robust Documentation (Local File): Prepare comprehensive, contemporaneous documentation detailing intercompany transactions, functional analyses, and benchmarking studies. Consider Advance Pricing Agreements (APAs): For complex or high-value transactions, explore APAs with tax authorities to gain prior certainty on pricing methods and reduce dispute risks. Utilize Safe Harbors (if available): Leverage safe harbor provisions, such as those offered in Indian transfer pricing regulations, to simplify compliance where applicable. Ensure Intercompany Agreements are in Place: Formalize all significant related-party transactions through written agreements outlining terms, pricing, and responsibilities. Real-World Case Studies Coca-Cola vs. IRS: One of the most prominent examples discussed in the guide is the transfer pricing dispute involving Coca-Cola and the U. S. Internal Revenue Service (IRS). This case highlights the complexity and financial risks associated with transfer pricing compliance, especially for multinational corporations with substantial intangible assets. Background Coca-Cola faced scrutiny over the allocation of profits... --- - Published: 2025-05-16 - Modified: 2025-07-21 - URL: https://treelife.in/legal/decoding-the-indemnification-clause/ - Categories: Legal - Tags: indemnification clause, indemnification clause in a contract, indemnification clause in agreement, indemnification clause in employment agreement, indemnification clause sample for consultants, what is an indemnification clause Indemnification Clause Meaning An indemnification clause or indemnity clause serves as a contractual mechanism for mitigating and re-allocating risk between two parties, ensuring compensation for financial losses that may arise due to specific events outlined in an agreement. It acts as a legal safeguard, protecting one party from liabilities or losses resulting from particular actions by the other party. Rooted in common law, indemnity clauses fall under the broader category of compensation. A contract of indemnity essentially involves a commitment by one party to shield the other from financial harm. This article explores the nature of indemnity clauses, their legal framework, and how they differ from damages. What is the Contract of Indemnity?   According to Section 124 of the Indian Contract Act, 1872, a contract of indemnity is defined as "A contract by which one party promises to save the other from loss caused to him by the conduct of the promisor himself, or by the conduct of any other person. "  In other words, the first party agrees to defend against and/or cover any losses incurred by the second party, as a result of the first party’s actions or omissions. An indemnifier is the party in a contract who promises to compensate the other party, i. e. , the indemnified, for any losses, damages, or liabilities specified in the indemnity clause. The indemnifier assumes responsibility for defending against legal claims and/or covering financial losses that may arise due to certain predefined events, actions, or third-party claims. To ensure that an indemnity clause is fair and practical, it should include a predetermined liability cap (usually as a proportion of the consideration paid or payable between the parties), preventing the indemnifier from being burdened with excessive liability beyond reasonable circumstances. This liability cap usually excludes losses or damages resulting from serious breaches which can result in material losses or damages, such as fraud, misconduct, negligence, and/or breaches of data privacy, confidentiality, intellectual property rights, and/or applicable laws.   Key Components of an Indemnification Clause A well-drafted indemnification clause typically includes: Indemnification Event: Specific circumstances triggering indemnification. Indemnifying Party: The party responsible for providing indemnity. Indemnified Party: The party receiving indemnity. Scope of Indemnification: Types of losses covered. Exclusions: Limitations on indemnification. Time Limits: Period within which indemnification claims must be made. Why Are Indemnification Provisions Essential? Indemnification clauses provide numerous benefits to contracting parties, enabling them to: Customize Risk Allocation: Parties can tailor the level of financial responsibility they are willing to assume in each transaction. The indemnification clause in an agreement ensures that risks are assigned based on which party is better positioned to manage them. Protect Against Damages and Lawsuits: An indemnification clause in a contract helps safeguard a party from liabilities that the counterparty can more efficiently manage. For example, in a sale of goods agreement, the seller is better suited to bear risks associated with product defects or third-party injuries, as they have greater control over the quality and manufacturing process. How Indemnification Clauses Benefit Contracting Parties Recovering Additional Costs: Some losses, such as legal fees and litigation costs, can explicitly state that such expenses will be compensated by the indemnifying party. Limiting Financial Exposure: A contract can incorporate liability caps, materiality qualifiers, and liability to ensure that the indemnifying party's obligations are reasonable and proportionate. A mutual indemnification clause can ensure both parties have protection while limiting excessive liability. Indemnification Clauses in Different Agreements Employment Agreements: Indemnification clauses in employment agreements protect employees from liabilities arising during their employment, provided they acted within the scope of their duties. Consultant Contracts: A sample indemnification clause for consultants might state: "The Consultant shall indemnify and hold harmless the Client from any losses, damages, or claims arising due to errors, omissions, or negligence in the services provided, except where such claims result from the Client’s own negligence. " Liability of the Indemnifier The indemnifier must compensate the indemnified party for any losses that arise due to the event specified in the indemnity clause. The indemnifier’s liability is limited to the scope of indemnity agreed upon in the contract. If the contract has a financial limit, the indemnifier is only responsible up to that amount. If indemnity does not cover indirect or consequential losses, the indemnifier is not liable for them. The indemnifier cannot be forced to pay beyond what is stated in the indemnity contract.  Difference between Indemnity and Damages  IndemnityDamages Can be invoked for losses arising from the actions of third parties or specific events outlined in the contract, irrespective of a breach. Arise solely from a breach of contract by one of the contracting parties. It allows the indemnified party to claim compensation upon the accrual of liability, even before an actual loss is suffered. Claims can only be made after the breach has occurred and actual loss has been incurred. May cover a broader range of losses, depending on the contract's terms. Typically limited to direct losses that are a natural consequence of the breach; indirect or remote damages are generally not recoverable. Indemnification Case Laws Gajanan Moreshwar v. Moreshwar Madan, 1 April, AIR 1942 BOMBAY 302, Bombay high court  In this case, the plaintiff (Gajanan Moreshwar) had given certain immovable property as security for a loan taken by the defendant (Moreshwar Madan). The defendant was responsible for repaying the loan, but he failed to do so. The plaintiff, fearing that the creditor would take legal action against him, sought an indemnity from the defendant, asking him to either repay the loan or compensate him before he suffered an actual loss. The defendant contended that the plaintiff had not yet suffered an actual loss and, therefore, could not claim indemnity. The court noted that Sections 124 and 125 of the Indian Contract Act, 1872, do not cover all possible situations of indemnity. It pointed out that indemnity can apply even when the loss is not caused directly by the indemnifier or a third party. If a person has a definite financial liability, they don’t have to... --- - Published: 2025-05-16 - Modified: 2025-07-21 - URL: https://treelife.in/compliance/esg-compliance-in-india/ - Categories: Compliance - Tags: ESG Compliance, ESG Compliance in India Introduction to ESG Compliance in India What is ESG Compliance? Environmental, Social, and Governance (ESG) compliance refers to the set of standards that businesses must adhere to when assessing their impact on the environment, society, and corporate governance. ESG frameworks evaluate how well companies manage environmental risks, foster social responsibility, and maintain transparent, accountable governance structures. ESG in India: Growing Importance In India, ESG compliance is rapidly gaining importance as businesses recognize the need for sustainable and ethical practices. With increasing public awareness, pressure from investors, and government regulations, companies are now focusing on aligning their strategies with ESG principles. The rise in ESG adoption also reflects global trends where businesses are expected to contribute positively to environmental sustainability, social welfare, and effective governance practices. The Role of ESG in Business Strategy ESG compliance in India is no longer just about corporate social responsibility (CSR). It is integral to a company's overall business strategy. Companies that prioritize ESG are not only looking to improve their environmental and social footprints but are also addressing critical areas such as waste management, employee welfare, and corporate transparency. This shift towards ESG in India ensures businesses build long-term sustainability while meeting growing consumer and investor expectations. ESG Compliance in India: A Regulatory Overview India’s regulatory landscape has evolved to enforce greater accountability in ESG practices. The Securities and Exchange Board of India (SEBI) plays a central role in shaping these regulations, with mandatory Business Responsibility and Sustainability Reporting (BRSR) frameworks. These frameworks compel companies to disclose their ESG performance, providing transparency and fostering a culture of responsibility across industries. Why is ESG Compliance Crucial for Indian Companies? Investor Demand: Investors are increasingly factoring ESG performance into their decision-making. Funds with an emphasis on sustainable investment are growing, and businesses that fail to comply with ESG standards may find it challenging to attract capital. Regulatory Pressure: The introduction of stricter regulations like the BRSR framework in India means businesses need to comply or face potential penalties or reputational risks. Consumer Trust: As consumers become more conscious of environmental and social issues, companies that implement ethical ESG practices can build greater consumer trust and loyalty. Risk Management: Proactively managing ESG risks, such as environmental damage or governance failures, can help businesses avoid costly litigation, penalties, and operational disruptions. Global Competitiveness: Adhering to ESG standards allows companies to remain competitive in the global market, aligning with international norms and practices. How ESG Compliance Enhances Business Sustainability Adopting robust ESG strategies has a direct impact on business sustainability in India. Companies that integrate ESG into their operations are better equipped to address long-term environmental challenges, manage social impacts, and maintain strong governance standards. This integration not only helps mitigate risks but also opens new opportunities for innovation, funding, and market growth. As the business landscape in India evolves, embracing ESG compliance will increasingly determine a company's ability to thrive in a socially-conscious and eco-friendly future. Businesses that take the lead in ESG practices are not just adhering to regulations—they are setting a benchmark for sustainable, responsible, and ethical business operations. Understanding ESG Regulations in India Key Legislations Governing ESG in India India has developed a robust legal framework to promote ESG compliance across various sectors. These regulations are designed to ensure that businesses operate sustainably, contribute to society, and follow good governance practices. Here are the key pieces of legislation that govern ESG regulations in India: Companies Act, 2013: Mandating Corporate Social Responsibility (CSR) The Companies Act, 2013 is a cornerstone legislation that mandates Corporate Social Responsibility (CSR) for companies meeting specific criteria. This Act requires eligible companies to allocate a certain percentage of their profits toward social and environmental initiatives. The CSR provisions are applicable to companies that: Have a net worth of ₹500 crore or more Have a turnover of ₹1000 crore or more Have a net profit of ₹5 crore or more during a financial year The aim is to ensure that businesses contribute positively to society by addressing critical issues like education, healthcare, environmental sustainability, and poverty alleviation. CSR compliance is a crucial element of ESG regulations in India, as it pushes companies to align their strategies with social good while ensuring governance and transparency in their efforts. Securities and Exchange Board of India (SEBI) Regulations: BRSR Framework The Securities and Exchange Board of India (SEBI) plays a pivotal role in shaping ESG regulations for listed companies in India. SEBI’s regulations, particularly the Business Responsibility and Sustainability Reporting (BRSR) framework, have become essential for enhancing ESG disclosures. Introduced in 2021, the BRSR framework replaced the earlier Business Responsibility Report (BRR) and brought in stricter and more comprehensive reporting requirements. It mandates the top 1000 listed companies (by market capitalization) to report on key ESG parameters. The BRSR focuses on areas such as: Environmental Impact: Companies must disclose their actions on climate change, energy usage, and waste management. Social Responsibility: Reporting on employee welfare, stakeholder engagement, and community development is emphasized. Governance Standards: It evaluates corporate governance practices such as transparency, accountability, and business ethics. By making these disclosures mandatory, SEBI aims to improve transparency and accountability in ESG reporting for businesses operating in India. Environmental Protection Act, 1986: Ensuring Environmental Conservation The Environmental Protection Act, 1986 is one of the primary regulations in India that underpins environmental sustainability in the country. It sets the legal foundation for the protection and improvement of the environment, addressing issues like pollution control, waste management, and conservation of natural resources. The Act empowers the Central Pollution Control Board (CPCB) to set standards for the emission and discharge of pollutants, ensuring that businesses adhere to environmental standards. Compliance with this Act is a crucial part of ESG regulations in India, particularly for companies whose activities have a direct environmental impact. Role of Regulatory Bodies in ESG Compliance India’s ESG regulatory framework is enforced by several key regulatory bodies, each playing a specific role in ensuring businesses meet ESG standards. Ministry of Corporate Affairs (MCA): Ensuring Governance and CSR Compliance... --- - Published: 2025-05-16 - Modified: 2025-07-21 - URL: https://treelife.in/startups/startup-equity-in-india/ - Categories: Startups - Tags: buy equity in startups, equity for advisors startup, equity shares startup, equity sharing agreement startup, how to give equity in a startup, how to sell equity in a startup, how to share equity in a startup, invest in startups for equity, startup employee equity pool, startup equity, startup equity dilution, startup equity distribution, understanding equity in startups What Is Startup Equity? Definition and Concept of Equity in a Startup Startup equity refers to the ownership interest in a startup company, typically represented by shares or stock options. It signifies the portion of the company that is owned by an individual or entity, giving them a stake in the company’s potential success. Equity is often granted to founders, employees, advisors, and investors in exchange for their contributions, which could be in the form of capital, effort, expertise, or time. Equity holders benefit from the company's growth, as their shares become more valuable when the business succeeds. This ownership is crucial in the early stages of a startup, especially when cash flow is limited. Equity holders are typically entitled to a proportion of profits, potential dividends, and, in some cases, voting rights on key decisions. How Startup Equity Differs from Salaries and Profit-Sharing While salaries and profit-sharing are common methods of compensating employees, startup equity works quite differently. Here’s how: Salaries: A salary is a fixed, regular payment made to employees for their work, and it is typically not tied to the success of the company. Salaries are predictable, and employees are paid irrespective of the company’s performance. Profit-Sharing: Profit-sharing offers employees a percentage of the company’s profits, often paid out at the end of a fiscal year. While it aligns employee interests with company performance, it’s still a form of compensation that is not tied to ownership. Equity: In contrast, equity represents actual ownership in the company. Instead of receiving fixed wages or a share of profits, equity holders benefit from the company’s future value growth. If the startup scales and becomes valuable, the equity holders' stakes can increase significantly. Equity rewards individuals for their long-term commitment to the startup's growth, offering them a direct financial benefit tied to the company’s success. Unlike salaries or profit-sharing, equity allows individuals to participate in the appreciation of the company's value. Who Can Get Equity in a Startup? Founders Founders are the individuals who establish a startup and take on the primary responsibility for its vision, direction, and initial development. Founders typically receive a significant portion of the startup equity, often in the form of founder’s equity. This equity represents their stake in the company, compensating them for their time, effort, and capital invested in starting and growing the business. Founder equity is usually split based on the agreement among the founding team and can vary depending on factors such as contributions, expertise, and risks taken. Founders are often subject to a vesting schedule, ensuring that they remain committed to the company over time. A standard vesting period is 4 years, with a 1-year cliff, meaning founders need to stay with the company for at least one year before their equity begins to vest. Employees One of the most common ways to offer equity in a startup is through ESOPs (Employee Stock Ownership Plans) or stock options. Startups often use employee equity pools to attract and retain top talent, especially when cash compensation is limited. ESOPs give employees the right to purchase company shares at a predetermined price after a certain vesting period. Why Offer ESOPs? Retention: Employees are incentivized to stay long-term as they accumulate equity over time. Alignment of Interests: When employees own a piece of the company, they become more motivated to contribute to its success. Typically, employee equity is vested over 4 years, with a 1-year cliff, ensuring that employees stay committed and actively contribute to the company’s growth. Advisors and Mentors Equity for advisors is a common way to compensate experienced individuals who provide strategic guidance and mentorship to startups. Advisors often play a crucial role in shaping business strategy, navigating challenges, and connecting startups with networks and resources. In return, they are typically granted advisor equity, which compensates them for their time, expertise, and industry knowledge. The vesting period for advisor equity is generally shorter than that of employees. It ranges from 1 to 2 years, allowing advisors to earn their equity over a shorter duration. The terms of the equity agreement for advisors are typically outlined in an advisory agreement, which specifies their roles, contributions, and the amount of equity granted. Angel Investors and VC/PE Firms Angel investors and venture capital (VC) or private equity (PE) firms play a pivotal role in the growth of startups by providing the necessary funding in exchange for equity. These investors help startups scale by injecting capital that enables product development, marketing, and expansion. Investors are usually granted preferred shares, which give them certain rights over common equity holders, such as priority in case of liquidation or liquidation preferences. Unlike employees or advisors, investors typically receive their equity immediately upon making the investment, without any vesting period. VC/PE firms often negotiate terms related to the amount of equity, the valuation of the company, and their rights in the startup’s governance. They are also crucial in subsequent funding rounds, where they may influence the startup equity dilution. Quick Table: Stakeholders vs Equity Type vs Common Vesting Terms StakeholderType of EquityTypical VestingFoundersFounder’s Equity4 years with 1-year cliffEmployeesESOPs/Stock Options4 yearsAdvisorsAdvisor Equity1–2 yearsInvestorsPreferred SharesImmediate on investment How to Share Equity in a Startup? Legal Framework for Sharing Equity 1. Shareholders’ Agreement (SHA) A Shareholders' Agreement (SHA) is a legally binding document that outlines the rights and responsibilities of the equity holders in a startup. It defines how equity is allocated among shareholders, the governance structure, decision-making processes, and exit terms. The SHA is essential for protecting the interests of founders, employees, investors, and other stakeholders. Key components of an SHA: Equity distribution and ownership percentages. Vesting schedules and cliff periods for founders and key employees. Terms for dilution, exit options, and liquidation preferences. 2. ESOP Scheme An ESOP (Employee Stock Ownership Plan) is another key element of the equity-sharing framework, especially for startups offering equity to employees. It allows employees to purchase or receive shares in the company, often at a discounted price, after a certain period of time. Key Elements of... --- - Published: 2025-05-16 - Modified: 2025-08-28 - URL: https://treelife.in/compliance/fema-compliance-in-india/ - Categories: Compliance - Tags: FEMA Compliance, FEMA Compliance in India What is FEMA Compliance? Understanding FEMA and Its Purpose The Foreign Exchange Management Act (FEMA), 1999 is India’s cornerstone legislation for regulating and facilitating external trade, payments, and foreign exchange. Introduced to replace the restrictive FERA (Foreign Exchange Regulation Act), FEMA focuses on promoting transparent and lawful dealings in foreign currency, particularly in the context of globalization and increasing foreign investment in India. FEMA is administered by the Reserve Bank of India (RBI) and the Directorate of Enforcement, and applies to all residents, companies, and individuals involved in foreign exchange transactions—including inward remittances, outward remittances, foreign investments, and export/import of goods and services. FEMA compliance is part of India’s broader regulatory framework for managing capital inflows and outflows to ensure economic stability, prevent illegal fund flows, and support ease of doing business globally. What Does FEMA Compliance Mean? FEMA compliance refers to meeting all legal obligations, documentation, and reporting requirements under FEMA and RBI guidelines for cross-border financial transactions. It includes: Filing RBI-mandated forms like Form FC, FC-GPR, FC-TRS, APR, and FLA Following KYC and AML guidelines for foreign exchange dealings as prescribed by Authorized Dealer banks Adhering to limits and conditions on FDI, ODI, ECB, and import/export payments Timely submission of disclosures through FIRMS portal or authorized dealer (AD) banks Whether it’s a private limited company receiving FDI, a foreign subsidiary making payments, or an exporter collecting foreign receivables, FEMA compliance ensures that all such transactions are monitored, transparent, and legally valid. Use Case: FEMA Compliance in Action Let’s say an Indian tech startup receives investment from a Singapore-based VC. Under FEMA: It must file Form FC-GPR within 30 days of share allotment. It must conduct KYC checks through its AD bank. It must report the inflow under the Entity Master Form and include the transaction in its FLA Return each year. Failing any of these would mean FEMA non-compliance—potentially stalling future investment and attracting RBI scrutiny. Why is FEMA Compliance Important? Safeguarding International Transactions and Regulatory Reputation FEMA compliance plays a vital role in maintaining India’s credibility in global trade and investment. It ensures that all foreign exchange transactions—whether inward remittance, export receipts, foreign direct investment (FDI), or overseas direct investment (ODI)—are traceable, lawful, and economically beneficial to the country. As India continues to be a preferred investment destination, ensuring FEMA regulatory compliance is critical for startups, exporters, and foreign subsidiaries to build investor confidence and avoid legal risks. Why Investors Care About FEMA Compliances Foreign investors, venture capitalists, and global partners conduct regulatory due diligence before investing. Any lapse in FEMA compliance for private limited companies or foreign subsidiaries can stall funding or affect deal closure. Startups and MSMEs that maintain proper documentation, adhere to KYC AML FEMA compliance, and fulfill reporting requirements under FEMA are perceived as lower-risk and more investment-ready. Who Needs to Comply with FEMA? Scope of FEMA Compliance in India FEMA compliance is applicable to all individuals, companies, and entities involved in foreign exchange transactions—whether it's receiving capital, making payments abroad, or handling export/import proceeds. The compliance ensures such transactions adhere to the rules prescribed by the Reserve Bank of India (RBI) under the Foreign Exchange Management Act, 1999. If you're transacting with a non-resident, dealing in foreign currency, or involved in global trade or investment, FEMA compliance is not just advisable—it is mandatory. 1. Indian Companies with FDI or Foreign Subsidiaries Operating in India Companies that raise capital from foreign investors under the Foreign Direct Investment (FDI) route or foreign subsidiaries set up in India (treated as resident entities) must: File Form FC-GPR and Entity Master Form Maintain sectoral cap compliance Follow pricing guidelines and KYC norms Report capital infusion and share allotments Comply with downstream investment rules if the subsidiary makes further investments in other Indian entities Adhere to KYC AML FEMA compliance requirements Ensure compliance during the transfer of shares from a foreign investor to a resident, which involves filing Form FC-TRS File annual returns like Foreign Liabilities and Assets (FLA) and Annual Performance Report (APR), especially when involved in Overseas Direct Investment (ODI) These companies must maintain a robust FEMA compliance checklist for private limited companies to avoid penalties or delays in investment. 2. Startups Receiving Foreign Investment DPIIT-recognized or unregistered startups receiving foreign funding through equity, SAFE, or convertible notes must comply with: Valuation norms (or justify exemption) Reporting timelines FEMA and RBI guidelines applicable to early-stage ventures FEMA compliance is essential even for angel or VC-funded startups to ensure legitimacy of funds and future funding eligibility. 3. Exporters and Importers Companies and individuals engaged in the export of goods or services or import of raw materials, technology, or capital goods must: Register for an Import Export Code (IEC) Realize and report export proceeds within the prescribed timeline of 9 months from the date of shipment (extendable upon request to RBI) Settle import payments within the prescribed timeline of 6 months from the date of shipment (extendable with RBI approval) File shipping documents and SOFTEX forms (for services) Both FEMA compliance for export of goods and FEMA compliance for import payments involve coordination with banks and timely documentation. Non-compliance with the prescribed timelines may result in penalties or restrictions on future transactions. 4. NRIs and PIOs Investing or Remitting Funds to India Non-Resident Indians (NRIs) and Persons of Indian Origin (PIOs) who: Invest in real estate, mutual funds, startups, or equity Send money via inward remittance Repatriate profits or inheritance Must follow FEMA regulations, which include: Using designated accounts (NRE/NRO) Filing relevant declarations Following investment caps in restricted sectors FEMA compliance for inward remittance ensures funds are legitimate and traceable. Key FEMA Compliance Requirements Overview of FEMA Regulatory Compliance The Foreign Exchange Management Act (FEMA) outlines a series of mandatory compliance obligations for entities engaged in foreign exchange transactions. These cover various activities such as foreign direct investment (FDI), overseas direct investment (ODI), export/import of goods and services, and inward or outward remittances. FEMA and RBI Compliances: Core Reporting Requirements RequirementApplicable FormsTimelineRegulating AuthorityFDI ReportingFC-GPR, FC-TRS30–60 daysRBIOverseas InvestmentForm FC On... --- - Published: 2025-05-15 - Modified: 2025-07-21 - URL: https://treelife.in/legal/convertible-debentures-in-india/ - Categories: Legal - Tags: CCDs, compulsory convertible debentures, compulsory convertible debentures india, convertible debentures, convertible debentures in india, convertible debentures meaning, fully convertible debentures, optionally convertible debentures, what is convertible debentures Introduction to Convertible Debentures What Are Convertible Debentures? Convertible debentures are financial instruments issued by companies that start as debt but offer the unique option to convert into equity shares after a specified period or under certain conditions. Essentially, they are hybrid securities combining the features of both debt and equity. The holder receives fixed interest payments like traditional debentures, but also gains the potential benefit of owning shares in the company by converting the debentures into equity. This dual nature provides investors with a safety net of fixed returns while also offering the upside of participating in the company's growth through equity conversion. The conversion terms, including the price and ratio, are predefined at issuance, ensuring transparency and clarity for investors. Convertible Debentures Meaning and Their Role in Corporate Finance In corporate finance, convertible debentures serve as a strategic tool for companies looking to raise capital without immediate dilution of ownership. They allow firms to secure debt financing with the promise of future equity conversion, providing flexibility in managing capital structure and balancing debt-equity ratios. For investors, convertible debentures present a compelling option to earn steady interest income coupled with the possibility of capital appreciation. They are particularly attractive in scenarios where investors seek lower risk than direct equity investment but want exposure to potential upside. By issuing convertible debentures, companies can often access funding at lower interest rates compared to non-convertible debt, reflecting the added value of the conversion option. This feature makes convertible debentures an important instrument for growth-oriented businesses and startups aiming to optimize their financing costs while preserving long-term equity capital. Understanding the Basics: Convertible Debentures Explained How Convertible Debentures Work Convertible debentures are essentially debt instruments that give the holder an option to convert their debentures into equity shares of the issuing company, usually after a predetermined period. When an investor purchases a convertible debenture, they lend money to the company and receive regular fixed interest payments, similar to traditional debentures. However, unlike regular debentures, convertible debentures come with a built-in option allowing investors to convert their debt into equity shares at a specified conversion price and ratio. This conversion feature provides flexibility. If the company's equity performs well, investors can convert their debentures into shares and benefit from capital appreciation. Conversely, if the share price does not perform favorably, investors may choose to hold onto the debentures, earning fixed interest until maturity. Difference Between Debentures and Shares The key difference between debentures and shares lies in their nature and rights: Debentures represent a loan made by investors to the company. Debenture holders are creditors and have a fixed income through interest payments. They do not have voting rights or ownership in the company unless they convert their debentures into shares. Shares, on the other hand, represent ownership in the company. Shareholders have voting rights and can participate in the company’s profits through dividends and capital gains. However, shares come with higher risk, as returns depend on the company's performance. Convertible debentures blend these characteristics by starting as debt and potentially transforming into equity, giving investors the best of both worlds. Fixed Interest vs Potential Equity Upside A defining feature of convertible debentures is their combination of fixed income and equity participation potential: Fixed Interest: Until conversion, debenture holders receive fixed periodic interest payments, providing a steady income stream regardless of company performance. Potential Equity Upside: Upon conversion, investors gain equity shares, enabling them to benefit from the company’s growth and share price appreciation. Types of Convertible Debentures in India Fully Convertible Debentures (FCDs) Definition: Fully Convertible Debentures (FCDs) are debt instruments that can be entirely converted into equity shares of the issuing company after a specified period or upon meeting certain conditions. Unlike partly convertible debentures, the entire principal amount converts into shares, eliminating the debt component post-conversion. Conversion Mechanics: At the time of issuance, the conversion ratio and conversion price are fixed. Upon maturity or at the investor’s option (based on the terms), FCD holders convert their debentures fully into equity shares. This process increases the company's share capital as the debt portion is completely converted. Impact on Company Equity:Issuing FCDs leads to dilution of existing shareholders' equity since new shares are issued upon conversion. However, it improves the company’s debt-equity ratio by replacing debt with equity, enhancing the company's financial stability and creditworthiness. Legal Reference: The issuance and conversion of FCDs are governed by the provisions of the Companies Act, 2013, particularly those related to the issuance of debentures and allotment of shares. Compliance with SEBI (Issue and Listing of Debt Securities) Regulations is also essential for listed companies or public offerings of FCDs. Partly Convertible Debentures (PCDs) Definition: Partly Convertible Debentures (PCDs) are hybrid instruments where only a portion of the debenture amount is convertible into equity shares, while the remaining portion continues as a debt instrument until maturity. Portion Convertible vs Non-Convertible: For example, a PCD might be structured so that 60% of the amount is convertible into shares, and 40% remains as a non-convertible debenture that pays fixed interest and is redeemed in cash at maturity. Benefits for Issuers and Investors: PCDs allow companies to raise capital while controlling equity dilution. For investors, PCDs provide a balance of fixed income (from the non-convertible portion) and the opportunity for capital gains via conversion of the convertible portion. Legal Reference: PCDs are subject to the regulations under the Companies Act, 2013, applicable to debentures. The convertible portion is further governed by regulations pertaining to the allotment of shares, and if listed, SEBI regulations related to debt securities apply to the non-convertible portion. Compulsory Convertible Debentures (CCDs) Meaning and Mandatory Conversion:Compulsory Convertible Debentures (CCDs) are debentures that must be converted into equity shares after a predetermined period. Unlike optionally convertible debentures, the conversion is not at the investor’s discretion but mandated by the terms of issuance. Regulatory Context in India: In India, CCDs are popular in startup funding and venture capital deals because they comply with regulatory requirements related to foreign... --- > Among the most prominent in the Indian context are Convertible Notes and Compulsorily Convertible Debentures (CCDs). Both instruments allow startups to raise capital initially structured as debt, with provisions for conversion into equity at a later stage. - Published: 2025-05-15 - Modified: 2025-08-07 - URL: https://treelife.in/legal/convertible-notes-cn-vs-compulsorily-convertible-debentures-ccd-in-india/ - Categories: Legal - Tags: CN Vs CCD, Convertible Notes (CN) vs Compulsorily Convertible Debentures (CCD) in India, Convertible Notes vs Compulsorily Convertible Debentures, Differences between Convertible Notes and Compulsorily Convertible Debentures READ FULL PDF Introduction: Navigating Early-Stage Funding in India The Indian startup ecosystem is a vibrant and rapidly evolving landscape, recognized globally as the third largest. For entrepreneurs navigating this environment, securing timely and appropriate funding is paramount, yet often challenging. Early-stage ventures, frequently characterized by innovative ideas but limited revenue streams and uncertain valuations, face hurdles in attracting capital. Investors, similarly, grapple with assessing risk and potential returns in these nascent businesses. In response to these challenges, hybrid financial instruments have gained significant traction, offering flexible solutions that bridge the gap between traditional debt and equity financing. Among the most prominent in the Indian context are Convertible Notes and Compulsorily Convertible Debentures (CCDs). Both instruments allow startups to raise capital initially structured as debt, with provisions for conversion into equity at a later stage. This structure can be particularly advantageous when determining a precise company valuation is difficult or premature. The increasing adoption of these instruments signifies a maturing Indian venture ecosystem, adapting sophisticated financing structures seen globally, yet embedding them within India's specific regulatory framework. The government's formal introduction of Convertible Notes specifically for startups further underscores this trend. However, Convertible Notes and CCDs are distinct instruments with crucial differences in their legal nature, eligibility requirements, conversion mechanisms, procedural formalities, and tax implications. Choosing between them is not merely a financial calculation but a strategic decision impacting founder control, investor rights, risk allocation, and regulatory compliance, especially concerning foreign investment governed by the Foreign Exchange Management Act (FEMA). This analysis aims to provide a clear, expert comparison of Convertible Notes and Compulsorily Convertible Debentures within the Indian legal and business environment, equipping founders and investors with the knowledge to make informed decisions. Understanding Convertible Notes(CN) : The Flexible Friend? Meaning A Convertible Note is formally defined as an instrument issued by a startup company acknowledging the receipt of money initially as debt. Crucially, it is repayable at the option of the holder (the investor), or convertible into a specified number of equity shares of the issuing company within a defined period, upon the occurrence of specified events or as per agreed terms. Key characteristics define the Convertible Note in India: Initial Debt Structure: The instrument begins its life as a debt obligation of the company. Investor Optionality: This is a defining feature. The decision to convert the note into equity or demand repayment at maturity (or upon other specified events) rests solely with the investor. The company cannot force conversion if the investor prefers repayment. Strict Eligibility Criteria: Issuer: Only a 'Startup Company' recognized by the Department for Promotion of Industry and Internal Trade (DPIIT) under the Startup India initiative can issue Convertible Notes1. To qualify as a DPIIT-recognized startup, a private limited company generally must be incorporated or registered for less than 10 years, have an annual turnover not exceeding INR 100 crore in any financial year since incorporation, and be working towards innovation, development, or improvement of products/processes/services, or possess a scalable business model with high potential for employment or wealth creation. Investment Amount: Each investor must invest a minimum amount of INR 25 Lakhs (or its equivalent) in a single tranche. This minimum threshold effectively acts as a filter, potentially excluding smaller angel investors or traditional friends-and-family rounds from utilising this specific instrument. It suggests a regulatory inclination towards channeling Convertible Note usage for slightly larger, perhaps more formalized, early-stage investments involving sophisticated angels or funds. Tenure: The maximum period within which the Convertible Note must be either repaid or converted into equity shares is 10 years from the date of issue. Notably, a recent amendment to the Foreign Exchange Management (Non-debt Instruments) Rules, 2019 (FEMA NDI Rules) extended the tenure for foreign investments via Convertible Notes from 5 years to 10 years. This alignment resolves a previous inconsistency between domestic regulations (Companies Act/Deposit Rules) and foreign investment rules, significantly enhancing the practicality and predictability of Convertible Notes for startups raising capital from both domestic and foreign investors in the same round. Valuation Deferral: One of the primary attractions of Convertible Notes is the ability to postpone the often contentious process of establishing a precise company valuation until a later, typically larger, funding round (like a Series A). Valuation is instead handled implicitly through mechanisms negotiated in the Convertible Note agreement, such as: Conversion Discount: A percentage reduction on the share price determined in the subsequent qualified financing round. Valuation Cap: A ceiling on the company valuation used for conversion, ensuring early investors receive a potentially lower effective price per share if the next round valuation is very high. Valuation Floor: A minimum valuation for conversion, protecting the company from excessive dilution if the next round valuation is unexpectedly low. Simpler Process: Compared to equity rounds or even CCD issuance, the process for issuing Convertible Notes is generally perceived as faster, involving less complex documentation and potentially lower legal costs. This speed is often critical for early-stage companies needing quick capital infusion. Understanding Compulsorily Convertible Debentures (CCDs): The Path to Equity Meaning Compulsorily Convertible Debentures (CCDs) are hybrid financial instruments issued by a company initially as debt, but which must mandatorily convert into equity shares of the company after a predetermined period or upon the occurrence of specified trigger events. Key features of CCDs: Hybrid Nature: CCDs embody a transition – they begin as debt instruments but are destined to become equity. Because conversion is certain, they are often referred to as "deferred equity instruments". Mandatory Conversion: Unlike Convertible Notes, there is no option for the investor to seek repayment of the principal amount instead of conversion. The conversion into equity shares is compulsory as per the terms agreed upon at issuance. This mandatory feature signals a stronger, pre-agreed commitment to eventual equity ownership from both the company and the investor compared to the optionality inherent in Convertible Notes. Broader Issuer Eligibility: Any private limited company incorporated under the Companies Act, 2013, can issue CCDs, regardless of whether it is recognized as a startup by... --- > The debt market at IFSC showed impressive growth in FY 2024-25, with total issuances reaching USD 6.99 billion across 57 listings, underscoring its growing role as a global capital hub. - Published: 2025-05-15 - Modified: 2025-07-22 - URL: https://treelife.in/reports/the-debt-market-at-ifsc/ - Categories: Reports - Tags: Debt Market at GIFT City IFSC, Debt Market at IFSC DOWNLOAD PDF The International Financial Services Centre (IFSC) at GIFT City has emerged as a pivotal platform for Indian financial institutions to tap into international capital markets. The debt market at IFSC showed impressive growth in FY 2024-25, with total issuances reaching USD 6. 99 billion across 57 listings, underscoring its growing role as a global capital hub. This article provides an in-depth analysis of the trends, sectoral shifts, and emerging patterns shaping the debt landscape at IFSC. Market Size and Composition Cumulative Issuance:In FY 2024-25, GIFT IFSC facilitated 57 debt issuances, totaling USD 6. 99 billion, reflecting its strong presence in the global debt market. Although issuance volumes fluctuated throughout the year, the total issuance volume for the year remained significant, reinforcing IFSC’s role as a key player in global capital flow. Sectoral Distribution:The Non-Banking Financial Companies (NBFCs) dominated the market, accounting for 50 issuances totaling USD 5. 23 billion. This highlights IFSC’s critical role in facilitating funding for Indian financial institutions, especially NBFCs, that are leveraging international capital markets to fuel their growth. Issuer Profile:The top five issuers by volume in FY 2024-25 were: Muthoot Finance: USD 650 million (9. 3% of total issuance) Continuum Trinethra: USD 650 million (9. 3% of total issuance) State Bank of India: USD 500 million (7. 2% of total issuance) REC Limited: USD 500 million (7. 2% of total issuance) Shriram Finance: USD 500 million (7. 2% of total issuance) Together, these five issuers accounted for nearly 40% of the total market volume, highlighting some concentration within the market. Instrument Analysis Fixed vs Floating Rate:The market exhibited a clear preference for fixed-rate bonds, which made up 95% of the total value, with 22 issuances totaling USD 6. 66 billion. In contrast, floating-rate bonds represented only 5% of the total value, with 35 issuances totaling USD 329. 2 million. This reflects a demand for larger, more stable issuances through fixed-rate bonds, while floating-rate bonds cater to more specialized, smaller funding needs. Coupon Rates: Fixed Rate Bonds: Coupon rates ranged from 3. 75% to 9. 7%, with an average rate of 6. 63%. Floating Rate Bonds: Predominantly SOFR-linked, with spreads ranging from SOFR + 0. 95% to SOFR + 5. 0%, averaging SOFR + 4. 43%. Sustainable Finance: ESG-Focused Instruments Sustainable finance has gained significant traction at IFSC. In FY 2024-25, ESG-focused instruments accounted for 39. 4% of the total debt issuance, with green bonds leading the charge. Green Bonds: USD 1. 455 billion (20. 8% of total issuance) Social Bonds: USD 850 million (12. 1% of total issuance) Sustainable Bonds: USD 450 million (6. 43% of total issuance) This shift towards sustainable finance underlines the increasing interest in ESG investments and positions IFSC as a hub for sustainable capital flow. Market Infrastructure & Participants The trustee services market at IFSC was split between Indian and foreign trustees. Key participants include global entities such as BNY Mellon, Deutsche Bank, and Citicorp International, along with Indian trustees like Catalyst Trusteeship. Foreign Trustees: 17 issuances totaling USD 5. 415 billion. Indian Trustees: 36 issuances totaling USD 1. 15 billion. This distribution shows the global and local participation in the IFSC debt market, further enhancing its accessibility to a wide range of institutional investors. Credit Rating Trends Out of the 57 issuances, 45. 6% were rated, representing 89. 5% of the total issuance volume. The ratings were predominantly high yield (BB+ and below), with 20 issuances amounting to USD 4. 63 billion, while investment-grade bonds (BBB- and above) accounted for 6 issuances, totaling USD 1. 63 billion. Key Takeaways Growth in Debt Issuances: IFSC continues to grow as a critical hub for global debt markets, with USD 6. 99 billion raised in FY 2024-25. Sectoral Leadership: NBFCs dominated the issuances, reflecting IFSC's role in connecting Indian financial institutions to international markets. Rise of ESG: Sustainable finance gained momentum, with 39. 4% of total issuances being ESG-focused instruments. Instrument Preferences: Fixed-rate bonds remain dominant, while floating-rate bonds cater to specialized funding needs. Credit Rating Mix: A balanced mix of high-yield and investment-grade bonds demonstrates the market's attractiveness to a wide range of investors. Explore Opportunities at IFSC The debt market at IFSC is evolving rapidly, offering substantial opportunities for investors and issuers alike. To navigate this dynamic market and explore tailored solutions for your business, connect with Treelife’s expert team. --- - Published: 2025-05-14 - Modified: 2025-07-22 - URL: https://treelife.in/foreign-trade/export-import-bank-of-india-support-for-exporters/ - Categories: Foreign Trade - Tags: EXIM Bank, EXIM Bank for Exporters, EXIM Bank Support for Exporters, Export Import Bank of India, Export-Import Bank of India EXIM Bank Overview: Empowering Indian Exporters What is EXIM Bank? The Export-Import Bank of India (EXIM Bank) is a specialized financial institution that provides comprehensive support to Indian exporters. Established in 1982 under the Export-Import Bank of India Act, it plays a crucial role in promoting and financing the international trade activities of Indian businesses. EXIM Bank’s services are pivotal in enhancing India's export capabilities and facilitating access to global markets. By providing financing solutions, risk mitigation tools, and market access support, EXIM Bank ensures that Indian exporters are well-equipped to compete in the global marketplace. It operates with a clear mandate to contribute to the country’s economic growth by boosting the export sector. History and Establishment of the Export-Import Bank of India EXIM Bank was established by an Act of Parliament with the primary aim of promoting and financing India’s foreign trade. It was created to address the growing need for export financing and provide Indian businesses with a platform to enhance their international competitiveness. Over the years, EXIM Bank has evolved into a central institution for export promotion and trade financing, with a wide range of products and services to support businesses across various sectors. Since its inception, EXIM Bank has been instrumental in advancing India’s export interests by facilitating access to capital, offering guidance on export markets, and strengthening the overall trade ecosystem. Mandate and Objectives of EXIM Bank EXIM Bank’s mandate revolves around providing financial assistance to Indian exporters and enhancing India’s position in international markets. Its key objectives include: Providing Export Financing: EXIM Bank offers export credit, both pre-shipment and post-shipment, to enable exporters to fulfill international orders. Risk Mitigation: The bank helps businesses manage risks related to currency fluctuations, payment delays, and political instability through various risk mitigation products like insurance and hedging. Promoting Market Access: EXIM Bank actively supports Indian exporters in finding new global markets and expanding their reach through market research and promotional activities. Facilitating Trade Finance: The bank offers trade finance solutions that help businesses manage their working capital needs and streamline international transactions. How EXIM Bank Supports the International Growth of Indian Exporters EXIM Bank is committed to empowering Indian exporters by providing not just financial support, but also comprehensive services to help businesses thrive in international markets. Here’s how EXIM Bank makes a difference: Financing Solutions for Exporters: By offering various forms of export credit, EXIM Bank ensures that exporters can meet production requirements and fulfill international contracts without worrying about cash flow constraints. Support for Sector-Specific Exports: EXIM Bank understands the unique needs of different industries and offers customized financing and risk mitigation products that are suited to sectors such as textiles, pharmaceuticals, engineering, and more. Export Credit Guarantee: The bank partners with the Export Credit Guarantee Corporation (ECGC) to provide export insurance, safeguarding exporters against payment defaults and non-receipt of funds from foreign buyers. Market Expansion Support: Through its various market access schemes, EXIM Bank helps businesses explore new international markets by providing market research, connecting exporters with potential overseas clients, and promoting Indian products globally. By facilitating easy access to credit, offering specialized financial products, and enhancing market outreach, EXIM Bank has become a key enabler for businesses seeking to expand their export operations. Key Services Offered by EXIM Bank EXIM Bank offers a wide array of services that cater to the diverse needs of exporters, from financing solutions to risk management tools. Below are the key services offered by EXIM Bank: Export Credit and Financing EXIM Bank provides both pre-shipment and post-shipment credit to help exporters manage their working capital needs and ensure smooth operations in international trade. Pre-shipment Credit: This financing is provided to exporters to meet the costs of production and shipment before goods are exported. EXIM Bank offers flexible repayment terms and competitive interest rates. Post-shipment Credit: After the shipment of goods, EXIM Bank provides credit to help exporters manage the gap between shipment and payment receipt from foreign buyers. This type of credit ensures exporters can continue their business operations without financial interruptions. Trade Finance Trade finance solutions offered by EXIM Bank help exporters manage their transactions with foreign buyers. This includes various instruments such as: Letters of Credit (LC): EXIM Bank facilitates LCs, which guarantee payment to the exporter upon fulfilling agreed terms. This reduces payment risks and ensures safe transactions. Documentary Collections: EXIM Bank also offers services for handling document-based transactions, providing exporters with secure methods to ensure payment upon the shipment of goods. Working Capital Finance: The bank provides short-term working capital financing to help exporters fulfill orders without the burden of liquidity constraints. These trade finance solutions enable exporters to safeguard their international transactions, mitigate risks, and ensure timely payments. Foreign Exchange Solutions Given the global nature of exports, managing foreign exchange (forex) is crucial. EXIM Bank offers a range of forex-related services that help exporters manage currency fluctuations, ensuring the stability of their financial operations: Hedging Options: EXIM Bank provides hedging solutions to protect exporters against adverse movements in foreign exchange rates. These products help exporters lock in favorable exchange rates and avoid unexpected losses due to currency volatility. Foreign Currency Accounts: EXIM Bank allows exporters to maintain foreign currency accounts, making it easier for them to handle payments from overseas customers and settle transactions in different currencies. Market Access Assistance To succeed in international markets, exporters need to understand market dynamics, consumer preferences, and regulations. EXIM Bank offers market access assistance to help Indian businesses expand their global footprint: Market Research and Development: EXIM Bank conducts research to help exporters identify potential markets and opportunities, offering insights into customer demand, competitor analysis, and market trends. Export Promotion Programs: EXIM Bank facilitates the participation of Indian exporters in international trade fairs, exhibitions, and buyer-seller meets, helping them showcase their products and connect with international buyers. Trade Delegations and B2B Meetings: EXIM Bank organizes trade missions and business-to-business (B2B) meetings, facilitating direct interaction between Indian exporters and foreign buyers to secure deals and explore new market... --- - Published: 2025-05-14 - Modified: 2025-07-21 - URL: https://treelife.in/foreign-trade/navigating-trade-barriers-and-tariffs-on-indian-exports/ - Categories: Foreign Trade - Tags: Non-Tariff Barriers, NTB, Tariffs, Trade Barriers Understanding Trade Barriers and Their Impact on Indian Exports India, one of the world’s largest economies, faces several hurdles in its export market due to trade barriers. These barriers can significantly impact the country's global trade relationships and hinder the growth potential of Indian exports. In this section, we’ll break down what trade barriers are, their impact on India’s export market, and why addressing these issues is critical for the continued growth of Indian exports. What Are Trade Barriers? Trade barriers refer to any restrictions or obstacles that make it difficult or expensive for countries to exchange goods and services. These barriers can be classified into two primary categories: Tariffs: These are taxes or duties imposed on imported goods. Tariffs make foreign goods more expensive, thereby encouraging consumers to buy locally produced products. For Indian exporters, tariffs can increase the cost of their products in foreign markets, which can make them less competitive. Non-Tariff Barriers (NTBs): These are regulatory or procedural barriers other than tariffs. NTBs include quotas, licensing requirements, technical standards, and customs procedures. While NTBs are often less visible than tariffs, they can have an even greater impact on trade, especially for developing countries like India. Overview of Tariffs and Non-Tariff Barriers (NTBs) Tariffs: The Traditional Barrier Tariffs have traditionally been one of the most common barriers to international trade. Countries, including India, face tariff charges when exporting goods to nations that want to protect their domestic industries. For example, the U. S. has implemented tariffs on various Indian goods, especially in sectors like electronics, textiles, and machinery. These tariffs can significantly increase the cost of Indian exports, affecting competitiveness in the global market. In the case of India, tariffs on key export products such as textiles, chemicals, and engineering goods in markets like the U. S. and EU have made it harder for Indian exporters to maintain their market share. In 2020, the U. S. imposed an additional 27% tariff on Indian electronics, affecting India's competitiveness in the electronics sector. Non-Tariff Barriers (NTBs): The Invisible Challenge While tariffs are a more direct form of trade restriction, NTBs are often more complex and harder to overcome. NTBs can range from technical barriers, such as stringent product standards and regulations, to logistical hurdles like customs procedures and delays. For instance, the European Union imposes strict food safety regulations that require Indian exporters to meet high hygiene standards, creating significant challenges in the agri-business sector. Other NTBs include quotas limiting the volume of goods that can be exported to certain countries, and licensing requirements that make it difficult for exporters to enter foreign markets. Sanitary and phytosanitary measures, often seen in the agricultural sector, can also limit the export of Indian food products. These barriers can create additional costs, delays, and complexity in the trade process. How They Impact India’s Export Market and Global Trade Economic Impact on Indian Exports Both tariffs and NTBs play a critical role in shaping India’s global export landscape. According to recent statistics, India’s total export value was $323 billion in 2022. However, India’s growth potential is constrained by the prevalence of these trade barriers. Tariffs increase the overall cost of Indian goods, making them less appealing in foreign markets, while NTBs can complicate access to lucrative markets, especially in the EU and U. S. For example, India's textile industry, which is one of the largest export sectors, is often hampered by non-tariff barriers such as quotas and stringent quality controls in the EU. Similarly, Indian agricultural products face obstacles due to sanitary and phytosanitary standards in developed countries. Impact on Exporter Profitability For Indian exporters, these barriers can reduce profitability by raising costs and limiting market access. When tariffs or NTBs are imposed, Indian companies may need to either absorb the increased costs or pass them on to consumers, which can affect sales and market share. For instance, higher tariffs on India's electronic goods exports to the U. S. have forced Indian manufacturers to find new markets or reduce their pricing strategy to remain competitive. Importance of Addressing These Barriers for Growth in Indian Exports To ensure continued growth in Indian exports, it’s crucial to address both tariffs and NTBs. As global trade continues to evolve, India must find strategies to navigate these barriers effectively. Here are some key reasons why addressing these issues is essential for the future of India’s export growth: 1. Boosting Market Access Reducing or eliminating tariffs will allow Indian goods to enter global markets at more competitive prices. Free Trade Agreements (FTAs) and trade policy reforms can help eliminate NTBs, improving access to key markets such as the U. S. , EU, and China. 2. Enhancing Export Competitiveness By addressing regulatory hurdles, India can enhance the competitiveness of its export sectors, especially in high-value industries like pharmaceuticals, engineering, and IT services. 3. Strengthening Trade Relations Reducing trade barriers strengthens India’s position in international trade negotiations. India’s ability to negotiate more favorable terms with key trade partners can have long-term benefits for the economy. 4. Expanding into New Markets By mitigating trade barriers, Indian exporters can explore new markets in Africa, Southeast Asia, and Latin America, reducing dependence on traditional trading partners. Global Tariffs and How to Overcome Them Global tariffs have a significant impact on India’s export performance. They not only increase costs but also limit market access, hindering Indian businesses from reaching their full potential in the international market. This section will explore what global tariffs are, their effects on Indian exports, and strategies to navigate them. What Are Global Tariffs? Definition of Tariffs in International Trade Tariffs are taxes imposed by governments on imported goods. They are used as a tool to protect domestic industries from foreign competition and to generate government revenue. For Indian exporters, tariffs increase the cost of their goods in foreign markets, making them less competitive compared to products from countries with lower or no tariffs. Types of Tariffs: Ad Valorem, Specific Tariffs, Compound Tariffs Ad Valorem Tariffs: A percentage of the value... --- - Published: 2025-05-14 - Modified: 2025-05-14 - URL: https://treelife.in/news/sebi-extends-deadline-for-nism-certification-compliance-for-aif-managers/ - Categories: News SEBI has extended the deadline for compliance with the certification requirement for the key investment team of AIF Managers. This extension now sets a revised deadline of July 31, 2025, providing additional time for AIFs to fulfill the NISM certification requirement, initially due by May 9, 2025. Impact on Existing AIFs This extension ensures more flexibility for the AIF industry, helping them align with SEBI’s Regulations without compromising compliance standards. The certification is essential for the key personnel of AIF Managers and aims to enhance industry professionalism and investor protection. Next Steps: AIFs that are yet to meet the certification requirement must ensure compliance by July 31, 2025. The updated certification requirement affects all AIFs, including schemes launched prior to May 2024 and those pending approval. Announcement by NISM for Category Specific Exams for AIF Managers on May 1, 2025 In a related development, NISM has announced the introduction of separate certification exams for AIF Managers, set to begin on May 1, 2025. These exams will be tailored to specific AIF categories (i. e. , Category I / II AIFs and Category III AIFs) covering the distinct regulatory guidelines and operational nuances of each category. However, it’s important to note that SEBI has not provided any updates regarding this new certification framework in its latest circular dated May 13, 2025. As such, the timeline for mandatory compliance with these new exams remains unclear. Have Questions? Let’s connect at dhairya. c@treelife. in for a discussion! --- - Published: 2025-05-14 - Modified: 2025-05-14 - URL: https://treelife.in/news/ifsca-set-to-streamline-ancillary-and-techfin-services-framework/ - Categories: News The International Financial Services Centres Authority (IFSCA) has taken a significant step towards consolidating the Ancillary Services Framework (2021) and TechFin Framework (2022) into a single, unified framework. We summarize the key points to note in the draft IFSCA (TechFin and Ancillary Services) Regulations, 2025 below: 1) New Permissible Activities Proposed to be Added: Ancillary Services: Actuarial Services Business Process Outsourcing (BPO) Customer Care Support Human Resource and Payroll Processing Insolvency and Liquidation Support Services Knowledge Process Outsourcing (KPO) Risk Management and Mitigation Supply Chain Management Support Tech-Fin Services: Cloud Computing Services Data Centre Operations ERP Systems Implementation of eGRC Software Platforms IT services linked to the payment ecosystem 2) Strengthening Governance: The appointment of a Principal Officer (PO) and Compliance Officer (CO) is now mandated in the draft regulations. The educational criteria for these roles have also been clearly specified, emphasizing qualifications like CA, CS, CMA, CFA, or relevant postgraduate degrees in finance, law, or business. 3) Service Recipient: It is important to note that the requirement of Service Recipient being: An entity in GIFT-IFSC Any BFSI entity located outside India for the purpose of making arrangements for delivery of financial services specified by IFSCA Indian entities solely for setting up offices in IFSC... still remains unchanged. Link to the Consultation Paper:Consultation Paper on draft IFSCA (TechFin and Ancillary Services) Regulations, 2025 Comments are invited on the Consultation Paper until June 1st, 2025. Write to us at dhairya. c@treelife. in for discussion. --- - Published: 2025-05-14 - Modified: 2025-05-14 - URL: https://treelife.in/quick-takes/income-received-in-gift-ifsc-taxed-in-india-an-anomaly-worth-noticing/ - Categories: Quick Takes Section 5(1)(a) of the Income-tax Act, 1961 provides that the total income of a resident includes all income received or deemed to be received in India, regardless of its source. This seems straightforward until you factor in GIFT IFSC. GIFT IFSC, though geographically within India, is positioned as a distinct financial jurisdiction offering global financial services. One of its advantages is allowing foreign entities to open bank accounts with IBUs (IFSC Banking Units) irrespective of whether they have any presence in India or not. This raises an interesting point: If a foreign entity receives funds into a foreign currency bank account at an IBU in GIFT IFSC, is this considered "income received in India" for tax purposes merely because the bank account is technically within Indian territory? While such receipts may be taxable under Indian law, they are not taxed in full by default. The actual tax liability would depend on the nature of the income, as the provisions related to deductions and exemptions under the relevant head of income would apply. This issue gains significance when you consider the growing scale of banking activity within GIFT IFSC. As of December 2024 (as per IFSCA bulletin for Oct to Dec 2024), IBUs have facilitated opening of nearly 2,600 bank accounts for foreign entities and close to 6,900 accounts for non-resident individuals (including NRIs), with aggregate deposits crossing USD 4. 98 billion. This volume highlights the practical importance of clarity on the tax treatment of receipts in said bank accounts. Write to us at dhairya. c@treelife. in for discussion. --- - Published: 2025-05-14 - Modified: 2025-05-14 - URL: https://treelife.in/news/sebis-new-consultation-paper-a-step-towards-flexible-co-investment-models-for-aifs/ - Categories: News The recent consultation paper by SEBI proposing changes to the co-investment framework for Category I & II intends to allow creation of a Co-Investment Vehicle (CIV), which would allow AIFs to offer co-investment opportunities to accredited investors in unlisted securities via a separate scheme under the AIF structure. Key Takeaways: A separate CIV scheme will need to be launched for each co-investment in an investee company, with prior intimation to SEBI, in accordance with the shelf PPM for CIV schemes filed with SEBI at the time of registration. Each CIV will require separate bank accounts, demat accounts, and a PAN. CIVs will have the flexibility to invest up to 100% of their corpus in a single portfolio. Co-investment opportunities can only be provided to investors of the AIF who are Accredited Investors. Exit timing to be co-terminus for the AIF and CIV. While the proposed changes could lead to more agile and competitive AIFs, it’s crucial that the regulatory framework remains streamlined and doesn't introduce unnecessary complexity into the co-investment process. In light of this, SEBI has invited industry feedback on the consultation paper. Reach out at priya. k@treelife. in for a discussion. --- - Published: 2025-05-14 - Modified: 2025-07-21 - URL: https://treelife.in/startups/foreign-direct-investment-fdi-in-indias-manufacturing-sector/ - Categories: Startups India's manufacturing sector presents numerous opportunities for foreign investors, especially with the simplification of the Foreign Direct Investment (FDI) process. If you’re planning to enter India’s manufacturing space, here’s a comprehensive guide to help you navigate the process. 1. FDI Limit and Route India has opened up its manufacturing sector to foreign investment, permitting up to 100% FDI through the automatic route. This means that foreign investors do not require prior approval from the Government of India or the Reserve Bank of India (RBI). This liberalization significantly simplifies market entry for foreign entities looking to set up operations in India. 2. Modes of Manufacturing Foreign investors have two primary options for setting up manufacturing operations in India: Self-Owned Manufacturing Operations: Investors can choose to establish their own manufacturing facilities within India. Contract Manufacturing: Investors can also opt for contract manufacturing, which can be structured either on a Principal-to-Principal or Principal-to-Agent basis. This option allows manufacturers to collaborate with Indian entities under legally enforceable contracts. Important Note: Contract manufacturing must take place within India to qualify under the automatic route. Offshore manufacturing arrangements do not fall under this framework. 3. Sales and Distribution Channels Once a foreign manufacturer sets up operations in India, they can sell their products through various channels, including wholesale, retail, and e-commerce platforms. No additional approvals are required for the downstream retailing of products manufactured in India. This enables seamless integration of operations — from manufacturing to final consumer sales — all under a single investment framework. 4. Prohibited Sectors While the manufacturing sector is largely open to FDI, there are certain restrictions: Prohibited Sectors: FDI is not allowed in the manufacturing of cigars, cheroots, cigarillos, and cigarettes of tobacco or tobacco substitutes. 5. Compliance Snapshot Despite the liberalized entry process, investors must still adhere to the following compliance requirements: Sectoral Caps: Compliance with applicable sectoral caps is mandatory, which may limit the amount of foreign investment in certain sectors. Security and Regulatory Conditions: Companies must comply with India’s security regulations and other applicable regulatory conditions. Timely Reporting: Investors must report the issuance of equity instruments to the RBI by filing Form FC-GPR (Foreign Currency-Gross Provisional Report), ensuring timely submission of the prescribed filings. 6. Final Thoughts India’s manufacturing sector offers a plug-and-play FDI environment, making it an attractive destination for global players and domestic manufacturers alike. The liberalized FDI regime, combined with flexible manufacturing options and ease of market access, ensures that foreign investors can enter the market with minimal regulatory hurdles. --- - Published: 2025-05-14 - Modified: 2025-07-21 - URL: https://treelife.in/news/nism-introduces-separate-certification-exams-for-aif-managers/ - Categories: News The National Institute of Securities Markets (NISM) has announced a significant change in the certification framework for Alternative Investment Fund (AIF) managers. Effective May 1, 2025, the existing unified NISM Series-XIX-C certification will be split into two distinct exams, tailored to the specific AIF categories: 1) NISM Series-XIX-D: Meant for key investment personnel managing Category I and II AIFs, this exam will cover topics such as regulatory guidelines, fund management practices, investment valuation norms, taxation, and other category-specific aspects. 2) NISM Series-XIX-E: Targeted at those managing Category III AIFs, it will focus on similar themes, but customized to reflect the distinctive features and regulatory nuances of Category III funds. The new exams are stated to be available starting May 1, 2025. However, while NISM has clarified the structure and launch of these certifications, uncertainty remains regarding the exact timelines for mandatory compliance. The Securities and Exchange Board of India (SEBI) has yet to issue a formal notification specifying when these exams will become compulsory for AIF managers. With the May 9, 2025 deadline approaching, it will be interesting to see how this transition unfolds. Write to us at priya. k@treelife. in if you need assistance here. --- - Published: 2025-05-14 - Modified: 2025-07-16 - URL: https://treelife.in/quick-takes/ma-in-startups-dont-overlook-the-gst-angle/ - Categories: Quick Takes Mergers & Acquisitions are transformative for startups—but beneath the surface lies a complex layer often overlooked: GST compliance. Whether you're a founder preparing for exit, an investor funding scale-ups, or a financial advisor structuring the deal—understanding GST in M&A is critical for protecting value and ensuring seamless integration. Here’s what you need to know: Transfer of Input Tax Credit (ITC): Unutilized ITC can be a significant cash asset—if transferred correctly. Section 18(3) of the CGST Act and Rule 41 enable ITC transfer via Form GST ITC-02. In demergers, ITC must be apportioned based on asset value ratios (as per Circular 133/03/2020-GST). Missteps here can lead to ITC loss or scrutiny. Structure Determines GST Impact Transfer as a Going Concern (TOGC) – Exempt from GST. But only if all business elements are transferred and documented. Slump Sale – May trigger GST depending on asset type. Demerger – Requires meticulous ITC allocation across states/entities to avoid credit reversals and future disputes. GST Registration & Post-Deal Liabilities Under Section 87 of the CGST Act, GST registration and liabilities need realignment post-amalgamation. Any oversight here can carry risks or dual tax exposures. Investor/Advisor Checklist Before Closing a Deal Conduct detailed GST due diligence: returns, liabilities, pending litigations. Certify ITC transfers with CA validation. Align GST compliance with deal structure early—don’t leave it for post-closing. Plan cash flows factoring in credit reversals or tax costs. The GST layer in M&A isn’t just about compliance—it’s about preserving deal value, ensuring smooth transitions, and protecting stakeholder interests. Have you encountered GST-related roadblocks during a merger, acquisition, or demerger? Let’s discuss in the comments—or connect if you’re planning a transaction and want to future-proof your GST strategy. --- > To make your compliance journey smoother, we’ve created a monthly Compliance Calendar that highlights all the important statutory deadlines in one place. - Published: 2025-05-02 - Modified: 2025-05-02 - URL: https://treelife.in/calendar/compliance-calendar-may-2025/ - Categories: Calendar - Tags: compliance calendar, compliance calendar may 2025 SYNC WITH GOOGLE CALENDAR SYNC WITH APPLE CALENDAR Navigating India’s complex regulatory landscape can be a challenge for any business. Missed filings or delayed compliance can result in penalties, reputational risks, and operational disruptions. At Treelife, we understand how crucial timely compliance is—especially for startups and fast-scaling companies. To make your compliance journey smoother, we’ve created a monthly Compliance Calendar that highlights all the important statutory deadlines in one place. Whether it’s GST, TDS, STPI, SEZ, FEMA, or MCA filings, our calendar is tailored to help founders, CFOs, and compliance officers stay proactive and organized. What’s Inside the May 2025 Calendar? The May edition of our calendar includes key due dates for: GST Filings (GSTR-1, 3B, 5, 6, 7, 8, PMT-06, IFF, SRM-II) TDS/TCS Returns FEMA filings like ECB-2 MCA filings such as PAS-6 STPI and SEZ reporting SFT Form 61A Each date is carefully listed with its corresponding activity and is backed by notes to guide applicability (e. g. , turnover limits, return types, industry-specific filings). Add Events to Your Calendar – Automatically! To make this even easier, you can now subscribe to our Google Calendar and get automatic reminders for each compliance deadline. No more missed filings. No more last-minute chaos. Add to Google Calendar Stay organized, stay compliant – let the calendar do the tracking for you. Need Help With Compliance? At Treelife, we assist 1000+ startups and investors with comprehensive compliance management – from GST filings and MCA returns to STPI, SEZ, and FEMA advisory. Our expert legal and financial teams ensures you never miss a regulatory deadline while staying audit-ready year-round, we ensure: Zero penalty exposure On-time submissions Accurate reporting aligned with the latest updates Call: +91 22 6852 5768 | +91 99301 56000Email: support@treelife. inBook a meeting: https://calendly. com/consulttreelife  --- > This report provides an in-depth analysis of the complex relationship and subsequent crisis involving Gensol Engineering Ltd. (GEL), a publicly listed renewable energy and EPC, and BluSmart Mobility Pvt Ltd., a prominent electric vehicle ride-hailing service. - Published: 2025-05-02 - Modified: 2025-08-07 - URL: https://treelife.in/finance/the-gensol-blusmart-crisis/ - Categories: Finance - Tags: Gensol-BluSmart Crisis DOWNLOAD PDF Summary This report provides an in-depth analysis of the complex relationship and subsequent crisis involving Gensol Engineering Ltd. (GEL), a publicly listed renewable energy and EPC, and BluSmart Mobility Pvt Ltd. , a prominent electric vehicle ride-hailing service. It details their intertwined origins under common founders, the critical electric vehicle (EV) leasing arrangement that formed their operational backbone, and the sequence of events leading to Gensol's financial distress and regulatory intervention by the Securities and Exchange Board of India (SEBI). The report outlines SEBI's serious allegations of fund diversion, corporate governance failures, and market manipulation against Gensol's promoters, the Jaggi brothers. It presents a comprehensive overview of the issue, its timeline, current status, and broader implications for India's startup and EV ecosystem. The Gensol-BluSmart Nexus: A Symbiotic but Strained Relationship Shared Genesis: The Jaggi Brothers and Corporate Structure The roots of the Gensol-BluSmart relationship lie in their shared parentage. Gensol Engineering Ltd. was founded in 2012 by brothers Anmol Singh Jaggi and Puneet Singh Jaggi, initially establishing itself as an engineering, procurement, and construction (EPC) company focused on the solar energy sector1. A decade later, around 2018, the Jaggi brothers, sensing an opportunity in the nascent electric mobility space, conceived the idea for an EV-only ride-hailing service. This venture began life under the Gensol umbrella, incorporated as Gensol Mobility Private Limited in October 2018. It was rebranded as Blu-Smart Mobility Private Limited a year later, in 2019, with Punit Goyal joining the Jaggi brothers as a third co-founder. 2 This shared founding established deep operational and leadership connections from the outset. Anmol Singh Jaggi served as Chairman and Managing Director of the publicly listed Gensol Engineering while simultaneously being a co-founder of the private entity BluSmart. Puneet Singh Jaggi also held promoter and director roles within Gensol alongside his co-founder status at BluSmart. Even BluSmart's initial subsidiaries carried the Gensol branding before being renamed. This structure inherently blurred the lines between the interests of Gensol's public shareholders and the promoters' significant private stake in BluSmart. Decisions within Gensol regarding resource allocation, such as EV leasing terms or direct financial support, could directly influence the valuation and success of the privately held BluSmart. This raised questions about potential conflicts of interest and the true independence of transactions between the two entities, despite claims and audits suggesting they were conducted at arm's length. Gensol's annual reports continued to disclose significant related-party transactions with BluSmart entities, underscoring the ongoing financial entanglement. Although BluSmart maintained that Gensol held no direct equity stake, the influence exerted by the common promoters remained substantial. This arrangement, where public company resources could potentially be leveraged to build a private enterprise benefiting the same promoters, laid the groundwork for the governance challenges later highlighted by regulatory authorities. The EV Leasing Model: Operational and Financial Dependencies The core operational link between Gensol and BluSmart was a large-scale EV leasing arrangement. Gensol diversified into the EV leasing business, becoming a primary financier, owner, and lessor of electric vehicles specifically for BluSmart's ride-hailing fleet. This model was designed to allow BluSmart to scale rapidly with a relatively asset-light approach, avoiding the significant upfront capital expenditure required to purchase thousands of EVs. Gensol effectively took on the responsibility of procuring and owning the vehicles, offering them to BluSmart on a "pay-per-use" basis. This structure, however, created profound mutual dependencies and significant financial exposure for Gensol. Media reports indicated that Gensol's balance sheet was heavily utilized to finance BluSmart's expansion. In the fiscal year 2024 alone, Gensol reportedly spent over Rs 500 crore in supporting BluSmart. At one point, Gensol owned more than 5,000 vehicles out of BluSmart's total fleet of approximately 8,000, making it by far the largest fleet supplier. Consequently, BluSmart became Gensol's single biggest customer, establishing a critical reliance where the downfall of one could significantly impact the other. The inherent structure of this leasing model created a direct financial feedback loop. Gensol secured substantial loans, often from public financial institutions like the Indian Renewable Energy Development Agency (IREDA) and the Power Finance Corporation (PFC), specifically to purchase EVs destined for BluSmart's fleet3. BluSmart's operational revenue from its ride-hailing service was intended to cover the lease rental payments back to Gensol. Gensol, in turn, depended heavily on these lease payments as a primary income stream to service its own significant debt obligations incurred for the vehicle purchases. Any disruption in BluSmart's ability to generate revenue and make timely lease payments – due to factors like high cash burn or operational challenges – would directly impede Gensol's cash flow. This, as events later demonstrated, directly threatened Gensol's capacity to meet its own loan repayment commitments, creating a clear pathway for financial distress to spread from the private entity (BluSmart) to the public one (Gensol). Related Party Transactions and Early Warning Signs The close financial relationship was explicitly documented in Gensol's regulatory filings. The company's annual report for FY24 disclosed substantial contracts classified as related party transactions with BluSmart entities. Beyond the formal disclosures, signs of strain began to emerge. Reports indicated that BluSmart experienced delays in making its lease payments to Gensol, leading to a significant increase in Gensol's receivables. This put direct pressure on Gensol's working capital and balance sheet, as the company still needed to service the debt taken on for the EVs. Credit rating agency ICRA explicitly highlighted that delayed payments by BluSmart on its non-convertible debentures (NCDs) could adversely impact Gensol's own financial flexibility and capital-raising ability, demonstrating the recognized contagion risk. Internal concerns also existed prior to the public crisis. Arun Menon, who served as an independent director on Gensol's board, later revealed in his resignation letter that he had expressed growing concern internally, as early as mid-2024, about "the leveraging of GEL balance sheet to fund the capex of other business's" and questioned "the sustainability of servicing such high debt costs by GEL"4. These indicators suggested that the operational interdependencies were translating into tangible financial stress and potential governance weaknesses well before the full-blown... --- - Published: 2025-04-28 - Modified: 2025-07-21 - URL: https://treelife.in/foreign-trade/how-to-export-goods-from-india/ - Categories: Foreign Trade - Tags: Export from India, Export Goods from India, Exporting from India, Exporting Goods from India, How to Export Goods from India Overview: Exporting from India – An Introduction India has rapidly emerged as a global export hub, driven by its diverse manufacturing base, expanding MSME ecosystem, and proactive trade policies. Exporting goods from India offers immense growth potential for individuals, businesses, and start-ups looking to tap into global demand. Importance of Exports to India’s Economy Exports are a key engine of India's GDP, contributing over 20% of the national output as per Ministry of Commerce reports. They boost employment, foreign exchange reserves, and industrial output across sectors like textiles, pharmaceuticals, electronics, and agri-products. India exported goods worth USD 437 billion in FY 2023-24 (as per DGCI&S). Sectors such as engineering goods, petroleum, gems & jewellery, and organic chemicals lead the charge. Export growth enhances India’s global trade presence and reduces current account deficit. Growth of MSME and Startup Exports India’s MSMEs contribute nearly 45% to the country’s overall exports. With digital platforms and global B2B access, even small-scale exporters are reaching new markets. Startups recognized by DPIIT are leveraging government incentives and simplified compliance to export SaaS, D2C products, and niche innovations. Sectors such as handicrafts, organic food, apparel, and health-tech are gaining traction globally. Role of FTAs, DGFT, and AEO in Boosting Exports India has signed over 13 Free Trade Agreements (FTAs) with countries including UAE, ASEAN, Japan, and Australia. These agreements lower import duties for buyers and make Indian goods more competitive. DGFT (Directorate General of Foreign Trade) is the key regulatory body overseeing licensing, IEC registration, and export policies under India’s Foreign Trade Policy (FTP). AEO (Authorized Economic Operator) status is offered to compliant exporters, enabling: Faster customs clearance Reduced inspections Mutual recognition with trading partners under MRAs Who Can Export from India? Anyone with a valid Importer Exporter Code (IEC) can become an exporter from India. This includes: Individuals or sole proprietors MSMEs and small businesses Private Limited and LLP firms Public companies and partnership firms Startups recognized under DPIIT No minimum turnover threshold is required to begin exports. Even first-time exporters can ship products globally after IEC registration. Legal and Procedural Framework for Exporting from India The export process in India is governed by: Foreign Trade Policy issued by DGFT FEMA (Foreign Exchange Management Act) for forex compliance Customs Act and GST laws for classification, valuation, and tax treatment Product-specific regulations from bodies like FSSAI, BIS, and APEDA Exporters must also comply with documentation standards, licensing requirements (where applicable), and Rules of Origin (RoO) under FTAs. Step-by-Step Process to Export Goods from India (2025) Exporting from India involves a clear procedural framework that every new exporter must follow. From setting up a business to managing logistics, here’s a complete breakdown of how to start and scale your export business in India. 1. Set Up Your Export Business Before you can start shipping products abroad, you need to legally establish your business. Choose a Business Structure Sole Proprietorship Partnership Firm Private Limited Company LLP or Public Limited Company Choose a structure that supports international transactions and banking ease. Obtain a PAN and Open a Current Account PAN is mandatory for tax and regulatory compliance. Open a current account with a bank authorized to handle foreign exchange. Register on DGFT Portal Head to https://www. dgft. gov. in to register your business as an exporter. This is essential for tracking IEC and benefits under India's Foreign Trade Policy. 2. Apply for IEC (Importer Exporter Code) IEC is the gateway to international trade in India. Why IEC is Mandatory Required to clear customs, receive foreign currency, and access shipping documentation. No exports can take place without a valid IEC. IEC Registration Process Visit the DGFT portal Log in using Aadhaar or DSC Fill in business details, upload documents (PAN, bank certificate) Pay ₹500 application fee Receive IEC digitally Validity & Cost Valid for a lifetime unless surrendered or cancelled No renewal required 3. Register with Export Promotion Councils (EPCs) EPCs help exporters connect with buyers and claim incentives. Major EPCs in India: APEDA – Agri and processed food EEPC – Engineering goods FIEO – All goods and services Benefits of RCMC (Registration-Cum-Membership Certificate) Mandatory to claim benefits under RoDTEP, MEIS, or Advance Authorization schemes Helps in participating in international trade fairs and buyer-seller meets 4. Select Product and Target Market Product and market selection is critical to building a sustainable export strategy. Use HS Code for Product Identification HS Code (Harmonized System Code) classifies goods for international trade. Required for customs clearance and export documentation. Research Target Markets Use these tools: Indian Trade Portal – Check tariffs, NTMs, CoO requirements ITC Trade Map – Analyze export demand DGFT Market Access Initiatives Pro Tip: Focus on FTA partner countries to leverage zero or reduced import duties. 5. Understand Export Compliance & Regulations Every product must meet specific standards in both India and the importing country. Product-Specific Compliance FSSAI for food BIS for electronics Drug Controller for pharmaceuticals Packaging, Labeling & Marking Must comply with international regulations and buyer specs Includes HS code, weight, manufacturing date, expiry, barcode, etc. Pre-shipment Inspections Mandatory for certain categories like steel, chemicals, or as per buyer requirements. Sample Export Compliance Checklist Product CategoryRegulatorCompliance RequiredPackaged FoodFSSAILicense, shelf life, nutritional infoMedical DevicesCDSCORegistration, labeling, CE markElectronicsBISISI marking, RoHS, packaging specs 6. Find Buyers & Secure Orders To grow your export business, you need to build a pipeline of overseas buyers. Where to Find Buyers Online B2B platforms: Alibaba, IndiaMART, Global Sources Trade fairs and buyer-seller meets organized by EPCs Indian embassies and commercial wings abroad Secure Contracts with Clear Terms Include details on Incoterms (FOB, CIF, etc. ), delivery timelines, and penalties. Ensure clarity on payment method, dispute resolution, and quality specs. 7. Finalize Payment Terms & Currency Risk Managing payments and forex risk is key to a successful export business. Popular Payment Methods: Advance Payment Letter of Credit (LC) – Safer, bank-to-bank assurance Documents Against Payment (D/P) or Acceptance (D/A) Open Account (for trusted partners) Risk Mitigation Tools EXIM Bank financing ECGC (Export Credit Guarantee Corporation) protection against... --- - Published: 2025-04-25 - Modified: 2025-07-22 - URL: https://treelife.in/compliance/section-194t-new-tds-changes-for-partnership-firms-llps-effective-april-1-2025/ - Categories: Compliance - Tags: TDS Changes 1st April 2025, TDS Changes from 1st April 2025 The Finance Act, 2024, has brought in significant changes for partnership firms and Limited Liability Partnerships (LLPs) with the introduction of Section 194T. Effective from April 1, 2025, this provision mandates Tax Deducted at Source (TDS) on specific payments made by firms to their partners. This article delves into the intricacies of Section 194T, its implications, and the steps firms need to undertake to ensure compliance. Understanding Section 194T Prior to this amendment, payments such as salary, remuneration, commission, bonus, or interest made by a firm to its partners were not subject to TDS. Section 194T changes this by bringing these payments under the TDS ambit. Applicability: Entities Covered: All partnership firms and LLPs operating in India. Payments Subject to TDS: Salary Remuneration Commission Bonus Interest on capital or loans Exclusions: Drawings or capital withdrawals Profit share exempt under Section 10(2A) Reimbursements for business expenses TDS Rate and Threshold Rate: 10% Threshold: TDS is applicable if the aggregate payments to a partner exceed ₹20,000 in a financial year. Once this threshold is crossed, TDS applies to the entire amount, not just the excess over ₹20,000. Example: If a partner receives ₹25,000 as remuneration and ₹10,000 as interest in a financial year, totaling ₹35,000, TDS at 10% will be deducted on the entire ₹35,000, amounting to ₹3,500. Timing of TDS Deduction TDS under Section 194T must be deducted at the earlier of the following: Credit of the amount to the partner's account (including capital account) in the firm's books. Actual payment to the partner by cash, cheque, draft, or any other mode. Note: Even if the amount is credited to the partner's capital account without actual payment, it is deemed as payment for TDS purposes. Compliance Requirements To adhere to Section 194T, firms must: Obtain a TAN: If not already held, apply for a Tax Deduction and Collection Account Number. Update Partnership Deeds: Clearly define the nature and terms of partner payments to avoid ambiguities. Deduct and Deposit TDS Timely: Ensure TDS is deducted at the appropriate time and deposited within the stipulated deadlines to avoid interest and penalties. File Quarterly TDS Returns: Submit returns detailing TDS deductions and deposits as per the prescribed due dates. Issue TDS Certificates: Provide Form 16A to partners, enabling them to claim credit in their personal tax returns. Penalties for Non-Compliance Failure to comply with Section 194T can result in: Interest: 1% per month for failure to deduct TDS. 1. 5% per month for failure to deposit TDS after deduction. Late Filing Fee: ₹200 per day for non-filing of TDS returns, capped at the total TDS amount. Disallowance of Expenses: 30% of the expense may be disallowed under Section 40(a)(ia) for non-deduction of TDS. Practical Implications 1. Impact on Partner Withdrawals Firms, especially family-owned ones, often allow partners to withdraw funds based on cash flow needs. With Section 194T, such withdrawals, if classified as remuneration or interest, will attract TDS, necessitating a more structured approach to partner payments. 2. Cash Flow Management The requirement to deduct TDS on partner payments can impact the firm's cash flows. Firms need to plan their finances to ensure timely TDS deductions and deposits without hampering operational liquidity. 3. Clarification in Partnership Deeds Ambiguities in partnership deeds regarding the nature of payments can lead to misclassification and potential non-compliance. It's imperative to clearly define terms like salary, remuneration, and interest in the deed. No Exemptions or Lower TDS Rates Unlike other TDS provisions, partners cannot: Submit Form 15G or 15H to avoid TDS. Apply for a certificate under Section 197 for lower or nil TDS deduction. This underscores the mandatory nature of TDS under Section 194T, irrespective of the partner's total income or tax liability. Conclusion Section 194T marks a significant shift in the taxation landscape for partnership firms and LLPs. While it aims to enhance tax compliance and transparency, it also introduces additional compliance responsibilities for firms. Proactive measures, such as updating partnership deeds, structuring partner payments, and ensuring timely TDS deductions and filings, are essential to navigate this new regime effectively. Need Assistance? At Treelife, we specialize in guiding partnership firms and LLPs through complex tax landscapes. Our team of experts can assist you in: Assessing the applicability of Section 194T to your firm. Updating partnership deeds to align with the new provisions --- - Published: 2025-04-25 - Modified: 2025-08-28 - URL: https://treelife.in/foreign-trade/setting-up-an-import-business-in-india/ - Categories: Foreign Trade - Tags: Import Business, Import Business in India, Setting Up an Import Business in India - Steps & Process (2025), Starting Import Business in India Starting an Import Business in India (2025) India's import ecosystem in 2025 presents immense growth opportunities for entrepreneurs and global traders. With a population of over 1. 4 billion and a rising demand for foreign goods—ranging from electronics and industrial machinery to specialty foods and cosmetics—the country continues to be a major importer across diverse sectors. Whether you're planning to import niche products or cater to B2B supply chains, now is the right time to start an import export business in India. According to the Ministry of Commerce & Industry, India’s merchandise imports crossed USD 715 billion in FY 2023-24, and this number is expected to rise further with the strengthening of bilateral trade agreements and government-backed trade facilitation schemes. Why Now? India’s Import Opportunity in 2025 Fast digitization of import-clearance systems through ICEGATE & DGFT portals Simplified IEC registration process (Importer Exporter Code) online Emerging markets in Tier 2 and Tier 3 cities for consumer imports High demand in sectors like renewables, healthcare, EV components, and semiconductors These trends open the door for new businesses to participate in India’s global trade. However, the real differentiator for long-term success is compliance and proper documentation. Choosing the Right Business Structure for Imports in India Before you can begin importing goods into India, it's essential to establish the right legal entity. Your business structure determines your tax liability, compliance requirements, credibility with foreign suppliers, and access to government incentives. Choosing wisely can give your import venture the stability and flexibility it needs to grow. Types of Business Entities Allowed for Imports India allows multiple types of business structures for conducting import-export activities. Each has its pros and cons depending on the scale of operations, ownership, and regulatory preferences. Private Limited Company for Import Business A Private Limited Company (Pvt Ltd) is the most preferred structure for medium to large-scale importers due to its limited liability protection, corporate identity, and better credibility in global markets. Benefits: Eligible to apply for Importer Exporter Code (IEC) Perceived as more trustworthy by overseas suppliers Easy to raise funds or attract investors Compliant with FDI norms if foreign shareholders are involved Compliance: Must comply with the Companies Act, 2013. Includes mandatory audit, annual filings, and board governance. Ideal for: Entrepreneurs aiming to scale, import high-value goods, or build long-term trade partnerships. LLP for Import Export India A Limited Liability Partnership (LLP) combines the operational flexibility of a partnership with limited liability benefits, making it a cost-effective choice for small businesses. Benefits: Fewer compliance requirements compared to a Pvt Ltd Company Limited liability for partners Can obtain IEC and engage in international trade Suitable for professional import partnerships Compliance: Registered under the LLP Act, 2008. Requires annual filings but no mandatory statutory audit unless turnover exceeds threshold. Ideal for: Small import businesses run by two or more partners who want limited liability. Sole Proprietorship A Sole Proprietorship is the simplest structure to start an import business in India. It is unregistered and owned by one individual. Benefits: Quick and low-cost setup Basic registration (GST, IEC) sufficient Suitable for low-volume, low-risk imports Challenges: No legal distinction between owner and business Difficult to scale or raise external funding Ideal for: First-time importers testing the market or handling niche, small consignments. Partnership Firm A Registered Partnership Firm allows two or more individuals to jointly run an import business. Benefits: Shared capital and risk Can obtain IEC and conduct import-export operations Easier compliance than a company Challenges: Partners have unlimited liability Not preferred by banks and foreign vendors for large deals Ideal for: Small businesses with clear profit-sharing and limited international exposure. One Person Company (OPC) An OPC allows a single founder to operate with limited liability—bridging the gap between sole proprietorship and private limited company. Benefits: Single promoter ownership with corporate protection Eligible for IEC and import transactions Separate legal entity Challenges: Cannot have more than one shareholder Conversion to Pvt Ltd required after revenue or investment thresholds Ideal for: Solo entrepreneurs planning to scale gradually while limiting liability. Mandatory Registrations and Licenses for Importers in India (2025) Before you can legally begin importing goods into India, you must obtain a few critical registrations. These not only make your import business compliant with Indian laws but also unlock tax benefits, government support schemes, and faster customs clearance. Let’s look at the three key registrations every importer should know. IEC Registration (Importer Exporter Code) What is IEC? The Importer Exporter Code (IEC) is a unique 10-digit code issued by the Directorate General of Foreign Trade (DGFT). It is mandatory for any business or individual importing goods into India. Without IEC, customs authorities will not allow the clearance of imported goods, and banks won’t process international payments. How to Get Import Export Code in 2025 (Online Process) As of 2025, IEC registration is a 100% online process through the official DGFT portal: Steps: Visit DGFT portal and log in using your PAN (or register as a new user) Navigate to “Apply for IEC” under services Fill the online form and upload documents Pay the application fee (currently ₹500) Receive IEC digitally No physical documents are required, and the certificate is issued electronically. Documents Required for IEC Registration PAN Card (individual or business entity) Address proof (utility bill, rent agreement, or property papers) Cancelled cheque or bank certificate Email ID and mobile number linked to Aadhaar Digital Signature Certificate (DSC) for companies/LLPs GST Registration for Importers Applicability of GST for Importers Any importer engaged in commercial import of goods into India must obtain GST registration, regardless of turnover. This is because IGST (Integrated GST) is levied on imported goods at the time of customs clearance. Procedure to Obtain GST Registration for Import Business Register on the GST portal using PAN and mobile number Upload required documents and complete e-KYC GSTIN is issued Required Documents: PAN of business Aadhaar of proprietor/partners/directors Proof of business address Passport-sized photo Bank account details GST on Imported Goods IGST is charged on assessable value + customs duty IGST paid... --- - Published: 2025-04-25 - Modified: 2025-07-21 - URL: https://treelife.in/foreign-trade/licenses-and-permits-required-for-exporting-from-india/ - Categories: Foreign Trade - Tags: Licenses and Permits for Exporting from India, Licenses and Permits Required for Exporting from India, Licenses for Exporting from India, Permits for Exporting from India Navigating India's Export Compliance Landscape India as a Fast-Growing Global Export Powerhouse India has emerged as a major player in global trade, exporting to over 200 countries across sectors like pharmaceuticals, textiles, electronics, agricultural commodities, and engineered goods. With export volumes crossing USD 450 billion in FY 2023–24, India continues to strengthen its position as a preferred global sourcing destination. Factors like cost competitiveness, production-linked incentives (PLI), robust manufacturing hubs, and the push for “Make in India” have fueled a sharp rise in demand for Indian goods across international markets. Whether you're sourcing raw materials or finished products, importing from India offers strategic benefits in cost, quality, and diversity. Why Compliance is Critical for Importers of Indian Goods While India presents immense trade opportunities, importers must adhere to mandatory Indian export regulations to ensure seamless shipments and avoid customs delays, financial penalties, or legal issues. International buyers are required to ensure that their Indian supplier holds the necessary import-export permits and follows all compliance protocols. Failure to meet the required documentation or engage with non-compliant exporters can result in: Seizure or rejection of goods at customs Loss of import duty exemptions or input tax credit Delayed cargo clearance or legal scrutiny In an era of digitalized trade documentation and border security, regulatory compliance is not optional—it’s essential. Key Licenses Required to Import Goods from India To legally export goods out of India, the exporter must obtain the following key licenses and permits: Importer Exporter Code (IEC): A 10-digit registration issued by the Directorate General of Foreign Trade (DGFT), mandatory for all import-export transactions. GST Registration for Importers: Required to comply with India’s Goods and Services Tax framework and claim Input Tax Credit (ITC) on IGST levied at customs. Special Permits for Restricted Goods: These include export licenses, No Objection Certificates (NOCs), or approvals from sectoral regulators like the Ministry of Defence, CDSCO, or FSSAI, depending on the type of product. Importer Exporter Code (IEC): Your First Step to Importing from India What is the IEC Code and Why is it Mandatory? The Importer Exporter Code (IEC) is a 10-digit alphanumeric code issued by the Directorate General of Foreign Trade (DGFT) under the Ministry of Commerce, Government of India. It serves as a unique identification number for businesses involved in the import or export of goods and services from India. Whether you're an individual, partnership, LLP, or private limited company, obtaining an IEC code is mandatory for importing from India or sending goods abroad. Key Uses of the IEC Code: Required at the time of customs clearance of imported goods Mandatory for remittance of foreign currency through banks Essential to claim export incentives like RoDTEP, MEIS, and SEIS Enables compliance under GST, FEMA, and RBI regulations Note: Businesses engaged in import/export without a valid IEC may face penalties, delayed shipments, or inability to process payments through authorized banks. Why the IEC Code Matters for Global Importers If you're sourcing products from India, it's crucial to ensure that your Indian supplier has a valid IEC. Here's why: Customs Clearance: IEC is linked to the exporter’s identity and is validated by Indian Customs for every shipment. Banking & Forex Compliance: The IEC is used by banks when processing payments related to international trade. Eligibility for Government Benefits: Exporters without an IEC cannot avail of DGFT or Ministry of Commerce benefits like duty drawbacks or GST refunds. How to Get IEC Code for Importing from India Step-by-Step IEC Registration Process for Importers and Exporters Getting an IEC for Indian businesses is now a simple online process via the DGFT portal. Here's how: Step 1: Register on DGFT Portal Visit https://www. dgft. gov. in Create an account using your business email and mobile number Step 2: Fill Out Form ANF-2A Select “Apply for IEC” and complete Form ANF-2A digitally Step 3: Upload Required Documents PAN Card of the entity Address proof (Electricity Bill/Lease Agreement/Telephone Bill) Bank certificate or cancelled cheque for the business account Step 4: Pay the Application Fee Flat fee of INR 500 (payable via Net Banking, Credit/Debit Card, or UPI) Step 5: Receive the IEC Certificate Once verified, your IEC is issued digitally The IEC can be downloaded anytime from the DGFT portal GST Registration for Imports in India: What Importers Must Know Is GST Mandatory for Importing from India? Yes — GST registration is mandatory for importers operating in or through India. Any business or individual involved in importing goods into India, whether for resale, manufacturing, or re-export, must obtain a valid GSTIN (Goods and Services Tax Identification Number). Even if you're not physically based in India but import through an Indian entity or for re-export purposes, GST compliance is non-negotiable. Key GST Rules and Implications for Importers 1. IGST is Levied on All Imports Imports into India attract Integrated GST (IGST) under the reverse charge mechanism at the time of customs clearance. This tax is applied on the transaction value plus customs duty and other applicable charges. 2. Eligibility to Claim Input Tax Credit (ITC) Importers can claim Input Tax Credit on IGST paid at customs, which can be used to offset future tax liabilities under GST. This makes imports cost-efficient and reduces tax burden when properly documented. 3. GSTIN Required for Customs Clearance You must provide your GSTIN at the time of filing a Bill of Entry. Without GST registration, importers cannot: Clear goods through Indian Customs File GST returns (GSTR-1, GSTR-3B) Avail benefits under input tax system Documents Required for GST Registration (Importers) To register for GST as an importer in India, keep the following documents ready: Document TypePurposePAN of the business/entityUnique ID for tax registrationAadhaar of the proprietor/partnerIdentity verificationBusiness address proofUtility bill, rent agreement, etc. Bank account proofCancelled cheque or bank statementDigital Signature Certificate (DSC)Required for company/LLP registration For companies with foreign ownership or NRIs acting as importers, additional documentation such as passport copies and board resolutions may be required. Special Permits for Restricted or Regulated Goods What Are Restricted Goods for Export from India? Restricted goods... --- - Published: 2025-04-25 - Modified: 2025-07-21 - URL: https://treelife.in/foreign-trade/how-to-import-goods-from-india/ - Categories: Foreign Trade - Tags: How to Import Goods from India, Import from India, Importing Goods from India Introduction India has emerged as a major player in the global trade ecosystem, exporting goods and services to over 200 countries. For international businesses seeking to diversify their sourcing base, India offers a compelling mix of quality, scale, and affordability. If you're exploring how to import goods from India, understanding its trade potential and the import procedure India mandates is the first step to a smooth experience. India’s Global Export Position Ranked among the top 20 global exporters, India’s export industry is supported by robust manufacturing infrastructure, skilled labor, and a favorable regulatory environment. According to data from the Ministry of Commerce & Industry, India’s total merchandise exports crossed USD 450 billion in FY 2023–24, with strong performance across multiple sectors. Key Sectors Driving Indian Exports India's export portfolio spans a wide range of industries, with certain sectors being globally dominant. These include: Textiles & Apparel – India is the world’s second-largest exporter of textiles, known for cotton, silk, and handloom products. Pharmaceuticals – A global leader in generic drugs, India supplies over 20% of the world’s generic medicine exports. Engineering Goods & Machinery – From industrial equipment to automotive components, Indian engineering exports have consistently grown. Handicrafts & Home Décor – Indian artisanship is highly valued in global markets, especially in the US and Europe. Gems & Jewellery – India accounts for a significant share of global diamond cutting and gold jewellery exports. Agricultural Commodities – Spices, rice, tea, coffee, and seafood are major export items with high global demand. Step-by-Step Guide on Importing Products from India Planning to source goods from India? This step-by-step guide on importing products from India covers the essential phases—from product selection to compliance—so that your international trade operations start off on the right foot. 1. Identify the Right Product and Conduct Market Research Before entering into any trade agreement, the first critical step is to identify a viable product with global demand and minimal regulatory hurdles. Key Actions: Assess demand in your target market using tools like Google Trends, industry reports, or Amazon product research. Ensure compliance requirements like labeling, packaging, and safety certifications are clear in both India and your own country. Check trade restrictions or sanctions that may apply to certain categories (e. g. , pharma, defense equipment). Classify the product using the Harmonized System (HS) Code, a global classification system essential for customs, tariffs, and documentation. Knowing the HS Code also helps calculate duties and taxes before the goods leave Indian shores. 2. Choose a Reliable Indian Supplier India offers a large and diverse base of manufacturers and traders, but finding a dependable one is key to long-term success. Where to Find Suppliers: B2B Portals: Use trusted platforms like IndiaMART, TradeIndia, GlobalSources and others. Export Promotion Councils: Refer to EPCs like FIEO, AEPC, or GJEPC based on your product category. Trade Fairs & Expos: Attend international expos like the India International Trade Fair (IITF) or product-specific events. Direct Outreach: Source through regional manufacturing hubs (e. g. , Surat for textiles, Moradabad for handicrafts, Pune for engineering goods). Tips for Due Diligence: Request GST certificate, IEC (Importer Exporter Code), and business registration proof. Ask for samples or conduct third-party factory inspections via agencies like SGS or Bureau Veritas. Check references and export history. 3. Finalize the Import Contract Once you’ve shortlisted the supplier, it’s time to lock in the agreement with clarity on responsibilities, costs, and recourse. What to Include: Incoterms (e. g. , FOB, CIF, EXW): Clearly state who bears the cost and risk at each step. Quality and Inspection Clauses: Include details on who will inspect the goods and how quality disputes will be resolved. Arbitration & Jurisdiction: Define a dispute resolution mechanism that is neutral and enforceable. Payment Terms: Decide on method (advance, L/C, D/P) and currency. A well-drafted contract protects both parties and streamlines customs processes later. 4. Obtain Importer Registration & Licenses in Your Country Even though India doesn’t mandate an export license for most items, you must be licensed to import goods into your country. Key Requirements for Foreign Buyers: Import/Export Registration: Apply for an Importer Number, EORI (in EU), or Custom Bond (in US). Product-Specific Licenses: Depending on your jurisdiction, certain goods may require licenses (e. g. , food items, cosmetics, chemicals). Customs Broker Authorization: Many countries require appointing a licensed customs broker to handle clearance. Pro tip: Keep your business profile updated with local customs authorities for faster clearance and access to trade facilitation programs. By following these importing from India step by step instructions, businesses can significantly reduce risks, delays, and hidden costs in the international sourcing journey. Up next, we’ll break down the key documentation and customs processes in India. Key Documentation Required for Importing from India Proper documentation is the backbone of a successful international trade transaction. If you’re planning to source products from India, it’s critical to be aware of the documents required for import from India to avoid shipment delays, customs issues, and compliance penalties. Essential Import Documents from India DocumentPurpose & ImportanceCommercial InvoiceServes as the primary proof of sale. It outlines the transaction value, HS Code, product description, quantity, and terms of sale (e. g. , FOB, CIF). Packing ListDetails how the shipment is packed — including weight, dimensions, and number of packages. Helps customs verify the contents without opening each box. Bill of Lading / Airway BillIssued by the carrier as proof of shipment. It confirms receipt of goods and includes the origin, destination, and handling instructions. Certificate of Origin (COO)Certifies the country where the goods were manufactured. Often mandatory for availing tariff benefits under trade agreements. Inspection CertificateIssued by a recognized third-party quality agency (e. g. , SGS, Intertek). Confirms that the goods meet agreed standards or specifications. Insurance CertificateProvides proof that the goods are insured during transit. Required especially for CIF (Cost, Insurance & Freight) shipments. Import License (if applicable)Necessary for restricted or regulated goods such as electronics, chemicals, or defense-related products. Should be obtained in the importer’s country. Understanding the Indian Customs Clearance... --- - Published: 2025-04-25 - Modified: 2025-07-21 - URL: https://treelife.in/foreign-trade/steps-for-importing-under-free-trade-agreements-fta/ - Categories: Foreign Trade - Tags: Free Trade Agreements, FTA, Import under FTA, Importing Under Free Trade Agreements What is a Free Trade Agreement (FTA)? Understanding the Meaning of FTA A Free Trade Agreement (FTA) is a formal arrangement between two or more countries designed to facilitate trade by reducing or removing tariffs, customs duties, import quotas, and other trade restrictions. The core purpose of an FTA is to encourage smoother cross-border movement of goods and services, thereby strengthening economic cooperation and competitiveness among the signatory nations. In simpler terms, if you're wondering "what is FTA? ", it’s a trade pact that allows goods to flow freely or at reduced tax rates between participating countries — provided specific compliance conditions are met. Key Features of a Free Trade Agreement Tariff reduction or elimination on eligible goods Preferential market access for exporters and importers Rules of Origin (RoO) to prevent misuse of concessions Mutual recognition of standards and documentation Applicable across goods, services, and sometimes investments These agreements are especially beneficial to countries like India looking to integrate more effectively into global value chains. India FTA Overview: Building Global Trade Links India has strategically signed several Free Trade Agreements (FTAs), Comprehensive Economic Cooperation Agreements (CECAs), and Comprehensive Economic Partnership Agreements (CEPAs) with key global regions. These agreements help Indian businesses tap into international markets while also enabling low-cost imports of raw materials, components, and finished goods. Major FTAs Signed by India Here’s a quick snapshot of India’s key FTAs and partner regions: FTA NamePartner RegionCountries InvolvedASEAN-India FTASoutheast AsiaSingapore, Thailand, Vietnam, Indonesia, etc. India-South Korea CEPAEast AsiaSouth KoreaSAFTASouth Asian Free Trade AreaBangladesh, Nepal, Bhutan, Maldives, etc. India-Japan CEPAEast AsiaJapanIndia-UAE CEPA (2022)Middle EastUnited Arab Emirates Why FTAs Matter for Indian Importers and Exporters Reduced cost of sourcing due to lower import duties Greater market reach for Indian-made products Faster customs processing via preferential treatment Competitive edge in sectors like textiles, auto parts, electronics, and pharmaceuticals India’s FTA roadmap is a critical part of its foreign trade policy, and the Directorate General of Foreign Trade (DGFT) regularly updates guidelines on FTA usage, documentation, and compliance. Benefits of Importing Under FTAs Why FTAs Matter for Importers in India For Indian importers, leveraging Free Trade Agreements (FTAs) can lead to significant cost savings and strategic advantages. FTAs simplify cross-border transactions and enhance profitability, especially for businesses sourcing goods globally. Key Benefits of FTAs for Importers 1. Reduced or Zero Customs Duties One of the biggest benefits of FTAs for importers is the preferential tariff—allowing eligible goods to enter India at lower or nil customs duty, subject to compliance with Rules of Origin. 2. Preferential Market Access Importers can access exclusive product lines or quotas from FTA partner countries, ensuring priority treatment at customs and better access to high-demand global commodities. 3. Cost Competitiveness Lower landed costs make imported goods more competitive in the Indian market, helping importers maintain better profit margins or offer price advantages to customers. 4. Faster Customs Clearance Goods imported under FTAs often benefit from streamlined customs procedures. If you're an AEO-certified importer, you get even faster clearance and reduced inspections. 5. Diversified Sourcing at Lower Cost FTAs allow importers to tap into lower-cost markets like Vietnam, UAE, or ASEAN countries for sourcing raw materials, machinery, electronics, and more—optimizing supply chains. Strategic Edge for AEO Importers AEO (Authorized Economic Operator) importers enjoy expedited processing, fewer delays, and compliance facilitation under FTAs—amplifying the trade benefits. Step-by-Step Process to Import Under FTAs Importing goods into India under a Free Trade Agreement (FTA) offers significant cost advantages—but only if the correct procedures are followed. Here’s a detailed, practical guide to help importers navigate the process seamlessly from product eligibility to post-clearance compliance. Step 1: Identify the Relevant FTA and Check Product Eligibility The first step is to confirm whether the goods you intend to import are covered under any existing FTA signed by India. Each FTA has a detailed tariff schedule listing products eligible for reduced or zero customs duties. To determine eligibility: Refer to the official FTA tariff schedules, which are often available through India’s trade portals or notified by the Directorate General of Foreign Trade (DGFT). Ensure that your product’s Harmonized System (HS) Code matches the one listed in the agreement. You may also consult with a licensed customs broker to validate eligibility and duty rates under different FTAs. It's important to note that even small differences in HS Codes can impact whether or not a product qualifies for duty benefits. Step 2: Obtain a Valid Certificate of Origin (CoO) A Certificate of Origin is essential for claiming duty benefits under any FTA. It certifies that the goods originate from a partner country and meet the rules prescribed in the agreement. Key points to ensure: The CoO must be issued by a recognized and authorized agency in the exporting country. It should be in the format specified by the FTA—such as Form AI for the ASEAN-India agreement. The details in the CoO (product description, quantity, invoice numbers, etc. ) should match your import documentation exactly. An invalid or incorrectly issued CoO can lead to denial of preferential treatment at Indian customs. Step 3: Prepare Complete Import Documentation Once your product is eligible and the CoO is in hand, make sure all standard import documents are ready and accurate. These typically include: Commercial invoice Packing list Bill of lading or airway bill Importer Exporter Code (IEC) certificate Certificate of Origin Any applicable import license or regulatory approvals Having these documents in order ensures smooth customs processing and avoids unnecessary delays or rejections. Step 4: Declare FTA Claim During Customs Clearance When filing the Bill of Entry with Indian Customs, you must specifically declare your intent to claim benefits under a Free Trade Agreement. Steps involved: Submit the Bill of Entry through the ICEGATE portal or via a customs broker. Include the Certificate of Origin and supporting import documents. Ensure that the goods are correctly classified and the duty rate reflects the FTA benefit. If the FTA preference is not declared at this stage, you may lose the opportunity to claim duty concessions for... --- - Published: 2025-04-18 - Modified: 2025-07-22 - URL: https://treelife.in/news/ifsca-notifies-updated-regulations-for-capital-market-intermediaries-in-ifsc/ - Categories: News The International Financial Services Centres Authority (IFSCA) has officially notified the much-anticipated Capital Market Intermediaries (CMI) Regulations, 2025. These new regulations, approved in a recent Board meeting, represent a significant stride towards aligning the capital markets framework of India's International Financial Services Centres (IFSCs) with evolving global practices and the dynamic needs of investors. The updated CMI Regulations introduce several key changes designed to simplify operations, improve market access, and enhance regulatory clarity within GIFT IFSC, while also aligning with international standards. Key Changes Introduced in the New Regulations Expansion of Intermediary Categories: The revised regulations now specifically recognize and include ESG (Environmental, Social, and Governance) rating and data providers, as well as research entities, within the official list of recognized intermediaries. This expansion reflects the growing importance of sustainable finance and data-driven insights in global capital markets. Lower Net Worth Requirements: To facilitate easier entry for new players and smaller firms, IFSCA has reduced the minimum net worth requirements for certain intermediaries. This includes investment bankers, investment advisers, and credit rating agencies. This move is expected to democratize access to the IFSC market for a wider range of financial service providers. Defined Eligibility Criteria for Compliance Officers: The updated framework introduces clear definitions and prescribed qualifications for the crucial role of a Compliance Officer. This is aimed at strengthening the compliance function within intermediary firms and ensuring that qualified professionals oversee adherence to regulatory standards. These comprehensive changes are geared towards fostering a more efficient, accessible, and robust capital market ecosystem within the IFSC. By reducing barriers to entry and clearly defining roles and responsibilities, IFSCA aims to solidify GIFT IFSC's position as a globally competitive financial hub. Link to new regulations: https://ifsca. gov. in/Viewer? Path=Document%2FLegal%2Fifsca-cmi-regulations-202517042025051646. pdf&Title=IFSCA%20%28Capital%20Market%20Intermediaries%29%20Regulations%2C%202025&Date=17%2F04%2F2025 --- - Published: 2025-04-18 - Modified: 2025-07-21 - URL: https://treelife.in/compliance/liabilities-of-directors-under-the-companies-act-2013/ - Categories: Compliance - Tags: board of directors liability, criminal liability of directors, duties and liabilities of directors, duties and liabilities of directors in company law, liabilities of a director in a private limited company, liabilities of additional director, liabilities of company director, liabilities of director towards third party, liabilities of directors, liabilities of directors in company law, liabilities of directors of a limited company, liability of directors under companies act 2013, liability of independent director, personal liability of directors and officers, personal liability of directors companies act 2013, power duties and liabilities of directors, rights and liabilities of directors Introduction: Understanding Directors' Liabilities in India Directors play a critical role in shaping the governance and operations of a company, making decisions that affect both the company and its stakeholders. Under the Companies Act, 2013, (hereinafter “the Act”) the liabilities of directors have become more defined and stringent, creating a strong legal framework for ensuring accountability at the top levels of corporate leadership. In India, the liabilities of directors are categorized into civil and criminal liabilities, based on the nature of the offense or omission. These liabilities are enforced to promote ethical corporate governance and to ensure that directors act in the best interest of the company and its stakeholders, including employees, shareholders, and creditors. Understanding these duties and liabilities of directors is essential for preventing corporate misconduct, minimizing risks, and maintaining legal compliance. Why Directors Must Understand Their Legal Liabilities The Importance of Directors' Liabilities in Corporate Governance The Act provides a comprehensive framework detailing the liabilities of directors to ensure transparency and accountability in the corporate sector. Directors, as the decision-makers of a company, are responsible for ensuring that the company adheres to legal, financial, and regulatory obligations. A director’s failure to comply with these legal duties can lead to serious consequences, including personal liability, civil penalties, and even criminal prosecution. For companies, directors' knowledge of their liabilities is critical for preventing violations that could result in legal disputes or reputational damage. For independent and non-executive directors, who may not be involved in day-to-day operations, it is still crucial to be aware of the scope of their liability under the Act, as they too are accountable for company actions under certain conditions. These roles may shield them from day-to-day activities but do not absolve them from liability if they were complicit or negligent. Liabilities of Directors under the Companies Act, 2013: Key Points for Non-Executive and Independent Directors The Act includes specific provisions for independent directors and non-executive directors. Under Section 149(12), the liability of directors is restricted to instances where their actions or omissions were done with their knowledge and consent. This ensures that directors who do not engage in the operational decisions of the company but act in a governance capacity are protected unless they have neglected their duties. However, independent directors should be aware that their liability under the Act can still extend to situations where their involvement in decision-making is proven or where they fail to act on known issues. The Act also provides that directors can be held liable for acts of omission and commission that occur during their tenure, even if they were not directly involved in the act itself. This highlights the significance of diligence in understanding and monitoring the company’s operations. What Are the Liabilities of Directors Under the Companies Act, 2013? Directors hold pivotal roles in the governance and management of companies, but with these responsibilities come significant liabilities. The Act lays down clear guidelines for director liability, categorizing them into civil and criminal liabilities.   Civil Liabilities of Directors Under the Companies Act, 2013 Civil liability primarily involves financial penalties and obligations imposed on directors for failing to comply with certain provisions of the Act. These liabilities are not as severe as criminal penalties, but they can still have a significant impact on the company’s financial position and the director’s personal reputation. Common Civil Liabilities of Directors Failure to File Annual Returns and Financial Statements: Directors are required to ensure the timely filing of annual returns, financial statements, and other statutory documents with the Registrar of Companies (RoC) and Regional Director (RD). Failing to do so can result in penalties and fines under the Act. Breach of Fiduciary Duties: Directors' duties include acting in good faith, avoiding conflicts of interest, and acting in the best interest of the company. A breach of fiduciary duty can lead to civil penalties and personal liability. This includes failing to disclose personal interests, misusing company funds, or engaging in actions against the company's best interests. Non-Compliance with Corporate Governance Requirements: Non-compliance with provisions related to the board meetings, appointment of key managerial personnel (KMP), maintenance of statutory records, and other governance obligations can result in fines and penalties for directors. Criminal Liabilities of Directors Under the Companies Act, 2013 While civil liabilities can be financially burdensome, criminal liability is far more severe, involving potential imprisonment or larger fines. Directors found guilty of criminal activities under the Act can face serious legal consequences, including imprisonment for a maximum term of 10 years. Common Criminal Liabilities of Directors Fraud and Misrepresentation: Section 447 of the Act prescribes stringent penalties for fraud, including imprisonment for up to 10 years and fines up to three times the amount involved in the fraud. Fraud can include fraudulent financial reporting, misstatement of company financials, or misusing company assets. Violations of Securities Law (Insider Trading): Directors involved in insider trading or violating securities law can face criminal prosecution. Using non-public, material information to trade shares for personal gain is a serious offense under Indian securities laws. Ultra Vires Acts: Ultra vires acts refer to actions taken by directors that are beyond the powers granted by the company’s constitution, such as actions undertaken beyond their authorised scope. Directors approving or participating in ultra vires acts can face criminal charges. Non-Compliance with Orders of the Tribunal: If a director fails to comply with the orders or directions issued by regulatory bodies or tribunals such as the National Company Law Tribunal (NCLT), they may face criminal prosecution. Distinction Between Civil and Criminal Liabilities of Directors The Act distinctly separates civil and criminal liabilities for directors to reflect the severity and intent behind the non-compliance or misconduct: AspectCivil LiabilityCriminal LiabilityNature of PenaltyFinancial fines, penalties, or disgorgement of profitsImprisonment, heavy fines, or bothExamplesFailure to file documents, breach of fiduciary dutyFraud, insider trading, ultra vires actsIntent RequiredNegligence or failure to perform statutory dutiesFraudulent intent, misrepresentation, or unlawful actsSeverityLess severe, typically financial consequencesSevere, can lead to imprisonment or substantial financial penalties Liability to Third Parties Directors... --- - Published: 2025-04-16 - Modified: 2025-05-27 - URL: https://treelife.in/compliance/india-key-trade-schemes/ - Categories: Compliance - Tags: India Trade Schemes, India's Foreign Trade Policy, Indian Foreign Trade Policy, Indian Trade Schemes About India's Foreign Trade Policy India's Foreign Trade Policy (FTP) serves as the cornerstone for the nation's engagement with the global economy, outlining strategies and support mechanisms to enhance international trade. The current policy framework, FTP 2023, marks a significant shift, moving towards a dynamic, facilitation-focused approach that emphasizes remission of duties and taxes over direct incentives, aligning with global trade norms. With an ambitious goal of reaching USD 2 trillion in exports by 2030 , the policy leverages technology, collaboration, and targeted schemes to boost competitiveness. Key government schemes For businesses engaged in international trade, understanding the key government schemes available is crucial for optimizing costs, enhancing competitiveness, and navigating the regulatory landscape. This guide provides a detailed overview of the major schemes currently supporting exporters and importers in India. 1. Remission of Duties and Taxes on Exported Products (RoDTEP) What is it? The RoDTEP scheme is a flagship initiative designed to refund various embedded central, state, and local duties, taxes, and levies that are incurred during the manufacturing and distribution of exported goods but are not rebated through other mechanisms like GST refunds or Duty Drawback. Its core objective is to ensure that taxes are not exported, thereby achieving zero-rating for exports and making Indian products more price-competitive globally. Importantly, RoDTEP was structured to be compliant with World Trade Organization (WTO) rules, replacing the earlier Merchandise Exports from India Scheme (MEIS). Who is it for? This scheme targets exporters across various sectors who seek to enhance their global competitiveness by neutralizing the impact of domestic taxes embedded in their export products. Key Benefits: Reimburses previously unrefunded taxes like VAT on fuel used in transportation, electricity duty, and mandi tax. Refunds are issued as transferable duty credit e-scrips maintained in an electronic ledger. These e-scrips can be used to pay Basic Customs Duty (BCD) on imported goods or can be sold to other importers, providing liquidity. The entire process, from claim filing to credit issuance, is digitized and managed through the ICEGATE portal, ensuring transparency and faster processing. Who Can Apply? The scheme is open to all exporters holding a valid Importer-Exporter Code (IEC). It applies only to specified goods exported to specified markets, with rates notified in Appendix 4R of the Handbook of Procedures. Exporters must indicate their intention to claim RoDTEP benefits on the electronic shipping bill at the time of export. Certain categories are typically excluded, such as exports from Special Economic Zones (SEZs) or Export Oriented Units (EOUs) , although an interim extension of RoDTEP benefits to SEZ/EOU/Advance Authorisation exports until February 5, 2025, has been notified. 2. Advance Authorisation (AA) What is it? The Advance Authorisation scheme facilitates the duty-free import of inputs that are physically incorporated into the final export product, accounting for normal process wastage. It can also cover the duty-free import of fuel, oil, and catalysts consumed or utilized during the production process for exports. Who is it for? This scheme is designed for exporters who want to reduce the cost of production for goods manufactured specifically for export markets by eliminating duties on required inputs. Key Benefits: Provides exemption from paying Basic Customs Duty (BCD), Additional Customs Duty, Education Cess, Anti-dumping Duty, Countervailing Duty, Safeguard Duty, IGST, and Compensation Cess on the import of specified inputs. Significantly lowers the input cost for export manufacturing. Exporters with a consistent export history can opt for an Advance Authorisation for Annual Requirement, simplifying regular imports. FTP 2023 introduced reduced application fees for MSMEs under this scheme. Who Can Apply? The scheme is available to manufacturer exporters and merchant exporters who are tied to supporting manufacturers. Authorisations are typically issued based on Standard Input Output Norms (SION) or, where unavailable, ad-hoc norms based on self-declaration. Imports under AA are subject to an 'actual user' condition and a time-bound Export Obligation (EO), generally 18 months. 3. Duty Drawback Scheme (DBK) What is it? Administered by the Department of Revenue (CBIC) , the Duty Drawback scheme provides a refund of Customs and Central Excise duties that were paid on inputs (whether imported or indigenous) used in the manufacture of goods subsequently exported. Who is it for? This scheme is for exporters who have utilized duty-paid inputs in their export production process and seek reimbursement for those duties to ensure their products remain competitive internationally. Key Benefits: Refunds duties already paid on inputs, effectively neutralizing the tax component in the export cost. Enhances the price competitiveness of Indian goods in global markets. Drawback can be claimed either at pre-determined All Industry Rates (AIR) published in a schedule or through Brand Rate fixation based on actual duty incidence for specific products. Who Can Apply? Any exporter who manufactures and exports goods using inputs on which applicable Customs or Central Excise duties have been paid can apply for Duty Drawback. 4. Export Promotion Capital Goods (EPCG) Scheme What is it? The EPCG scheme aims to facilitate the import of capital goods (including machinery, equipment, components, computer systems, software integral to capital goods, spares, tools, moulds, etc. ) at zero customs duty. This is intended to enhance the production quality of goods and services, thereby boosting India's manufacturing capabilities and export competitiveness. Who is it for? This scheme targets manufacturer exporters, merchant exporters tied to supporting manufacturers, and service providers who need to import capital goods to upgrade their production or service delivery capabilities for the export market. Key Benefits: Exemption from Basic Customs Duty (BCD) on the import of eligible capital goods. Exemption from the Integrated Goods and Services Tax (IGST) and Compensation Cess on these imports. Permits indigenous sourcing of capital goods, offering a concessional Export Obligation in such cases. FTP 2023 provides for reduced application fees for MSMEs and reduced obligations for units under PM MITRA parks. Who Can Apply? Manufacturer exporters, merchant exporters tied to supporting manufacturers, and service providers (including sectors like hotels, travel operators, logistics, construction) are eligible. An EPCG license must be obtained from the DGFT prior to import. The scheme carries a... --- - Published: 2025-04-11 - Modified: 2025-06-13 - URL: https://treelife.in/news/ifsca-unveils-transition-framework-for-fund-managers-under-new-2025-regulations/ - Categories: News The International Financial Services Centres Authority (IFSCA) has introduced a comprehensive transition framework for Fund Management Entities (FMEs) operating within the IFSCs. Through its circular dated April 8, 2025, IFSCA has provided clarity on the shift to the new Fund Management Regulations, 2025, which supersede the 2022 regulations. This move aims to enhance regulatory clarity and offer greater operational flexibility for FMEs in the GIFT IFSC. The transition framework addresses key areas, particularly concerning the eligibility and process for launching schemes under the new regime. Key Clarifications and Updates Include Eligibility for launching schemes filed under the erstwhile regulations: FMEs can now launch schemes under the 2025 Regulations only if those schemes were formally "taken on record" by IFSCA during the six-month validity period stipulated under the 2022 Regulations (i. e. , ending on February 19, 2025). Furthermore, the FMEs must have received approval for an extension of the Private Placement Memorandum (PPM) validity, with the extended period concluding on or after February 19, 2025. Launching of schemes where the validity period of PPMs has expired: IFSCA has granted a one-time opportunity for FMEs to re-file PPMs for Venture Capital and Restricted Schemes whose validity had expired before February 19, 2025. This opportunity is subject to specific conditions: The PPM must be re-filed within three months. There should be no material changes in the PPM. A filing fee equivalent to 50% of the standard fee applicable for a fresh scheme under the 2025 regulations must be paid. Upon successful re-filing, IFSCA will take the revised PPM on record and grant an additional validity of six months, calculated from the date of its communication. Processing fee clarity in relation to PPMs whose validity had expired: FMEs are generally required to inform the Authority about any material changes from the information provided in the PPM, along with the payment of applicable processing fees. However, the framework clarifies that if any such filing becomes necessary due to an action by the Authority or a revision in the regulatory regime, the processing fee will not be applicable. These amendments underscore IFSCA's commitment to fostering innovation, improving the ease of doing business, and enhancing global competitiveness within GIFT IFSC’s asset management landscape. For entities considering setting up or restructuring their fund operations in the IFSC, understanding these updated guidelines is crucial for seamless transition and compliance. If you're considering setting up or restructuring your fund operations in IFSC, feel free to reach out at dhairya. c@treelife. in for a discussion --- - Published: 2025-04-11 - Modified: 2025-06-13 - URL: https://treelife.in/news/ifsca-revises-fee-structure-for-gift-ifsc-entities-effective-immediately/ - Categories: News The International Financial Services Centres Authority (IFSCA) has issued a revised fee circular, effective April 8, 2025, outlining updated fee structures for a variety of entities operating or intending to operate within the GIFT IFSC. These changes impact various regulatory frameworks and aim to align with the evolving landscape of financial services in the IFSC. Several key frameworks have seen revisions in their annual recurring fees: FinTech Entities: The recurring fees for FinTech entities are now linked to their annual revenues, ranging from Nil to USD 10,000. This revenue-based fee structure likely aims to provide a more scalable and equitable approach to fees for these innovative companies. Ancillary Service Providers: The flat annual recurring fee for Ancillary Service Providers has been revised from USD 1,000 to USD 1,500. Global/Regional Corporate Treasury Centres (GRCTCs): The flat annual recurring fee for GRCTCs has been revised from USD 12,500 to USD 25,000. This increase aligns with the enhanced regulatory oversight and benefits associated with operating as a GRCTC in the IFSC. A notable point of discussion arising from the circular is its "effective immediately" clause, dated April 8, 2025. This raises questions about whether the revised fees will apply to annual payments for the financial year 2024-25, which are typically due by April 30, 2025. This immediate implementation could have implications for entities that had budgeted based on the previous fee structure for the current financial year. The revised fee structure is a critical update for all entities in GIFT IFSC, requiring careful review to understand the impact on their operational costs. Link to circular: https://ifsca. gov. in/Viewer? Path=Document%2FLegal%2Fifsca-fee-circular-08apr202508042025073502. pdf&Title=Fee%20structure%20for%20the%20entities%20undertaking%20or%20intending%20to%20undertake%20permissible%20activities%20in%20IFSC%20or%20seeking%20guidance%20under%20the%20Informal%20Guidance%20Scheme&Date=08%2F04%2F2025 --- - Published: 2025-04-08 - Modified: 2025-06-13 - URL: https://treelife.in/news/ifsca-amends-corporate-governance-guidelines-for-gift-ifsc-finance-companies-exempts-treasury-centres/ - Categories: News The International Financial Services Centres Authority (IFSCA) has recently updated its Corporate Governance and Disclosure Requirements for finance companies operating within the Gujarat International Finance Tec-City (GIFT IFSC). In a significant development dated April 4, 2025, IFSCA carved out finance companies registered as Global/Regional Corporate Treasury Centres (GRCTCs) from the full applicability of its corporate governance framework, aiming to streamline regulations and enhance ease of doing business for these specialized entities. The original framework, designed to ensure transparency, accountability, and robust management practices, lays down comprehensive governance and disclosure standards. These standards cover critical areas such as "fit and proper" criteria for management, detailed risk management policies, compliance functions, comprehensive disclosure requirements, and robust grievance redressal mechanisms. Key Changes and Their Implications The recent amendment specifically exempts finance companies operating as GRCTCs from both Part I (Generic Guidelines) and Part II (Detailed Guidelines) of the comprehensive governance framework. This revision is particularly notable given the unique operational nature of treasury centers. Tailored Regulation for GRCTCs: By exempting GRCTCs from the general governance framework, IFSCA acknowledges their distinct role within corporate structures. GRCTCs primarily serve as in-house banks for multinational corporations, centralizing fund management, intercompany lending, and financial risk management for their group entities. Their operations, while critical, differ significantly from those of traditional finance companies offering services to external clients. Reduced Compliance Burden: This exclusion is expected to significantly reduce the compliance burden on GRCTCs. Instead of adhering to the broader governance requirements designed for diverse finance companies, GRCTCs will now operate under a more specific and streamlined regulatory framework tailored to their treasury functions. This will allow them to focus more on their core activities of optimizing group-wide liquidity, managing financial risks, and facilitating inter-company transactions. Encouraging GRCTC Setup in GIFT IFSC: The move is a strategic step by IFSCA to make GIFT IFSC an even more attractive destination for multinational corporations looking to set up their global or regional treasury operations. By offering a more agile regulatory environment for these specialized units, IFSCA aims to draw more such centers to the IFSC, bolstering its position as a competitive international financial hub. Continued Focus on Prudence: While exempting GRCTCs from the general governance framework, it's understood that IFSCA will continue to maintain appropriate prudential oversight to ensure the safety and soundness of these entities, in line with their specific risk profiles and activities. This reflects a balanced approach to regulation – one that is both facilitative and prudent. This proactive regulatory update by IFSCA demonstrates its commitment to adapting the regulatory landscape to the evolving needs of the global financial industry. It aims to foster a more business-friendly environment within GIFT IFSC, attracting specialized financial activities and contributing to the growth of India's international financial services ecosystem. For companies considering establishing a finance company or a corporate treasury center in GIFT City, understanding these updated guidelines is crucial for efficient setup and operations. Link to amendment circular: https://ifsca. gov. in/Viewer? Path=Document%2FLegal%2F02-guidelines-on-corporate-governance-and-disclosure-requirements-for-a-finance-company04042025061002. pdf&Title=Amendment%20to%20the%20%E2%80%98Guidelines%20on%20Corporate%20Governance%20and%20Disclosure%20Requirements%20for%20a%20Finance%20Company&Date=04%2F04%2F2025  If you’re considering setting up a finance company or treasury centre in GIFT City, feel free to reach out at dhairya. c@treelife. in for a discussion. --- - Published: 2025-04-08 - Modified: 2025-06-13 - URL: https://treelife.in/news/ifsca-updates-framework-for-global-regional-corporate-treasury-centres-grctcs-enhancing-regulations/ - Categories: News GET PDF The International Financial Services Centres Authority (IFSCA) has introduced a revised framework for Global/Regional Corporate Treasury Centres (GRCTCs) in GIFT IFSC, effective April 4, 2025. This updated framework brings several key regulatory enhancements and newly introduced provisions aimed at streamlining operations and strengthening oversight for these specialized financial entities. The revisions build upon the erstwhile framework dated June 25, 2021, incorporating changes across various aspects of GRCTC operations, from permissible activities to corporate governance. Key Changes in the Revised Framework: Expanded Permissible Activities: While the core permissible activities for GRCTCs largely remain the same, the revised framework includes key additions such as managing obligations of service recipients towards insurance and pension-related commitments, acting as a holding company, and managing relationships with financial institutions, investors, and counterparties. GRCTCs can also undertake any other treasury activity with prior intimation to the Authority. Broadened Definition of "Group Entity": The definition of "group entity" has been expanded. Previously, it covered holding, subsidiary, associate companies, branches, joint ventures, or subsidiaries of a holding company to which it is also a subsidiary. The revised framework now also includes entities sharing a common brand name. Mandatory Substance Requirements: A significant new inclusion is the mandate for GRCTCs to employ at least five qualified personnel, based in IFSC, to undertake permissible activities. This includes the Head of Treasury and the Compliance Officer, who must be appointed before the commencement of operations. This contrasts with the erstwhile framework, which had no specific mention of substance requirements for GRCTCs beyond those applicable to finance companies generally. Flexible Service Recipients: While the erstwhile framework restricted permissible activities to only Group Entities domiciled in jurisdictions not identified as 'High-Risk Jurisdictions subject to a Call for Action' by FATF, the revised framework allows services to be undertaken for: Group Entities; Group Entities of the Parent; and Branches of such Parent or Group Entities. GRCTCs must maintain an updated list of all service recipients and provide it to IFSCA when requested. Time Limit for Commencement of Operations: The revised framework now explicitly requires GRCTCs to begin operations within six months of obtaining registration , a provision not present in the erstwhile framework. Revised Fee Structure: While the application fee (USD 1,000) and registration fee (USD 12,500) remain unchanged, the annual recurring fee has been doubled from USD 12,500 to USD 25,000. Enhanced Currency of Operations: The previous framework permitted operations only in freely convertible foreign currency, with Indian Rupee (INR) allowed solely for administrative expenses via a separate INR SNRR account. Transactions in non-freely convertible currencies were only permitted if directly linked to underlying trade flows of Group Entities and settled in freely convertible currency. The revised framework allows operations in "Any of the Specified Foreign Currency(ies)" and permits transactions outside IFSC in currencies other than Specified Foreign Currency(ies). Additionally, GRCTCs may now open an SNRR account with an authorized dealer in India (outside IFSC) under Schedule 4 of FEMA Deposit Regulations, 2016, for business transactions outside IFSC. Specific Corporate Governance Policy: Unlike the erstwhile framework which required compliance with general IFSCA Guidelines on Corporate Governance and Disclosure Requirements for a Finance Company , the revised framework mandates GRCTCs to have a Board-approved corporate governance policy clearly documenting governance arrangements. It also requires a Board-approved policy for undertaking permissible activities, including approval processes, financial limits, oversight/audit procedures, and other relevant control mechanisms. Transition Period: Existing GRCTCs are required to align with the new framework within six months from the date of its notification. These changes reflect IFSCA's continuous efforts to evolve its regulatory landscape, making GIFT IFSC a more robust and attractive destination for corporate treasury operations while ensuring sound governance practices. --- - Published: 2025-04-07 - Modified: 2025-07-22 - URL: https://treelife.in/news/mca-proposes-to-broaden-fast-track-merger-framework-aims-to-ease-nclt-burden-and-boost-ease-of-doing-business/ - Categories: News In a significant move aligned with the Hon'ble Finance Minister's Budget 2025 speech, the Ministry of Corporate Affairs (MCA) has released a draft notification proposing to expand the scope of fast-track mergers under Section 233 of the Companies Act, 2013. This initiative is a strategic response to the substantial backlog of cases at the National Company Law Tribunal (NCLT), with over 8,000 cases under the Companies Act, 2013 pending as of September 2024, highlighting an urgent need to streamline corporate restructuring processes. The existing fast-track merger mechanism, while efficient, has had a limited scope. The proposed amendments aim to widen its applicability significantly, thereby reducing the burden on the NCLT and enhancing the overall ease of doing business in India. Key Proposed Inclusions under the Fast-Track Route The draft notification outlines several crucial categories of companies that will now be eligible for the fast-track merger process: Unlisted Companies with Limited Borrowings and No Default: Unlisted companies (excluding Section 8 companies, which are non-profit entities) will be able to pursue fast-track mergers if their borrowings are less than ₹50 crore and they have no record of default in repayment. This opens the fast-track route to a large segment of the corporate sector that currently has to undergo the longer NCLT-approved merger process. Holding Company with Unlisted Subsidiaries: The framework proposes to include mergers between a holding company (whether listed or unlisted) and one or more of its unlisted subsidiaries. Currently, only wholly-owned subsidiaries are explicitly covered under the fast-track route, and this expansion will provide greater flexibility for intra-group consolidations. Fellow Unlisted Subsidiaries within a Group: Mergers between unlisted subsidiaries of the same holding company (often referred to as "fellow subsidiaries") will also be brought under the fast-track mechanism. This is a pragmatic step to simplify internal group restructuring, which typically presents lower risks compared to mergers involving unrelated entities. Cross-Border Mergers with Indian WOS: The draft proposes to integrate the merger of a foreign holding company into its Indian Wholly-Owned Subsidiary (WOS) within Rule 25, making it a self-contained fast-track route for eligible cross-border mergers. This is particularly relevant in the context of the growing "reverse flip" trend, where Indian-founded startups, previously domiciled abroad, are looking to shift their base back to India for strategic or investor-driven reasons. This streamlined process will facilitate such re-domestication. Implications and Way Forward This expansion of the fast-track merger framework is a welcome development. It is expected to: Reduce Regulatory Friction: By allowing more categories of mergers to bypass the lengthy NCLT approval process, the amendments will significantly reduce the time, cost, and complexity associated with corporate reorganizations. Improve Ease of Doing Business: The streamlined process will contribute to a more efficient and attractive business environment in India, encouraging both domestic and international companies to consider mergers and acquisitions for growth and consolidation. Enable Faster Intra-Group Consolidations: The inclusion of holding-subsidiary and fellow subsidiary mergers will allow corporate groups to consolidate their entities more rapidly, leading to operational efficiencies and better resource allocation. The MCA has invited stakeholders to submit their comments on this draft notification until May 5, 2025, through its e-Consultation Module. This consultative approach ensures that the final framework is robust and addresses the practical needs of businesses. This proactive step by the MCA reinforces the government's commitment to judicial efficiency and creating a more agile and business-friendly regulatory landscape in India. Source on pending appeals: Parliament Response, DECEMBER 17, 2024 https://sansad. in/getFile/annex/266/AU2450_7V12kR. pdf? source=pqars#:~:text=As%20per%20information%20provided%20by,one%20President%20and%2062%20members --- - Published: 2025-04-07 - Modified: 2025-08-07 - URL: https://treelife.in/finance/the-role-of-bookkeeping-services-for-small-businesses/ - Categories: Finance - Tags: bookkeeping services for small business, bookkeeping services in india, bookkeeping services near me, mobile bookkeeping, online bookkeeping services, outsource bookkeeping services india, outsource bookkeeping services india., outsourced bookkeeping services What are Bookkeeping Services for Small Businesses? Definition and Overview Bookkeeping services for small businesses are professional services that manage the financial records of a company. These services include a wide range of tasks designed to keep track of the financial health of the business. Core activities in bookkeeping involve: Expense Tracking: Monitoring day-to-day expenditures, including office supplies, utilities, and operational costs. Payroll Management: Calculating wages, ensuring tax deductions, and handling employee compensation. Tax Reporting: Preparing financial data for tax filings, ensuring compliance with local tax laws and deadlines. Bookkeeping services for small businesses are essential for organizing financial data, helping owners and managers understand their financial position and make informed decisions. Whether a business is just starting out or is looking to streamline its financial operations, outsourcing these tasks can help save time and resources. Outsourced Bookkeeping Services India Many small businesses, particularly those with limited budgets, are turning to outsourced bookkeeping services in India. India offers affordable, high-quality bookkeeping solutions that can help businesses save significantly on labor costs. The skilled professionals in India have experience in handling complex accounting tasks and can ensure timely, accurate reporting for businesses worldwide. By opting for outsourced bookkeeping services, small business owners can delegate essential financial tasks to experts, allowing them to focus on growing their business. Outsourcing also provides access to the latest tools and technologies, ensuring that the bookkeeping process is streamlined and efficient. Outsourcing bookkeeping services allows businesses to stay organized, reduce administrative burdens, and improve their overall financial management practices. Whether you're a startup or an established business, outsourcing can be a game-changer in maintaining accurate financial records without the overhead costs of hiring an in-house accounting team. Benefits of Using Bookkeeping Services for Small Businesses Efficiency and Time Management For small business owners, time is one of the most valuable resources. By utilizing bookkeeping services for small business, you free up significant time that can be better spent on growing and scaling your business. When you outsource bookkeeping tasks, such as managing expenses, payroll, and tax reporting, you no longer have to worry about the day-to-day complexities of financial management. Instead, you can focus on core activities like sales, marketing, and customer relations. Outsource bookkeeping services India offers the added benefit of having professional teams handle your financial records, allowing you to concentrate on what matters most—running and expanding your business. This time savings also prevents burnout, as business owners no longer need to juggle financial tasks alongside their primary responsibilities. Accuracy and Compliance Accurate financial records are essential for making informed business decisions and ensuring compliance with tax regulations. By relying on bookkeeping services for small business, you ensure that your financial data is accurate and aligned with current tax laws and regulations. Professional bookkeepers can identify discrepancies, update records regularly, and maintain precise financial statements. Inaccurate bookkeeping can lead to costly errors, missed deadlines, or even tax audits. With expert bookkeeping services, you reduce the risk of such mistakes and the potential penalties that come with non-compliance. Furthermore, accurate financial data supports effective tax filing, helping you avoid issues with tax authorities and ensuring you take advantage of available deductions and credits. For small businesses, staying compliant with local, state, and federal tax laws is crucial. Outsourcing bookkeeping ensures that your business operates within legal boundaries and adheres to all applicable regulations, providing peace of mind to business owners. Cost-Effective Solutions for Small Businesses One of the key benefits of using outsourced bookkeeping services is the cost savings it provides. Hiring an in-house accounting team involves salaries, benefits, training, and infrastructure costs. In contrast, outsourcing to companies offering bookkeeping services in India allows small businesses to access high-quality accounting services at a fraction of the cost. Outsourcing bookkeeping is particularly advantageous for small businesses that need to manage finances efficiently without breaking the bank. Bookkeeping services in India offer competitive pricing while ensuring expertise and accuracy. This makes outsourcing an ideal solution for small businesses looking to maximize their financial resources while avoiding the overhead associated with hiring full-time staff. Moreover, outsourcing provides flexibility, allowing businesses to choose from a range of service packages that suit their specific needs, from basic bookkeeping to more advanced financial services. This flexibility ensures that businesses only pay for the services they require, making it a more cost-effective solution than maintaining an in-house team. Types of Bookkeeping Services for Small Businesses Bookkeeping is a foundational element of financial management for any small business. Accurate and up-to-date financial records not only ensure regulatory compliance but also support sound decision-making and business growth. Depending on the size, scale, and nature of operations, small businesses can choose from different types of bookkeeping services. These vary in complexity, delivery model, and the level of financial oversight provided. 1. Single-Entry Bookkeeping Single-entry bookkeeping is the simplest form of financial recordkeeping. It involves recording each transaction only once—typically as income or expense—without maintaining a complete ledger of assets and liabilities. This method is useful for small businesses that have a low volume of transactions and do not deal with inventory or credit sales. Why it works for small businesses: It’s easy to maintain, requires minimal accounting knowledge, and is cost-effective for businesses with straightforward income and expense tracking needs. Limitations: It does not provide a full picture of the business’s financial health and may not be sufficient for tax filing or securing funding. 2. Double-Entry Bookkeeping Double-entry bookkeeping is the standard method for most businesses that need a more structured and accurate financial system. In this system, every transaction affects at least two accounts—ensuring that the books are always balanced. Why it works for small businesses: It offers greater accuracy and helps generate financial statements such as balance sheets and profit and loss reports, which are essential for growth, compliance, and investor reporting. Limitations: Requires a basic understanding of accounting principles or support from a professional bookkeeper or accountant. 3. Virtual or Online Bookkeeping Online bookkeeping uses cloud-based platforms like Zoho Books, QuickBooks, Tally,... --- - Published: 2025-04-07 - Modified: 2025-08-07 - URL: https://treelife.in/finance/understanding-accounting-and-taxation/ - Categories: Finance - Tags: accounting and bookkeeping services, accounting and taxation, accounting and taxation services, accounting consultancy services, accounting services, accounting services in india, accounting services in mumbai, accounting taxation services, chartered accountant services, chartered accountant services online, finance and accounting services, online accounting services, outsourced accounting services india, small business accounting services, tax and accounting services, what is financial accounting advisory services Introduction to Accounting and Taxation Services Brief Overview of Accounting and Taxation Services Accounting and taxation services encompass essential business functions focused on recording financial transactions, preparing accurate financial statements, and ensuring compliance with taxation laws. These services form the backbone of financial management, enabling businesses—from startups to established enterprises—to track profitability, manage tax liabilities, and fulfill statutory obligations efficiently. Accounting services primarily involve bookkeeping, financial accounting, advisory, auditing, and consultancy. Taxation services cover tax planning, tax compliance, filing returns, and advisory on complex tax regulations. Collectively, these professional services help streamline business operations, reducing the risk of financial errors and penalties. Importance of Professional Finance and Accounting Services in Business Engaging professional finance and accounting services significantly enhances business stability and growth. Accurate financial accounting advisory services empower businesses with precise insights into their financial health, facilitating informed decision-making and strategic planning. Small businesses, in particular, benefit from specialized small business accounting services, helping them manage tight budgets, forecast cash flow, and minimize tax liabilities. Additionally, outsourced accounting services in India are growing rapidly, thanks to their cost-effectiveness and scalability, enabling businesses to access top-tier financial expertise without incurring high internal staffing costs. Professional chartered accountant services online are particularly advantageous due to their convenience and reliability. Online accounting services and accounting bookkeeping services offer flexibility, real-time updates, and simplified collaboration, essential for fast-paced businesses operating in competitive markets like Mumbai and other major Indian cities. What are Accounting and Taxation Services? Definition and Scope of Accounting and Taxation Services Accounting and taxation services refer to comprehensive financial management processes designed to record, analyze, report, and comply with the financial and tax obligations of businesses. Accounting services typically include bookkeeping, financial reporting, budget management, auditing, payroll processing, and financial accounting advisory services. Taxation services broadly involve tax planning, filing tax returns, GST compliance, income tax preparation, and advice on managing tax liabilities efficiently. The scope of accounting taxation services extends beyond basic financial management, integrating strategic financial advisory that enables businesses to optimize their fiscal responsibilities. These services help maintain regulatory compliance, facilitate transparency in financial reporting, and streamline operational effectiveness, significantly minimizing business risks. Importance of Accounting and Taxation Services for Businesses, Particularly Small Businesses For small businesses, professional accounting and taxation services are not merely beneficial—they're essential. Small business accounting services assist entrepreneurs in effectively tracking income, managing expenses, and preparing accurate financial statements, enabling informed decisions crucial to business survival and growth. Professional chartered accountant services online provide small businesses affordable access to skilled experts, enhancing efficiency without significant overhead costs. Utilizing outsourced accounting services in India is especially advantageous for small businesses seeking cost-effective yet comprehensive finance and accounting services. Online accounting services and accounting bookkeeping services offer flexible, scalable solutions that ensure regulatory compliance, reduce the risk of costly financial errors, and allow business owners to focus on their core operations and strategic growth. Accounting consultancy services are also vital, providing tailored financial strategies, insights, and recommendations essential for competitiveness. Types of Accounting Services in India 1. Financial Accounting Advisory Services What is Financial Accounting Advisory Services? Financial accounting advisory services involve providing expert guidance to businesses on their financial management practices, ensuring they maintain compliance with accounting standards and regulatory requirements. These services help businesses create accurate financial statements, manage budgets, forecast cash flows, and implement strategies to optimize financial performance. Key Responsibilities and Benefits of Financial Accounting Advisory Services The core responsibilities of financial accounting advisory services include: Strategic financial planning: Assisting businesses in setting financial goals, budgeting, and forecasting. Risk management: Identifying and mitigating financial risks, particularly in tax planning and compliance. Financial reporting: Ensuring the business’s financial statements are accurate, transparent, and in compliance with applicable regulations. The benefits of these services are numerous, especially for companies looking to scale. Professional financial accounting advisory services help businesses make informed decisions, improve operational efficiency, and maintain financial health. They also ensure businesses remain compliant with Indian tax regulations, thus avoiding potential penalties. 2. Accounting and Bookkeeping Services Difference Between Accounting and Bookkeeping Services While bookkeeping services focus on the daily recording of transactions such as sales, expenses, and payments, accounting services go a step further by analyzing and interpreting these financial records to provide insights into the company’s financial position. Essentially, bookkeeping is the groundwork for accounting, ensuring that accurate data is available for further financial analysis. Benefits of Accounting and Bookkeeping Services Professional accounting and bookkeeping services help businesses maintain clear, accurate, and up-to-date financial records, which are essential for making sound business decisions. These services also reduce the risk of errors and fraud, ensure regulatory compliance, and enhance transparency in financial reporting. Online Bookkeeping Services vs Traditional Bookkeeping With the evolution of digital tools, online bookkeeping is increasingly preferred over traditional accounting methods, especially for agile businesses. Traditional Bookkeeping: Manual processes: Entries are done manually, using physical ledgers or offline spreadsheets. Limited access: Financial records are stored on-premises, making remote collaboration difficult. Infrequent updates: Data is updated periodically (e. g. , monthly), which can delay critical decisions. Higher costs: Often requires in-house staff and physical storage, increasing overhead. Online Bookkeeping: Powered by cloud-based platforms such as Zoho, QuickBooks, Xero, and Tally, online bookkeeping offers several advantages: Real-time tracking: Automatic syncing keeps your books updated instantly. Remote accessibility: Tools like Google Drive, Dropbox, and Slack enable seamless collaboration from anywhere. Scalability: Easily integrate with payroll (RazorpayX, Keka), payments (PayPal, Kodo), and reporting tools. Cost-effective: Reduces the need for full-time staff and minimizes infrastructure costs. With tools like those in our tech stack, online bookkeeping becomes a smarter, more agile solution for modern businesses. 3. Chartered Accountant Services Online Overview of Chartered Accountant Services Chartered accountants (CAs) provide specialized services such as tax planning, auditing, financial reporting, and business advisory. These services are crucial for businesses aiming to optimize their financial strategies, maintain compliance with tax laws, and manage complex financial transactions. Chartered accountant services online are increasingly popular due to their flexibility and accessibility. Advantages of Chartered Accountant Services Online... --- - Published: 2025-04-04 - Modified: 2025-06-13 - URL: https://treelife.in/news/sebi-alerts-investors-on-risks-of-virtual-trading-platforms/ - Categories: News The Securities and Exchange Board of India (SEBI) has reiterated a crucial warning to investors regarding unauthorized virtual trading platforms. While the advisory was initially issued on November 4, 2024, its relevance remains paramount in today's rapidly evolving digital financial landscape. These platforms, often presenting as harmless fantasy trading games, paper trading simulators, or stock market competitions, utilize real-time or historical stock price data of listed companies to simulate trading activities. Understanding SEBI's Concern These virtual trading platforms typically draw users in with the allure of prize-based competitions, the creation of virtual portfolios, or gamified trading experiences. They allow participants to "trade" using virtual money, mimicking the dynamics of actual stock market transactions. However, SEBI's primary concern stems from the fact that these platforms operate without any registration or oversight from the regulatory body. This lack of regulation translates into significant risks for unsuspecting users: Absence of Investor Protection: Users of these platforms are not afforded the same level of investor protection that is mandatory for dealings with SEBI-registered intermediaries. This means that if something goes wrong, there are no established regulatory safeguards to protect their interests. No Grievance Redressal or Dispute Resolution: In the event of a dispute, issue, or perceived unfair practice, participants have no recourse to SEBI's robust grievance redressal or dispute resolution mechanisms. This leaves them vulnerable with limited avenues for complaint or resolution. Potential Misuse of Data: There is a considerable risk of personal and trading data being misused by unregulated platforms, given the absence of stringent data protection protocols typically enforced by SEBI for its registered entities. A Recurring Warning It's important to note that this isn't the first time SEBI has issued such a caution. A similar advisory was released in 2016, underscoring a persistent issue in the market. The latest advisory serves as a strong reminder that only SEBI-registered intermediaries are authorized to facilitate investment and trading activities in the Indian securities markets. Key Takeaway for Investors For investors, the message is clear: exercise extreme caution. If a platform promises risk-free stock market games, virtual trading, or prize-based competitions, it's essential to think twice before engaging. While the immediate financial risk might seem minimal (as real money isn't directly invested in the simulated trades), participation in such unregulated schemes can expose individuals to other financial risks, including the misuse of personal data and the absence of legal safeguards. Stay informed, verify the credentials of any platform offering investment-related services, and always choose to engage with SEBI-registered intermediaries for your financial activities. --- - Published: 2025-04-03 - Modified: 2025-06-13 - URL: https://treelife.in/news/sebi-relaxes-advance-fee-rules-for-investment-advisers-and-research-analysts-boosting-flexibility/ - Categories: News In a move set to provide greater operational flexibility for financial professionals, the Securities and Exchange Board of India (SEBI) has announced a significant relaxation in its advance fee provisions for SEBI-registered Investment Advisers (IAs) and Research Analysts (RAs). The changes, introduced via a circular issued yesterday, April 2, 2025, address long-standing requests from the industry for more practical fee structures. Previous Limitations on Advance Fees Prior to this circular, SEBI had placed strict limitations on the amount of advance fees that IAs and RAs could charge their clients: Research Analysts (RAs): Were restricted from charging advance fees for more than three months. Investment Advisers (IAs): Could not charge advance fees for periods exceeding six months. These restrictions, while aimed at investor protection, sometimes limited the ability of professionals to offer comprehensive, long-term advisory and research services, and could create administrative overhead for both parties. Key Changes Introduced by SEBI The new circular introduces several key modifications to these provisions: Extended Advance Fee Period: Both Investment Advisers and Research Analysts can now charge advance fees for a period of up to one year, provided this arrangement is mutually agreed upon by the client. This allows for longer engagement terms and potentially reduces the frequency of billing cycles. Targeted Application of Fee Rules: Significantly, SEBI has clarified that its fee-related provisions, including fee limits and refund policies, will now primarily apply only to individual and Hindu Undivided Family (HUF) clients, with the exception of accredited investors. Bilateral Agreements for Specific Clients: For non-individual clients, accredited investors, and institutional investors, the fee structures will no longer be dictated by SEBI-mandated limits. Instead, these arrangements will be governed by bilateral contractual agreements between the IA/RA and the client, allowing for greater customization and negotiation based on the scale and complexity of the services. Implications for the Industry and Clients This relaxation is poised to have several positive implications: Increased Flexibility for Professionals: IAs and RAs will now have more leeway to structure their services and fee models, enabling them to offer more integrated and long-term recommendations. This aligns with industry demands for a more adaptive regulatory environment. Streamlined Operations: For both service providers and clients, longer advance fee periods can simplify administrative processes related to billing and payments. Client Vigilance Remains Key: While the changes offer flexibility, clients, particularly individual and HUF investors, must remain diligent. It is crucial for them to carefully review and understand the terms of any long-term fee commitments before agreeing to them. They should ensure that the fee structure aligns with the services they expect to receive and their financial planning needs. SEBI's move reflects an evolving approach to regulating financial services, balancing investor protection with the need to foster a dynamic and efficient market for financial advisory and research services. Looking to set up an RIA / RA? Reach out to us for a detailed discussion at priya. k@treelife. in --- - Published: 2025-04-01 - Modified: 2025-07-21 - URL: https://treelife.in/startups/cheat-sheet-for-fdi-in-single-brand-retail-trading/ - Categories: Startups - Tags: FDI in Single Brand Retail Trading India’s Foreign Direct Investment (FDI) policy in Single Brand Retail Trading (SBRT) has undergone significant changes, making it easier for global brands to enter the market while ensuring local economic benefits. Here’s everything you need to know: FDI Limits & Approval Process 100% FDI is permitted in SBRT under the automatic route (since Jan 2018), eliminating the need for government approval. Earlier, government approval was required for FDI beyond 49%. Local Sourcing Requirement (30% Mandate) If FDI exceeds 51%, at least 30% of the goods' value must be sourced from India, with a portion mandatorily procured from MSMEs, village and cottage industries, artisans, and craftsmen. To ease compliance, for the first 5 years, global sourcing from India (for both Indian and international operations) can be counted toward this requirement. After this period, the 30% sourcing rule must be fulfilled solely for the brand’s Indian operations. E-Commerce Allowed but physical store needed in 2 Years Retailers can sell online but need to set up physical store within two years from date of start of online retail. The brand must be owned or globally licensed under the same name (e. g. , Apple & IKEA). Branding & Product Categories Products must be sold under a single brand, registered globally. Franchise models are allowed subject to filing of agreements. Impact of FDI Liberalization in SBRT Boosts consumer choices with better access to global brands. Encourages local manufacturing & supply chains through mandatory sourcing. Creates jobs across retail, logistics, and infrastructure sectors. Enhances warehousing & distribution networks, strengthening retail expansion. Challenges & Key Considerations Balancing local sourcing compliance with maintaining global quality standards. Navigating India's regulatory framework & periodic policy updates. Competing with domestic retailers & e-commerce giants. Final Thoughts India’s liberalized SBRT FDI policy presents significant opportunities for global brands. However, careful planning around sourcing, compliance, and local market strategy is crucial for long-term success. --- - Published: 2025-04-01 - Modified: 2025-08-25 - URL: https://treelife.in/taxation/how-us-tariffs-on-china-could-boost-indian-exports/ - Categories: Taxation - Tags: US Tariff, US Tariffs on China Introduction In early 2025, the USA President Donald Trump announced a new wave of tariffs targeting major U. S. trading partners, including China, Canada, and Mexico1. These measures are designed to address long-standing trade imbalances and protect domestic industries. However, the immediate effect has been a disruption of global supply chains, prompting American businesses to look for alternative sourcing destinations. China has historically played a dominant role in U. S. imports, amounting to $439 billion in 2024—down from $505 billion in 2018—reflecting a steady decline that the 2025 tariffs have accelerated2. The newly imposed 20% tariff on all Chinese imports in February 20253 has accelerated this shift and we need to bring out the acceleration of the decline. Among the potential beneficiaries, India emerges as a strong contender, thanks to its growing manufacturing sector, improving ease of doing business, and strategic government initiatives. This article examines India's positioning as a viable alternative to China in U. S. imports, analyzing the opportunities, challenges, and strategic implications of this shift. Current India-U. S. Trade Relations and Opportunities India-U. S. Bilateral Trade Statistics India and the U. S. share a strong trade relationship, with total bilateral trade reaching $191 billion in 2024, marking a steady rise from $146 billion in 2019. The U. S. is India's largest trading partner, accounting for approximately 17% of India's total exports. (Source: USTR, Ministry of commerce) YearIndia's Exports to U. S. (in Billion $)India's Imports from U. S. (in Billion $)Total Bilateral Trade (in Billion $)20195435892022764812420249883191 Comparison of key sector exports by India to US vis-a-vis China to US Below table showcases comparison of historical data related to key sector exports by India to US vis-a-vis China to US: SectorIndia’s Exports to U. S. (2024) (in Billion $)China’s Exports to U. S. (2024) (in Billion $)IT & Software Services3570Pharmaceuticals22. 575Textiles & Apparel9. 234Automotive Components18. 348Electronics13140 India’s growing share in these critical sectors positions it as an ideal trade partner for the U. S. , particularly as tariffs on Chinese goods push American companies to look for new suppliers. Current trade disruption owing to US imposition of tariffs and India's Strategic Advantage U. S. -China Trade War and Its Ripple Effect The U. S. -China trade relationship has seen turbulence for years, with tariffs and counter-tariffs disrupting supply chains. The latest tariff escalation adds to the strain, making American companies more cautious about relying on Chinese suppliers. This has fueled a growing interest in India as a manufacturing and export hub. Projected Tariff Impact on U. S. Imports YearTotal U. S. Tariffs (in Billion USD)2024USD 76 billion2025 (Projected)USD 697 billion - of which $273 billion would be derived from 'Dutiable' goods and $424 billion from 'Non-dutiable' goods—reflecting a shift from zero tariffs on these products Source: Impact of US tariffs Many U. S. multinationals have structured their supply chains around Free Trade Agreements (FTAs). As a result, the imposition of tariffs on previously “non-dutiable” goods could significantly disrupt their sourcing strategies. According to a report on the U. S. tariff industry analysis, these tariffs disproportionately impact sectors such as industrial products, pharmaceuticals, automotive, and consumer electronics. This shift presents a strategic opportunity for India to strengthen its position in U. S. supply chains. The following figure4 provides a detailed breakdown of the top 10 U. S. importer jurisdictions, highlighting tariff rates, recent increases, and the major product categories affected: To analyze the current vs. proposed tariff state, the below figure5 summarizes the prospective annual impact for the top industries with the largest incremental increase of potential tariffs: India's Growing Manufacturing Ecosystem India has made significant strides in manufacturing, driven by the "Make in India" initiative. Despite a modest production growth rate of 1. 4% in FY 2023-24 compared to 4. 7% in the previous fiscal year6, the government remains committed to expanding the sector’s contribution to Gross Value Added (GVA) from 14% to 21% by 20327. Key policies such as the Production-Linked Incentive (PLI) scheme have attracted over $17 billion in investments, spurring production worth $131. 6 billion and creating nearly one million jobs in just four years8. Business-Friendly Environment "India improved its global standing in the past, ranking 63rd out of 190 countries in the World Bank’s Doing Business Report 2020910. This is the result of pro-business reforms, including: Liberalization of foreign investment rules Modernized Insolvency and bankruptcy laws Elimination of retrospective taxation Jan Vishwas (Amendment of Provisions) Act, 2023, which decriminalized 183 provisions across 42 Central Acts11 Introduction of beneficial taxation regime for newly started manufacturing companies Workforce availability & skill development With a labor force exceeding 500 million, India provides an abundant and cost-effective workforce. The non-agricultural sector alone added 11 million jobs from October 2023 to September 2024, bringing total employment in this sector to 120. 6 million12. To further enhance workforce readiness, the Indian government is investing heavily in skill development programs to align with industry needs. Key sectors poised to gain from the U. S. tariffs on China Electronics & Manufacturing India's manufacturing sector has been experiencing steady growth, with manufacturing GDP increasing from $327. 82 billion in 2015 to $440. 06 billion in 202213. The Production-Linked Incentive (PLI) scheme has played a crucial role in accelerating this growth, particularly in electronics manufacturing. A report highlights that companies like Foxconn and Samsung are set to receive over ₹4,400 crore under the smartphone PLI scheme, indicating significant investments and expansions in India's electronics manufacturing sector14. India is benefiting from U. S. import diversification, and reports also highlight that disruptions in semiconductor and communication equipment imports from China could create significant opportunities for India in certain sectors. Information Technology (IT) and Software Services India's Information Technology (IT) exports have continued their upward trajectory in the fiscal year 2023-24. According to the Press Information Bureau (PIB), India's services exports, which encompass IT services, reached approximately $341. 1 billion15 in 2023-24. The United States is India's largest IT services market, and with trade restrictions on China, U. S. firms are increasingly turning to Indian companies for... --- - Published: 2025-03-31 - Modified: 2025-08-07 - URL: https://treelife.in/legal/lock-in-period-in-ipo/ - Categories: Legal - Tags: ipo lock in period, ipo lock in period india, is there any lock in period for ipo, is there lock in period for ipo, lock in period for ipo, lock in period in ipo, Lock-in period, pre ipo lock in period Introduction  A company’s transition from private to public ownership is marked by an Initial Public Offering (IPO), enabling it to raise capital for growth, debt repayment, or acquisitions. While an IPO offers greater visibility and access to funds, it also brings challenges such as regulatory scrutiny and increased shareholder expectations. A crucial aspect of this process is the lock-in period, during which company insiders and early investors are restricted from selling their shares. This helps ensure market stability by preventing a sudden flood of shares immediately after the IPO. The lock-in period plays a vital role in maintaining investor confidence and enabling a smoother post-IPO transition by stabilizing share prices. What is a Lock-In Period? A lock-in period is a specific timeframe during which certain shareholders—such as company promoters, executives, and early investors—are restricted from selling their shares after the company has gone public through an IPO. This restriction helps prevent a sudden influx of shares into the market immediately after listing, which could trigger sharp price declines and increased volatility. In simple terms, a lock-in period ensures that designated shareholders cannot sell their stocks for a specified duration after an IPO, and promotes post-IPO market stability. Who Does the Lock-In Period Apply To? The lock-in period generally applies to the company’s founders, promoters, anchor investors, employees holding ESOPs (Employee Stock Option Plans), and certain other pre-IPO investors. Retail investors who purchase shares during the IPO are typically exempt from the lock-in period and can freely trade their shares once the stock is listed. The exact duration and applicability of the lock-in period depend on regulatory guidelines and the category of the investor. Types of Lock-In Periods in IPO As per SEBI guidelines, the lock-in periods in the Indian stock market include the following: Anchor Investors: 50% of the shares allotted to anchor investors are subject to a lock-in of 90 days from the date of allotment, while the remaining 50% are locked in for 30 days. (Initially, the lock-in period for anchor investors was only 30 days, but this was extended to curb early exits and enhance market stability. ) Promoters: For allotment up to 20% of the post-issue paid-up capital, the lock-in period has been reduced to 18 months, down from the earlier 3 years. For any allotment exceeding 20% of the post-issue paid-up capital, the lock-in period has been reduced to 6 months, from the previous 1 year. Non-Promoter Pre-IPO Shareholders: The lock-in period for non-promoters (such as venture capital or private equity investors) has also been reduced to 6 months, down from 1 year. After the lock-in period expires for a particular investor category, those shareholders are free to sell their shares in the open market. Regulatory Framework - SEBI  Lock-in periods are regulated by stock exchanges, financial regulators, and securities laws. While regulations vary across countries, the underlying objective is to prevent market manipulation and stabilize the stock price of newly listed companies. In India, lock-in periods are governed by the Securities and Exchange Board of India (SEBI) under the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018. As per current SEBI guidelines: For promoters, the lock-in requirement for allotment up to 20% of the post-issue paid-up capital is 18 months, and for any holding exceeding 20%, the lock-in period is 6 months. For other pre-IPO investors, such as venture capitalists, private equity firms, and early-stage investors, the lock-in period is also 6 months. SEBI plays a critical role in regulating and approving IPOs, ensuring transparency, preventing unfair practices, and maintaining fairness in the market. Why are Lock-In Periods important?   Market Stability & Reduced Volatility: Lock-in periods prevent sudden large sell-offs that could lead to a price crash, particularly after an IPO. They help maintain a stable share price and boost investor confidence. Investor Protection: They safeguard retail investors from potential price manipulation by preventing early investors or promoters from offloading their shares immediately. This reduces the risk of speculative trading and artificial price inflation. Promoter & Institutional Commitment: Lock-in periods ensure that promoters, founding shareholders, and key institutional investors remain committed to the company for a defined period. This encourages long-term strategic decision-making over short-term profit-taking. Enhances Corporate Governance: They strengthen trust between public investors and key shareholder groups by ensuring that major stakeholders have a vested interest in the company’s long-term growth. This also helps reduce instances of fraud and “pump-and-dump” schemes. Encourages Employee Retention (ESOPs): In Employee Stock Ownership Plans (ESOPs), lock-in periods help retain employees by incentivizing long-term service and aligning their interests with the company’s success. Ensures Proper Use of Funds (IPOs & Venture Capital): Lock-in periods ensure that funds raised through IPOs and venture capital are utilized for business growth rather than immediate exits by early investors. While they restrict liquidity temporarily, they ultimately build trust, stability, and long-term value in financial markets. What Are the Drawbacks of Lock-In Periods? Lock-in periods restrict major shareholders from selling their stocks, which can sometimes create a misleading perception of the stock’s stability. Retail investors may not realize that some early investors who lack long-term conviction in the company could be waiting for the lock-in period to end before selling their shares. Once the lock-in period expires, stock prices often decline as some investors offload their holdings to capitalize on post-IPO price levels. This sudden surge in supply can lead to a drop in share price and negatively impact market sentiment. Retail investors may interpret the exit of major shareholders as a red flag, triggering a shift toward bearish sentiment. As a result, the end of a lock-in period is often seen as a key test of the market’s confidence in the company. Conclusion  Lock-in periods play a crucial role in maintaining market stability, protecting investor interests, and ensuring long-term commitment from key stakeholders. By restricting the sale of shares for a predetermined duration, they help prevent excessive volatility and safeguard retail investors from potential price manipulation. These restrictions are particularly important in IPOs, as they ensure that promoters, institutional... --- - Published: 2025-03-28 - Modified: 2025-07-22 - URL: https://treelife.in/taxation/income-tax-tds-tcs-changes-from-1st-april-2025/ - Categories: Taxation - Tags: income tax changes, income tax changes 2025 The Union Budget 2025 introduced a series of major changes in the Indian tax landscape, applicable from 1st April 2025. These updates significantly impact individuals, startups, and businesses — with revised income tax slabs, increased thresholds for TDS and TCS, and extended exemptions for start-ups and IFSC units. Here’s a comprehensive breakdown of the key changes and what they mean for you: 1. Revised Income Tax Slabs (New Tax Regime) Under the default New Tax Regime (Section 115BAC), income tax slabs have been revised for FY 2025-26 onwards: 0%: Income up to ₹4,00,000 5%: ₹4,00,001 – ₹8,00,000 10%: ₹8,00,001 – ₹12,00,000 15%: ₹12,00,001 – ₹16,00,000 20%: ₹16,00,001 – ₹20,00,000 25%: ₹20,00,001 – ₹24,00,000 30%: Above ₹24,00,000 Note: The Old Tax Regime remains optional and unchanged. 2. Higher Rebate Under Section 87A The rebate limit under the New Tax Regime has been increased to ₹60,000 (from ₹25,000). This means individuals earning up to ₹12,00,000 annually will have zero tax liability under the new regime. The rebate for the Old Regime remains unchanged at ₹12,500 (up to ₹5 lakh income). 3. Increased TDS Thresholds Multiple TDS sections now have higher deduction limits, reducing unnecessary withholding and easing compliance: SectionNature of PaymentOld ThresholdNew Threshold193Interest on SecuritiesNIL₹10,000194AInterest (Senior Citizens)₹50,000₹1,00,000194AInterest (Others – Banks)₹40,000₹50,000194AInterest (Others – Non-Banks)₹5,000₹10,000194Dividend (Individual Shareholder)₹5,000₹10,000194KMutual Fund Units₹5,000₹10,000194B/194BBLottery, Crossword, Horse Race WinningsAggregate > ₹10,000/year₹10,000 (per transaction)194DInsurance Commission₹15,000₹20,000194GLottery Commission/Prize₹15,000₹20,000194HCommission or Brokerage₹15,000₹20,000194-IRent₹2,40,000/year₹50,000/month194JProfessional/Technical Fees₹30,000₹50,000194LAEnhanced Compensation₹2,50,000₹5,00,000194TRemuneration to PartnersNIL₹20,000 Other TDS sections remain unchanged 4. TCS Changes (Effective April 2025) SectionNature of TransactionOld ThresholdNew Threshold206C(1G)Remittance under LRS & Overseas Tour Package₹7,00,000₹10,00,000206C(1G)LRS for Education (via Educational Loan)₹7,00,000Exempt (No TCS)206C(1H)Purchase of Goods₹50,00,000Exempt (No TCS) Other TCS provisions remain unchanged. 5. Capital Gains Tax on ULIPs Redemption proceeds from ULIPs (Unit Linked Insurance Plans) will now be taxed as capital gains if: The premium exceeds 10% of the sum assured, or The annual premium is more than ₹2. 5 lakhs This ends the long-standing ambiguity and brings parity with mutual fund taxation. 6. Higher LRS Limit & TCS Relief on Education Loans The threshold for TCS on foreign remittances under Section 206C(1G) has been raised from ₹7 Lakhs to ₹10 Lakhs per financial year. No TCS will be applicable on remittances for education, if funded through educational loans from specified financial institutions. These changes aim to ease compliance and reduce the tax burden on students and families funding overseas education. 7. Updated Return (ITR-U) – 4-Year Filing Window The time limit for filing Updated Tax Returns (ITR-U) has been extended to 48 months (4 years) from the end of the relevant assessment year. This move encourages voluntary disclosure of previously missed or under-reported income. Time of Filing ITR-UAdditional Tax PayableWithin 12 months25% of additional tax (tax + interest)Within 24 months50% of additional tax (tax + interest)Within 36 months60% of additional tax (tax + interest)Within 48 months70% of additional tax (tax + interest) Applicable from FY 2025-26 onwards 8. Start-up Tax Exemption Extended Start-ups can now avail 100% tax exemption for 3 consecutive years out of 10 years from the year of incorporation under Section 80-IAC if they are: Incorporated on or before 1st April 2030 Eligible under DPIIT criteria and other prescribed conditions 9. Extended Tax Benefits for IFSC Units The sunset date for starting operations to claim tax concessions in IFSC units has been extended to 31st March 2030. Under Section 10(10D), the entire maturity amount of a life insurance policy purchased by a non-resident from an IFSC office is fully exempt, with no premium limit. Final Thoughts These updates signal a shift toward simplification, transparency, and digital compliance in India’s tax ecosystem. But with so many rule changes across income tax, TDS, TCS, and capital gains — staying compliant is more critical than ever. --- - Published: 2025-03-27 - Modified: 2025-07-21 - URL: https://treelife.in/taxation/gst-amendments-effective-from-1st-april-2025/ - Categories: Taxation - Tags: GST Amendments, GST Amendments 2025, GST changes, GST changes 2025, GST updates The Goods and Services Tax (GST) framework is set to undergo significant transformations starting April 1, 2025. These amendments aim to enhance compliance, streamline tax processes, and ensure a more robust taxation system. Below is a detailed analysis of the key GST changes in 2025 and their implications for businesses across various sectors. Multi-Factor Authentication (MFA) – Mandatory for All TaxpayersTo enhance security measures, all taxpayers will be required to implement Multi-Factor Authentication (MFA) when accessing GST portals. This initiative is designed to protect sensitive financial data and prevent unauthorized access. Businesses should ensure that their authorized personnel are equipped with the necessary tools and knowledge to comply with this requirement.  E-Way Bill Restrictions Effective January 1, 2025, the generation of E-Way Bills will be restricted to invoices issued within the preceding 180 days, with extensions capped at 360 days. Additionally, the National Informatics Centre (NIC) will introduce updated versions of the E-Way Bill and E-Invoice systems to enhance security and compliance. Businesses must adapt their logistics and invoicing processes to align with these new timelines and system updates. Mandatory Sequential Filing of GSTR-7 Taxpayers filing GSTR-7, which pertains to Tax Deducted at Source (TDS) under GST, must now adhere to a sequential filing order without skipping any filing numbers. This measure aims to ensure accurate reconciliation of Input Tax Credit (ITC) and streamline the TDS collection process. Thereby improving the efficiency ofTDS collections and facilitating timely Input Tax Credit (ITC) claims for taxpayers. Biometric Authentication for DirectorsStarting March 1, 2025, Promoters and Directors of companies, including Public Limited, Private Limited, Unlimited, and Foreign Companies, will be required to complete biometric authentication at any GST Suvidha Kendra (GSK) within their home state. This change simplifies the authentication process by eliminating the need to visit jurisdiction-specific GSKs, thereby enhancing the ease of doing business. Mandatory Input Service Distributor (ISD) MechanismFrom 1st April 2025, the ISD mechanism will be mandatory for businesses to distribute ITC on common services like rent, advertisement, or professional fees across GST registrations under the same Permanent Account Number (PAN). Businesses must issue ISD invoices for ITC distribution and file GSTR-6 monthly, due by the 13th of each month. The ITC will be reflected in GSTR-2B of receiving branches for use in GSTR-3B filing. Non-compliance will result in the denial of ITC and penalties ranging from ₹10,000 to the amount of ITC availed incorrectly. Adjustments in GST Rates for Hotels and Used CarsHotel Industry: The "Declared Tariff" concept will be abolished, with GST now calculated based on the actual amount charged to customers. Hotels offering accommodation priced above ₹7,500 per unit per day will be classified as "specified premises" and will attract an 18% GST rate on restaurant services, along with the benefit of ITC. New hotels can opt for this rate within 15 days of receiving their GST registration acknowledgment. Used Cars: The GST rate on the sale of old cars will increase from 12% to 18%, impacting the pre-owned car market and potentially leading to higher tax liabilities for businesses dealing in used vehicles. Implementation of New Invoice Series and Turnover CalculationStarting 1st April 2025, businesses will be required to begin using a new invoice series to maintain accurate records and ensure a smooth transition into the new financial year with updated compliance requirements. Additionally, businesses must recalculate their aggregate turnover to determine if they are liable to take GST registration or issue e-invoices. This calculation will help assess their compliance obligations for GST registration, the QRMP Scheme, GST filing, and e-invoicing in the new financial year. Introduction of GST Waiver Scheme 2025Businesses that have settled all tax dues up to March 31, 2025, may be eligible for a GST waiver under schemes SPL01 or SPL02, provided they apply within three months of the new fiscal year. This initiative offers a tax relief opportunity for compliant taxpayers. Enhanced Credit Note ComplianceRecipients of credit notes must now accept or reject them through the Integrated Management System (IMS) to prevent ITC mismatches. This protocol ensures transparency and accuracy in ITC claims, reducing discrepancies in tax filings. Changes in GST Registration Process (Rule 8 of CGST Rules, 2017)As per recent updates to Rule 8 of the Central Goods and Services Tax (CGST) Rules, 2017, applicants opting for Aadhaar authentication must undergo biometric verification and photo capturing at a GSK, followed by document verification for the Primary Authorized Signatory (PAS). Non-Aadhaar applicants are required to visit a GSK for photo and document verification. Failure to complete these processes within 15 days will result in the non-generation of the Application Reference Number (ARN), thereby delaying the registration process. The forthcoming GST amendments underscore the government's commitment to refining the tax system, enhancing compliance, and fostering a transparent business environment. It is imperative for businesses to proactively understand and implement these changes to ensure seamless operations and avoid potential penalties. Engaging with tax professionals and leveraging updated compliance tools will be crucial in navigating this evolving landscape effectively. --- - Published: 2025-03-25 - Modified: 2025-06-13 - URL: https://treelife.in/news/india-takes-pre-emptive-steps-to-ease-us-trade-tensions-avoid-retaliatory-tariffs/ - Categories: News In a significant diplomatic and economic maneuver, India has taken proactive steps to ease trade tensions with the United States and avert potential retaliatory tariffs. These measures, outlined in recent government actions, signal India's commitment to fostering a more harmonious and collaborative trade relationship with its largest trading partner. Abolition of the Equalization Levy (the "Google Tax") One of the most notable developments is India's decision to remove the 6% equalization levy, often dubbed the "Google Tax. " This levy, introduced in 2016, applied to foreign digital companies generating revenue from Indian users without a physical presence in the country. U. S. tech giants such as Google and Meta had long viewed this tax as discriminatory, making it a persistent point of contention in bilateral trade discussions. The removal of this levy, announced at the enactment stage of the Finance Bill 2025 and effective from April 1, 2025, is a direct response to U. S. concerns. This move aims to align India's digital taxation framework with global consensus-driven approaches and facilitate smoother trade negotiations. The levy's abolition is expected to reduce the tax burden on these digital companies and, potentially, lower advertising costs for Indian businesses. Considering Tariff Reductions on U. S. Imports In a further gesture of goodwill and strategic foresight, India is reportedly considering reducing tariffs on a substantial portion of U. S. imports, estimated to be valued at approximately $23 billion. This proactive measure seeks to preempt and mitigate the impact of potential U. S. retaliatory tariffs, which could otherwise affect a much larger volume of Indian exports, valued at an estimated $66 billion. While the specifics of these tariff cuts are still under deliberation, discussions include a range of agricultural products such as almonds, pistachios, oatmeal, and quinoa. However, key domestic sectors like meat and dairy are expected to remain protected from these reductions, reflecting India's efforts to balance trade liberalization with safeguarding its national interests. Strategic Trade Diplomacy Ahead of Deadline These concerted efforts underscore India's commitment to de-escalating trade frictions and fostering stronger economic ties with the United States. By taking these preemptive actions ahead of the April 2 deadline for potential U. S. tariffs, India demonstrates a proactive and diplomatic approach to global trade challenges. The ongoing discussions and proposed changes are indicative of a maturing trade relationship between the two democracies, emphasizing dialogue and mutual understanding to navigate complex global economic landscapes. As India continues to integrate into the global economy, such strategic moves will be crucial in shaping its international trade policies and alliances. Source: https://www. reuters. com/world/india/india-eyes-tariff-cut-23-bln-us-imports-shield-66-bln-exports-sources-say-2025-03-25/ --- > The Startup India Initiative is a part of the action plan to realise the government’s aim to create a networking platform for accelerators, entrepreneurs, investors, incubators, government agencies and bodies, mentors and newfound companies. - Published: 2025-03-22 - Modified: 2025-07-21 - URL: https://treelife.in/startups/startup-india-registration/ - Categories: Startups - Tags: company registration under startup india, documents required for startup india registration, how to register a company in startup india, how to register a company in startup india scheme, how to register under startup india, online registration for startup india, startup india registration, startup india registration benefits, startup india registration eligibility, startup india registration fees, startup india registration login, startup india registration online, startup india registration services Introduction to Startup India Registration If you're an entrepreneur looking to scale your business in India, Startup India registration is your gateway to a host of benefits. Launched by the Government of India, the Startup India Scheme aims to foster innovation, support budding startups, and boost job creation by simplifying regulatory hurdles and offering tax exemptions. What is the Startup India Scheme? The Startup India Scheme is a flagship initiative by the Department for Promotion of Industry and Internal Trade (DPIIT) that provides recognition and benefits to eligible startups. With a focus on innovation and economic growth, the scheme helps startups access funding, legal support, mentorship, and fast-track regulatory approvals. Who Should Register Under Startup India? Any business entity—Private Limited Company, Limited Liability Partnership (LLP), or Partnership Firm—that is less than 10 years old, has an annual turnover below ₹100 crores, and is working on an innovative product, service, or process can apply for Startup India registration. Whether you're just starting up or scaling your venture, getting recognized under this scheme can be a game-changer. Importance of DPIIT Recognition Certificate One of the most critical aspects of Startup India registration is obtaining the DPIIT Recognition Certificate. This certificate validates your business as a recognized startup and makes you eligible for key benefits like: Income Tax and Capital Gains Exemptions Faster IP (Trademark & Patent) Processing Access to Government Tenders and Grants Self-Certification under Labour and Environmental Laws Without DPIIT recognition, your startup won’t be able to avail these benefits, even if it’s incorporated under MCA. Company Incorporation vs Startup India Registration Many founders confuse company incorporation with Startup India recognition. It’s important to understand that: Company registration is the legal formation of your business entity under the Companies Act or LLP Act. Startup India registration (via DPIIT) is an additional recognition that provides government-backed startup benefits. In short, incorporation is the first step, and Startup India recognition is the growth booster that follows. Benefits of Startup India Registration Wondering why so many businesses are opting for Startup India registration? Getting DPIIT recognition under the Startup India Scheme unlocks a range of benefits that can significantly ease your startup journey. From tax exemptions to funding support, the scheme is designed to empower entrepreneurs and foster innovation. Key Benefits of Startup India Registration Tax Exemptions (Income Tax & Capital Gains)Recognized startups are eligible for a 3-year income tax holiday and exemption on long-term capital gains, helping you reinvest profits back into your business. Self-Certification for Labour & Environmental LawsAvoid unnecessary inspections—DPIIT-recognized startups can self-certify under six labour laws and three environment laws, reducing compliance burden. Access to Government Grants, Funds & TendersGain access to a ₹10,000 crore Fund of Funds, and exclusive government tenders reserved for startups—no prior experience required. Fast-track IPR Filing (Trademarks & Patents)Get up to 80% rebate on patent fees and expedited processing for trademarks and intellectual property filings. Startup India Hub & Mentorship SupportGet connected to incubators, mentors, investors, and corporate partners via the Startup India platform to accelerate your growth. Easier Public Procurement AccessStartups recognized under the scheme get relaxed criteria for public procurement, making it easier to secure government projects. Eligibility Criteria – Who Can Apply Under the Startup India Scheme? Before you start the Startup India registration process, it's essential to ensure your business meets the eligibility norms defined by the government. The DPIIT recognition is granted only to startups that fulfill certain criteria related to business structure, innovation, and turnover. Startup India Registration Eligibility – Key Requirements CriteriaDescriptionBusiness TypeYour entity must be a Private Limited Company, Limited Liability Partnership (LLP), or Partnership Firm. Business AgeThe business should be less than 10 years old from the date of incorporation. Annual TurnoverThe company’s turnover must not exceed ₹100 crores in any financial year since incorporation. Innovation RequirementThe startup must be working towards innovation, development, or improvement of products, services, or processes. It can also be a scalable business model with potential for employment generation or wealth creation. Not Formed by SplittingThe entity must not be formed by splitting or restructuring an existing business. Only genuinely new ventures qualify. Meeting these Startup India registration eligibility criteria is the first step toward gaining access to exclusive startup benefits and government support. Documents Required for Startup India Registration Before applying for Startup India registration, make sure you have all the necessary documents in place. A well-prepared application with the right paperwork increases your chances of quick DPIIT recognition approval. Here’s a quick checklist of documents required for Startup India registration: Startup India Registration Document Checklist Certificate of Incorporation Incorporation or registration certificate issued by MCA (for Private Limited, LLP, or Partnership Firm). Company PAN Card Permanent Account Number (PAN) issued in the name of the entity. Founders’ KYC Documents PAN, Aadhaar card, and contact details of all directors or partners. Brief Description of Business/Product/Service Clearly mention your business idea, innovation, or product offering. Pitch Deck / Website / Patent (if available) Supporting documents that highlight your innovation or scalability. MSME Registration Certificate (Optional) While not mandatory, an MSME certificate can help strengthen your application. Authorization Letter (If applying via consultant) A signed letter authorizing a consultant to file the application on your behalf. Submitting these documents accurately will ensure a smooth and faster approval process from DPIIT. Missing or incorrect documents can lead to unnecessary delays. Decoding Key Documents for Your Indian Startup: DSC, DIN, MOA, and AOA Registering a startup in India involves navigating several crucial documents and designations. Understanding the purpose and significance of each – the Digital Signature Certificate (DSC), Director Identification Number (DIN), Memorandum of Association (MOA), and Articles of Association (AOA) – is fundamental for a smooth and compliant registration process. 1. Digital Signature Certificate (DSC): Your Digital Identity In an increasingly digital landscape, the Digital Signature Certificate (DSC) acts as your secure online identity. It's the electronic equivalent of a physical signature, providing both authentication and integrity for electronic documents. What it is: A DSC is a cryptographically secured digital certificate issued by... --- - Published: 2025-03-21 - Modified: 2025-06-13 - URL: https://treelife.in/news/sebi-proposes-removal-of-noc-requirement-for-stock-brokers-in-gift-ifsc/ - Categories: News The Securities and Exchange Board of India (SEBI) is set to significantly streamline the process for SEBI-registered stock brokers looking to establish a presence in the Gujarat International Finance Tec-City (GIFT-IFSC). A recently released consultation paper proposes the removal of the current No Objection Certificate (NOC) requirement, a move anticipated to enhance the ease of doing business and encourage greater participation in the burgeoning international financial services center. Under the existing regulatory framework, SEBI-registered stock brokers are mandated to obtain an NOC from the market regulator before they can float a subsidiary or enter into a joint venture to operate within GIFT-IFSC. This requirement has been identified as a potential hurdle for swift market entry and expansion. Key Proposed Changes SEBI's new proposal aims to abolish this NOC requirement entirely. Instead, stock brokers will be permitted to offer their services in GIFT-IFSC through a Separate Business Unit (SBU). This significant shift is designed to alleviate compliance burdens and enhance ease of doing business. Implications of the Proposal The proposed changes carry several key implications for stock brokers and the GIFT-IFSC ecosystem: Seamless Market Entry: Stock brokers will be able to leverage their existing infrastructure and operational expertise to establish a presence in GIFT-IFSC with greater ease and efficiency. This could lead to a quicker setup time and reduced administrative overhead. Independent SBU Operations: While operating under the umbrella of the parent stock broker, the SBU in GIFT-IFSC will function independently. Crucially, it will be required to maintain an "arms-length relationship" with the broker’s Indian operations, ensuring regulatory distinctiveness. Different Grievance Redressal Mechanisms: It's important to note that grievance redressal mechanisms applicable to Indian operations, such as SEBI Complaints Redressal System (SCORES) and the Investor Protection Fund (IPF), will not extend to these SBUs. This is because the SBUs will fall under the regulatory jurisdiction of the International Financial Services Centres Authority (IFSCA) within GIFT-IFSC, which has its own set of investor protection frameworks. Transition for Existing Entities: The proposal also includes provisions for existing subsidiaries and joint ventures already operating in GIFT-IFSC to transition into the SBU model, offering them the benefits of the simplified framework. SEBI has actively sought feedback on this crucial proposal, inviting public comments until April 11, 2025. Interested stakeholders can access the detailed consultation paper and submit their comments directly through the official SEBI website: https://www. sebi. gov. in/reports-and-statistics/reports/mar-2025/consultation-paper-on-facilitation-to-sebi-registered-stock-brokers-to-undertake-securities-market-related-activities-in-gujarat-international-finance-tech-city-international-financial-services-cent-_92823. html This move by SEBI underscores its commitment to fostering a more conducive and accessible environment for financial services within GIFT-IFSC, aligning with India's broader vision of establishing a world-class international financial hub. Have doubts? Speak to us at dhairya. c@treelife. in --- - Published: 2025-03-20 - Modified: 2025-03-28 - URL: https://treelife.in/newsletter/january-february-newsletter/ - Categories: Newsletter - Tags: feb newsletter, jan newsletter, January-February Newsletter 1) A Snapshot of the Concert Economy: Insights from Coldplay Did you know India’s concert economy is growing at a staggering 17. 6% CAGR, with the live events market projected to hit ₹143 billion by 2026? Coldplay’s recent concerts in Mumbai and Ahmedabad alone drew 400,000 fans and contributed significantly to the local economy, generating millions in tourism and hospitality. Our latest report analyzes how large-scale events like concerts drive growth across multiple industries, including travel, F&B, and the overall economy. 2) Insights from Gujarat GCC Policy 2025–30 Launch  We had the privilege of attending the launch of the Gujarat Global Capability Centre (GCC) Policy 2025–30, unveiled by Hon’ble CM Shri Bhupendra Patel at GIFT City, Gandhinagar. This landmark policy aims to attract over 250 new GCCs, create 50,000+ jobs, and bring in ₹10,000+ crore in investments. With key benefits like CAPEX support up to ₹200 crore, OPEX assistance, employment incentives, and skill development grants, Gujarat is set to emerge as a global GCC hub. Curious about how this policy can boost digital transformation, innovation, and business growth? 3) Top Government Schemes for Startups in India India is home to over 1,40,000 registered startups, driving innovation, employment, and economic growth. To support this booming ecosystem, the government has introduced several key schemes offering funding, tax exemptions, infrastructure support, and market access. Our latest guide maps out the top government schemes that can accelerate your startup journey. 4) Compliance Calendar 2025 — Your Complete Checklist Staying compliant with India's regulatory framework is crucial to avoid hefty penalties and maintain business integrity. Treelife’s Compliance Calendar 2025 offers a month-by-month guide to essential compliance tasks, covering GST return filings, TDS deposits, advance tax payments, and more. This checklist helps businesses ensure timely submissions, reducing the risk of financial penalties and reputational damage. Whether it’s quarterly tax deadlines or annual filings, our Compliance Calendar ensures you never miss an important date.   5) Union Budget 2025 — What It Means for Startups, Investors & GIFT IFSC The Union Budget 2025 presents a reform-driven, growth-focused roadmap for India’s economic future, aligning with the government’s long-term vision of Viksit Bharat 2047. With a real GDP growth forecast of 6. 4% for FY 2025 and total expenditure of ₹50. 65 lakh crore, the budget emphasizes investment-led growth, infrastructure expansion, and private sector participation. Curious how these reforms impact startups, investors, and GIFT IFSC? 6) Understanding the Draft Digital Personal Data Protection Rules, 2025 On January 3, 2025, the Union Government released the Draft Digital Personal Data Protection Rules, 2025, for public consultation. These rules, formulated under the Digital Personal Data Protection Act, 2023 (DPDP Act), aim to strengthen the protection of citizens’ digital personal data. Our latest article breaks down the key provisions of the Draft Rules. It also highlights potential challenges and the broader implications for individuals and businesses. Stay informed and understand how these rules might affect you and your business. 7) Understanding Lock-In Periods for IPOs in India Planning to invest in an IPO? Or you’re an investor or a startup founder preparing for an IPO, this breakdown will help you navigate the rules and implications. Lock-in periods are a crucial aspect of public offerings that every stakeholder should understand. Our latest carousel simplifies it all, covering about lock-in period, who does it apply to and importance. 8) Equity for Startups – Simplified Ever wondered how startup equity works and why it’s crucial for founders, investors, and employees? Our latest guide simplifies the world of equity. Learn how equity can shape your startup journey. Webinar Highlights: Budget 2025 & GIFT IFSC Proposals We recently hosted two insightful webinars, bringing together industry professionals, founders, and investors for engaging discussions on Budget 2025 and its implications. Decoding Budget 2025 – Implications for Startups, Founders & Investors: This session dived deep into how Budget 2025 impacts the startup ecosystem, offering practical insights for navigating the new fiscal policies. Decoding GIFT IFSC Proposals from Budget 2025: We explored India’s evolving position as a global financial hub. A special thank you to Mr. Sandip Shah, Head of IFSC Department, GIFT City, for sharing his expertise and making the session truly valuable. Recent Transaction Advisories: Dealstreet We recently advised on 4 exciting transactions, partnering with promising startups and investors across the fintech, D2C self–care, and pet care sectors. Celebrating Our Journey Together with Our Clients We recently shared a series of client testimonials on YouTube featuring founders, startups, and investors who have been part of our journey. Hear directly from our clients as they reflect on their experiences with Treelife, sharing stories of growth, collaboration, and success. These testimonials reflect the meaningful partnerships we’ve nurtured over the past decade. Thank you to all our clients for trusting us and being an integral part of our story! Welcoming New Joinees  Empower your business with expert legal and financial advice  Call us at +919930156000 or BOOK A CONSULTATION Disclaimer: The content in this newsletter is for information purposes only and does not constitute advice or a legal opinion and are personal views of the author. It is based upon relevant law and/or facts available at that point of time and prepared with due accuracy & reliability. Readers are requested to check and refer to relevant provisions of statute, latest judicial pronouncements, circulars, clarifications etc before acting on the basis of this write-up. The possibility of other views on the subject matter cannot be ruled out. By the use of the said information, you agree that Treelife Consulting is not responsible or liable in any manner for the authenticity, accuracy, completeness, errors or any kind of omissions in this piece of information for any action taken thereof. --- - Published: 2025-03-12 - Modified: 2025-03-12 - URL: https://treelife.in/news/navigating-the-new-cyber-security-framework-in-gift-ifsc/ - Categories: News Cyber threats are evolving, and for entities operating in GIFT IFSC, staying ahead is not just strategic, rather it's essential. As GIFT IFSC grows into a global financial powerhouse, the complexity of cyber risks also intensifies. Recognizing this, the International Financial Services Centres Authority (IFSCA) has introduced the "𝐺𝑢𝑖𝑑𝑒𝑙𝑖𝑛𝑒𝑠 𝑜𝑛 𝐶𝑦𝑏𝑒𝑟 𝑆𝑒𝑐𝑢𝑟𝑖𝑡𝑦 𝑎𝑛𝑑 𝐶𝑦𝑏𝑒𝑟 𝑅𝑒𝑠𝑖𝑙𝑖𝑒𝑛𝑐𝑒" aimed at safeguarding data, operations, and reputations. Key Implications Every entity registered with IFSCA (Regulated Entities / REs) must appoint a Designated Officer (like a CISO) to lead cyber risk management. Entities need to develop and regularly update a Cyber Security and Cyber-Resilience Framework tailored to their operations. Annual audits are now mandatory Cyber incidents to be reported within 6 hours, followed by a root cause analysis within 30 days. Important Due Dates The framework comes into effect April 1, 2025. Annual audits to be completed and reported within 90 days of the financial year-end. Entities exempt from this guideline Certain entities, such as units with less than 10 employees, branches of regulated entities, and foreign universities, enjoy a 3-year exemption subject to specific conditions as under: REs shall adopt the Cyber Security and Cyber Resilience framework and IS Policy of its parent entity. The CISO of the parent entity shall act as the Designated Officer for the REs in IFSC. The parent entity of REs, in India or overseas, shall be regulated by a financial sector regulator in its home jurisdiction. If you're navigating these new regulations or setting up operations in GIFT IFSC, it's crucial to align strategies early. Have questions or need guidance? Let's connect at dhairya. c@treelife. in for a discussion. --- - Published: 2025-03-12 - Modified: 2025-07-21 - URL: https://treelife.in/startups/startup-india-seed-fund-scheme-sisfs/ - Categories: Startups - Tags: startup india seed fund scheme, startup india seed fund scheme (sisfs), startup india seed fund scheme amount, startup india seed fund scheme eligibility, startup india seed fund scheme interest rate, startup india seed fund scheme launch date, the startup india seed fund scheme, what is startup india seed fund scheme, who launched startup india seed fund scheme What is the Startup India Seed Fund Scheme? The Startup India Seed Fund Scheme (SISFS) is a flagship funding initiative launched by the Department for Promotion of Industry and Internal Trade (DPIIT) under the Ministry of Commerce and Industry, Government of India, in January 2021. The scheme aims to provide financial support to early-stage startups for activities including proof of concept, prototype development, product trials, market entry, and commercialization. With a budget of ₹945 Crore for a four-year period from 2021 to 2025, SISFS is expected to assist approximately 3,600 entrepreneurs through the involvement of around 300 incubators over the next four years. Recognizing that many startups struggle with securing early-stage capital, SISFS addresses this critical funding gap and helps transform innovative ideas into scalable businesses. As part of the broader Startup India initiative, the SISFS has become an essential resource for emerging entrepreneurs across various sectors and geographies. As of March 2025, the scheme is still valid, and DPIIT-recognized startups can apply for funding. Need for the Seed Fund Scheme  Early-stage startups often face significant challenges in raising the initial capital needed to develop prototypes, conduct product trials, or successfully launch into the market. Unfortunately, many promising business ideas fail to gain traction due to a lack of financial support at these critical stages. Traditional funding sources such as angel investors, venture capitalists, and banks generally prefer startups that have already demonstrated traction or market readiness. This creates a substantial gap for nascent businesses that are still in their early stages but have the potential for growth. To address this challenge, the Government of India launched the SISFS. The scheme aims to provide crucial financial backing and institutional support to startups during their most vulnerable phases, enabling them to bring their innovative ideas to life and scale up. Objectives of Startup India Seed Fund Scheme SISFS has the following key objectives: Provide Financial Assistance: To support DPIIT-recognized startups with crucial funding for activities such as proof of concept, prototype development, product trials, market entry, and commercialization. Encourage Innovation-Driven Entrepreneurship: To foster innovation across all sectors and regions, promoting entrepreneurship that is driven by creative ideas and cutting-edge technology. Decentralize Funding Access: To extend financial support to startups in Tier II and Tier III cities, ensuring that entrepreneurs from regions outside major metro hubs also benefit from this initiative, promoting balanced growth across the country. Strengthen Incubators: To empower incubators as key enablers of early-stage startup growth, enabling them to disburse funds and provide essential mentorship to entrepreneurs. Boost Support for Key Sectors: The scheme places special emphasis on sectors like social impact, waste management, and financial inclusion, encouraging startups working on innovative and impactful solutions in these areas. How the Startup India Seed Fund Scheme Works The SISFS operates through eligible incubators, which act as intermediaries between the government and startups. The process is as follows: Startup Application: DPIIT-recognized startups apply to incubators through the Startup India Seed Fund portal. Evaluation and Selection: A Seed Fund Approval Committee (SFAC) at the incubator level evaluates and selects startups based on factors such as innovation potential, team strength, scalability, and impact. Funding Disbursement: Once selected, approved startups receive funding through the incubator in a milestone-based disbursement model. This ensures that funds are provided in phases based on the achievement of specific development milestones. Additional Support: Incubators offer a range of additional services to startups, including mentorship, access to labs, co-working spaces, and other support services to help startups grow and scale efficiently. Key Features of SISFS Corpus Allocation: The scheme has an allocated corpus of ₹945 crore for a four-year period (2021–2025) to support early-stage startups across India. Funding Type: Grants: Startups can receive grants of up to ₹20 lakh for activities such as proof of concept, prototype development, and product trials. Convertible Debentures / Debt/Equity-Linked Instruments: Startups can also receive funding of up to ₹50 lakh through convertible debentures or debt/equity-linked instruments, aimed at supporting market entry and commercialization efforts. Disbursement Channel: Funds are routed exclusively through empanelled incubators, ensuring that financial support is provided by trusted intermediaries who can monitor progress and facilitate growth. Focus on Decentralization: The scheme places significant emphasis on supporting startups in underserved regions, particularly in Tier II and Tier III cities, thereby promoting inclusive growth and enabling entrepreneurs outside major metro hubs to benefit from government funding. Supportive Infrastructure: Beyond financial backing, the scheme also provides startups with access to essential resources, including incubation facilities, mentorship, investor connections, and various ecosystem enablers to help scale operations and improve business outcomes. Eligibility Criteria for Startup India Seed Fund Scheme For Startups: Recognition and Incorporation: Must be recognized by the Department for Promotion of Industry and Internal Trade (DPIIT) and incorporated not more than 2 years ago at the time of application. Business Idea and Scalability: Should have a business idea aimed at developing a product or service with clear market fit, viable commercialization potential, and scalability. Technology Integration: Must utilize technology in its core product or service, business model, distribution model, or methodology to address the targeted problem. Sector Preference: Preference will be given to startups offering innovative solutions in sectors such as social impact, waste management, water management, financial inclusion, education, agriculture, food processing, biotechnology, healthcare, energy, mobility, defense, space, railways, oil and gas, textiles, etc. Previous Government Funding: Should not have received more than ₹10 lakh of monetary support under any other Central or State Government scheme for the same purpose. This excludes prize money from competitions, subsidized workspace, founder monthly allowance, access to labs, or prototyping facilities.   Promoter Shareholding: At least 51% shareholding by Indian promoters at the time of application, in accordance with the Companies Act, 2013, and SEBI (ICDR) Regulations, 2018. Seed Support Limit: A startup is eligible to receive seed support only once under the scheme, either as a grant or as debt/convertible debentures. For Incubators: Legal Entity: Must be a legal entity, such as: A society registered under the Societies Registration Act, 1860. A trust registered under... --- - Published: 2025-03-11 - Modified: 2025-07-21 - URL: https://treelife.in/compliance/conversion-of-loan-into-equity/ - Categories: Compliance - Tags: Conversion of Loan into Equity, conversion of loans to equity, convert loan to equity, how to convert loan to equity Picture this: A company, in its quest for financial sustenance, may find solace in loans from its director, their kin, or even other corporate entities. These funds serve myriad purposes, from greasing the wheels of day-to-day operations to amplifying existing infrastructures. Now, here's the kicker: while obligated to settle its debts within agreed-upon terms, this company has a sneaky little ace up its sleeve. Instead of the mundane ritual of repayment, it can charm its lenders by offering to morph those loans into shares – a sort of financial shape-shifting, if you will.   And guess what?   It's all legit, courtesy of Section 62(3) of the Companies Act of 2013.   Talk about turning debt into dividends, right? Can the director or their relative give a loan to the company? (Section 73(2) of the Companies Act, 2013 read with Companies (Acceptance of Deposits) Rules, 2014) “Loan received from the Directors of the Company shall be considered as Exempted Deposit. ”Loans accepted by a private limited company from its directors or their relatives is allowed (out of own fund) and is considered as an exempt category deposit. Can the Shareholders give loans to a Company? Rule 3 of Companies (Acceptance of Deposits) Rules, 2014 , restricts company from accepting or renewing deposit from its members if the amount of such deposits together with the amount of other deposits outstanding as on the date of acceptance or renewal of such deposits exceeds 35% of the aggregate of the Paid-up share capital, free reserves and securities premium account of the company.  Notification issued by MCA dated June 13, 2017 exempts Private Limited Companies from the restriction of accepting deposit only up to 35% from its members and they can accept it beyond 35% but subject to the following conditions: i) The amount of deposit should not exceed 100% of the aggregate of the paid up share capital, free reserves and securities premium account; orii) It is a start-up, for five years from the date of its incorporation; or iii) which fulfills all of the following conditions, namely: -(a) Which is not an associate or a subsidiary company of any other company; (b) The borrowings of such a company from banks or financial institutions or any Body corporate is less than twice of its paid-up share capital or fifty crore rupees, whichever is less; and (c) such a company has not defaulted in the repayment of such borrowings subsisting at the time of accepting deposits under section 73 Provided also that all the companies accepting deposits shall file the details of monies so accepted to the Registrar in Form DPT-3. Limits of Borrowings & Approvals required, if any Pursuant to MCA Notification dated June 05, 2015, the provisions of Section 180 of the Companies Act, 2013 is not applicable to the private limited Companies. SectionsRequirementsSection 180 (1) (c) of the Act, 2013This section states that the Board of Directors of a company shall exercise the Borrowing powers only with the consent of the company by a special resolution where the money to be borrowed, together with the money already borrowed by the company will exceed aggregate of its paid-up share capital, free reserves and securities premium, apart from temporary loans obtained from the company’s bankers in the ordinary course of business. Section 180(2)Every special resolution passed by the company in general meeting in relation to the exercise of the powers referred to in clause (c) of sub-section (1) shall specify the total amount up to which monies may be borrowed by the Board of Directors. Section 180 (5) No debt incurred by the company in excess of the limit imposed by clause (c) of sub-section (1) shall be valid or effectual, unless the lender proves that he advanced the loan in good faith and without knowledge that the limit imposed by that clause had been exceeded Section 62(3) under the Companies Act of 2013 Groundbreaking shift in the financial landscape The introduction of Section 62(3) under the Companies Act of 2013 marked a groundbreaking shift in the financial landscape. This provision allows companies to metamorphose loans into equity, but with a quirky catch. Only loans that come with an in-built option for future equity conversion, approved by shareholders through a special resolution, can take this magical transformational journey. Now, let's delve into the spellbinding process of converting these loans. Suppose a company has borrowed an unsecured loan from its directors and dreams of turning it into equity down the line. To make this enchantment happen, it must first forge a debt conversion agreement with said directors, sealing the pact. Then, through the mystical power of a special resolution, the company can set the wheels in motion for the conversion. But wait, there's more! Before the magic unfolds, the company must seek a declaration from the director or their kin, as per Rule 2(c)(viii) of the Companies (Acceptance of Deposits) Rules, 2014. This declaration is like a potion, ensuring that the borrowed sum isn't conjured from thin air but has a tangible source i. e. such amount is not being given out of borrowed funds and the same is disclosed in the board report. And thus, through this bewitching procedure, loans are transmuted into equity, weaving a tale of financial alchemy that dances between the realms of loans and shares. Compliances to be undertaken at the time of taking loans 1) Hold a Board Meeting & pass a resolution For accepting a loan with an option to convert it to equity in future. To fix time, date and place of extra ordinary general meeting & to approve the draft notice along with explanatory statement of extra ordinary general meeting. 2) Hold Extra Ordinary General Meeting and Pass a special resolution for accepting the loan with an option to convert it to equity in future and giving authority to enter into loan conversion agreement Execute a loan conversion agreement between the company and lenders. File form MGT-14 within 30 days of passing the special resolution. Compliances to be undertaken at the... --- - Published: 2025-03-11 - Modified: 2025-07-21 - URL: https://treelife.in/compliance/registered-owner-vs-beneficial-owner-unveiling-types-of-ownership/ - Categories: Compliance - Tags: Beneficial Owner, company ownership, company ownership structure, company ownership types, how to transfer company ownership, nature of company ownership, private limited company ownership, Registered Owner, Types of Ownership What is beneficial ownership in generic parlance? It refers to having some interest in any property, goods including securities, or favorable interest may be referred to a "profit, benefit or advantage panning out from a contract, or the ownership of an estate as distinct from the legal possession or control. ” Difference between Registered Owner & Beneficial Owner as per Companies Act, 2013 (‘Act, 2013’) Under the Companies Act, 2013 (‘Act, 2013’)1, the Registered Owner refers to the person whose name is entered in the register of members or records of the company as the legal owner of the shares. This individual holds the title and has the right to vote and receive dividends. In contrast, the Beneficial Owner is the person who ultimately enjoys the benefits of ownership, such as dividends or control, even though the shares are registered in another person’s name. Section 89 of the Act mandates disclosure when the registered owner and beneficial owner are different, ensuring transparency in ownership structures and preventing misuse through proxy or benami holdings Meaning of Registered owner as per the Companies Act? A person whose name is entered in the Register of Members as the holder of shares in that company but who does not hold the beneficial interest in such shares is called as the registered owner of the shares;Meaning of Beneficial owner as per the Companies Act? Beneficial interest has been defined in the following manner for section 89 and 90 of the Act, 2013 as follows:"(10) For the purposes of this section and section 90, beneficial interest in a share includes, directly or indirectly, through any contract, arrangement or otherwise, the right or entitlement of a person alone or together with any other person to—(i) exercise or cause to be exercised any or all of the rights attached to such share; or(ii) receive or participate in any dividend or other distribution in respect of such shares. ” Requirements for Company Ownership under the Act, 2013 SectionsRequirementsExamplesUnder Section 89Section 89 of the Act, 2013, requires making of declaration in cases where the registered owner and the beneficial owner of shares in a company are two different personsFor acquiring membership by such entities (for example: partnership firm, Hindu Undivided Family (‘HUFs’), etc) who are not allowed to hold shares directly of a company. First proviso to section 187The first proviso of section 187 allows a holding company to hold the shares of its wholly- owned subsidiary in the name of nominees, other than in its own name for the purpose of meeting the minimum number of members as per the Act, 2013i) To satisfy the requirement of minimum number of members (i. e. ) 2 (Two) in case of a private limited company and 7 (Seven) in case of a public limited company. ii) To incorporate or to have a wholly owned subsidiary. Mandatory Declarations: Under Section 89 read with Rule 9 of the Companies (Management and Administration) Rules, 2014  Section 89 read with rule 9 of the Companies (Management and Administration) Rules, 2014 deals with declaration of beneficial interest in the shares held. The person or the company (as the case may be), whose name is to be entered into the register of members of the company shall submit a declaration in Form MGT-4 within thirty days from the date of acquisition or change in beneficial interest to the company The person or a company (as the case may be), who holds the beneficial interest in any share shall submit a declaration in Form MGT-5 along with the covering or request letter to the company in which they hold the beneficial interest within thirty days from the date of acquisition or change in beneficial interest. On receipt of declaration in Form MGT-4 & MGT-5 by the company, the Company to make note of such declaration in the register of members and intimate the Registrar of Companies (‘ROC’) in e-Form MGT 6 within thirty days from the date of receipt of declaration in Form MGT-4 & 5. The basic intent behind the above section is to reveal the identity of the beneficial owner who is unknown to the company. Significant Beneficial Owner (SBO) Section 90 of the Act, 2013 has the following features in broad: SBO has been defined; Every individual who is a significant beneficial owner in the reporting company shall file a declaration to the Company in form no. BEN-1; Upon receipt of Declaration in the manner specified above, the reporting Company shall file a return of SBO in form BEN-2 with the Registrar of Companies (ROC); Register in form no. BEN-3 is to be kept for recording the declarations given under this section; Power of companies to seek information from members, believed to be beneficial owners, in form no. BEN-4; Power of companies to approach the Tribunal in case of non-receipt or inadequate response from the members and non-members; and Serious penal provisions for non-compliances with the provision of the said section. Section 89 and 90 work in two different fields altogether. While section 89 talks about disclosure of nominal and beneficial interest thereby providing duality / dichotomy of ownership, section 90 indicates the magnitude of holding. Further, section 89 does not require the disclosure only from individuals but bodies corporate as well. The same is not the case with section 90 which aims at revealing the individuals as significant beneficial owner(s). Section 187 of the Act, 2013 ApplicableBrief descriptionFor CompaniesThe proviso to sub-section (1) grants exemption to holding companies in case of holding shares of its subsidiary companies. The exemption allows holding companies to appoint nominees for itself to hold shares in the subsidiary/wholly-owned subsidiary companies in order to meet the statutory minimum limit of members in a company. Difference between Section 89 and First proviso to Section 187  Basis of DifferenceSection 89First proviso to Section 187 Consists ofIt deals with making disclosures by the registered owner, beneficial owner and the company to the ROCIt deals with making and holding investment by a holding company... --- > Maharashtra continues to assert its dominance as India’s economic powerhouse, and the recently released Economic Survey 2024-25 not only reinforces this status but also sets the tone for a forward-looking growth narrative. From impressive economic fundamentals to a vibrant startup ecosystem, robust infrastructure, and strategic policy reforms, Maharashtra is setting benchmarks for inclusive and sustainable development. - Published: 2025-03-11 - Modified: 2025-08-07 - URL: https://treelife.in/reports/maharashtra-economic-survey-2024-25/ - Categories: Reports - Tags: Maharashtra Economic Survey, Maharashtra Economic Survey 2024-25 DOWNLOAD PDF Maharashtra continues to assert its dominance as India’s economic powerhouse, and the recently released Economic Survey 2024-25 not only reinforces this status but also sets the tone for a forward-looking growth narrative. From impressive economic fundamentals to a vibrant startup ecosystem, robust infrastructure, and strategic policy reforms, Maharashtra is setting benchmarks for inclusive and sustainable development. This article presents a comprehensive deep dive into the highlights of the survey, accompanied by contextual insights and implications for entrepreneurs, investors, and businesses seeking to scale in India’s most dynamic state economy. Section 1: Macroeconomic Overview Solid Fundamentals, Strong Outlook Maharashtra’s economy is projected to grow at 7. 3% in FY25 — a rate higher than India’s overall growth estimate of 6. 5%. This comes on the back of a strong 7. 6% real GSDP growth in FY24. More importantly, Maharashtra’s per capita income stands at ₹2. 79 lakh (FY24), nearly 47% above the national average (₹1. 89 lakh), highlighting superior prosperity levels and strong consumption potential. Category Maharashtra IndiaPopulation- 2011 census11. 24 crore (9. 3% of India)121. 08 croreUrbanization - 2011 census45. 2%31. 1%Literacy Rate - 2011 census82. 3%73%Sex Ratio (females per 1,000 males) - 2011 census 929943Net Sown Area (2021-22) (lakh hectares)16. 59 (11. 8% of India)141Major CropsJowar (44. 4%), Cotton (34%), Wheat (3. 7) Wheat ( 115. 4 metric ton) Cotton (299. 26 lakh bales)Livestock (2019 Census)3. 3 crore (6. 2 of India) 53. 67 crore Forest Area (2021) (sq. km) 61,952 (8% of India)7,75,377Foreign Direct Investment (FDI) (2019-24) 31% of India’s total $709. 84 billionSmall & Medium Enterprises 46. 74 lakh (14. 3) 326. 65 lakh (total MSMEs in India)Electricity Generation (2023-24) (million kWh)1,43,746 (8. 3% of India)17,34,375Bank Branches (2024)13,929 (8. 8% of India)1,59,130Gross State Domestic Product (GSDP) (2023-24) (₹ lakh crore)40. 55 (13. 5% of India)301. 22Per Capita Income (₹) as per 31st March 20242,78,6811,88,892 These figures are a testament to Maharashtra’s structural resilience and diversified growth engines, positioning it as an engine of India’s broader economic momentum. Section 2: India's Largest State Economy Maharashtra by the Numbers The state accounts for 13. 5% of India’s GDP — the highest share among all states. Its nominal GSDP is estimated at ₹40. 56 lakh crore (~$550 billion), which places it ahead of many countries including Portugal, UAE, and Thailand. With this scale, Maharashtra is not only the largest subnational economy in India but also one of the top 20 economic regions globally. The depth of its economy is driven by a diversified industrial base, high financial inclusion, and strong urban-rural economic linkages. Section 3: Maharashtra on the Global Stage Not Just a Regional Leader If Maharashtra were a standalone nation, it would rank among the top 20 global economies in terms of GDP. Mumbai — the capital — is the nerve center of India’s financial ecosystem. It hosts institutions like RBI, SEBI, BSE, NSE, and serves as the operational base for many global banks and corporations. This global positioning enhances investor confidence, facilitates capital flows, and elevates Maharashtra’s strategic significance on the international map. Moreover, the state’s efforts to integrate into global value chains through trade and investment policies further strengthen this standing. Section 4: GSDP Composition A Balanced Growth Engine The GSDP composition highlights a structurally balanced economy: Services (58%): Dominated by trade, transport, communication, finance, real estate, education, health, and IT-enabled services. Industry (27%): Includes manufacturing (automobiles, electronics, pharmaceuticals), construction, electricity, gas, water supply, and mining. Agriculture & Allied (15%): Comprises agriculture, animal husbandry, forestry, and fishing. Such diversification acts as a natural buffer against sector-specific downturns and underpins Maharashtra’s sustained economic momentum. Section 5: Fiscal Health Sound and Sustainable Public Finances Maharashtra has demonstrated fiscal prudence while pursuing economic development: Debt-to-GSDP ratio (FY25 BE): 17. 3%, comfortably below the FRBM benchmark of 25%. Total Debt Stock: ₹7. 83 lakh crore Revenue Receipts (FY24): ₹4. 86 lakh crore, showing steady growth. Own Tax Revenue (FY24): ₹2. 43 lakh crore, primarily driven by GST, excise duties, stamp duty, and registration charges. Notably, committed expenditure (salaries, pensions, interest) forms about 60% of total expenditure — a fiscal challenge that requires efficiency reforms. Still, the state has fiscal headroom to expand capital investments and welfare spending. Section 6: FDI Inflows Maharashtra Leads from the Front Maharashtra continues to be the top destination for foreign direct investment: 31% share of India’s total FDI inflows (Oct 2019 – Sep 2024). Driven by investor-friendly policies, skilled workforce, and robust infrastructure ecosystem. FDI sectors include financial services, IT/ITeS, manufacturing, logistics, and renewable energy. The government has complemented this with proactive facilitation through initiatives like MAITRI (single-window clearance), district investment councils, and sector-specific promotion. Section 7: Startup Capital of India Deep and Distributed Innovation Maharashtra has emerged as India’s most prolific startup hub: 26,686 DPIIT-recognized startups as of FY25 — nearly 24% of India’s total. 27 Unicorns — highest among all Indian states. Startups present in every district — highlighting democratization of entrepreneurship. Support infrastructure includes over 125 incubators, state-backed venture funds, innovation grants (like Maharashtra Startup Week), and women-focused startup incentives. The Maharashtra State Innovation Society (MSInS) has been instrumental in coordinating startup policy and programs. Section 8: Domestic Investment Momentum Capital Inflows Beyond Metros In early 2024, the state conducted investment drives across 34 districts: 2,652 MoUs signed Proposed Investment: ₹96,680 crore Estimated Employment Generation: 2. 3 lakh jobs This decentralization of investment reflects the state’s commitment to inclusive industrial growth and job creation beyond Tier 1 cities. Section 9: Export Performance & Infrastructure Edge A Trade Powerhouse Maharashtra ranks second in India’s merchandise exports with a 15. 4% share in FY24. Key sectors include: Automobiles Pharmaceuticals Chemicals Textiles Machinery and Equipment Software and IT Services (2nd highest software exports in India) Infrastructure Highlights: JNPT: India’s largest container port (~50% of India’s container cargo handled here) Mumbai & Pune: International airports with cargo capabilities Multi-modal logistics parks, dry ports, and industrial corridors strengthen last-mile connectivity. These trade-enabling assets position Maharashtra as a global manufacturing and services export hub. Section 10: What This Means for Startups, Businesses & Investors Maharashtra’s economic, infrastructural, and policy... --- - Published: 2025-03-04 - Modified: 2025-07-21 - URL: https://treelife.in/compliance/gift-sez-compliances/ - Categories: Compliance - Tags: gift sez, gift sez compliance Establishing and operating a unit within the Gujarat International Finance Tec-City (GIFT) International Financial Services Centre (IFSC) offers numerous advantages, including strategic location and a business-friendly environment. However, to fully leverage these benefits, it's imperative for businesses to adhere to the compliance requirements set forth by the Special Economic Zone (SEZ) authorities. This blog provides a comprehensive overview of the periodic and transaction-based reporting obligations essential for seamless operations in GIFT IFSC. Key Periodic SEZ Compliances for Units in GIFT IFSC Monthly Performance Report (MPR): Units are required to submit a Monthly Performance Report detailing their business activities and performance metrics for the preceding month. This report serves as a vital tool for the Development Commissioner to monitor the unit's operations and ensure alignment with SEZ objectives. Service Export Reporting Form (SERF): For units engaged in service exports, the SERF must be filed monthly. This form captures comprehensive data on the nature and value of services exported, aiding in the assessment of the unit's contribution to foreign exchange earnings. Annual Performance Report (APR): Annually, units must submit an APR, which provides a detailed account of their financial performance, including the Net Foreign Exchange (NFE) earnings. The Unit Approval Committee utilizes this report to evaluate whether the unit meets the performance criteria stipulated in the SEZ regulations. Investment and Employees Report: This report offers insights into the capital investments made and employment generated by the unit. It is essential for validating the unit's economic impact and adherence to the development goals of the SEZ. Renewal of NSDL Portal Access and Payment of Annual Maintenance Contract (AMC) Fees: To maintain uninterrupted access to the SEZ Online portal, units must ensure timely renewal of their credentials and payment of the associated AMC fees. This portal is crucial for the electronic filing of various compliance documents and forms. Transaction-Based Reporting Requirements In addition to periodic reports, units may need to comply with transaction-specific reporting, depending on their operational activities: Import Clearance at SEZ: Units importing goods or services into the SEZ must follow the prescribed customs clearance procedures, ensuring all documentation aligns with SEZ import regulations. Filing for Integrated Goods and Services Tax (IGST) Exemption for Procurement from Domestic Tariff Area (DTA): SEZ units are eligible for IGST exemptions on goods and services procured from the DTA. To avail this benefit, appropriate filings and declarations must be submitted as per the guidelines. Execution of Additional Bond-cum-Legal Undertaking: Depending on the nature of transactions, units might be required to execute additional bonds or legal undertakings, committing to fulfill specific obligations under the SEZ laws. Importance of GIFT SEZ Compliance Adherence to these compliance requirements is not merely a statutory obligation but a cornerstone for the smooth and efficient functioning of businesses within GIFT IFSC. Non-compliance can lead to operational disruptions, financial penalties, and could potentially jeopardize the unit's status within the SEZ. Conclusion Operating within GIFT IFSC presents a unique opportunity to be part of a dynamic financial ecosystem. By diligently adhering to the outlined SEZ compliance requirements, businesses can ensure seamless operations and fully capitalize on the benefits offered by this premier international financial services center. --- - Published: 2025-03-04 - Modified: 2025-07-21 - URL: https://treelife.in/finance/bitcoin-etfs-a-tax-efficient-gateway-for-indian-investors/ - Categories: Finance - Tags: bitcoin etf Bitcoin continues to dominate financial discussions as a high-growth asset, attracting significant interest from investors worldwide. As global markets embrace Bitcoin through various investment vehicles, Indian investors face unique challenges due to regulatory ambiguities and taxation policies surrounding direct cryptocurrency investments. However, the introduction of Bitcoin Exchange-Traded Funds (ETFs) provides a compelling alternative. These ETFs offer a regulated and potentially tax-efficient route to gain exposure to Bitcoin without the complexities of direct ownership. With major financial institutions launching spot Bitcoin ETFs, global investors now have a new, regulated means of entering the crypto market. For Indian investors, this development presents an opportunity to invest in Bitcoin indirectly while mitigating regulatory concerns and high taxation. Why Bitcoin ETFs? Bitcoin ETFs are funds that track the price of Bitcoin and are traded on stock exchanges, much like traditional ETFs that follow equity indices or commodities. Instead of purchasing Bitcoin directly and dealing with issues like wallet security and exchange risks, investors can simply buy shares of Bitcoin ETFs. This structured approach provides greater transparency, liquidity, and ease of access compared to direct cryptocurrency investments. For Indian investors, Bitcoin ETFs offer several advantages over direct crypto ownership: Regulated Market Access – Unlike cryptocurrencies, which operate in an uncertain regulatory landscape, ETFs trade on established stock exchanges such as the NYSE or NASDAQ. This ensures transparency and compliance with financial regulations. Easier Transactions – Investors can buy and sell Bitcoin ETFs using their existing brokerage accounts without requiring access to crypto exchanges. No Need for Private Wallets – Bitcoin ETFs eliminate concerns related to securing private keys, managing wallets, or falling victim to exchange hacks. Potential Tax Efficiency – ETFs might be taxed more favorably than direct Bitcoin holdings, though clarity is still evolving in the Indian context. Tax Implications: Bitcoin ETFs vs. Direct Bitcoin Investments One of the most critical considerations for Indian investors is taxation. The tax treatment of Bitcoin ETFs is still uncertain and subject to interpretation under existing regulations. Below is a comparative look at the taxation of Bitcoin ETFs versus direct cryptocurrency investments: 1. Capital Gains Taxation Bitcoin ETFs: If treated like foreign equity investments, long-term capital gains (holding period over 24 months) may be taxed at 12. 5%, and short-term capital gains may be taxed as per individual income slabs. Direct Bitcoin Investments: Gains from cryptocurrency transactions are taxed at a flat 30% rate under India’s Virtual Digital Asset (VDA) classification, with no indexation benefits or loss set-offs. 2. Unclear VDA Classification The broad definition of VDAs under the Income-tax Act raises the possibility that Bitcoin ETFs could be categorized under the same tax regime as cryptocurrencies. However, since ETFs do not entail direct Bitcoin ownership, their classification remains ambiguous. 3. Offsetting Losses Bitcoin ETFs: If taxed under equity rules, losses from Bitcoin ETFs could be set off against gains from other investments. Direct Bitcoin Investments: VDA losses cannot be carried forward or offset against other gains, making it a less flexible investment from a tax perspective. While Bitcoin ETFs present potential tax advantages, regulatory uncertainty persists. Investors should consult tax professionals before investing to ensure compliance with evolving regulations. Regulatory Considerations and Compliance for Indian Investors Beyond taxation, Indian investors need to account for regulatory frameworks governing overseas investments in Bitcoin ETFs: 1. Liberalised Remittance Scheme (LRS) Compliance Investments in foreign Bitcoin ETFs fall under India’s Liberalised Remittance Scheme (LRS), allowing individuals to remit up to USD 250,000 annually. A 20% Tax Collected at Source (TCS) applies on remittances exceeding INR 7 lakh annually, though it may be claimed as a refund when filing tax returns. 2. Regulated Exchange Trading Unlike direct Bitcoin investments through unregulated crypto exchanges, Bitcoin ETFs are traded on well-established stock exchanges, ensuring compliance with financial regulations. 3. Investment Legality and Future Outlook While investing in Bitcoin ETFs via foreign exchanges is currently allowed under LRS, India’s stance on crypto-related investments continues to evolve. SEBI and RBI’s regulatory perspectives will play a crucial role in determining the long-term viability of such investments. Conclusion: A New Asset Class for Indian Investors? Bitcoin ETFs present an exciting opportunity for Indian investors seeking exposure to Bitcoin in a regulated manner. By trading on established exchanges, these funds eliminate many of the challenges associated with direct cryptocurrency investments, including security risks, regulatory uncertainty, and high taxation. However, the tax treatment of Bitcoin ETFs in India remains uncertain and subject to evolving regulatory interpretations. While ETFs offer potential tax advantages, their classification under India’s VDA framework is yet to be clarified. Additionally, investors must navigate LRS compliance and TCS obligations when investing in foreign Bitcoin ETFs. As global markets continue innovating in the cryptocurrency space, Bitcoin ETFs could emerge as a distinct asset class, offering Indian investors a strategic way to participate in Bitcoin’s growth while navigating regulatory complexities. Investors should conduct thorough research, consult financial professionals, and monitor regulatory changes before making investment decisions. Bitcoin ETFs might just be the bridge between traditional finance and the evolving world of digital assets, offering a new and potentially lucrative pathway for Indian investors to gain exposure to the Bitcoin revolution. --- - Published: 2025-03-04 - Modified: 2025-03-04 - URL: https://treelife.in/case-studies/whats-in-a-name-the-80-crore-lesson-from-bira-91s-costly-mistake/ - Categories: Case Studies The Rise of Bira 91   Bira 91 emerged as a disruptor in India’s beer market, challenging the dominance of traditional brands with its bold flavors, innovative branding, and youthful appeal. The brand quickly became synonymous with India’s growing craft beer culture. By FY23, Bira 91 was leading the premium beer segment, selling over 9 million cases annually and attracting global investors like Japan’s Kirin Holdings. The company was on track for an IPO in 2026, and the future looked bright. But then, a seemingly innocuous decision—a name change—derailed its momentum and cost the company ₹80 crore. Regulatory Oversight: The Name Change That Triggered Non-Compliance In preparation for its IPO, Bira 91’s parent company, B9 Beverages, decided to drop the word “Private” from its name. On the surface, this appeared to be a minor administrative update. However, in India’s heavily regulated alcohol industry, even the smallest changes can have far-reaching consequences. The moment B9 Beverages changed its name, all existing product labels became invalid. Under Indian excise laws, alcohol brands must register their labels with state authorities, and any change in the company’s name requires re-registration. This meant that Bira 91 had to halt sales and re-register its labels across multiple states—a process that took 4-6 months. During this period, the company was unable to sell its products, despite strong demand. The result? ₹80 crore worth of unsold inventory had to be discarded, leading to a 22% drop in sales and a 68% rise in losses, which ballooned to ₹748 crore—exceeding the company’s total revenue of ₹638 crore. The Domino Effect: What Went Wrong? Bira 91’s crisis was not just a result of regulatory hurdles but also a failure to anticipate and plan for them. Here’s a breakdown of what went wrong: 1. Lack of Pre-Approval: B9 Beverages did not secure regulatory approvals for the new labels before implementing the name change. This oversight led to an abrupt halt in operations. 2. No Phased Transition: The company failed to adopt a phased transition strategy, which could have allowed it to sell existing inventory under the old name while introducing the new branding gradually. 3. Inadequate Buffer Period: Without a buffer period to account for compliance timelines, Bira 91 was left vulnerable to sudden disruptions. 4. Industry-Specific Challenges: The alcohol industry in India is governed by a patchwork of state-specific excise laws, making compliance particularly complex. Regulatory Challenges and Legal Complexities The root of Bira 91’s problem lies in India’s outdated excise laws, which lack a streamlined mechanism for corporate name changes in regulated industries. Here’s why the system failed Bira 91: - No Transition Period: Indian excise laws do not provide a grace period for companies to sell products under their old name after a corporate restructuring. - Slow Re-Registration Process: The re-registration process for labels is time-consuming and varies from state to state, creating: unnecessary delays. - Mandatory Sales Pause: The requirement to halt sales during re-registration poses a significant operational and financial risk for businesses. This case highlights the urgent need for policy reforms that allow companies to update their branding without disrupting their sales cycles. Strategic Compliance Planning: The Key to Business Continuity - Takeaway for Founders and Businesses  Bira 91’s costly mistake serves as a wake-up call for businesses operating in regulated industries. Here are some key takeaways: 1. Conduct a Regulatory Impact Study: Before making any structural changes, analyze the legal, excise, and tax implications. Understanding the regulatory landscape is crucial to avoiding costly missteps. 2. Plan Compliance Before Action: Secure all necessary approvals before implementing changes. This includes pre-approval of new labels and conditional approvals from state authorities. 3. Adopt a Phased Transition Strategy: Avoid abrupt shifts by introducing changes gradually. This allows businesses to maintain continuity while complying with regulations. 4. Build a Regulatory Buffer Period: Factor in compliance timelines to prevent unexpected disruptions. A well-planned buffer period can save businesses from significant financial losses. 5. Understand Industry-Specific Regulations: Heavily regulated sectors like alcohol, finance, and pharmaceuticals require extra diligence. Founders must familiarize themselves with the unique challenges of their industry. Bira 91’s costly mistake underscores a critical lesson for businesses operating in highly regulated industries—compliance is not just a legal necessity, but a strategic pillar of business continuity. A lack of foresight in regulatory planning can lead to severe financial losses, operational disruptions, and reputational damage. To prevent such pitfalls, companies must integrate compliance into their core business strategy. 1. Compliance as a Business Strategy Rather than viewing compliance as an afterthought, companies must embed regulatory risk assessments into their decision-making processes. Any structural or operational change—be it a corporate restructuring, rebranding, or IPO preparation—should undergo a thorough compliance evaluation before execution. For instance, businesses can establish a Regulatory Compliance Checklist, ensuring that all approvals, industry-specific requirements, and legal frameworks are accounted for in advance. This proactive approach reduces the risk of operational halts and financial setbacks. 2. Regulatory Risk Mapping & Preemptive Approvals Industries like alcohol, pharmaceuticals, and financial services face complex, state-specific regulatory challenges. Mapping out regulatory risks at an early stage can prevent delays, penalties, and sales disruptions. Companies should engage with regulatory bodies well in advance, seeking conditional approvals or phased transition permissions to ensure smoother execution. For example, instead of abruptly implementing a name change like Bira 91 did, a business could apply for provisional label approvals before making corporate changes official. This would create a regulatory buffer that allows business continuity while compliance processes are underway. 3. Phased Implementation to Avoid Revenue Loss A phased transition strategy can mitigate risks associated with regulatory shifts. Companies should: Maintain existing operations while initiating new compliance processes in parallel. Introduce changes in select markets first before rolling out nationwide. Allocate a transition period where products under both old and new branding can legally coexist, preventing inventory wastage. Had Bira 91 implemented such an approach, it could have avoided the ₹80 crore in unsold inventory losses and the prolonged halt in sales. 4. Building a Regulatory Buffer for Compliance Timelines... --- - Published: 2025-03-04 - Modified: 2025-07-21 - URL: https://treelife.in/compliance/converting-your-partnership-firm-to-a-company/ - Categories: Compliance - Tags: convert partnership to company, Converting Partnership Firm to a Company Thinking of converting your partnership firm into a private limited company? This can be a strategic move for business expansion, credibility, and limited liability protection. However, the conversion process has several legal and procedural considerations. Here’s everything you need to know before making the transition. Eligibility Criteria for Conversion Conversion of a partnership firm into a private limited company is permitted under the Companies Act, 2013, provided certain conditions are met. The two most critical factors are: Registered Partnership Deed: Your partnership firm must be registered with the Registrar of Firms (ROF). If your firm is not registered, you will need to complete the registration process first. Deed Permitting Conversion: The existing partnership deed must explicitly include a clause that allows conversion to a company. If such a clause is missing, the deed must be amended to incorporate this provision and then re-registered with the ROF. Step-by-Step Process of Conversion of Partnership Firm to a Company Here’s a structured approach to converting your partnership firm into a private limited company: STEP 1 - Obtain Digital Signature Certificates (DSC) and Director Identification Numbers (DIN) All proposed directors must acquire DSC and DIN from the Ministry of Corporate Affairs (MCA). STEP 2 - Name Approval from MCA Apply for name approval through the RUN (Reserve Unique Name) service on the MCA portal. The new company name should ideally include "Private Limited" and should not be identical to existing names. STEP 3 - Draft and File Necessary Documents Incorporation Documents: File SPICe+ (INC-32) along with e-MoA (INC-33) and e-AoA (INC-34). Declaration by Directors and Partners: File necessary declarations stating compliance with the conversion process. STEP 4 - Execution of Asset and Liability Transfer Agreement The partnership firm must execute an agreement transferring all assets and liabilities to the new company. STEP 5 - Obtain New Registrations (PAN, TAN, GST, etc. ) Since the legal entity changes, a new PAN, TAN, and GST registration must be obtained for the company. STEP 6 - Closure of Partnership Firm’s Bank Account Once the private limited company is incorporated, the firm’s bank accounts must be closed, and a new account opened in the company’s name. STEP 7 - Apply for Business Licenses and Compliances Licenses such as GST, MSME, and professional tax must be re-registered in the company’s name. Tax Implications of Conversion The conversion process has some tax consequences that businesses should be aware of: Capital Gains Tax: If the firm’s assets appreciate in value, capital gains tax may be applicable upon transfer. Income Tax Impact: The new company must comply with corporate tax laws, which may differ from partnership taxation. GST Considerations: Any pending GST liabilities must be settled, and unutilized GST input credit can be transferred to the new entity. Stamp Duty: Depending on the state, a stamp duty may be levied on asset transfer agreements. Impact on Existing Contracts & Licenses Contracts with Clients & Vendors: All agreements with suppliers, customers, and vendors must be reviewed and transferred to the new company. Loan & Bank Agreements: Any outstanding loans in the firm’s name may need to be renegotiated or transferred. Intellectual Property (IP) & Trademarks: If the partnership owns a trademark or patent, it must be formally assigned to the new company. Employee Considerations Employment Contracts: Employee agreements must be revised under the new corporate entity. Provident Fund (PF) & ESIC Registration: If the firm had PF registration, a new registration under the company’s name is required. Tax Deduction at Source (TDS) on Salaries: A new TAN registration must be obtained to deduct TDS on employee salaries. Timeframe and Legal Complexities Amending and re-registering the partnership deed can be a time-consuming process, often taking anywhere from 6 to 8 months. The reason for this is that registration with the ROF is still largely a physical process, requiring submission of multiple documents and approvals. While your core business operations can continue without interruption, it’s essential to factor in this timeframe when planning your transition to a private limited company. Key Procedural Changes Upon Conversion Once your firm is converted to a company, several backend processes require immediate attention: New Registrations Required PAN (Permanent Account Number): Since the legal entity changes, the company will require a fresh PAN. The PAN of the partnership firm cannot be transferred. TAN (Tax Deduction and Collection Account Number): A new TAN is needed for the company to deduct tax at source (TDS) for employees, vendors, and other payments. GST (Goods and Services Tax): GST registration must be obtained afresh for the new company, as GST registrations are PAN-based. PT (Professional Tax): Professional Tax registrations also need to be updated under the new entity’s name. Transfer of Assets & Liabilities The company must take over all assets and liabilities of the partnership firm. A proper valuation and transfer agreement are essential to ensure a smooth transition. Intangible assets such as goodwill, brand value, and customer contracts must be assigned correctly to the new entity. What Happens to Your GST Input Credit? If you are looking to convert partnership to a company, a significant advantage is that GST input credit can be carried forward. This means any unutilized input tax credit from the partnership firm can be transferred to the new company, ensuring that you don’t lose financial benefits during the transition. Post-Conversion Compliance Requirements After incorporation, a private limited company must adhere to ongoing legal and financial compliance requirements: Annual Filings with ROC: Financial statements and annual returns must be filed with the MCA. Board Meetings: Conduct board meetings at least four times a year. Statutory Audit: A registered auditor must audit the company’s financial statements annually. Income Tax Filings: The company must file annual income tax returns and deduct TDS for employees and vendors. Why Convert? The Key Benefits Limited Liability Protection: The company structure shields personal assets from business liabilities. Better Credibility: A private limited company is perceived as more reliable and stable by investors, banks, and customers. Easier Fundraising: Raising capital from investors and financial institutions becomes... --- > Now, as Zepto gears up for an IPO in 2025, they are taking decisive steps to streamline its structure and enhance its market position. - Published: 2025-03-04 - Modified: 2025-03-04 - URL: https://treelife.in/case-studies/zepto-strategic-leap-restructuring-for-ipo/ - Categories: Case Studies - Tags: zepto ipo, zepto restructuring DOWNLOAD PDF Background Founded with a vision to revolutionize the hyperlocal delivery space, Zepto has rapidly grown into a major player in the quick commerce segment. With its focus on ultra-fast delivery and a robust operational model, it has carved a niche in the competitive landscape.   Now, as it gears up for an IPO in 2025, they are taking decisive steps to streamline its structure and enhance its market position. Reverse Flip for IPO Readiness Kiranakart Technologies Pte Ltd. , based in Singapore, has successfully secured approvals from the Singapore authorities1 and India’s NCLT to merge with its Indian subsidiary, Kiranakart Technologies Private Limited. This reverse flip is a crucial step as the company gears up for its much-anticipated IPO launch in 2025. What does it mean for investors from a tax perspective? Singapore: It is unlikely that this merger will have any capital gains implications for the investors as Singapore doesn't generally tax capital gains India: The transaction is expected to be tax-neutral under Indian tax laws. The cost of acquisition and the holding period for the shares of the Singapore Hold Co. i. e. Kiranakart Technologies Pte Ltd should carry over to the shares of the merged Indian company, received pursuant to merger. RBI approval to be obtained for this merger? No prior RBI approval will be required for such in-bound merger as it fulfils the conditions mentioned under the Foreign Exchange Management (Cross Border Merger) Regulations 2018 Business Model Rejig: Introduction of Zepto Marketplace Private Limited As part of its pre-IPO optimization, Zepto has restructured its business model by incorporating a wholly owned subsidiary, Zepto Marketplace Private Limited, under Kiranakart Technologies Private Limited. Key points to note here as per publicly available data2: Transfer of IP Ownership: The intellectual property rights for the Zepto app and website, previously owned by Kiranakart Technologies Private Limited, appear to have been transferred to Zepto Marketplace Private Limited. Consequently, Geddit Convenience Private Limited, Drogheria Sellers Private Limited, and Commodum Groceries Private Limited, which previously held licenses to the “Zepto” app and website from Kiranakart Technologies Private Limited, will now license the same through Zepto Marketplace Private Limited. Market Comparability: By adopting this structure, the business model aligns more closely with established players like Swiggy Instamart and Blinkit (Zomato). These developments underscore Zepto’s commitment to streamlining its operations and solidifying its market position as it prepares to enter the public domain. The strategic nature of these moves reflects the ambition to not just compete but lead in the fast-paced world of quick commerce. Please refer to the comparative structure outlined below for a clearer understanding. References: --- > In 2024, India’s online gaming market was valued at over $3.9 billion, but a battle with Google threatens its future. As Google tightens control over Google Play Store payments, Real Money Gaming (RMG) companies in India face an uncertain future—caught between regulatory battles, high service fees, and the looming expiration of Google’s pilot program. - Published: 2025-03-04 - Modified: 2025-08-07 - URL: https://treelife.in/technology/why-real-money-gaming-companies-face-uncertainty-on-the-google-play-store/ - Categories: Emerging Technology Introduction In 2024, India’s online gaming market was valued at over $3. 9 billion, but a battle with Google threatens its future. As Google tightens control over Play Store payments, Real Money Gaming (RMG) companies in India face an uncertain future—caught between regulatory battles, high service fees, and the looming expiration of Google’s pilot program.   In 2024, Google removed multiple Indian apps for allegedly violating its in-app payment policies, leading to a government intervention that temporarily reinstated these apps1. While alternative payment options were introduced following Competition Commission of India (CCI) intervention, the core issue remained unresolved—Google continued to charge high commissions on transactions, leading to further disputes and regulatory scrutiny. For RMG companies, the problem is twofold: Google’s high commission fees (15-30%) on in-app transactions, which could be imposed once the pilot program allowing RMGs on the Play Store expired in June 20242. The 28% GST on deposits, which already burdens gaming companies, making Google’s fees an additional financial blow. Now in 2025, with Google pausing its RMG expansion plans, government regulators stepping in, and global legal rulings influencing India’s tech policies, the future of RMGs on the Play Store remains uncertain. As of early 2025, Google has not officially implemented the standard 15-30% commission on RMG transactions, but its continued silence leaves companies uncertain about the future. Background: The Relationship Between RMGs and Google Play Store The Ban Before 2022 Before September 2022, RMG apps were not allowed on Google Play Store in India due to: Gambling Addiction Concerns – Easy access to RMGs on the Play Store might lead to users spending excessive amounts of money, raising concerns about gambling addiction. Regulatory Uncertainty – The RMG market in India was relatively new. The lack of clear guidelines for online gaming in India made Google hesitant to list RMG apps. As a result, RMG companies like Dream11, MPL, and RummyCircle had to rely on APK downloads from their websites, significantly limiting their reach and user acquisition. The 2022 Play Store Pilot Program for RMGs In September 2022, Google launched a pilot program allowing select RMG and fantasy sports apps to be listed on the Play Store without charging in-app commissions. This was a game-changer for the industry, as Dream11 alone gained 55 million new users in 2023, compared to only 20 million in 2022 before Play Store access. However, the pilot program was set to expire in June 2024, leading to concerns that RMG apps would be subjected to Google’s standard 15-30% service fee, significantly impacting their profitability3. Key Updates in 2024-2025: What Has Changed? 1. Google Pauses RMG Expansion Plans (June 2024) Google had initially planned to expand Play Store support for more RMG apps in India and other countries. However, in June 2024, Google paused this expansion, citing difficulties in supporting real-money gaming apps in markets without clear licensing frameworks. This decision created further uncertainty for RMG operators, as Google has yet to confirm whether existing apps will face higher service fees. 2. Government and CCI Intervene Against Google’s App Store Policies In March 2024, Google delisted several Indian apps, including non-RMG platforms, for not complying with Play Store billing policies. This triggered a strong response from the Indian government, which forced Google to reinstate these apps temporarily. In November 2024, the Competition Commission of India (CCI) launched an official investigation into Google’s Play Store policies for RMG and non-RMG apps, following complaints of monopolistic practices. The case is still ongoing, and Google may be required to revise its policies depending on the outcome. Now, industry leaders and legal experts are calling for stricter regulations that could classify app store dominance as an 'anti-competitive practice'—forcing Google to reduce or eliminate service fees for select industries. 3. Legal Rulings Impacting Google’s Play Store Fees A major U. S. court ruling in October 2024 required Google to allow third-party app stores on Android devices, setting a precedent for reduced reliance on Google Play billing. If similar regulations are introduced in India, RMG companies may not be forced to pay Google’s in-app fees. 4. Google to Allow RMG Ads on Play Store (April 2025 Onward) Google recently announced a policy change allowing skill-based real-money games to advertise on the Play Store from April 14, 2025. While this does not yet impact app listing fees, it signals a shift in Google’s approach towards monetizing the RMG industry. The “Double Blow” for RMG Companies: Google Fees + 28% GST If Google introduces a 15-30% commission on RMG transactions, it would be on top of the existing 28% GST on deposits. This “double taxation” could make it financially unviable for RMG apps to remain on the Play Store. As seen in 2023, Dream11’s Play Store listing boosted its user acquisition, but if fees increase, companies may return to website-based APK downloads to avoid excessive costs. For example, if a player deposits ₹1,000 on an RMG app, ₹280 is immediately deducted as GST. If Google’s 30% commission is imposed on in-app transactions, another ₹216 (30% of ₹720) would be taken, leaving the company with just ₹504—a loss of nearly 50% before any operational costs or player payouts. How RMG Companies Are Responding With uncertainty surrounding Google’s policies, RMG companies are exploring alternative strategies to sustain growth. 1. Shifting Away from Play Store Some gaming companies are returning to direct APK downloads from their websites to avoid Google’s high fees. Progressive Web Apps (PWAs) are also being considered as an alternative distribution model. 2. Lobbying for Government Intervention RMG companies are pushing for regulatory relief, urging the government to ensure fairer digital marketplace policies. 3. Exploring Alternative Payment Models Some platforms are experimenting with direct bank integrations, blockchain payments, and third-party payment gateways to bypass Google’s in-app billing system. The Future of RMGs on the Play Store: Possible Scenarios The fate of RMG companies on the Play Store depends on several key factors, including Google’s final policy decision, government regulatory action, and legal precedents. Scenario 1: Google Extends the Pilot Program Again RMGs... --- - Published: 2025-03-04 - Modified: 2025-07-16 - URL: https://treelife.in/taxation/understanding-your-income-tax-return-filing-options/ - Categories: Taxation - Tags: income tax return filing, income tax return filing date, income tax return filing date 2025, income tax return filing deadline, income tax return filing due date, income tax return filing last date, income tax return filing news, income tax return filing online, online income tax return filing Filing your Income Tax Return (ITR) on time is crucial to avoid penalties and ensure compliance with tax regulations. However, if you missed the deadline, made errors in your return, or need to declare additional income later, the Income Tax Department provides multiple options to rectify or update your filings. Here’s a detailed breakdown of the available options: 1. Belated Return: Filing After the Due Date The original deadline for filing your ITR for the Financial Year (FY) 2024-25 is 31st July 2025. If you miss this deadline, you still have the option to file a Belated Return by 31st December 2025. However, filing a belated return comes with certain consequences: Late Filing Fees: Under Section 234F of the Income Tax Act, a penalty is imposed based on taxable income: INR 5,000 for individuals with an income above INR 5 lakh. INR 1,000 for individuals with income up to INR 5 lakh. Interest on Tax Dues: If you have unpaid taxes, an interest of 1% per month (under Section 234A) is applicable on the outstanding tax amount until the date of filing. Ineligibility for Carry Forward of Losses: Losses under the heads “Capital Gains” or “Profits & Gains from Business & Profession” cannot be carried forward if you file a belated return. Filing a belated return is always better than not filing at all, as non-filing can lead to additional penalties, scrutiny, and even prosecution in some cases. 2. Revised Return: Correcting Mistakes in Filed ITR If you have already filed your ITR but later realize that there are errors—such as incorrect income details, missing deductions, or misreported figures—you can rectify these mistakes by filing a Revised Return under Section 139(5). The last date to file a revised return for FY 2024-25 is 31st December 2025. There is no limit to how many times you can revise your return, as long as the revised return is filed within the deadline. The revision process can be done online through the Income Tax e-Filing portal. Common mistakes that necessitate a revised return include: Incorrect bank account details. Omission of income sources. Claiming incorrect deductions. Errors in tax computation. Filing a revised return ensures accurate reporting and can help prevent penalties or scrutiny by tax authorities in case of discrepancies. 3. Updated Return: Rectifying Non-Disclosure of Income From April 2022, the government introduced the concept of an Updated Return (ITR-U) under Section 139(8A), allowing taxpayers to voluntarily update their tax filings for missed or additional income declarations. This option provides a safety net for those who may have: Forgotten to declare certain income. Underreported taxable earnings. Realized the need for additional disclosures after filing their return. Key Conditions for Filing an Updated Return: The Updated Return for FY 2024-25 can be filed until 31st March 2028 (within 24 months from the end of the relevant assessment year). Restrictions on filing an Updated Return: You cannot file an updated return to declare a loss or carry forward losses. You cannot use an updated return to reduce tax liability. You cannot claim a higher refund than originally declared. Additional Tax Liability: Filing an updated return requires payment of additional tax: 25% of the additional tax liability if filed within 12 months from the end of the relevant assessment year. 50% of the additional tax liability if filed after 12 months but before 24 months. This option provides a way for taxpayers to proactively correct their tax filings and avoid potential notices or penalties in the future. Which Option Should You Choose? The choice of whether to file a belated, revised, or updated return depends on your specific situation: ScenarioRecommended ActionMissed the original ITR deadlineFile a Belated Return before 31st December 2025Found mistakes in an already filed returnFile a Revised Return before 31st December 2025Need to disclose additional income after the deadlineFile an Updated Return (ITR-U) by 31st March 2028 Conclusion Filing income tax returns on time is always the best course of action, but if you missed the deadline or need to make corrections, the Income Tax Department provides options to rectify and update your filings. Whether you opt for a belated return, revised return, or updated return, understanding the implications of each can help you make an informed decision and stay compliant with tax laws. As tax laws and deadlines may be subject to change, it’s always advisable to consult a tax professional or refer to the official Income Tax Department portal for the latest updates. --- - Published: 2025-02-28 - Modified: 2025-02-28 - URL: https://treelife.in/news/from-fees-to-tokenization-key-ifsca-updates/ - Categories: News Strengthening the Regulatory Landscape at GIFT IFSC The International Financial Services Centres Authority (IFSCA) continues to enhance the regulatory landscape at GIFT IFSC, driving global competitiveness and ease of doing business. On February 26, 2025, IFSCA introduced key circulars and consultation papers aimed at providing greater clarity, easing compliance, and fostering innovation. Key Regulatory Changes i) Reduction in Interest on Late Payment of FeesIFSCA has significantly reduced the interest rate on late fee payments from 15% per month to 0. 75% per month. This reduction underscores the regulator’s commitment to promoting the overall IFSC ecosystem, easing compliance burdens while maintaining financial discipline . ii) Revised Aircraft Leasing FrameworkIFSCA has revised its aircraft leasing rules to allow lessors in IFSCs to acquire aircraft from Indian manufacturers, subject to the following conditions: The aircraft should not be exclusively used by Indian residents or for domestic services. Acquisition is permitted if the manufacturer is not a group entity of the lessor. Sale and leaseback transactions are permitted for aircraft being imported into India for the first time. This change strengthens India's position as a global aircraft leasing hub. iii) Mandatory FIU-IND FINGate 2. 0 RegistrationRegulated entities must register on the FIU-IND portal before commencing business (or within 30 days post-commencement). This step enhances compliance with AML/CFT regulations, reinforcing financial transparency at IFSC. Consultation Papers Tokenization of Real-World AssetsIFSCA is exploring a regulatory framework to enable the issuance, trading, and settlement of tokenized assets (commodities, real estate, etc. ). This aims to reduce transaction time, enhance liquidity, transparency, and accessibility . Securitization by Overseas Insurers/ReinsurersThe consultation paper seeks stakeholder views on the proposed securitization framework for overseas insurers/reinsurers providing insurance coverage to IFSC-regulated entities. It focuses on ensuring financial stability and risk mitigation while promoting a globally competitive insurance and reinsurance market in the IFSC. Need guidance on IFSC regulations? At Treelife, we help businesses navigate the GIFT IFSC and their strategic fit with expert legal, financial, and compliance solutions. Write to us at gift@treelife. in --- - Published: 2025-02-28 - Modified: 2025-07-22 - URL: https://treelife.in/startups/roll-up-vehicles-ruvs-and-syndicates-reshaping-startup-investments-in-india/ - Categories: Startups - Tags: roll up vehicles, roll up vehicles angellist, roll up vehicles india, syndicates The Indian startup ecosystem is experiencing a shift in the way investments are structured, with Roll Up Vehicles (RUVs) and Syndicates emerging as preferred models for pooling capital. These structures streamline startup funding while simplifying the cap table for founders and offering flexible investment opportunities for angel investors. As India witnesses a growing number of angel networks and syndicates, it is crucial to understand how these models work, how they compare with traditional investment structures, and the regulatory landscape governing them. Understanding RUVs and Syndicates Roll-Up Vehicles (RUVs) RUVs serve as a mechanism for founders to consolidate investments from multiple angel investors into a single entity, which then invests in the startup. This approach prevents a crowded cap table, making it easier for startups to manage investor relationships and future funding rounds. RUVs are particularly beneficial for early-stage startups that seek funding from numerous smaller investors but want to keep their capitalization structure simple and manageable. Syndicates Syndicates operate differently in that they are led by a seasoned lead investor who identifies investment opportunities, conducts due diligence, and negotiates deal terms. Once a startup is deemed a viable investment, the lead investor presents it to syndicate members, who can choose to participate in the deal. This model allows individual investors to access high-quality startup investments with the benefit of professional deal evaluation and guidance. Platforms like AngelList India and LetsVenture have played a pivotal role in facilitating RUVs and Syndicates, offering a marketplace that connects startups with a network of angel investors. These platforms simplify the investment process, ensuring compliance with regulations while enabling efficient deal execution. Comparison with Other Investment Models While RUVs and Syndicates offer streamlined investment mechanisms, they differ significantly from traditional models such as direct angel investments and venture capital (VC). Here’s how they compare: Investment ModelStructureInvestor InvolvementRisk ProfileRegulatory ComplexityDirect Angel InvestmentIndividual angel investors directly invest in startupsHigh – investors negotiate terms and conduct due diligence themselvesHigh – individual exposure to riskModerate – direct investment with fewer intermediariesSyndicatesLed by a lead investor who sources deals and manages the investmentMedium – syndicate members rely on lead investor’s expertiseMedium – risk is spread among multiple investorsHigher – structured under SEBI’s AIF frameworkRoll-Up Vehicles (RUVs)Pooling of multiple angel investors into a single investment vehicleLow – investors contribute capital without direct negotiationMedium – risk is diversified through structured poolingHigher – compliance with SEBI’s AIF norms RUVs and Syndicates sit between direct angel investments and venture capital in terms of structure and investor involvement. They provide individual investors with access to curated startup deals without requiring deep involvement in due diligence or negotiations, while still offering better diversification than direct angel investments. Regulatory Challenges & Compliance RUVs and Syndicates in India typically operate under SEBI’s Alternative Investment Fund (AIF) regulations, specifically under the Category I - Angel Funds framework. While these structures enable smoother investment pooling, they must adhere to specific compliance requirements: SEBI Regulations Governing RUVs and Syndicates Minimum Investment Requirement – Angel Funds must ensure that each investor contributes at least INR 25 lakh. Qualified Investors – Angel investors participating in these structures must meet SEBI-defined criteria for eligible investors. Investment Holding Period – Investments made by Angel Funds must be held for a minimum of 1 year before an exit. Eligible Startups – Angel Funds can only invest in registered startups Diversification Limits – Investments in a single startup cannot exceed 25% of the fund’s corpus, ensuring risk diversification. These regulations aim to balance investor protection with the flexibility needed to foster startup growth. However, the regulatory landscape is still evolving, and compliance requirements may change as SEBI refines its oversight on angel fund structures. The Future of RUVs and Syndicates in India The increasing adoption of RUVs and Syndicates reflects a broader trend of democratizing startup investments. With India already home to over 125 angel networks and syndicates, projections suggest this number will surpass 200 by 2030 (Source: Inc42). As more investors seek diversified exposure to high-growth startups, these structures will likely continue gaining traction. For investors, understanding the nuances of RUVs and Syndicates—along with their compliance requirements—is crucial to navigating India’s evolving startup investment landscape. As regulatory frameworks mature, these vehicles could become even more structured, providing an efficient bridge between angel investing and institutional venture capital. Conclusion RUVs and Syndicates are reshaping the way early-stage startups raise capital while providing investors with a streamlined and professionally managed investment avenue. As platforms like AngelList India and LetsVenture continue to support these models, and as SEBI refines its regulatory framework, these structures will likely play a pivotal role in India’s startup funding ecosystem. For founders, these models offer an opportunity to secure funding without burdening their cap tables. For investors, they provide a way to participate in high-potential startups with reduced administrative complexities. The key to success lies in understanding the regulatory requirements and choosing the right structure that aligns with investment goals. If you're an investor exploring syndicate-backed or RUV investments, or a founder considering these structures for your startup, ensuring compliance with SEBI’s regulations will be critical in making informed and successful investment decisions. --- - Published: 2025-02-28 - Modified: 2025-07-21 - URL: https://treelife.in/finance/aifs-focused-on-pre-ipo-investments-in-india/ - Categories: Finance - Tags: aif pre ipo investment in india, pre ipo investment, pre ipo investment in india India’s IPO market has witnessed a remarkable boom in recent years, driven by a growing startup ecosystem, increasing investor participation, and favorable regulatory changes. In this environment, Alternative Investment Funds (AIFs) specializing in Pre IPO investments have emerged as a key vehicle for investors seeking exposure to high-growth companies before they go public. These funds offer a structured approach to investing in private companies that are on the cusp of going public, enabling investors to capture value before the broader market gains access. However, structuring Pre-IPO AIFs correctly and selecting the right AIF category is crucial for fund managers and institutional investors. This ensures alignment with regulatory requirements, investment strategies, and risk-return profiles. Understanding the nuances of different AIF categories and their implications on Pre-IPO investments is essential for maximizing potential gains while mitigating compliance risks. Understanding AIF Categories for Pre-IPO Investments The Securities and Exchange Board of India (SEBI) classifies AIFs into three categories based on their investment strategies and risk profiles. Among these, Category II and Category III AIFs are the most relevant for Pre-IPO investments. Choosing the right category depends on factors such as investment horizon, liquidity preferences, regulatory constraints, and exit strategies. Category II AIFs: Best Suited for Unlisted Securities Category II AIFs are particularly well-suited for funds investing in unlisted companies, with planned exits through the Offer for Sale (OFS) mechanism during the IPO process. This category allows investors to participate in the late-stage growth of companies before they hit the public markets. Key characteristics include: Primarily investing in unlisted companies, either directly or through units of other AIFs. Allowed to invest up to 25% of investible funds in a single investee company. A majority allocation (>50%) must be in unlisted securities, with limited exposure to listed securities ( --- > Mahakumbh 2025 was more than just a spiritual event—it was a massive economic catalyst that reshaped Prayagraj and beyond. With 660 million attendees from 76 countries, this grand gathering generated ₹3 lakh crore (approximately $36 billion) in transactions, highlighting the intersection of faith and finance. - Published: 2025-02-28 - Modified: 2025-08-07 - URL: https://treelife.in/reports/the-maha-economy-of-mahakumbh-2025/ - Categories: Reports - Tags: mahakumbh 2025, mahakumbh 2025 dates, mahakumbh economy, mahakumbh mela 2025, mahakumbh news, mahakumbh prayagraj 2025, prayagraj mahakumbh 2025, startup mahakumbh DOWNLOAD PDF Mahakumbh 2025 was more than just a spiritual event—it was a massive economic catalyst that reshaped Prayagraj and beyond. With 660 million attendees from 76 countries, this grand gathering generated ₹3 lakh crore (approximately $36 billion) in transactions, highlighting the intersection of faith and finance. From tourism and hospitality to fintech and startups, Mahakumbh 2025 showcased how religious events can fuel an entire ecosystem of economic growth. Mahakumbh 2025: A Rare Celestial Event Unlike the regular Kumbh Mela held every 12 years, Mahakumbh 2025 was a once-in-144-years occurrence due to a rare alignment of the Sun, Moon, and Jupiter. Held at the sacred Triveni Sangam in Prayagraj, where the Ganga, Yamuna, and the mythical Saraswati rivers meet, this event attracted the highest number of religious tourists ever recorded. Mahakumbh’s scale dwarfed global festivals: Mahakumbh 2025: 660 million visitors Haj Pilgrimage: 2. 5 million visitors Rio Carnival: 7 million visitors Oktoberfest: 7. 2 million visitors The massive footfall cemented Mahakumbh’s place as the largest religious gathering in human history. The Religious Tourism Boom in India Religious tourism in India is experiencing unprecedented growth: 2022: 1. 43 billion religious tourists generated ₹1. 34 lakh crore (~$16 billion). Projected for 2028: Religious tourism revenue to hit $59 billion. Job Creation: Estimated 140 million jobs by 2030. Growth Rate: A CAGR of 16% (2023-2030). Mahakumbh 2025 played a major role in this growth, surpassing previous records and driving domestic and international tourism to new heights. The Maha Economic Impact: Infrastructure, Employment & Commerce Mahakumbh 2025 wasn’t just a spiritual milestone; it was an economic powerhouse that fueled multiple industries. Infrastructure Development To accommodate the massive influx of visitors, major infrastructure upgrades were undertaken: 12 km of paved ghats for holy dips 1,850 hectares of parking space 30 pontoon bridges 67,000 streetlights installed 1. 5 lakh public toilets These enhancements not only improved the Mahakumbh experience but will continue benefiting the region for years. Employment & Revenue Generation Mahakumbh significantly boosted employment: 60 lakh jobs (direct & indirect) ₹54,000 crore in state revenue Hospitality, travel, and financial services flourished, further expanding economic opportunities. Commerce & Consumer Spending Devotees and tourists drove enormous spending: Pooja essentials: ₹2,000 crore Flowers: ₹800 crore Groceries & daily essentials: ₹11,500 crore Hospitality industry: ₹2,500 crore Boatmen services: ₹50 crore These transactions reflect the massive economic potential of faith-based tourism. Startups at Mahakumbh 2025: The New-Age Economy Mahakumbh 2025 provided a platform for startups and digital innovations that enhanced visitor experiences: Spiritual Startups Vama: Offered live kathas, Gangajal delivery, and virtual pujas. Sri Mandir: Launched guided pilgrimages and the Maha Kumbh Ashirvad Box. AstroYogi: Allowed virtual darshan via its app. Quick Commerce & Convenience Blinkit: Set up a 100-square-foot store for rapid essentials delivery. Swiggy Instamart: Created a life-sized "S" pin serving as a meeting point for lost visitors. Fintech & AI in Mahakumbh Paytm: Introduced a special Maha Kumbh QR Code for seamless payments. ParkPlus: Implemented AI-powered smart parking for congestion control. Amazon India: Repurposed delivery boxes into free upcycled beds for pilgrims. These startups blended technology with tradition, making Mahakumbh more accessible, organized, and efficient. Unique Business Ventures: Innovation at Mahakumbh Mahakumbh 2025 inspired creative entrepreneurs who turned religious tourism into innovative business ideas: Digital Snan: A photographer offered digitally enhanced images of pilgrims’ spiritual baths for ₹1,100. Riverbed Coin Collection: A devotee used magnets to retrieve coins from the river, earning ₹40,000 daily. Sacred Water Business: Sellers bottled and distributed Triveni Sangam water to devotees worldwide. These initiatives showcase how faith-based tourism fuels grassroots innovation and micro-entrepreneurship. Celebrity & International Presence Mahakumbh 2025 attracted global icons, industrialists, and political leaders: Chris Martin (Coldplay), Dakota Johnson, Laurene Powell Jobs Vicky Kaushal, Katrina Kaif, Anupam Kher, Rajkummar Rao, Shankar Mahadevan Mukesh Ambani, Gautam Adani, top diplomats from 76 countries Even cricketer Suresh Raina described Mahakumbh as his “karm bhoomi”, further cementing its cultural impact. The Future of Religious Tourism in India The success of Mahakumbh 2025 marks a turning point for India’s religious tourism industry: 450,000+ pilgrimage sites across India are primed for tourism growth. Government-backed tourism initiatives will increase infrastructure investments. Varanasi’s tourism economy grew by 20-65%, showcasing how religious tourism boosts local economies. With the next Mahakumbh over a century away, India’s religious tourism sector is poised for long-term expansion, attracting global investments and fostering innovation. Final Thoughts: Mahakumbh as an Economic and Spiritual Beacon Mahakumbh 2025 was not just a religious event—it was a global spectacle, a booming economy, and a launchpad for startups. It showcased how faith, business, and innovation can co-exist to create a once-in-a-lifetime experience. For entrepreneurs, investors, and businesses, Mahakumbh 2025 opened doors to limitless possibilities. Whether it’s startups in Mahakumbh, fintech innovations, or tourism ventures, this event has redefined the role of religious tourism in India’s economy. --- - Published: 2025-02-21 - Modified: 2025-02-21 - URL: https://treelife.in/quick-takes/whats-in-a-name/ - Categories: Quick Takes Reserving a name is the first step in the Incorporation process of a Company, allowing entrepreneurs to search for and secure a unique name for their business. Every Company incorporated with effect from February 23, 2020 is required to make an application for reservation of name and incorporation through SPICe+ Forms available on the MCA portal. Here’s a guide to help you select an appropriate name of your Company: Do’sDon’tsCheck MCA website (www. mca. gov. in) to locate if your proposed name is already registered by another entityUse of commonly used words in the name, or names resembling that of existing or struck off companies or LLPs,Check Trademark Registry’s website (https://tmrsearch. ipindia. gov. in/tmrpublicsearch) to locate if any key words in your proposed name are already registered as Trademarks in India. *use names including words like "Bank", "Insurance", "Stock Exchange", Venture Capital’, ‘Asset Management’,, ‘Mutual Fund’, "National", "Union", "Central", "Board", "Commission", "Authority" etc. Use unique coined terms formed by combination of different words*use names suggesting association with government or foreign countries; or containing the word ‘State’, or containing only name of a Continent, Country, State, or City;Use abbreviations or uncommon acronyms, (supported by an explanation / significance, which needs to be mentioned in the application)Use names suggesting association with financial activities (financing, leasing, chit fund, investments, securities), when the Company is not carrying out such activitiesUse words from different languagesUse names including registered trademarks (Owner's NOC required for use of registered trademark in name)Use descriptive names (i. e. , incorporate a word indicating brief objects of the Company in the name. Eg. ‘XYZ Technologies Private Limited’ or ‘ABC Management Consultancy Private Limited’. )Use names containing words prohibited under the Emblems and Names (Prevention and Improper Use) Act, 1950, or containing words that are offensive to any section of people *separate regulatory approvals / government approvals are required for use of said words Additional Information/Enclosures as supporting documents for reservation of name Proposed Main objects of the Company, which encapsulate all the key business activities that the Company proposes to carry out after incorporation. Copy of Trademark certificate, if the proposed company is using a registered trademark, along with No Objection Certificate from the owner of the trademark and a KYC document By following the guidelines outlined above and being mindful of the do’s and don'ts, you can ensure that your Company's name is unique and compliant with regulatory requirements. Remember to conduct thorough checks on the MCA website and Trademark Registry to avoid any potential conflicts, rejections or resubmission remarks from the MCA. With careful planning and attention to detail, you can choose a name that effectively represents your brand and sets your business up for success. --- - Published: 2025-02-21 - Modified: 2025-03-11 - URL: https://treelife.in/news/2025-a-year-to-watch-for-international-tax-developments/ - Categories: News The international tax landscape is off to a dynamic start in 2025. On one hand, President Donald Trump, after assuming office on 20th January, announced the U. S. ’s withdrawal from its commitment to OECD’s global minimum tax, sparking uncertainties around Pillar 2 implementation worldwide. On the other hand, Indian tax authorities have provided a much-needed clarity on applicability of the Principle Purpose Test (PPT) provisions under tax treaties. What is PPT? The Principle Purpose Test is an anti-abuse measure introduced as part of the OECD’s BEPS Action Plan 6. It allows tax authorities to deny treaty benefits if it is reasonable to conclude that one of the principal purposes of a transaction or arrangement is to secure tax benefits under a treaty, unless such benefits align with the object and purpose of the treaty. By targeting only arrangements with the primary intent of tax avoidance, PPT ensures that legitimate tax planning within the framework of tax treaties remains unaffected. CBDT has issued Circular No. 1 of 2025, on 21 January, 2025 providing critical clarifications on invocation of PPT provisions under tax treaties, offering relief to genuine cases while reaffirming India’s commitment to curbing treaty abuse. Key highlights from the CBDT circular: 1) Prospective Application: PPT provisions apply prospectively. For DTAAs updated bilaterally, the PPT is effective from the entry into force of the treaty or protocol. For treaties modified through the MLI, the date is determined under Article 35 of the MLI. 2) Grandfathering provisions: Grandfathering clauses in DTAAs with countries like Cyprus, Mauritius, and Singapore shall remain unaffected by PPT provisions and would continue to operate under the specific terms of DTAA. 3) Supplementary Guidance: Tax authorities may refer to the UN Model Tax Convention Commentary (2021 update) and BEPS Action Plan 6 Final Report for necessary guidance while deciding on the invocation and application of the PPT provision, subject to India's reservations, wherever applicable. This circular strikes a balance by targeting treaty abuse while safeguarding legitimate tax planning under applicable treaty provisions. At a time when global developments bring uncertainty, India’s proactive approach provides much-needed clarity and relief for stakeholders. With these contrasting developments, 2025 is shaping up to be a pivotal year for international tax. What are your thoughts on these changes? --- - Published: 2025-02-20 - Modified: 2025-02-20 - URL: https://treelife.in/news/sebi-extends-timelines-for-aifs-to-hold-investments-in-dematerialised-form/ - Categories: News SEBI had earlier mandated that Alternative Investment Funds (AIFs) must hold their investments in dematerialised form as per its January 12, 2024, circular. Given industry feedback and implementation challenges, SEBI has now extended the deadlines, providing AIFs with more time to comply. The revised timelines to comply with compulsory dematerialisation requirements are as under: New Investments: The mandatory dematerialisation requirement for new investments by AIFs will now be effective from July 1, 2025 (previously October 1, 2024). This means any investment made on or after this date must be held in dematerialised form, ensuring greater transparency and ease of transaction. Existing Investments: AIFs holding investments that require dematerialisation must comply by October 31, 2025 (earlier January 31, 2025). This extension gives AIFs additional time to transition their holdings into a dematerialised format while maintaining regulatory compliance. Exemption for Certain AIF Schemes: AIF schemes with tenure ending on or before October 31, 2025, are exempt from this requirement (previously, the exemption was only for schemes ending on or before January 31, 2025). This provides relief for funds nearing maturity. These regulatory relaxations aim to provide AIFs with a smoother transition period while ensuring that compliance requirements are met efficiently. Link to SEBI circular dated 14 February 2025: https://lnkd. in/dW2-b9Ye --- - Published: 2025-02-20 - Modified: 2025-06-13 - URL: https://treelife.in/quick-takes/cracking-the-pricing-code-guidelines-for-cross-border-investments/ - Categories: Quick Takes Navigating RBI’s Pricing Guidelines is like playing a game of Monopoly—except the board is India’s financial landscape, and the rules ensure fair play for all! Whether you’re issuing fresh equity, converting instruments, or transferring shares across borders, the price tag can’t be a wild guess.   Get ready to crack the pricing code issued under paragraph 8 of Master Circular no. RBI/FED/2017-18/60-FED Master Direction No. 11/2017-18. Here’s a crisp and clear breakdown : Equity instruments issued by a Company to a person resident outside IndiaThe price of equity instruments of an Indian Company issued by it to a person resident outside India should not be less than the valuation of equity instruments done as per any internationally accepted pricing methodology for valuation on an arm’s length basis duly certified by a Chartered Accountant or a SEBI registered Merchant Banker or a practicing Cost Accountant. Instruments Convertible into equity issued by a Company to a person resident outside IndiaThe price/ conversion formula of the instrument is required to be determined upfront at the time of issue of the instrument. The price at the time of conversion should not in any case be lower than the fair value worked out, at the time of issuance of such instruments, in accordance with the extant FEMA rules. Note: Where a Company is issuing securities convertible into equity, it has to adhere to both point I and II. Subscription to Memorandum of AssociationWhere shares in an Indian company are issued to a person resident outside India in compliance with the provisions of the Companies Act, 2013, by way of subscription to Memorandum of Association, such investments shall be made at face value subject to entry route and sectoral caps and no valuation report will be required in this case. Equity instruments transferred by a person resident in India to a person resident outside IndiaThe price of equity instruments of an Indian Company transferred by a person resident in India to a person resident outside India should not be less than the valuation of equity instruments done as per any internationally accepted pricing methodology for valuation on an arm’s length basis duly certified by a Chartered Accountant or a SEBI registered Merchant Banker or a practicing Cost Accountant. Equity instruments transferred by a person resident outside India to a person resident in IndiaThe price of equity instruments of an Indian Company transferred by a person resident outside India to a person resident in India should not exceed the valuation of equity instruments done as per any internationally accepted pricing methodology for valuation on an arm’s length basis duly certified by a Chartered Accountant or a SEBI registered Merchant Banker or a practicing Cost Accountant. Investment in LLPInvestment in an LLP either by way of capital contribution or by way of acquisition/ transfer of profit shares, should not be less than the fair price worked out as per any valuation norm which is internationally accepted/ adopted as per market practice (hereinafter referred to as "fair price of capital contribution/ profit share of an LLP") and a valuation certificate to that effect should be issued by a Chartered Accountant or by a practicing Cost Accountant or by an approved valuer from the panel maintained by the Central Government. Note: We understand that where a person resident outside India contributes to the Capital of an LLP at the time of incorporation, in compliance with the provisions of the LLP Act, 2008, such investments shall be made subject to entry route and sectoral caps and no valuation report will be required in this case.  Transfer of capital contribution/ profit share of an LLPIn case of transfer of capital contribution/ profit share of an LLP from a person resident in India to a person resident outside India, the transfer should be for a consideration not less than the fair price of capital contribution/ profit share of an LLP. In case of transfer of capital contribution/ profit share of an LLP from a person resident outside India to a person resident in India, the transfer should be for a consideration which is not more than the fair price of the capital contribution/ profit share of an LLP. *Source: https://www. rbi. org. in/scripts/bs_viewmasdirections. aspx? id=11200 Non-applicability of pricing guidelines The pricing guidelines shall not apply where investment in equity instruments (whether acquired/transferred) by a person resident outside India on a non-repatriation basis - meaning that any profits, dividends, or income generated from such investments shall remain in India and shall not be remitted to the investor's home country. Conclusion In the world of cross-border investments, pricing isn’t a shot in the dark—it’s a well-calibrated process; When it comes to cross-border investments, RBI’s pricing guidelines are here to keep things fair, transparent, and opportunity-filled for everyone! Whether you’re issuing, converting, or transferring equity, the rules ensure that every deal is backed by solid valuation. So, go ahead, explore the possibilities, make informed moves, and let the numbers work in your favor! --- - Published: 2025-02-20 - Modified: 2025-02-21 - URL: https://treelife.in/quick-takes/why-do-related-party-transactions-matter-in-financial-due-diligence/ - Categories: Quick Takes Investors closely examine Related Party Transactions (RPTs) during due diligence because they can impact financial transparency and business integrity. While RPTs are common, lack of clarity can raise red flags. Here’s why they matter: Risk of Fund Misuse: Are company funds being diverted to entities owned by founders or key stakeholders? Distorted Financials: Inflated revenue or hidden expenses through related parties can misrepresent a true financial position. Lack of Transparency & Poor Governance: Failure to disclose related parties or transactions in the financial statements, along with inadequate approval and documentation, can indicate poor governance, lack of transparency, or even intentional misrepresentation. Regulatory Compliance: RPT disclosures are a mandatory requirement as per the provisions of Companies Act, Income Tax Act, and SEBI regulations. Any non-disclosure may result in legal and tax complications. Pro Tip: Always document RPTs properly, ensure they are at arm’s length, and disclose them in financial statements. How does your company manage related party transactions? Share your experiences or ask your questions in the comments! --- - Published: 2025-02-20 - Modified: 2025-02-21 - URL: https://treelife.in/quick-takes/key-terms-in-share-dematerialization/ - Categories: Quick Takes With the Ministry of Corporate Affairs making dematerialization (“Demat”) of securities mandatory for all companies, excluding small companies, many individuals, especially those new to the process, are finding the terminology and steps overwhelming. To ease this, we’ve focused on explaining the key terms involved in the dematerialization process. By understanding these terms, first-time users will have a clearer understanding of each step, making the entire process much simpler and more manageable. Issuer: The term 'Issuer' refers to the company whose securities (such as shares or other securities) are being dematerialized.   RTA (Registrar and Transfer Agent): The RTA acts as an intermediary between the Depositories and the Company, facilitating the maintenance of securities in dematerialized form. They handle the record-keeping and ensure that the dematerialised securities are properly managed. DP (Depository Participant): A DP is an intermediary between the investor and the Depositories. They assist investors with tasks such as transferring securities between Demat accounts, converting securities from physical to Demat form, and providing any necessary support related to Demat securities. Depositories: In India, the two primary depositories are NSDL (National Securities Depository Limited) and CDSL (Central Depository Services Limited). These depositories process all Demat applications and provide support to investors, issuers, and intermediaries involved in the process. Demat Account: An account where the securities are held in electronic (dematerialized) form. This eliminates the need for physical certificates. Whenever securities are credited or debited, such as when you buy or sell securities, those transactions are reflected in your Demat account after the necessary processing.   ISIN (International Securities Identification Number): The ISIN is a 12-character alphanumeric code used to uniquely identify financial instruments like shares, bonds, or other securities. Based on its unique characteristics, each type of security is assigned its own ISIN. The company applies for the ISIN through the RTA. Corporate Action: A corporate action refers to any activity that is carried out to credit securities to the Demat account holders after the ISIN has been assigned. Essentially, it’s the official process that ensures securities are transferred to Demat accounts once the Issuer has completed the allotment. DP ID: The DP ID is a unique 8-digit identification number assigned to each DP. This ID helps identify them in the system. The DP ID is used to track all transactions related to an investor's Demat account and ensures that securities are properly managed and transferred. Note: DP ID starting with 'IN' signifies that the Depository Participant (DP) is associated with NSDL.   Client ID: The Client ID is a unique 8-digit identification number assigned to each Demat account held by an investor. This ID helps track and manage all securities credited to or debited from the account. Whenever the account holder conducts a transaction, such as transferring or selling securities, the Client ID is referenced to ensure the proper handling and processing of those securities. BENPOS (Beneficiary Position Statement): The statement shows the securities held in Demat account of the investors, categorized by their ISIN, whether securities are in Demat form with CDSL or NSDL, or physical form. It is updated periodically and also whenever securities are transferred. The statement is emailed to the issuer's registered email ID to provide details of the current holdings in the Company as of a specific date. DIS (Delivery Instruction Slip): A DIS is a form used to transfer securities between two Demat accounts. It serves as an instruction to the DP to move securities from one account to another, such as during a sale or transfer. The DIS ensures that the transaction is processed correctly and securely. --- - Published: 2025-02-20 - Modified: 2025-02-21 - URL: https://treelife.in/quick-takes/understanding-document-authentication-a-guide-to-apostillation-consularisation-and-notarisation/ - Categories: Quick Takes When dealing with international documents, it's essential to understand the different authentication processes. The Ministry of Corporate Affairs (MCA) requires non-resident / foreign individuals, Foreign entities and body corporates to submit documents that are duly Notarized, Apostilled or Consularised. Understanding these authentication processes can help streamline document submission and ensure compliance with Indian regulations. Here's a breakdown of Apostille, Consularisation, and Notarisation: Apostilled Documents An Apostille is a specialized certificate that authenticates public documents, enabling their recognition and validity across international borders. Issued in accordance with the 1961 Hague Convention Treaty (‘Hague Convention’), an Apostille certifies a document for acceptance by member countries. As a signatory to the Hague Convention, India recognizes Apostilled documents from other member countries, eliminating the need for additional attestation or legalization. This streamlined process facilitates the use of Apostilled documents in India. For a comprehensive list of Hague Convention member countries, please refer to https://www. hcch. net/en/states/hcch-members Consularised Documents Consularisation of documents is the process of authenticating or verifying documents by the consulate or embassy of a country where said document is to be used. This involves confirming the authenticity and legitimacy of documents to ensure they meet the destination country's requirements. This requirement typically applies to documents originating from countries that are not signatories to the Hague Convention. Specifically, if a document is intended for submission in India, it must be consularised by the Indian Embassy before submission. Note: A document may either be apostilled or consularised. Both authentications may not be required. Notarised Documents Notarisation of documents is the process of verifying the authenticity of a document and the identity of the person signing it. A Notary Public, an impartial witness appointed by the government, confirms that the document is genuine and not tampered with, the signer is who they claim to be, and the signer is voluntarily signing the document. The Notary Public affixes their official seal or stamp and signs the document. Conclusion To ensure timely compliance, it is essential to consider the time and cost involved in authenticating documents for submissions with Indian authorities, specifically, documents that often require both Notarisation and Apostillization or Notarisation and Consularisation. Further, it is also important to check the sequence of authentication of documents (Notary is usually done prior to Apostillation / Consularisation). Factoring in the timelines for these processes can help avoid unnecessary delays and ensure seamless submissions. --- - Published: 2025-02-20 - Modified: 2025-08-07 - URL: https://treelife.in/news/sebi-proposes-amendments-to-ease-investment-norms-for-credit-focused-aifs/ - Categories: News SEBI has released a consultation paper proposing revisions to Regulation 17(a) of the SEBI (Alternative Investment Funds) Regulations, 2012. The move aims to address concerns raised by credit-focused Category II AIFs, whose investment opportunities in unlisted debt securities have been significantly impacted by recent changes in the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. Current Issues: Owing to the introduction of Regulation 62A of SEBI (LODR) Regulations, 2015, all listed entities (entities with equity shares, non-convertible debt, preference shares, perpetual instruments, Indian depository receipts, securitized debt, mutual fund units, or other SEBI approved securities listed on any of the recognized stock exchanges) were required to: List all subsequent NCD issuances from January 1, 2024 onwards. List any previously unlisted NCDs issued post-January 1, 2024, within 3 months of any new listed issuance. This significantly restricted the availability of unlisted debt securities, making it difficult for Category II AIFs to comply with their >50% unlisted securities investment mandate. Proposed Amendment by SEBI: To provide greater flexibility while ensuring that AIFs continue to assume meaningful credit risk, SEBI proposes the following revision to the investment norms for Category II AIFs: “Category II Alternative Investment Fund to invest more than 50% of their total investible funds in unlisted securities, and/or listed debt securities having credit rating ‘A’ or below, directly or through investment in units of other AIFs. ” This change would allow Category II AIFs to meet the >50% “primarily” threshold by investing in a combination of unlisted securities and lower-rated listed debt, ensuring continued capital flow to businesses that lack access to traditional funding sources. SEBI is inviting public comments on this proposal until February 28, 2025. Share your views here: https://lnkd. in/dukSc3Mi --- - Published: 2025-02-20 - Modified: 2025-02-20 - URL: https://treelife.in/news/clarification-on-usage-of-snrr-accounts-for-ifsc-units/ - Categories: News IFSCA has amended the circular on permissible transactions through Special Non-Resident Rupee (SNRR) accounts to bring much-needed regulatory clarity and flexibility for IFSC units. Previously, IFSC units faced restrictions on using SNRR accounts outside the IFSC for business-related transactions. Now, pursuant to this circular: IFSC units now have the flexibility to manage business-related expenses in INR outside IFSC, i. e. , they may also receive funds in INR like government incentives or sales proceeds. Financial service-related transactions such as receipt of fees shall continue to stay within IFSC banking units. This step simplifies operations for IFSC units and reinforces India’s growing role as a global financial hub. A welcome move to address industry needs! Link to circular: https://lnkd. in/dpPx-SQ2 --- - Published: 2025-02-20 - Modified: 2025-02-20 - URL: https://treelife.in/news/ifsc-notifies-updated-fme-regulations/ - Categories: News The International Financial Services Centres Authority (IFSCA) on 19 February 2025, has notified the updated IFSCA (Fund Management) Regulations, 2022. Most of them are in line with the changes proposed in December 2024. Here's a quick summary of the new provisions for funds in GIFT IFSC: Non-retail schemes (Venture Capital Schemes and AIFs) Minimum scheme corpus reduced to USD 3 Mn from USD 5 Mn. For open-ended schemes, investment can commence at USD 1 Mn, with the minimum corpus achieved within 12 months. FME contribution in schemes increased to 100% (subject to the condition that the FME/its associates and their UBOs are non-residents in India, and the scheme does not invest more than 1/3rd of its corpus in any single company and its associates). Joint Investments by related individuals now permitted Manpower requirements for FMEs FMEs managing AUM exceeding USD 1 Bn must appoint an additional KMP. All employees of FMEs will be required to undergo certifications from institutions prescribed by IFSCA The requirement for obtaining prior approval from IFSCA for appointing Key Managerial Personnel (KMPs) has been removed. Going forward, FMEs only need to inform IFSCA about such appointments after they are made. Following amendments made to PO / KMP’s educational qualification and experience requirements: a) The required post-graduate diploma duration has been reduced from 2 years to 1 year. b) CFA or FRM certifications are now accepted as educational qualifications. c) If a PO has 15 years of relevant work experience, a graduate degree is enough. d) For the 5-year experience requirement, consultancy experience in fund management (e. g. , deal due diligence, transaction advisory) is now considered. However, only up to 2 years of consultancy experience will count, and the remaining 3 years must be in other specified areas as per the regulations. Retail Schemes Track record evaluation criteria for Registered FMEs (Retail) expanded to consider group experience collectively Listing of close-ended schemes on recognized exchanges is now optional if the minimum investment per investor is at least USD 10,000 Others Funds in IFSC (subject to exceptions) now mandated to appoint a custodian Temporary investments may be made in bank deposits / overnight schemes Minimum ticket size for PMS reduced to USD 75,000 from USD 150,000 --- > This article delineates the crucial differences between OPC and sole proprietorship in India and highlights a deeper understanding of the key functions of legal requirements of each of them in order to empower entrepreneurs in making informed decisions about the most suitable business structure for their ventures. Let us dive deep into Difference between OPC (One Person Company) and Sole Proprietorship in India. - Published: 2025-02-13 - Modified: 2025-07-21 - URL: https://treelife.in/compliance/difference-between-opc-and-sole-proprietorship/ - Categories: Compliance - Tags: Difference between OPC (One Person Company) and Sole Proprietorship in India, difference between opc and sole proprietorship, one person company vs sole proprietorship, opc vs sole propreitorship In the dynamic landscape of Indian business, both One Person Company (hereinafter ‘OPC’) and sole proprietorship offer unique opportunities to establish and run their ventures. However, they differ significantly in terms of legal structure, liability, and scalability. A sole proprietorship is the simplest form of business entity in India, where an individual owns and operates the business entirely on their own. It requires minimal formalities for registration and is predominantly suited for small-scale businesses with limited liabilities. On the other hand, an OPC, introduced in India through the Companies Act, 2013, provides a single entrepreneur with the benefits of a corporate entity. Unlike a sole proprietorship, an OPC has a separate legal identity distinct from its owner, offering limited liability protection. This means the personal assets of the owner are safeguarded in case of business debts or liabilities. While both structures cater to individual entrepreneurs, the choice between sole proprietorship and OPC depends on various factors such as the scale of operations, growth prospects, risk appetite, and compliance preferences. This article delineates the crucial differences between OPC and sole proprietorship in India and highlights a deeper understanding of the key functions of legal requirements of each of them in order to empower entrepreneurs in making informed decisions about the most suitable business structure for their ventures.  Let us dive deep into Difference between OPC (One Person Company) and Sole Proprietorship in India. What is a One Person Company (OPC) in India? A OPC is a unique legal entity that combines the ease of a sole proprietorship with the advantages of a corporate organization for single entrepreneurs. In an OPC, a single individual holds 100% ownership, ensuring complete control over the business. The key characteristic of an OPC is that it provides limited liability protection, separating the owner’s personal assets from business liabilities. This shields the owner’s personal wealth in case of financial distress or legal issues. OPCs are also allowed to hire directors, aiding in decision-making and governance. However, they are required to nominate a nominee who would take over in case of the owner’s incapacitation. OPCs are ideal for those seeking a streamlined business structure with enhanced credibility and limited personal risk. Features of a One Person Company (OPC) in India Perpetual Succession and CredibilityThe perpetual succession feature of an OPC ensures the company’s continuity beyond the lifetime of its owner. This means that even if the owner passes away or becomes incapacitated, the OPC remains a separate legal entity, with the nominee taking over management. This feature safeguards the company’s existence, contracts, and assets, enhancing investor and stakeholder confidence in its long-term viability. Additionally, due to its structured legal framework and limited liability protection, an OPC tends to command more credibility and trust in the market. This credibility can attract potential customers, partners, and investors, as it signals a commitment to formal business practices and responsible management, fostering a positive reputation in the business landscape. Compliance RequirementsFor an OPC, there are several compliance and reporting requirements that need to be adhered to, ensuring transparency and legality:i) Annual Financial Statementsii) Annual Returnsiii) Board Meetingsiv) Income Tax Filingv) Statutory Auditsvi) Compliance with ROCvii) GST and Other Tax Registrationsviii) Filing of Director’s Report Ownership Transfer and ExpansionIn an OPC, ownership transfer is facilitated by the nomination of a successor, ensuring continuity upon the owner’s incapacitation. Expansion involves converting the OPC into a private limited company or forming subsidiaries, allowing for equity infusion and increased operations. This transformation enables the company to bring in more shareholders and capital, supporting growth while maintaining the limited liability protection and distinct legal entity status. Taxation BenefitsIn India, OPCs enjoy certain taxation benefits, such as lower tax rates for smaller businesses and access to presumptive taxation schemes. OPCs with a turnover of up to a specified limit can opt for the presumptive taxation scheme, which simplifies tax calculations and reporting. Additionally, OPCs are eligible for various deductions and exemptions available to other types of companies, reducing their overall tax liability and promoting a favorable environment for small business growth. Single Promoter and OwnershipAn OPC is characterized by its single promoter or owner, who holds complete control over the business operations and decision-making processes. This individual is the sole shareholder and director, enabling swift and efficient decision-making without the need for consensus from multiple stakeholders. This autonomy empowers the owner to align the company’s strategies and directions with their vision, without compromising due to differing viewpoints. This streamlined decision-making not only accelerates operational efficiency but also enhances the business’s adaptability to changing circumstances.  Limited LiabilityOne of the primary advantages of an OPC is the limited liability protection it offers to the owner. This means that the owner’s personal assets are distinct and separate from the company’s liabilities. In the event of financial issues or legal disputes faced by the company, the owner’s personal wealth remains safeguarded. This separation ensures that the owner’s risk exposure is limited to the capital invested in the company, reducing the potential impact on their personal finances. Separate Legal Entity (Demarcation of Personal & Company Assets)In an OPC a clear demarcation exists between personal and business assets. This separation ensures that the owner’s personal belongings, such as property and savings, are entirely distinct from the company’s assets and liabilities. Consequently, if the company faces financial setbacks or legal obligations, the owner’s personal assets remain insulated from these challenges. This distinction reinforces the limited liability nature of OPCs, providing owners with a significant degree of financial protection and peace of mind. Advantages of a One Person Company (OPC) Perpetual Succession: An OPC offers an advantage over a sole proprietorship in terms of continuity. A sole proprietorship ceases to exist if the owner dies or becomes incapacitated. An OPC, however, is a separate legal entity from its owner. This means the business can continue to operate even if there are changes in ownership. Limited Liability: A key benefit of an OPC is limited liability protection. The owner’s personal assets are shielded from business debts and liabilities. This means that... --- - Published: 2025-02-13 - Modified: 2025-02-13 - URL: https://treelife.in/news/insights-from-the-gujarat-gcc-policy-2025-30/ - Categories: News - Tags: GCC, Gujarat Global Capability Centre (GCC) Policy, Gujarat Global Capability Centre Policy We had the privilege of attending the launch of the Gujarat Global Capability Centre (GCC) Policy 2025-30, unveiled by Hon’ble CM Shri Bhupendra Patel at GIFT City , Gandhinagar. This landmark policy reinforces Gujarat’s reputation as a policy-driven, business-friendly state and aims to position it as a global hub for GCCs. 𝐊𝐞𝐲 𝐇𝐢𝐠𝐡𝐥𝐢𝐠𝐡𝐭𝐬 𝐨𝐟 𝐭𝐡𝐞 𝐏𝐨𝐥𝐢𝐜𝐲 To attract 250+ new GCCs leading to creation of 50,000+ jobs ₹10,000+ crore expected investment inflow CAPEX support up to ₹200 crore & OPEX assistance up to ₹40 crore Employment incentives, covering CTC reimbursement & EPF support Interest subsidies, electricity duty exemptions, and skill development grants With world-class infrastructure, progressive policies, and a thriving talent pool, Gujarat is set to become a preferred destination for Global Capability Centres. The state’s focus on digital transformation, innovation, and economic growth aligns with India's vision of Viksit Bharat@2047. As a firm assisting businesses in setting up operations in India as well as GIFT IFSC, we are excited about the opportunities this policy unlocks! Looking forward to collaborating with businesses looking to expand in Gujarat’s vibrant ecosystem. For more information, reach out to us at https://gift. treelife. in/ or call us at +91-9930156000 or email us at gift@treelife. in  Source: https://cmogujarat. gov. in/en/latest-news/gujarat-gcc-policy-2025-30-launch  #GCC #GIFTCity #StartupIndia #Innovation #DigitalTransformation #PolicyDrivenGrowth #Gujarat #Consulting #IndiaExpansion --- - Published: 2025-02-13 - Modified: 2025-03-11 - URL: https://treelife.in/news/exciting-developments-in-relation-to-foreign-investment-policy-in-india/ - Categories: News The Reserve Bank of India (RBI) has introduced further liberalizations in Foreign Direct Investment (FDI) rules through its latest Master Direction on Foreign Investment, dated January 20, 2025. Key changes: 1. Flexible Acquisition Options for FOCC: Previously, Foreign Owned and Controlled Corporations (FOCCs) with over 50% foreign shareholding investing in another Indian entity for downstream investments were required to remit the entire deal value upfront. The revised framework introduces much needed flexibility, aligning with the standard FDI provisions: a) Deferred payment - 25% of the transaction value may be deferred over a period of 18 months. b) Share Swaps - downward investment through share swaps is now permissible i. e. issue of its own shares in lieu of receipt of shares of the investee company. 2. Tenor Flexibility for CCD/CCPS: The tenor of Compulsorily Convertible Debentures (CCDs) and Compulsorily Convertible Preference Shares (CCPS) can now be amended in accordance with the Companies Act, 2013. This is especially beneficial when share conversion needs to be postponed due to fluctuating market conditions. These changes significantly enhance regulatory clarity and operational flexibility for M&A and investments. This would aid in fostering global-local partnerships, boost investor confidence, and catalyze growth for businesses across India. What does this mean for you? Let’s connect at dhairya. c@treelife. in for a discussion. Link to the updated Master direction on Foreign Investment - https://lnkd. in/dUC9sxUD  --- - Published: 2025-02-10 - Modified: 2025-08-07 - URL: https://treelife.in/startups/government-schemes-for-startups-in-india/ - Categories: Startups - Tags: Government Schemes for Startups DOWNLOAD PDF India is becoming one of the world’s fastest-growing startup ecosystems, with over 1,40,000 registered startups contributing to innovation, employment, and economic growth. To fuel this growth, the Indian government has introduced several schemes that provide funding, tax exemptions, infrastructure support, and market access to startups. Navigating these Government Schemes for Startups can be challenging, so we’ve mapped out the top government schemes that every startup and aspiring entrepreneur must know. 1. Startup India Initiative Launched: 2016Objective: To create an ecosystem that promotes innovation and entrepreneurship through policy support, tax incentives, and easier compliance for startups. Key Benefits: 3-year tax holiday on profits for eligible startups (Section 80-IAC of the Income Tax Act) Fund of Funds (₹10,000 Cr corpus) managed by SIDBI to provide capital access through alternative investment funds (AIFs) Self-certification under labor and environmental laws Simplified company registration through SPICe+ 2. Stand-Up India Launched: 2016Objective: To promote entrepreneurship among SC/ST and women entrepreneurs by providing easy access to loans for new businesses. Key Benefits: Loans between ₹10 lakh and ₹1 crore Available for manufacturing, services, and trading sectors Repayment period of up to 7 years with a moratorium of 18 months Encourages inclusivity in entrepreneurship 3. Startup India Fund of Funds (FFS) Launched: 2016Objective: To increase the availability of capital for startups by investing in venture capital and alternate investment funds that support early-stage ventures. Key Benefits: ₹10,000 crore corpus distributed through SIDBI to alternate investment funds (AIFs) Indirect funding model, supporting multiple startups through VCs. No direct investment in startups, but facilitates capital infusion through institutional investors. 4. Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) Launched: 2000Objective: To provide collateral-free loans to micro and small enterprises (MSMEs), including startups, and encourage financial institutions to lend without security requirements. Key Benefits: Collateral-free credit up to ₹2 crores Coverage of both term loans and working capital facilities Encourages risk-free lending by financial institutions 5. Atal Innovation Mission (AIM) Launched: 2016Objective: To foster innovation and entrepreneurship in India by promoting initiatives in education, incubation, and research. Key Benefits: Establishment of Atal Tinkering Labs (ATL) in schools to encourage innovation from a young age Creation of Atal Incubation Centers (AICs) to support startups with infrastructure and seed funding Mentorship programs and partnership opportunities 6. SAMRIDH Scheme (Startup Accelerator of MeitY for Product Innovation, Development & Growth) Launched: 2021Objective: To support early-stage startups by providing mentorship, access to corporate accelerators, and co-investment with VCs and angel investors. Key Benefits: Provides financial support of up to ₹40 lakh per startup by co-investing with venture capitalists or angel investors to help early-stage startups scale. Provides access to corporate accelerators, mentorship programs, and industry networks. Focuses on deep-tech and digital innovation. 7. Support for International Patent Protection in Electronics & IT (SIP-EIT) Launched: 2014Objective: To encourage startups to protect their innovations internationally by reimbursing patent filing expenses. Key Benefits: Reimbursement up to ₹15 lakh per patent Covers filing costs, attorney fees, and examination fees Strengthens intellectual property (IP) protection for Indian startups 8. Digital India Bhashini Initiative Launched: 2022Objective: To promote AI-based language solutions and support startups working on multilingual and natural language processing (NLP) technologies. Key Benefits: Government support for AI-driven Indic language solutions Encourages technology innovation for regional and local languages Connects startups with market opportunities 9. E-Marketplace (GeM) for Startups Launched: 2016Objective: To facilitate direct access to government procurement for startups. Key Benefits: Startups can register as sellers on the GeM portal No tender requirements for certain startups Increased visibility to government buyers 10. MUDRA Banks (Pradhan Mantri MUDRA Yojana - PMMY) Launched: 2015 Objective: To provide micro-financing support for small businesses and startups (in service sector and small trading businesses). Key Benefits: Loans under three categories: Shishu (₹50,000), Kishor (₹5 lakh), and Tarun (₹10 lakh). No collateral required. Encourages self-employment and entrepreneurship among micro and small enterprises (MSEs), particularly non-corporate small businesses in manufacturing, trading, services, and select agriculture-allied activities. 11. MeitY Startup Hub (MSH) Launched: 2019 Objective: To promote deep-tech innovation and support startups working in IT, AI, cybersecurity, and fintech. Key Benefits: Provides financial support and accelerator programs Access to government R&D labs for technology startups Mentorship and networking opportunities with industry experts 12. Startup India Seed Fund Scheme (SISFS) Launched: 2021 Objective: To provide seed funding for early-stage startups to develop prototypes and conduct market validation. Key Benefits: Grants up to ₹20 lakh for prototype development Investment up to ₹50 lakh as convertible debentures Access to incubators across India for infrastructure and mentoring 13. Aatmanirbhar Bharat App Innovation Challenge Launched: 2020 Objective: To promote homegrown app development across categories like AI, gaming, health, and education. Key Benefits: Financial rewards for top apps across multiple categories. Encourages development in AI, gaming, e-learning, health, and fintech. Support for scaling successful apps in global markets. 14. SPICe+ (Simplified Proforma for Incorporating a Company Electronically) Launched: 2020 (as an upgrade to SPICe) Objective: To simplify company incorporation and related regulatory approvals through a single-window online process. Key Benefits: Provides integrated services for company incorporation, including PAN, TAN, GST, EPFO, ESIC, and bank account opening in a single application. Reduces compliance burden and time required for business registration. Mandatory for all new company registrations, including Private Limited Companies, One Person Companies (OPCs), Section 8 Companies, and Producer Companies incorporated in India. 15. Software Technology Park (STP) Scheme Launched: 1991 Objective: To boost IT and software export sectors by offering tax benefits and infrastructure support. Key Benefits: 100% tax exemption on software exports. Duty-free import of capital goods. Access to world-class infrastructure and incubation facilities. 16. Dairy Processing and Infrastructure Development Fund (DIDF) Launched: 2017 Objective: To provide financial support for dairy startups and cooperatives to modernize and expand processing capacities. Key Benefits: Long-term loans at concessional interest rates. Financial assistance for milk processing, chilling plants, and modern dairy equipment. Strengthens the dairy value chain for entrepreneurs. 17. Multiplier Grants Scheme (MGS) Launched: 2016 Objective: To promote industry-academia collaboration for R&D projects in electronics, IT, and software development. Key Benefits:... --- - Published: 2025-02-10 - Modified: 2025-07-22 - URL: https://treelife.in/calendar/upcoming-compliances-for-private-limited-companies-in-the-fy2025-26/ - Categories: Calendar - Tags: compliance, compliance calendar, compliance for plc, compliance for private limited company As the financial year progresses, it is crucial for businesses and directors to stay informed about upcoming compliance deadlines to avoid penalties and ensure smooth operations. Here is an overview of the key upcoming compliance requirements to be reported by Companies to the Ministry of Corporate Affairs (“MCA”) under the Companies Act, 2013 (“Act”):  S. No. Form NameApplicabilityDue DateDetails RequiredConsequences of Non-Compliance1MSME Form IMSME Form I is applicable to all companies that receive goods or services from micro or small enterprises and whose payments to these enterprises exceed 45 days from the date of acceptance or the date of deemed acceptance of the goods or services. The filing of Form MSME-1 is required twice a year (half yearly):● For the period from 01 April 2025 to 30th September, 2025, the due date is 31st October, 2025. ● For the period from 01 October 2025 to 31 March 2026, the due date is 30 April 2026. ●Total outstanding amount due to MSME suppliers as of the reporting date. ● Name of the supplier and their PAN. ● Date from which the amount is due. ● The reasons for the delay in payments. Under Section 405 of the Act, failure to file Form MSME-1 can result in a penalty of INR 20,000/-. If the failure continues, an additional penalty of INR 1,000/- per day may be imposed, up to a maximum of INR 3,00,000/-. This penalty applies to both the defaulting company and its officers responsible for the non-compliance.  2Form DIR-3 KYC / Web KYCForm DIR-3 KYC is applicable to all individuals who have been allotted aDirector Identication Number (DIN) and are required to update their KYC details annually in order to keep the status of their DIN active. This annual compliance ensures that the personal information of directors are accurate and up-to-date on the MCA database, there by enhancing the transparency and integrity of corporate governance. Individuals holding a DIN as of the first financial year, i. e. , 31st March, 2025, are required to file Form DIR-3 KYC. The due date for filing DIR-3 KYC is 30th September 2025.  For subsequent years, Web KYC must be submitted by the same deadline of 30th September ● Personal mobile number and email address. ● Address proof and identity proof. ● Aadhar and PAN numbers. ● Passport in case of Foreign DirectorsFailure to file the Form DIR-3 KYC/ Web KYC within the due date results in the deactivation of the DIN.  Reactivation of DIN requires filing of Form DIR-3 KYC along with a late fee of INR 5,000/-. This non-compliance can restrict the director from participating in any business activities until the DIN is reactivated. 3Form AOC-4/ XBRLAll companies registered under the Act, including private limited companies, public limited companies, one-person companies (“OPC”), and small companies, must file Form AOC-4 annually. This form is used to file a company's financial statements with the MCA. This includes the balance sheet, profit and loss account statement, and other relevant documents required under Section 137 of the Act. The due date for filing Form AOC-4 is within 30 days from the date of the Annual General Meeting (“AGM”) for all companies, except for OPCs. OPCs have 180 days from the end of the financial year to file. ● Financial statements including balance sheet, profit and loss account statement and Cash Flow statement as applicable. ● Directors’ report● Auditors’ report● Details of related party transactions● Corporate social responsibility (CSR) activities, if applicableUnder Section 137 of the Act, failure to file Form AOC-4 within the due date may result in a penalty of INR 10,000/-. If the non-compliance continues, an additional penalty of INR 100/- per day will be imposed, subject to a cap on the company and its directors. Furthermore, the company’s directors may face disqualification under Section 164(2) of the Act, preventing them from being appointed as directors in any other company for five years. 4Form MGT-7A /Form MGT-7All companies, except Small Companies and One OPCs, are required to file Form MGT-7. Small companies and OPCs must file Form MGT-7A. This form serves as the annual return, detailing the company’s shareholding structure, changes in directorship, and other key information that must be submitted to the MCA. The due date for filing Form MGT-7/7A is within 60 days from the date of the AGM, or the deemed date if no AGM is held. In case of no AGM, a statement specifying the reasons for not holding it must also be submitted. ● Details of shares, debentures, and other securities allotted. ● Particulars of holding, subsidiary, and associate companies● Details of directors, key managerial l personnel, and changes therein● Meetings of members//board/committees and attendance.  ● Remuneration of directors and key managerial personnel● Penalties and punishments imposed on the company, its directors, or officers. Any other information required as per the specified format of the Form. Under Section 92 of the Act, failure to file Form MGT-7/7A within the due date may result in a penalty of INR 10,000. If the non-compliance continues, an additional penalty of INR 100 per day will be imposed, subject to a cap of INR 2,00,000/- on the company and its directors, and fifty thousand rupees in case of an officer who is in default. Furthermore, the company’s directors may face disqualification under Section 164(2) of the Act, preventing them from being appointed as directors in any other company for five years. 5Annual Disclosures in Form MBP-1 and DIR-8Applicable to Directors who participate in the first meeting of the Board in each financial year or whenever there is a change in the interest of a director, they are required to disclose any concerns or interests that may arise in any company, body corporate, firms, or other associations of individuals. This disclosure should take place at the first Board meeting held after such a change in form MBP-1. Every Director of the Company is required to provide disclosure of non-disqualification annually. The company must record the disclosures annually at the first board meeting of each financial... --- > As Coldplay’s 2025 India tour took the country by storm, we at Treelife took a closer look at the numbers, stakeholders, and economic impact behind this massive event. - Published: 2025-02-05 - Modified: 2025-08-07 - URL: https://treelife.in/reports/a-snapshot-of-the-concert-economy-insights-from-coldplay/ - Categories: Reports - Tags: coldplay concert india, coldplay concert mumbai, coldplay india, coldplay india 2025, coldplay india concert economy, coldplay songs, concert economy, concert economy india, members of coldplay, what is coldplay concert, what is concert economy DOWNLOAD PDF REPORT Concerts aren’t just about music—they’re multi-billion-dollar economic engines that impact multiple industries, from ticketing platforms to tourism, hospitality, taxation, and sustainability. As Coldplay’s 2025 India tour took the country by storm, we at Treelife took a closer look at the numbers, stakeholders, and economic impact behind this massive event. With revenue numbers, total attendees, and a ripple effect across various sectors, this was more than just a concert—it was a case study in how live events fuel economy and growth. What’s the Concert Economy? A concert economy refers to the ripple effect large-scale music events have on multiple industries, including hospitality, transport, food & beverages, merchandise, and other local businesses.   When a global artist like Coldplay performs in India, the financial impact extends far beyond ticket sales. The entire event ecosystem—from airlines and hotels to restaurants, transport, and local businesses—experiences a surge in revenue. Concerts drive employment, generate tax revenue, and contribute to the growth of industries like ticketing, event management, and streaming platforms. The Indian live events market was valued at ₹88 billion in 2023 and is projected to reach ₹143 billion by 2026, reflecting a compound annual growth rate (CAGR) of 17. 6%. The ticketed live music segment alone is expected to reach ₹1,864 crore ($223 million) in 2025. Music events form a substantial part of this ecosystem, with concert numbers expected to double from 8,000 in 2018 to over 16,700 by 2025. Key Components of the Concert Economy Ticketing Revenue – The biggest driver of revenue, shared between artists, event promoters, and ticketing platforms. Sponsorship & Brand Partnerships – Brands pay crores to associate with global tours (e. g. , BMW & DHL for Coldplay). Media Rights & Streaming – Platforms like Disney+ Hotstar acquire streaming rights, adding a new revenue channel. Tourism & Hospitality Boost – Hotels, flights, and local businesses benefit from concert-driven travel. Government Earnings – GST, venue permits, and licensing fees contribute to the public economy. Local Business Growth – Restaurants, cafés, shopping malls, transport services, and even street vendors see a surge in demand, with metro stations in Ahmedabad handling over 4,05,000 passengers during Coldplay’s concerts.  Government Earnings – GST, venue permits, entertainment taxes, and licensing fees contribute to state and national revenue. Coldplay’s concerts alone generated an estimated ₹58 crore in GST revenue from ticket sales.   In essence, a concert isn’t just a musical event—it’s a massive business operation that impacts multiple industries. Coldplay’s India Tour by the Numbers Here’s a breakdown of the financial impact Coldplay’s concerts had in India: Revenue from ticket sales – ₹322+ crore across five shows in Mumbai & Ahmedabad BookMyShow’s earnings from convenience fees – ₹32. 2 crore GST collection for the government – ₹58 crore at 18% GST (ticket sales) Metro revenue spike – ₹66 lakh in additional earnings (during concert days) Metro passenger surge – 4,05,264 passengers to Motera Stadium during Ahmedabad concerts Disney+ Hotstar streaming numbers – 8. 3 million views during concert days Total concert attendance – 400,000+ fans across five shows Coldplay’s concerts didn’t just impact the fans inside the stadiums—it boosted local businesses, increased hospitality demand, and drove digital engagement across streaming platforms. Who Makes Money in the Concert Economy? A concert of this scale involves multiple stakeholders working together to create a profitable and smooth experience. Tour Promoters & Event Organizers – Live Nation (Coldplay’s global promoter), BookMyShow (ticketing & event organization in India) Ticketing Platforms – BookMyShow, Paytm Insider, District by Zomato Venue Operators – DY Patil Stadium (Mumbai), Narendra Modi Stadium (Ahmedabad) Sponsorship & Branding – BMW (Battery Partner), DHL (Logistics Partner), Mastercard, Disney+ Hotstar (Streaming Rights) Media & Streaming Rights – Disney+ Hotstar exclusively streamed the concerts in India Production & Logistics –responsible for stage design, sound, and lighting Sustainability & Energy Partners – BMW-powered show batteries, kinetic floors for energy generation Government & Regulatory Bodies – Earnings from GST, licensing fees, and event permits From ticketing to brand partnerships, venue revenues to tax collections, the concert economy is an interconnected web of businesses, governments, and event specialists working together. The Challenges & Future of India’s Concert Economy While concerts bring massive economic benefits, they also come with significant challenges that impact the overall experience for fans, organizers, and businesses. Addressing these barriers is essential for the growth of India's live music industry. Ticket Scalping & Resale – Black-market ticket prices surged up to ₹80,000, highlighting the need for stricter regulations. Infrastructure Gaps – Venue congestion, inadequate public transport, and lack of large-scale arenas limit event scalability. Taxation & Licensing Complexities – High GST rates (18%), multiple permits, and regulatory approvals make organizing large concerts more challenging. Sustainability Issues – While Coldplay introduced kinetic floors and battery-powered shows, most concerts still rely on diesel generators. What’s Next for India’s Concert Economy? India’s live concert economy is on the verge of massive expansion, driven by increasing demand, rising disposable incomes, and global interest in music tourism. Here’s what lies ahead: Projected Market Growth India accounted for 27,000 live events, from music to comedy shows and theatre, in 2024, 35% more than in the same period last year. Estimated concert-linked spending is expected to reach 60 billion rupees and 80 billion rupees on an annual basis over the next 12 months. Aggregate revenue from India’s live entertainment market is projected to be around $1. 7 billion by 2026, growing at a CAGR of nearly 20% over the next three to five years. More Concerts, Bigger Events In 2018, India hosted 8,000+ concerts—by 2025, this is expected to double to 16,700+. Large-scale music & food festivals are expected to attract 1. 5 million unique visitors annually—Ziro Festival, Hornbill Festival, NH7 Weekender, Zomaland, Nykaaland, and more. Expanding Revenue Streams OTT Platforms live-stream digital platforms and sponsorships will further boost industry revenues (e. g. , Disney Hotstar x Coldplay – 8. 3 million views). Growth in regional concerts will create new revenue opportunities in Tier 2 & 3 cities. Better Infrastructure & Investments Modern multi-purpose... --- > Think of a compliance calendar as your personalized roadmap to regulatory bliss. It outlines key deadlines for filings, reports, and other obligations mandated by various governing bodies. From taxes and accounting to industry-specific regulations, a comprehensive compliance calendar ensures you meet all your requirements on time, every time. - Published: 2025-02-05 - Modified: 2025-07-21 - URL: https://treelife.in/calendar/compliance-calendar-2025/ - Categories: Calendar - Tags: annual compliance checklist, compliance, compliance calendar, compliance calendar 2025-26 DOWNLOAD COMPLIANCE CALENDAR IN PDF DOWNLOAD COMPLIANCE CALENDAR IN EXCEL In today’s fast-paced corporate world, the cost of non-compliance can be severe, ranging from hefty financial penalties to significant reputational damage. For any business, understanding and adhering to regulatory requirements is not just a legal obligation but a crucial aspect of operational integrity. To assist companies in navigating this complex landscape, we’ve developed a detailed Compliance Calendar for the year 2025-26. Following this schedule meticulously can safeguard your business from unwanted legal consequences and ensure that you meet all necessary regulatory deadlines. This meticulously curated guide covers essential deadlines across various domains, including Income Tax, Goods and Services Tax (GST), Ministry of Corporate Affairs (MCA) compliances, Employees' Provident Fund (EPF), Employees' State Insurance (ESI), and more. By leveraging this calendar, you can proactively manage your compliance activities, minimize risks, and focus on your core business growth. What is a Compliance Calendar? Think of a compliance calendar as your personalized roadmap to regulatory bliss. It outlines key deadlines for filings, reports, and other obligations mandated by various governing bodies. From taxes and accounting to industry-specific regulations, a comprehensive compliance calendar ensures you meet all your requirements on time, every time. Why is a Compliance Calendar Important for your Business? A well-structured compliance calendar is more than just a list of dates; it's a strategic tool that offers numerous benefits: Avoid Penalties & Fines: Timely adherence to deadlines prevents the imposition of late fees, interest, and other statutory penalties, directly impacting your bottom line. Maintain Legal Standing: Regular compliance ensures your business operates within the legal framework, safeguarding its reputation and credibility. Streamline Operations: A clear roadmap of compliance tasks allows for better planning, resource allocation, and efficient workflow management. Enhanced Audit Readiness: Being consistently compliant means your records are always up-to-date and audit-ready, reducing stress and potential issues during inspections. Informed Decision-Making: Understanding upcoming obligations helps in financial planning and strategic business decisions. Boost E-E-A-T (Expertise, Experience, Authoritativeness, Trustworthiness): Demonstrating a clear commitment to compliance builds trust with stakeholders, clients, and regulatory bodies. Key Compliance Requirements for 2025: A Month-by-Month Breakdown Here’s a detailed, month-by-month breakdown of critical compliance deadlines for the financial year 2025-26, presented in an easy-to-read table format for maximum clarity and featured snippet potential. April 2025 Due DateCompliance TypeDescriptionApplicable Form/Act7thTDS/TCS DepositDeposit of TDS/TCS collected for the preceding month (March 2025). Income Tax Act, 196110thGST - GSTR-7Monthly return for Tax Deducted at Source (TDS). GSTR-7 / CGST Act, 201710thGST - GSTR-8Monthly return for E-commerce Operators. GSTR-8 / CGST Act, 201711thGST - GSTR-1Monthly outward supply (sales) details for taxpayers with turnover exceeding ₹5 crores. GSTR-1 / CGST Act, 201713thGST - GSTR-1 (QRMP)Quarterly outward supply (sales) details for taxpayers opting for the QRMP scheme (Jan-Mar 2025). GSTR-1 / CGST Act, 201713thGST - GSTR-5Monthly return for Non-Resident Taxable Persons. GSTR-5 / CGST Act, 201713thGST - GSTR-6Monthly return for Input Service Distributors (ISDs). GSTR-6 / CGST Act, 201715thEPF PaymentMonthly Provident Fund contributions for March 2025. Employees' Provident Funds and Miscellaneous Provisions Act, 195215thESI PaymentMonthly Employees' State Insurance contributions for March 2025. Employees' State Insurance Act, 194818thGST - CMP-08Quarterly statement-cum-challan for composition taxpayers (Jan-Mar 2025). CMP-08 / CGST Act, 201720thGST - GSTR-3BMonthly summary return for tax payment and ITC utilization. GSTR-3B / CGST Act, 201722ndGST - GSTR-3B (QRMP - Category X States)Quarterly summary return for QRMP taxpayers in specified states (Jan-Mar 2025). GSTR-3B / CGST Act, 201724thGST - GSTR-3B (QRMP - Category Y States)Quarterly summary return for QRMP taxpayers in other specified states (Jan-Mar 2025). GSTR-3B / CGST Act, 201725thGST - ITC-04Quarterly statement of goods/capital goods sent to job worker and received back (Oct-Mar 2025). ITC-04 / CGST Rules, 201730thTDS Challan-cum-StatementFor payments made under Sections 194IA, 194IB, and 194M during March 2025. Form 26QB, 26QC, 26QD / Income Tax Act, 196130thMSME-1 (Half-yearly)For outstanding payments to Micro and Small Enterprises (Oct 2024 - Mar 2025). Form MSME-1 / MSMED Act, 200630thProfessional TaxPayment for March 2025 (State-specific due dates apply). State-specific Professional Tax Acts30thGST - GSTR-4 (Composition)Annual return for composition taxpayers (FY 2024-25). GSTR-4 / CGST Act, 2017 May 2025 Due DateCompliance TypeDescriptionApplicable Form/Act7thTDS/TCS DepositDeposit of TDS/TCS collected for the preceding month (April 2025). Income Tax Act, 196110thGST - GSTR-7Monthly return for Tax Deducted at Source (TDS). GSTR-7 / CGST Act, 201710thGST - GSTR-8Monthly return for E-commerce Operators. GSTR-8 / CGST Act, 201711thGST - GSTR-1Monthly outward supply (sales) details for taxpayers with turnover exceeding ₹5 crores. GSTR-1 / CGST Act, 201713thGST - GSTR-5Monthly return for Non-Resident Taxable Persons. GSTR-5 / CGST Act, 201713thGST - GSTR-6Monthly return for Input Service Distributors (ISDs). GSTR-6 / CGST Act, 201715thEPF PaymentMonthly Provident Fund contributions for April 2025. Employees' Provident Funds and Miscellaneous Provisions Act, 195215thESI PaymentMonthly Employees' State Insurance contributions for April 2025. Employees' State Insurance Act, 194815thTDS CertificatesIssuance of TDS certificates (Form 16B, 16C, 16D) for tax deducted under Sections 194IA, 194IB, and 194M during FY 2024-25. Form 16B, 16C, 16D / Income Tax Act, 196120thGST - GSTR-3BMonthly summary return for tax payment and ITC utilization. GSTR-3B / CGST Act, 201730thTDS Challan-cum-StatementFor payments made under Sections 194IA, 194IB, and 194M during April 2025. Form 26QB, 26QC, 26QD / Income Tax Act, 196130thLLP Form 11Annual return for LLPs (FY 2024-25). Form 11 / LLP Act, 200830thPAS-6 (Half-yearly)Reconciliation of Share Capital Audit Report for unlisted public companies (Oct 2024 - Mar 2025). Form PAS-6 / Companies Act, 201331stTDS Return - Q4 FY24-25Quarterly statement of TDS for the quarter ending March 31, 2025 (Forms 24Q, 26Q, 27Q). Form 24Q, 26Q, 27Q / Income Tax Act, 196131stForm 10BD & 10BEStatement of donations received and certificate for eligible donations for FY 2024-25. Form 10BD, 10BE / Income Tax Act, 196131stProfessional TaxPayment for April 2025 (State-specific due dates apply). State-specific Professional Tax Acts June 2025 Due DateCompliance TypeDescriptionApplicable Form/Act7thTDS/TCS DepositDeposit of TDS/TCS collected for the preceding month (May 2025). Income Tax Act, 196110thGST - GSTR-7Monthly return for Tax Deducted at Source (TDS). GSTR-7 / CGST Act, 201710thGST - GSTR-8Monthly return for E-commerce Operators. GSTR-8 / CGST Act, 201711thGST - GSTR-1Monthly outward supply (sales) details... --- > The Union Budget 2025 presents a reform-driven and growth-focused vision for India's economic trajectory, aligning with the government’s long-term goal of Viksit Bharat 2047. With a strong emphasis on fiscal prudence, policy continuity, and structural transformation, the budget outlines measures to accelerate infrastructure growth, economic stability, and private sector participation. - Published: 2025-02-03 - Modified: 2025-08-07 - URL: https://treelife.in/reports/union-budget-2025/ - Categories: Reports, Finance - Tags: budget 2025, budget 2025 expectations, budget 2025 highlights, budget 2025 income tax, budget session 2025, income tax relief budget 2025, new budget 2025, union budget 2025, union budget 2025 date DOWNLOAD PDF Budget 2025: Key Highlights and Analysis  The Union Budget 2025 presents a reform-driven and growth-focused vision for India's economic trajectory, aligning with the government’s long-term goal of Viksit Bharat 2047. With a strong emphasis on fiscal prudence, policy continuity, and structural transformation, the budget outlines measures to accelerate infrastructure growth, economic stability, and private sector participation. India remains one of the fastest-growing major economies, with a real GDP growth forecast of 6. 4% for FY 2025 and a fiscal deficit target of 4. 4% for FY 2026. The budget's total expenditure stands at ₹50. 65 lakh crore, reflecting a 14% increase, largely focused on investment-led growth. The government reiterates its commitment to inclusive development for GYAN, centering its initiatives around Garib (poor), Yuva (youth), Annadata (farmers), and Nari (women). The budget also prioritizes MSMEs, exports, energy security, and employment generation, ensuring long-term economic resilience. Budget 2025 – Key Growth Drivers The Union Budget 2025 is structured around six core reform domains: Taxation – Simplified tax policies to enhance compliance. Power Sector – Boosting clean energy investments. Urban Development – Expanding infrastructure. Mining – Strategic development of natural resources. Financial Sector – Policy predictability and economic stability. Regulatory Reforms – Improving ease of doing business. Additionally, the budget introduces sector-specific funds, regulatory overhauls, and incentives for startups and MSMEs to drive innovation and economic growth. Key Policy Announcements in Budget 2025 The Union Budget 2025 highlights several major reforms and policy announcements: 1. Introduction of a New Income Tax Bill A new Income Tax Bill will be introduced to modernize and simplify India’s tax laws, promoting efficiency and predictability in the tax regime. 2. Startup and MSME Incentives ₹10,000 crore Fund of Funds to support startups. Deep Tech Fund of Funds for next-gen technology startups. MSME classification limits revised for investment and turnover, expanding opportunities for small businesses. National Manufacturing Mission to enhance ease of business, support a future-ready workforce, and drive clean tech manufacturing. 3. Investment and Business-Friendly Policies FDI in the insurance sector increased to 100% (from 74%). Fast-track merger procedures streamlined to boost corporate consolidation. Investor Friendliness Index to be launched for states in 2025. 4. Financial Sector and Compliance Easing Rationalization of TDS & TCS provisions, including: Higher TDS exemption limits for various income categories. Removal of higher TDS/TCS for non-filers of ITR. TCS exemption threshold for overseas remittances increased from ₹7 lakh to ₹10 lakh. Simplified transfer pricing framework – 3-year ALP (Arm’s Length Price) assessment period to reduce litigation. Introduction of a revamped Central KYC registry in 2025. 5. Boosting Investments through GIFT IFSC Enhanced tax benefits for offshore funds relocating to GIFT IFSC. Exemption on capital gains and dividends for ship leasing units in IFSC, aligning it with aircraft leasing benefits. Simplification of fund manager compliance rules, making GIFT IFSC a more attractive financial hub. Decoding Tax Reforms in Budget 2025 I. Startups and Other Businesses Budget 2025 brings notable tax reforms aimed at boosting the startup ecosystem and improving business ease. Key highlights include: Extension of Startup Tax Holiday: The 100% tax deduction under Section 80-IAC has been extended till March 31, 2030, supporting early-stage startups. However, the low utilization rate of this benefit (only ~2. 36% of DPIIT-registered startups) signals a need for further streamlining. Restrictions on Loss Carry Forward in Amalgamations: Startups and businesses undergoing mergers will now be restricted from indefinitely carrying forward losses, ensuring tax compliance and preventing evergreening of losses. Rationalization of TCS on LRS & Tour Bookings: The TCS threshold under the Liberalized Remittance Scheme (LRS) has been increased from ₹7 lakh to ₹10 lakh, easing overseas transactions for businesses and individuals. Higher TDS Thresholds to Improve Compliance: Businesses benefit from higher TDS applicability limits across multiple categories, reducing compliance burdens. For instance, TDS on professional services and rent has been revised, making compliance more streamlined. Treelife Insight: While these changes improve compliance efficiency, the impact on startup liquidity and cash flow management will be key to watch. II. AIFs and Other Investors The Budget introduces critical reforms for Alternative Investment Funds (AIFs) and institutional investors, ensuring regulatory clarity and tax stability. Clarity on Tax Treatment of Securities Held by AIFs: Category I & II AIFs will have their securities classified as capital assets, ensuring uniform capital gains tax treatment rather than business income taxation. Removal of TCS on Sale of Goods (Including Securities): The 0. 1% TCS on sales above ₹50 lakh has been abolished, significantly reducing tax compliance burdens for investment funds and capital market transactions. Reduced TDS on Securitization Trust Distributions: The TDS rate for residents receiving payments from securitization trusts has been slashed from 25%-30% to 10%, ensuring smoother fund flow within investment structures. Streamlined Tax Rate for FPIs & Specified Funds: Long-term capital gains (LTCG) tax for FPIs has been standardized at 12. 5%, reducing disparities and bringing tax certainty. Treelife Insight: These reforms simplify fund structures and reduce compliance friction, making India’s investment ecosystem more competitive. III. Personal Taxation Personal taxation changes in Budget 2025 focus on increasing exemptions, easing compliance, and rationalizing TDS/TCS: Higher Basic Exemption & Rebate Under the New Tax Regime: Basic exemption limit raised to ₹4 lakh (from ₹3 lakh). Rebate under Section 87A increased to ₹12 lakh, reducing tax outgo for middle-income taxpayers. Crypto Asset Reporting Mandate: Section 285BAA introduces strict reporting requirements for cryptocurrency transactions, increasing transparency in digital asset taxation. Extension of Time Limit for Filing Updated Returns: Taxpayers now have up to 48 months (from 24 months) to file updated ITRs, subject to additional tax payments. Tax Deduction for NPS Vatsalya Scheme: A new deduction of ₹50,000 under Section 80CCD is introduced for contributions towards NPS for minors, encouraging long-term savings. Treelife Insight: While these changes offer tax relief for middle-income earners, the lack of direct income tax cuts may leave higher-income taxpayers wanting more. IV. GIFT-IFSC Budget 2025 strengthens GIFT City’s role as a global financial hub with extended tax incentives and new opportunities: Extension of Tax Exemptions Till 2030:... --- - Published: 2025-01-30 - Modified: 2025-08-07 - URL: https://treelife.in/legal/stock-appreciation-rights-in-india/ - Categories: Legal - Tags: stock appreciation rights, stock appreciation rights example, stock appreciation rights for private companies, stock appreciation rights in india, stock appreciation rights india, stock appreciation rights scheme, stock appreciation rights taxation india, what is stock appreciation rights Stock Appreciation Rights (“SARs”) offer a compelling form of employee compensation, allowing beneficiaries to enjoy an increase in the company’s valuation over time without the necessity to purchase or own actual shares. This predetermined timeframe for appreciation has seen SARs become increasingly popular in India as a viable alternative to traditional Employee Stock Option Plans (ESOPs). They offer flexibility to both employers and employees and are quickly gaining traction in the startup ecosystem. For example, employees at Jupiter (Amica Financial) experienced significant appreciation in their grants when the company’s valuation surged by 67% to INR 720 crores in 20201.   In this article, we break down what SARs are, how they work and what the key advantages are to offering this form of employee compensation, from the perspective of both employers and employees. What are Stock Appreciation Rights (SARs)? SARs are typically defined as the right to receive the benefit of increase/appreciation of the value of a company’s stock. This appreciation can be monetised by way of cash or stock and does not require the employee to invest their own money to purchase the stocks (as is the case with traditional ESOPs). How are SARs issued? SARs follow a lifecycle similar to that of ESOPs2, but differ in how these entitlements are earned. Unlike ESOPs, which require an employee to purchase the option and thereby exercise their right to the shares, SARs require no upfront payment from employees. Only the difference between the SAR price on the grant date and the market price on the settlement date will be paid out in cash, equity, or a combination of both. Once settled, SARs are considered retired. How do SARs work? Stock Appreciation Rights (SARs) in India are a popular employee benefit that allows employees to gain from the appreciation in a company's stock price without purchasing shares. The appreciation is calculated as the difference between the market value of the SAR on a predetermined date and its price on the grant date. This gain is typically settled in cash or equity, providing employees with financial incentives tied to the company's growth. SARs offer a tax-efficient and flexible alternative to stock options, making them an attractive tool for employee retention and motivation in India’s corporate landscape. Illustration of Stock Appreciation Rights Working Company A grants 100 SARs to an employee. The SAR Price is fixed at INR 10/- per SAR. The SARs will evenly vest over the next 4 years. The table below shows how the appreciation will be computed. This breakdown will be subject to change depending on how the company decides to settle these SARs - i. e. , as Cash Settled SAR or Equity Settled SAR or a combination of both. No. ParticularsEnd of Year 1End of Year 2End of Year 3End of Year 41SAR Price (each; in INR)101010102Vested SARs (in nos. )2550751003% of Vested SARs25%50%75%100%4Market Value per SAR(in INR)1002003004005Appreciation per SAR (in INR)901902903906If Cash Settled SAR (in INR)2,2509,50021,75039,0007If Equity Settled SAR (in nos. )*23487398 Notes: * Numbers are rounded up to prevent fractional computation. The amounts and number of shares in rows 6 and 7 above indicate the money/equity to be received by the employee based on the vesting schedule that vests 25% each year for 4 years. Combination of Cash Settled SAR and Equity Settled SAR will result in change to rows 6 and 7 appropriately, basis the relevant % to be applied.   Legal Background of SAR in India It is pertinent to note that companies that are listed on a recognised stock exchange are subject to certain regulations prescribed from time to time by the Securities and Exchange Board of India (‘SEBI’). While their formation and key foundational principles are contained within the framework of the Companies Act, 2013 (‘CA 2013’), public listed entities are predominantly governed by SEBI regulations issued from time to time. However, only the CA 2013 is applicable to private companies and the provisions of the act read with the rules formulated thereunder, do not explicitly address SARs, leading to uncertainty in the legal framework governing the adoption of employee equity-linked reward schemes by private companies that are alternatives to the traditional ESOP scheme.   SARs issued by Public Listed Companies SAR is legally defined in the Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 (“SBEB Regulations”), to mean: “a right given to a SAR grantee entitling him to receive appreciation for a specified number of shares of the company where the settlement of such appreciation may be made by way of cash payment or shares of the company.   Explanation 1 - A SAR settled by way of issue of shares of the company shall be referred to as equity settled SAR. Explanation 2 - For the purpose of these regulations, any reference to stock appreciation right or SAR shall mean equity settled SARs and does not include any scheme which does not, directly or indirectly, involve dealing in or subscribing to or purchasing, securities of the company. 3” The SBEB Regulations also define “appreciation” to mean “the difference between the market price4 of the share of a company on the date of exercise5 of SAR or the date of vesting of SAR, as the case may be, and the SAR price. 6”  The grant of SAR under a scheme by a public company is further governed by Part C of the SBEB Regulations, which impose inter alia, the following restrictions on issuing SARs as employee benefit: Cash Settled or Equity Settled SAR: Companies are free to implement cash settled or equity settled SAR schemes. It is notable that where the settlement results in fractional shares, such fractional shares should be settled in cash. Disclosures to Grantees: Every SAR grantee is required to be given a disclosure document from the company, including a statement of risks, information about the company and salient features of the scheme.   Vesting: SARs have a minimum vesting period of 1 year which shall only be inapplicable in... --- - Published: 2025-01-18 - Modified: 2025-03-11 - URL: https://treelife.in/news/resident-individuals-to-open-foreign-currency-bank-accounts-fca-with-ibus-in-ifscs/ - Categories: News IFSCA vide circular dated 11 July 2024, allowed Resident Individuals to open Foreign Currency bank Accounts (FCA) with IBUs in IFSCs for all permitted capital and current account transactions. Further to the same, owing to operational challenges IBUs were unable to open FCA for Resident Individuals. Accordingly, in order to provide guidelines to IBUs for opening and maintaining FCAs for Resident Individuals, IFSCA issued a circular on 10 October 2024 providing certain clarifications. However, IFSCA has now issued an updated circular on 13 December 2024 superseding the earlier circular providing following key guidelines / clarifications: 1) Resident individuals are permitted to deposit unutilized funds from their FCAs in Fixed Deposits, provided the tenure of such deposits does not exceed 180 days. 2) Resident individuals are allowed to remit funds directly into their FCAs from locations other than onshore India provided that such remittance represents funds duly remitted earlier under LRS or income earned on the investments made from funds duly remitted earlier under LRS. 3) IBUs are also encouraged to facilitate the opening of FCAs digitally through internet and mobile banking platforms, ensuring a smoother customer experience. These updates provide much-needed operational clarity for IBUs, ensuring smoother processes for FCA opening for resident individuals while aligning with IFSCA’s regulations and facilitating greater flexibility. Reach out to us at dhairya. c@treelife. in for a discussion. --- - Published: 2025-01-09 - Modified: 2025-07-22 - URL: https://treelife.in/legal/understanding-the-draft-digital-personal-data-protection-rules-2025/ - Categories: Legal - Tags: DPDP, DPDP Act, Draft Digital Personal Data Protection Rules, Draft Digital Personal Data Protection Rules 2023, Draft Digital Personal Data Protection Rules 2025 On January 3, 2025, the Union Government released the draft Digital Personal Data Protection Rules, 2025 1 (“Draft Rules”). Formulated under the Digital Personal Data Protection Act, 2023 (“DPDP Act”), the Draft Rules have been published for public consultation, with objections and suggestions on the same to be provided to the Ministry of Electronics and Information Technology by February 18, 2025. Formulated to further safeguard citizens’ rights to protect their personal data, the Draft Rules seek to operationalize the DPDP Act, furthering India’s commitment to create a robust framework to protect digital personal data.   In this blog, we break down the key provisions of the Draft Rules having regard to their background in the DPDP Act, and highlight certain challenges found in the draft legislation.   Background: the DPDP Act, 2023 The DPDP Act was a revolutionary step towards India’s adoption of a robust data protection regime. This legislation marks the first comprehensive law dedicated to the protection of personal data and received presidential assent on August 11, 2023. However, the Act itself is yet to be notified for enforcement and the implementation is expected in a phased manner. To understand the impact of the Draft Rules2, it is crucial to first understand the key terms and legal framework introduced by the DPDP Act. A. Key Terms: Board: the Data Protection Board of India established by the Central Government.   Consent Manager: a person registered with the Board who acts as a single point of contact to enable a Data Principal to give, manage, review, and withdraw consent through an accessible, transparent and interoperable platform. Data Fiduciary: any person who alone or in conjunction with other persons determines the purpose and means of processing personal data. Data Principal: the individual to whom the personal data relates. The ambit of this definition is expanded where the Data Principal is: (i) a child, to include their parents and/or lawful guardian; and (ii) a person with disability, to include their lawful guardian. Data Processor: person processing personal data on behalf of a Data Fiduciary. Personal Data: any data about an individual who can be identified by or in relation to such data. Processing: (in relation to personal data) wholly or partly automated operation(s) performed on digital personal data. Includes collection, recording, organisation, structuring, storage, adaptation, retrieval, use, alignment or combination, indexing, sharing, disclosure by transmission, dissemination or otherwise making available, restriction, erasure or destruction. B. Legal Framework: Scope and Applicability: Applies to the processing of personal data within India and to entities outside India offering goods/services to individuals in India. Covers personal data collected in digital form or data that is digitized after collection and excludes personal data processed for a personal or domestic purpose and data made publicly available by the Data Principal. Data Processing: Statutory requirement for clear, informed and unambiguous consent from Data Principals including a notice of rights. Certain scenarios (such as compliance with legal obligations or during emergencies) allow data processing without explicit consent - i. e. , for a legitimate purpose3.   Data Principals: Given rights that include access to information, correction and erasure of data, grievance redressal, and the ability to nominate representatives for exercising rights in case of incapacity or death.   Data Fiduciaries: Obligated to implement data protection measures, establish grievance redressal mechanisms, and ensure data security. Significant Data Fiduciaries4 are required to additionally conduct Data Protection Impact Assessments (DPIAs), and appoint Data Protection Officer and an independent data auditor evaluating compliance with the DPDP Act. Cross-Border Data Transfer: In a departure from the earlier regime requiring data localisation, the DPDP Act permits cross-border transfer of data unless explicitly restricted by the Indian government. Organisational Impact: Organizations must assess and enhance their data protection frameworks to comply with the DPDPA. Key steps include appointing Data Protection Officers (for significant data fiduciaries), implementing robust security measures, establishing clear data processing agreements, and ensuring mechanisms for data principals to exercise their rights. Penalties: Monetary penalty can be imposed by the Board based on the circumstances of the breach and the resultant impact (including whether any gain/loss has been realised/avoided by a person).   Enabling Mechanisms: the DPDP Rules, 2025 Under Section 40 of the DPDP Act, the Central Government is empowered to formulate rules to enable the implementation of the Act. Pursuant to this, the Draft Rules seek to provide guidance on compliance, operational aspects, administration and enforcement of the DPDP Act. The Draft Rules are to come into force upon publication however, certain critical provisions will only become effective at a later date5. Key Provisions: Notice Requirements for Data Fiduciaries: The notice for consent required to be provided to the Data Principal should be clear, standalone, simple and understandable. Most crucially, the Draft Rules specify that the notice should include an itemized list of personal data being collected and a clear description of the goods/services/uses which are enabled by such data processing. The Data Principal should also be informed of the manner in which they can withdraw their consent, exercise their rights and file complaints. Data Fiduciaries should provide a communication link and describe applicable methods that will enable the Data Principal to withdraw their consent or file complaints with the Board.   Consent Managers: Strict eligibility criteria have been prescribed for persons who can be appointed as Consent Managers - this must be an India-incorporated company with sound financial and operational capacity, with a minimum net worth of INR 2,00,00,000, a reputation for fairness and integrity and certified interoperable platform enabling Data Principals to manage their consent. These Consent Managers must uphold high standards of transparency, security and fiduciary responsibility and are additionally required to be registered with the Board and act as a single point of contact for Data Principals. Any transfer of control of such entities will require the prior approval of the Board. Data Processing by the State: The government can process personal data to provide subsidies, benefits, certificates, services, licenses or permits. However such processing must comply with the... --- - Published: 2025-01-06 - Modified: 2025-08-28 - URL: https://treelife.in/compliance/mca-compliances-for-foreign-entities-starting-business-in-india/ - Categories: Compliance - Tags: Foreign Companies Starting Business in India, Foreign Entities Starting Business in India, mca compliance Introduction India has emerged as a global hub for business and investment, attracting foreign entities eager to tap into its dynamic and growing market. Whether it’s multinational corporations expanding operations or startups venturing into new territories, establishing a presence in India offers immense opportunities. However, along with these opportunities come regulatory obligations that must be adhered to for smooth operations. The Ministry of Corporate Affairs (MCA) plays a pivotal role in regulating companies and ensuring compliance with Indian laws. For foreign entities, understanding and fulfilling these mandatory MCA compliances is crucial not only to avoid penalties but also to build credibility and maintain transparency. Overview of Foreign Entities Setting Up in India Foreign entities can establish a presence in India either through incorporated or unincorporated entities. Incorporated entities include Wholly Owned Subsidiaries (WOS), Joint Ventures (JV), and Limited Liability Partnerships (LLP). On the other hand, unincorporated entities like Liaison Offices (LO), Branch Offices (BO), and Project Offices (PO) allow businesses to operate without forming a distinct legal entity in India. Each mode of entry comes with its own set of benefits and limitations. For instance, incorporated entities enjoy a separate legal identity, while unincorporated entities often focus on specific functions like liaisoning or executing turnkey projects. Regardless of the mode chosen, foreign businesses must comply with: (i) stringent regulatory frameworks prescribed under the Companies Act, 2013 and governed by the Ministry of Corporate Affairs; and (ii) compliances under the Foreign Exchange Management Act, 1999, governed primarily by the Reserve Bank of India (RBI). Importance of Compliance with Companies Act, 2013: Compliance with the Companies Act, 2013 is paramount to legal sustainability of operations of a foreign entity in India, and consequently, is not just a legal requirement. Compliance with Companies Act, 2013 ensures that: a business operates within the legal framework, avoiding fines or operational restrictions. Stakeholders, including customers, investors, and partners, view the business as reliable and trustworthy. The business can leverage tax benefits, investment incentives, and other government schemes. Failure to comply with these corporate governance laws can lead to hefty penalties, reputational damage, and even suspension of business operations, implemented by the MCA. By maintaining compliance, foreign entities safeguard their interests and contribute to the ease of doing business in India. Modes of Setting Up Business in India Foreign entities looking to tap into India’s vast and growing market can choose from several modes to establish their business presence. These options are broadly categorized into unincorporated entities and incorporated entities, each with distinct features, advantages, and compliance requirements.   Unincorporated Entities Unincorporated entities allow foreign companies to establish a presence in India without creating a separate legal entity. These setups are ideal for specific or limited activities like representation, research, or project execution. 1. Liaison Office (LO) Purpose: A Liaison Office acts as a communication channel between the foreign parent company and its operations in India. It facilitates networking, market research, and promotion of technical and financial collaborations. Process: Approval is required from the Reserve Bank of India (RBI) under the Foreign Exchange Management Act (FEMA). Post-RBI approval, documents must be filed with the Ministry of Corporate Affairs (MCA) using e-Form FC-1. Restrictions: An LO cannot engage in any commercial or revenue-generating activities. Its operations are restricted to liaisoning, brand promotion, and market surveys. Validity is generally three years, with exceptions for specific sectors like NBFCs or construction (two years). 2. Branch Office (BO) Purpose: A Branch Office enables foreign companies to conduct business operations directly in India, aligned with the parent company’s activities. Activities Permitted: Import/export of goods. Rendering professional or consultancy services. Acting as a buying or selling agent. Conducting research and development. Process: Prior approval is required from the RBI. Incorporation documents and operational details must be filed with the MCA. Restrictions: The BO must engage in activities similar to its parent company. It cannot undertake retail trading or manufacturing unless explicitly permitted. 3. Project Office (PO) Purpose: A Project Office is set up to execute a specific project in India, often in sectors like construction, engineering, or turnkey installations. Setup: Approval from the RBI is necessary, particularly for projects funded by international financing or collaboration with Indian companies. Registration with the MCA is required post-approval. Validity Period: The PO remains valid for the duration of the project and ceases operations upon completion. Incorporated Entities Incorporated entities offer a more permanent business presence and distinct legal identity in India. These setups are suitable for foreign businesses seeking long-term growth and operational independence. 1. Joint Ventures (JV) Features: A Joint Venture is formed through collaboration between a foreign company and an Indian partner, sharing resources, risks, and expertise. Ownership and profit-sharing terms are defined contractually. Setup: Approval may be required based on the FDI policy and sectoral caps. The incorporation process involves filing e-Form SPICe+ with the MCA, along with drafting a Memorandum of Association (MOA) and Articles of Association (AOA). At least one Indian resident director is mandatory. 2. Wholly Owned Subsidiaries (WOS) Features: A Wholly Owned Subsidiary is entirely owned by the foreign parent company, offering complete control over operations. It operates as a separate legal entity, minimizing liability risks for the parent company. Process: Submit an incorporation application using e-Form SPICe+ to the MCA. The application also includes statutory registrations like PAN, TAN, GSTIN, and more. A minimum of one Indian resident director is required on the board. 3. Limited Liability Partnerships (LLP) Process: File the name reservation application using e-Form RUN-LLP. Submit incorporation documents through e-Form Fillip. Draft and register the LLP Agreement using e-Form 3. Advantages: An LLP combines the flexibility of a partnership with the limited liability of a company. It involves fewer compliance requirements compared to companies, making it cost-effective. Unlike incorporated entities, LLPs can commence operations immediately after obtaining the Certificate of Incorporation. The choice between unincorporated and incorporated entities depends on factors such as the nature of business, long-term goals, and regulatory implications. While unincorporated entities are ideal for specific, short-term projects or liaisoning, incorporated entities... --- - Published: 2024-12-31 - Modified: 2025-08-07 - URL: https://treelife.in/legal/non-disclosure-agreements-in-india/ - Categories: Legal - Tags: confidentiality and non disclosure agreement, nda format, nda template, non disclosure agreement document, non disclosure agreement format, non disclosure agreement india, non disclosure agreement meaning, non disclosure agreement pdf, non disclosure agreement sample, non disclosure agreement template, what is a non disclosure agreement Introduction Security of sensitive business information, protection of intellectual property and trade secrets and trust in collaborations are critical aspects of business security in an increasingly competitive and data-driven market today. It is to this effect that businesses typically execute non disclosure agreement (“NDA”), which imposes a contractual obligation on the party receiving the protected information to not only keep the same confidential but to not disclose or divulge such information without permission from the disclosing party.   NDAs can relate to trade secrets, business models, or intellectual property; all of which help to ensure confidentiality and security in business partnerships. Fundamentally, this agreement ensures that the recipient of such confidential information is obligated to keep the same protected. As such, any breach of an NDA would typically build in mechanisms for compensation for damages caused by the party in breach of the NDA.   Overview of NDAs in Indian Law / Legal Environment NDAs in India are enforceable as per the Indian Contract Act, 1872. They are very commonly employed across sectors and can be used for purposes ranging from technology/manufacturing to consulting to even labour or critical events requiring protection of sensitive information. An airtight NDA defines what is and is not confidential information, limits the use of such information, and outlines the consequences for a breach of the obligations. NDAs are widely used in India to guard proprietary information involving in commercial transactions, employment, or partnership. NDAs keep the most important business information private by: Security of proprietary information from unauthorized use or leakage. Developing intellectual property, trade secrets, and business plans protection laws. Establishing trust in relationships while going through mergers, acquisitions or negotiations. NDAs by ensuring confidentiality preserve a business’s competitive edge and eliminate litigation. such as technology, manufacturing, and consulting. NDAs can be unilateral, mutual or multilateral, but for it to be effective they should meet Indian laws. The success of an NDA depends on its definitions, enforceable provisions and jurisdiction. A breach of an NDA can be financially and reputationally disastrous. What is a Non-Disclosure Agreement (NDA)? A Non-Disclosure Agreement (NDA) is a legally binding contract designed to safeguard sensitive and proprietary information shared between two or more parties. It establishes a confidential relationship by outlining the type of information that must remain undisclosed, the purpose of sharing the information, and the consequences of any breach. NDAs are integral to protecting intellectual property, trade secrets, and other business-critical data. Definition of a Non-Disclosure Agreement In simple terms, an NDA is a formal agreement where one party agrees not to disclose or misuse the confidential information provided by the other party. Colloquially also referred to as a confidentiality agreement, an NDA ensures that the disclosed information is used solely for the intended purpose and remains secure. NDAs are enforceable under the Indian Contract Act, 1872, making them a vital tool in safeguarding sensitive data in India. Key Purposes and Objectives of NDAs The primary goal of an NDA is to maintain the confidentiality of information and prevent its unauthorized use. Key objectives include: Protecting Intellectual Property: Ensuring that trade secrets, patents, and proprietary processes remain secure. Establishing Trust: Building a reliable relationship between parties, particularly in mergers, acquisitions, or joint ventures. Avoiding Misuse of Data: Preventing employees, contractors, or partners from sharing confidential details with competitors. Defining Legal Recourse: Outlining the consequences of a breach, including penalties and legal actions. By clearly defining the scope of confidentiality, NDAs reduce the likelihood of disputes and offer a framework for resolution if a breach occurs. Real-Life Examples of NDA Use in Business Scenarios NDAs are widely used across various industries and situations, such as: Employment Agreements: Employers often require NDAs to protect internal policies, client lists, and proprietary methods from being disclosed by employees. Mergers and Acquisitions: During due diligence, NDAs secure sensitive financial and operational data exchanged between companies. This can also include restrictions on disclosure of investment by a party and prevention of any media release (as typically required by incubators). Technology and Innovation: Startups and tech companies frequently use NDAs to safeguard unique ideas, algorithms, or software codes when pitching to investors or collaborating with developers. Freelance and Consulting Projects: Freelancers or consultants working with confidential client data are bound by NDAs to prevent misuse. Vendor or Supplier Relationships: NDAs protect sensitive pricing strategies, product designs, or supply chain details shared with third-party vendors. For example, a startup seeking funding may share its business model, product specifications and financial projections with potential investors under an NDA, ensuring these details remain confidential and protected from competitors. Types of Non-Disclosure Agreements in India Non-Disclosure Agreements (NDAs) come in various forms depending on the nature of the relationship and the flow of confidential information between parties. Understanding the types of NDAs is essential for selecting the most suitable agreement to safeguard sensitive information. Typically, an NDA will impose a total ban on disclosure, except where such disclosure is required by law or on order of any statutory authority. Below are the primary types of NDAs used in India: 1. Unilateral NDAs A Unilateral NDA is a one-sided agreement where only one party discloses confidential information, and the receiving party agrees to protect it. This type of NDA is commonly used when a business shares proprietary information with employees, contractors, or third-party vendors who are not expected to reciprocate with their own confidential data. Common Use Cases: Protecting trade secrets during product development. Sharing sensitive business data with potential investors. Securing intellectual property shared with a freelancer or consultant. Example: A tech startup providing details of its proprietary algorithm to a marketing agency under a unilateral NDA. 2. Bilateral/Mutual NDAs A Bilateral NDA, also known as a mutual NDA, involves two parties sharing confidential information with each other and agreeing to protect it. This type of agreement is ideal when both parties need to exchange sensitive data, such as in partnerships, collaborations, or joint ventures. Common Use Cases: Collaborations between companies on a new product or service.... --- > The Software as a Service (SaaS) industry is transforming how businesses operate, enabling organizations to scale rapidly, reduce costs, and enhance accessibility. India’s SaaS story is particularly compelling: once a nascent segment, the Indian SaaS market is now projected to reach $50 billion by 2030, - Published: 2024-12-27 - Modified: 2025-08-07 - URL: https://treelife.in/reports/saas-blueprint-report/ - Categories: Reports - Tags: SaaS, SaaS Insights, SaasIndia DOWNLOAD PDF The Software as a Service (SaaS) industry is transforming how businesses operate, enabling organizations to scale rapidly, reduce costs, and enhance accessibility. India’s SaaS story is particularly compelling: once a nascent segment, the Indian SaaS market is now projected to reach $50 billion by 2030, contributing significantly to the global market valued at over $200 billion in 2024. The country is home to over 1,500 SaaS companies, several of which have achieved unicorn status, contributing to a market valued at approximately $13 billion in 2023.   In India, the SaaS ecosystem is experiencing an unprecedented boom, becoming a global hub for innovation, entrepreneurship, and investment. Treelife’s SaaS Blueprint: Unlocking India’s Potential with Industry Insights and Regulatory Guide offers a comprehensive exploration of the Indian SaaS landscape, delving into industry growth trends, regulatory frameworks, investment landscape, risk mitigation strategies, and key government initiatives driving the sector. Whether you’re an entrepreneur, investor, or an industry observer, this handbook provides actionable insights and a clear roadmap to navigate the opportunities in this vibrant and fast growing ecosystem. If you have any questions or need further clarity, please don’t hesitate to reach out to us at garima@treelife. in Why SaaS is the Future of Technology The Indian SaaS sector stands at the intersection of global opportunity and local ingenuity, ready to redefine industries with cutting-edge solutions. As businesses embrace technologies like artificial intelligence, blockchain, and machine learning, the potential for innovation and impact is limitless. The SaaS model is projected to surpass $300 billion globally by 2026 - a testament to its scalability and adaptability. From CRM and ERP solutions to AI-driven platforms and industry-specific tools, SaaS caters to diverse business needs. In India, the sector’s growth is equally remarkable, with the market expected to reach $50 billion by 2030. Fueled by affordable cloud infrastructure, a highly skilled workforce, and supportive government policies, the Indian SaaS sector has become a powerhouse of global significance. However, navigating the complexities of regulation, compliance, and market dynamics is essential for long-term success. With actionable insights and a deep dive into the regulatory framework, this handbook equips businesses and stakeholders to harness the immense potential of SaaS while staying compliant and resilient. Inside the SaaS Blueprint - Key Highlights 1. A Comprehensive Industry Overview The handbook provides an analysis of the SaaS industry’s evolution, market size, and the role of technology in driving transformation. Key highlights include: The global rise of SaaS, driven by innovations in AI, machine learning, and cloud computing. Insights into the Indian SaaS market, which is home to over 1,500 companies generating $13 billion in annual revenue, with 70% of revenue generated in international markets. An exploration of key SaaS segments like Customer Relationship Management (CRM), Enterprise Resource Planning (ERP), cybersecurity, fintech, and more, showcasing India’s ability to serve both local and global markets. 2. Regulatory and Legal Framework The legal and regulatory landscape for SaaS businesses is complex, with both domestic and international considerations. The handbook covers: Contract Law: SaaS agreements such as subscription, service level, and licensing agreements, and the importance of safeguarding intellectual property (IP). Data Protection and Privacy: Navigating India’s Digital Personal Data Protection Act, 2023, and ensuring compliance with global laws like GDPR, HIPAA, and CCPA. Intellectual Property Protection: Securing patents, copyrights, trademarks, and trade secrets to protect proprietary technology. Taxation: Detailed insights into GST implications, equalization levy updates, and income tax considerations for SaaS businesses operating domestically and internationally. 3. Investment Landscape India’s SaaS sector has emerged as an attractive destination for venture capital and private equity investment, with the handbook providing:  The growing preference for vertical SaaS solutions catering to niche industries like agritech and climate tech. Key investment trends, including the role of AI in creating new SaaS categories like software testing, predictive analytics, and automation. Challenges such as founder dilution and valuation pressures, with strategies for navigating these hurdles while attracting sustainable funding. 4. Mitigating Risks and Building Resilience The digital nature of SaaS exposes companies to unique risks, including data breaches and operational disruptions. Learn more about strategies to mitigate risk and build resilience through:: Enhancing data security through encryption, access controls, and compliance with local and global regulations. Building operational resilience with disaster recovery plans, fault-tolerant infrastructure, and robust incident response and reporting frameworks. Addressing third-party risks by vetting external vendors and ensuring alignment with security standards like SOC 2 and ISO 27001. 5. Government Initiatives Supporting SaaS Aimed at fostering innovation and promoting adoption of SaaS, the Government of India has launched multiple initiatives and policies, the most prominent of which are below: MeghRaj Initiative: Accelerating cloud adoption in public services to improve efficiency and scalability. National Policy on Software Products (NPSP): Supporting 10,000 startups and developing clusters for software product innovation. Government eMarketplace (GeM): Enabling SaaS companies to tap into public sector procurement opportunities. SAMRIDH Program: Connecting startups with resources for scaling and growth. Key Takeaways for Stakeholders Whether you're an entrepreneur, investor, or policymaker, this handbook provides actionable insights to navigate the opportunities and challenges of the SaaS ecosystem. Key takeaways include: The roadmap to build and scale a successful SaaS business in India. Strategies to ensure compliance with complex regulatory frameworks. Insights into investment trends and funding opportunities in SaaS. A detailed analysis of risks and resilience strategies to future-proof your business. Download the SaaS Blueprint today and take the next step in shaping the future of SaaS in India. For inquiries or further guidance, reach out to us at garima@treelife. in. --- - Published: 2024-12-26 - Modified: 2025-08-07 - URL: https://treelife.in/legal/mergers-and-acquisitions-in-india/ - Categories: Legal - Tags: advantages and disadvantages of mergers and acquisitions, benefits of mergers and acquisitions, difference between merger and acquisition, latest mergers and acquisitions, merger and acquisition process, mergers and acquisitions examples, mergers and acquisitions in india, mergers and acquisitions meaning, reasons for mergers and acquisitions, recent mergers and acquisitions in india, synergies in mergers and acquisitions, types of mergers and acquisitions, what is merger and acquisition Introduction Mergers and Acquisitions (M&A) have emerged as transformative business strategies in the Indian economic landscape, reshaping industries and fostering innovation. At its core, mergers involve the integration of two companies into a single entity, while acquisitions refer to one company taking control over another. Together, these strategies drive growth, create synergies, and enhance competitiveness in an increasingly dynamic marketplace. India, with its burgeoning economy and government initiatives such as Ease of Doing Business, offers a fertile ground for M&A activities. Key factors driving this trend include globalization, technological advancements, and the need for businesses to scale operations and access new markets. From tech startups to traditional manufacturing giants, M&A plays a pivotal role in aligning businesses with evolving market demands. As a result, the importance of M&A in the Indian economy cannot be overstated. It enables companies to achieve operational efficiencies, expand product portfolios, and enter untapped markets. For the Indian economy at large, M&A fosters job creation, encourages foreign investments, and enhances the global standing of Indian enterprises. Notable examples like the Flipkart-Walmart deal and the Disney India-Reliance (JioCinema) mergers highlight how such transactions have not only transformed the businesses involved but also impacted entire industries and consequently, the Indian consumer experience. As India continues to position itself as a global economic powerhouse, mergers and acquisitions remain a cornerstone of its corporate strategy, driving innovation, market consolidation, and economic progress. What are Mergers and Acquisitions? Mergers and Acquisitions (M&A) are strategic corporate actions that businesses undertake to achieve growth, gain competitive advantages, or drive value creation. While often discussed together, mergers and acquisitions have distinct definitions and implications in the corporate world. Definition of Mergers A merger occurs when two companies combine to form a single, unified entity. This is often done to pool resources, share expertise, and achieve operational efficiencies, or to expand the reach a business has in the relevant market. In a merger, the entities involved are typically of similar size, and the integration is seen as a collaborative effort. For example, the merger of Vodafone India and Idea Cellular created one of the largest telecom operators in India, Vodafone Idea. Definition of Acquisitions An acquisition, on the other hand, happens when one company takes control of another. This can involve purchasing a majority stake or acquiring the entire business. Acquisitions can be either friendly or hostile, depending on whether the target company agrees to the deal. A well-known acquisition in India is Walmart's takeover of Flipkart, which helped Walmart enter the Indian e-commerce market. Reasons for Mergers and Acquisitions Companies pursue mergers and acquisitions for several strategic reasons, including: Market Expansion:M&A enables businesses to enter new geographical regions, tap into different customer bases, and expand their market share. For example, in the financial year of 2023-2024, Reliance Industries acquired the retail, wholesale, logistics and warehousing businesses of Future Group. This deal is projected to consequently expand the reach of Reliance Industries’ retail arm in India.   Cost Savings:Consolidation often results in economies of scale, reducing production costs, streamlining operations, and enhancing profitability.   Diversification:By acquiring companies in different sectors, businesses reduce risk and ensure a steady revenue flow even in volatile markets. This trend can be seen in Zomato’s acquisition of grocery delivery company Blinkit (formerly known as Grofers). The acquisition greatly benefited Zomato, leading to 169% returns in the trailing year. Access to Technology and Talent:M&A helps organizations acquire cutting-edge technology, intellectual property, and skilled workforce without building these capabilities from scratch. For example, in F. Y. 2023-2024, Tata Motors announced a strategic partnership with Tesla Inc. whereby Tesla’s advanced battery technology and autonomous driving features could be introduced into Tata Motors’ EV lineup in India, in exchange for a 20% stake valued at USD 2 billion. Synergies:Perhaps the most significant reason for M&A is achieving synergies—the enhanced value generated when two companies combine.   Synergies in Mergers and Acquisitions Synergies in mergers and acquisitions refer to the financial and operational benefits derived from combining two businesses. Synergies can take several forms: Cost Synergies:Achieved by eliminating duplicate roles, sharing resources, and optimizing operations to reduce overall expenses. Revenue Synergies:Created when the combined entity generates higher sales due to a broader customer base, complementary products, or better market positioning. Financial Synergies:Resulting from better access to funding, improved credit ratings, and enhanced financial stability. For example, the merger of Daimler-Benz and Chrysler aimed to combine their expertise and resources, creating one of the largest automotive manufacturers with significant operational and cost synergies. Similarly in India, the Disney India-Reliance media asset merger will see not only continued survival of the streaming platform offered by Disney India, but will also enable the merged entity to provide a more comprehensive service to Indian consumers, thereby ensuring a steady synergy between the two companies.   Key Differences Between Mergers and Acquisitions Mergers and acquisitions are often used interchangeably, but they are fundamentally different in their structure, purpose, and impact. Understanding these differences is essential for businesses evaluating their growth strategies and for stakeholders aiming to interpret these corporate moves. What is the Difference Between a Merger and an Acquisition? Mergers and acquisitions differ across several dimensions, including their operational goals, legal requirements, and financial implications. Below is a detailed table explaining these differences: AspectMergerAcquisitionDefinitionCombining two companies into a single, unified entity. One company takes control of another by purchasing its shares or assets. ObjectiveTo achieve mutual growth by sharing resources and market opportunities. To expand market presence, gain assets, or eliminate competition. Legal ProcessInvolves mutual agreement and shareholder approval from both entities. A scheme of merger will also require approval from the National Company Law Tribunal and (where the applicable thresholds are attracted) approval from the Competition Commission of India and/or the Reserve Bank of India/Securities and Exchange Board of India. The acquiring company gains ownership, which can be friendly or hostile. This is typically done by way of business transfer agreements or slump sales.  Control and OwnershipOwnership is typically shared between the merged companies. The acquiring company retains... --- - Published: 2024-12-26 - Modified: 2025-07-21 - URL: https://treelife.in/compliance/compliances-for-limited-liability-partnership-llp/ - Categories: Compliance - Tags: compliance for limited liability partnership, compliance for llp india, compliances for llp Introduction In today’s fast-paced business environment, choosing the right legal structure is pivotal for business owners in India. One such popular structure is the Limited Liability Partnership (LLP) which essentially functions as a hybrid of a partnership and a corporate entity. The key benefit to the LLP structure is that the business can retain the benefits of limited liability while retaining operational flexibility. Consequently, LLPs have gained immense traction among entrepreneurs and professionals for their simplicity and efficiency in operation. However, with this flexibility comes the responsibility of maintaining LLP compliances in India, which are mandatory for safeguarding the legal standing and operational credibility of the entity. Adhering to these compliances for LLPs ensures that the LLP operates within the framework of the law, avoids hefty penalties, and maintains its goodwill among stakeholders and regulatory bodies. Failing to comply with these regulations can lead to severe repercussions, including financial penalties, legal disputes, and even the dissolution of the LLP. Therefore, understanding and adhering to LLP filing requirements and deadlines is not just a legal obligation but also a cornerstone of sustainable business management. This blog serves as a comprehensive guide to LLP annual compliance and filing requirements in India, detailing the steps, benefits, and consequences of non-compliance. What is LLP in India? LLPs in India are governed by the Limited Liability Partnership Act, 2008 (“LLP Act”). As defined thereunder, an LLP is a separate legal entity distinct from its partners. This means that the LLP can own assets, incur liabilities, and enter into contracts in its name, providing a level of security and independence not found in traditional partnerships. One of its hallmark features is limited liability, ensuring that the personal assets of the partners are not at risk beyond their agreed contributions to the business. An LLP is further governed by an LLP agreement executed between the partners and filed as part of the incorporation documents to be provided to the Ministry of Corporate Affairs under the LLP Act. Accordingly, critical terms such as the extent of liability, obligations of each partner and their capital contributions to the LLP are captured therein.   Key Characteristics of an LLP Separate Legal Entity: An LLP has its own legal identity, distinct from its partners, allowing it to function independently. Limited Liability: The partners’ liabilities are limited to their contributions, offering a layer of financial protection. Flexibility in Management: Unlike corporations, LLPs provide greater flexibility in internal operations and decision-making processes. No Minimum Capital Requirement: LLPs do not mandate a minimum capital requirement, making them accessible for startups and small businesses. How is an LLP Different from a Private Limited Company? While both LLPs and Private Limited Companies offer limited liability protection, they differ in various ways: Ownership and Control: In an LLP, the partners manage the business directly, whereas in a Private Limited Company, directors manage operations on behalf of shareholders. Compliance Burden: LLPs have fewer compliance requirements and lower operational costs compared to Private Limited Companies. Tax Advantages: LLPs generally benefit from a simplified tax structure, avoiding dividend distribution tax applicable to Private Limited Companies. Regulatory Oversight LLPs in India fall under the purview of the Ministry of Corporate Affairs (MCA), as designated by the LLP Act. Key regulations include registration, annual filings, and periodic updates for changes in partnership structure or business operations. The Registrar of Companies (RoC) monitors compliance, ensuring that LLPs adhere to the legal framework established under the LLP Act. By combining the best aspects of partnerships and corporations, LLPs have emerged as a favored structure for entrepreneurs seeking a balance of flexibility, liability protection, and operational efficiency. What are Compliances for LLP in India? Compliances for Limited Liability Partnerships (LLPs) in India refer to the set of mandatory legal, financial, and procedural obligations that LLPs must adhere to in order to maintain their legal standing and operational credibility. Governed by the Limited Liability Partnership Act, 2008, these compliances ensure that LLPs operate transparently, fulfill their tax obligations, and align with the regulations set by the Ministry of Corporate Affairs (MCA). Importance of LLP Compliance Maintaining compliance for a Limited Liability Partnership (LLP) is not just a legal obligation—it’s a cornerstone for ensuring the smooth operation and longevity of the business. LLP compliance encompasses all the mandatory filings and procedural requirements that safeguard the LLP’s legal standing and financial integrity. Why Compliance is Crucial for an LLP Preserving Legal StatusTimely compliance is essential to uphold an LLP’s status as a legally recognized entity. Non-compliance can lead to severe consequences, such as disqualification of partners, restrictions on business activities, and even the dissolution of the LLP by regulatory authorities. Ensuring Smooth Business OperationsCompliance helps in maintaining organized and transparent business practices. Adhering to LLP filing requirements, such as submitting financial statements and annual returns, ensures that the LLP operates within the boundaries of the law, minimizing disruptions. Avoiding Penalties and Legal ComplicationsNon-compliance with mandatory LLP requirements can result in hefty penalties, with additional penalty levied on a per day basis for any delays/contraventions that are not rectified. Additionally, prolonged non-compliance can escalate into legal complications, tarnishing the LLP’s reputation and creating obstacles for future business dealings. It is crucial to note that the ROC through the LLP Act, is empowered to strike off LLPs that are deemed to be defunct or not carrying on operations in accordance with the LLP Act. The Role of Timely Filings Maintaining TransparencyFiling annual returns (Form 11) and financial statements (Form 8) on time fosters transparency in financial and operational activities. This builds trust among stakeholders, clients, and regulatory bodies. Enhancing CredibilityA compliant LLP is viewed as reliable and trustworthy, which can be a critical factor when securing investments, loans, or partnerships. Timely compliance reflects professionalism and adherence to business ethics. Tax BenefitsCompliance also plays a significant role in tax planning and benefits. Filing accurate income tax returns on time helps avoid interest, penalties, and scrutiny from tax authorities. LLPs that adhere to tax filing requirements can also access incentives and deductions... --- > Protection of the trademark through trademark registration in India is a crucial step for businesses aiming to protect their brand identity and establish legal ownership, - Published: 2024-12-19 - Modified: 2025-08-07 - URL: https://treelife.in/legal/trademark-registration-in-india/ - Categories: Legal - Tags: benefits of trademark registration, brand trademark registration, classes in trademark registration, company trademark registration, documents required for trademark registration, government fees for trademark registration, how to check trademark registration, procedure for trademark registration in india, trademark and logo registration, trademark name registration, trademark registration certificate, trademark registration check, trademark registration cost in india, trademark registration fees in india, trademark registration in india, trademark registration in india can be renewed after, trademark registration online, trademark registration process in india, trademark registration process step by step, trademark registration search, trademark registration status, what is trademark registration Introduction to Trademark Registration in India In today’s competitive market, building a strong brand identity is vital for success. It is in this context that trademarks become a critical asset to distinguish a business’ products or services from others, ensuring they stand out and are instantly recognizable to a consumer. Consequently, protection of the trademark through trademark registration in India is a crucial step for businesses aiming to protect their brand identity and establish legal ownership over their logos, names, and symbols - all of which constitute intellectual property of the business. As a result, whether it’s a logo, name, slogan, or unique design, registering a trademark provides legal protection against infringement of intellectual property and legitimizes the brand’s ownership of such intellectual property. In India, the process of registering a trademark is governed by the Trade Marks Act, 1999, and is overseen by the Trade Marks Registry. The Trade Marks Registry was established in 1940, and was followed by the passing of the Trademark Act in 1999. The Head Office of the Trade Marks Registry is located in Mumbai and regional offices in Ahmedabad, Chennai, Delhi, and Kolkata. A registered trademark offers exclusive rights of use to the owner, preventing unauthorized use of the mark by others and providing a legal mechanism to pursue recourse against infringement. Additionally, registration helps avoid potential legal conflicts or claim of the mark by a third party, and protects the business from unfair competition. The answer to question - How to Register Trademark in India? is relatively straightforward, but it requires careful attention to detail to ensure compliance with legal requirements. It involves several steps, including a trademark search, filing the application, examination, publication, and ultimately the issuance of the registration certificate. Throughout this process, it is crucial to ensure that the trademark is distinct, does not conflict with existing marks, and is used in a way that is representative of the business' activities. What is Trademark Registration? Trademark registration is a legal process that grants exclusive rights to a brand or business to use a specific mark, symbol, logo, name, or design to distinguish its products or services from others in the market. A registered trademark becomes an integral part of a company’s intellectual property portfolio, offering both legal protection and a competitive edge. In India, trademarks are governed by the Trade Marks Act, 1999, which provides the framework for registering, protecting, and enforcing trademark rights.   Definition of a Trademark A trademark is a distinct sign, symbol, word, or combination of these elements that represents a brand and differentiates its offerings from others. Trademarks are not just limited to logos or names; they can include slogans, colors, sounds, or even packaging styles that uniquely identify a product or service. In India, trademarks are protected under the Trade Marks Act, 1999, offering exclusive rights to the owner. For example: The golden arches of McDonald’s are a globally recognized logo trademark. The tagline “Just Do It” is an example of a registered “wordmark” by Nike. Trademarks are classified into 45 trademark classes, which group various goods and services to streamline the registration process. Businesses must choose the relevant class that aligns with their offerings during registration. Intellectual Property Rights Symbols and Their Significance: ™, ℠, ® Understanding the symbols associated with trademarks is crucial for businesses and consumers alike: ™ (Trademark): This symbol indicates that the mark is being used as a trademark, but it is not yet registered. It signifies intent to protect the brand and discourages misuse. ℠ (Service Mark): Used for service-based businesses to highlight unregistered marks. Common in industries like hospitality, consulting, and IT services. ® (Registered Trademark): Denotes that the trademark is officially registered with the government. Provides legal protection and exclusive rights to use the mark in its registered category. Using the correct symbol helps businesses communicate their trademark status while deterring infringement and ensuring legal enforceability. Importance of Trademark Registration Trademark registration is essential for businesses looking to secure their brand identity. It ensures legal protection and provides exclusive rights to the owner to use the mark for their goods or services. Key reasons why trademark registration is important include: Brand Protection: Prevents competitors from using similar names, logos, or designs that could mislead customers. Legal Recognition: Grants official ownership under Indian law, ensuring your rights are safeguarded. Customer Trust: A trademark adds credibility to your brand, making it easier for customers to identify and trust your products or services. Asset Creation: Registered trademarks are intangible assets that can be licensed, franchised, or sold for business growth. Global Reach: Trademark registration in India can facilitate international trademark recognition, helping businesses expand globally. Benefits of Registering a Trademark in India The benefits of trademark registration extend beyond legal protection. Here are the key advantages: Exclusive Rights: Registration provides exclusive rights to the owner, ensuring the trademark cannot be legally used by others in the registered class. Competitive Edge: A trademark helps establish a distinct identity in the market, giving your business a competitive advantage. Prevention of Infringement: Protects against unauthorized use of your brand name, logo, or design. Market Goodwill: Builds trust and goodwill with customers, enhancing brand loyalty. Ease of Business Expansion: A registered trademark facilitates licensing or franchising, opening doors for business growth. Strong Legal Position: In the event of disputes, a registered trademark provides a strong legal standing. Brief Overview of the Trademark Registration Process in India The procedure for trademark registration in India is systematic and straightforward. Here’s a quick overview: Trademark Search: Conduct a trademark registration search to ensure the desired trademark is unique and not already registered. Application Filing: Submit the trademark application online or offline with all required documents, including ID proofs, business registration details, and the logo (if applicable). Examination and Review: Authorities review the application and may raise objections, which must be addressed within the stipulated time. Publication: The trademark is published in the Trademark Journal, allowing for public objections. Approval and Registration: If no objections are raised... --- > Registering your trademark as per trademark classification not only safeguards your brand identity but also prevents third parties from using it without authorization. It is a straightforward process in India, allowing businesses to protect their intellectual property and ensure their products or services stand out in the market. - Published: 2024-12-16 - Modified: 2025-08-07 - URL: https://treelife.in/legal/trademark-classification-in-india/ - Categories: Legal - Tags: tm classes, trademark, trademark categories, trademark class list india, trademark classes in india, trademark classes services india pdf, Trademark Classification Introduction to Trademarks A trademark is a unique term, symbol, logo, design, phrase, or a combination of these elements that distinguishes a business's products or services from those of its competitors in the market. Trademarks can take the form of text, graphics, or symbols and are commonly used on company letterheads, service banners, publicity brochures, and product packaging. By creating a distinct identity, trademarks play a vital role in building customer trust, enhancing brand recognition, and establishing a competitive edge. As a form of intellectual property, a trademark grants its owner the exclusive rights to use the registered term, symbol, or design. No other individual, company, or organization can legally use the trademark without the owner’s consent. If unauthorized use occurs, the trademark owner can take legal action under the Trade Marks Act of 1999. Registering your trademark as per trademark classification not only safeguards your brand identity but also prevents third parties from using it without authorization. It is a straightforward process in India, allowing businesses to protect their intellectual property and ensure their products or services stand out in the market. Trademarks are categorized into various classes based on the goods or services they represent. Understanding the classification system is crucial to ensure proper protection. In this article, we will explore the legal framework for trademarks, the classification system, and the online tools available to identify the correct trademark class for your registration. Background of Trademarks in India The Trade Marks Registry, established in 1940, administers trademark regulations under the Trademarks Act of 1999 in India. This Act aims to protect trademarks, regulate their use, and prevent infringement. Registering a trademark is essential for businesses to safeguard their name, reputation, and goodwill, as well as to strengthen brand identity and build customer trust. Trademarks can be in the form of graphics, symbols, text, or a combination, commonly used on letterheads, service banners, brochures, and product packaging to stand out in the market. The Trade Marks Registry has offices in Mumbai, Ahmedabad, Chennai, Delhi, and Kolkata to handle trademark applications. To apply for protection, businesses must classify their products or services under the NICE Classification (10th edition), a global system that ensures clarity in trademark registration. The importance of trademark classification was emphasized in the Nandhini Deluxe v. Karnataka Co-operative Milk Producers Federation Ltd. (2018) case, where the Supreme Court clarified that visually distinct trademarks for unrelated goods or services are not "deceptively similar" and may be registered, even if they fall under the same class. What is a Trademark Class? Trademark classes are the categories into which goods and services are classified under the NICE Classification (NCL), an internationally recognized system created by the World Intellectual Property Organization (WIPO). This classification system is essential for businesses seeking trademark registration, as it ensures that each trademark application accurately reflects the nature of the goods or services it represents. Types of Trademark Classes The NICE Classification divides goods and services into 45 distinct trademark classes: Goods: Classes 1 to 34. Goods type trademark classes, numbered 1 to 34, categorize products based on their nature. 1 This classification system helps businesses protect their brands by ensuring clear identification and preventing confusion in the marketplace. Services: Classes 35 to 45. Trademark classes 35-45 are dedicated to services, ranging from advertising and business management to education, healthcare, and legal services. Each class represents a specific category of goods or services. For example: Class 13 for Firearms and explosives. Class 36 for Financial and insurance services. How to Choose the Right Trademark Class? When filing a trademark application, the applicant must carefully select the correct class that corresponds to the goods or services their business offers. This choice is crucial for avoiding potential trademark infringement and conducting effective trademark searches. During the trademark registration process, specifying the trademark classes or categories of products and services for which the trademark will be used is essential. It defines the mark and determines its usage in the industry, acting as an identifier for the mark. Choosing the right category and classification for a trade name is highly beneficial. The applicant can also apply for protection of the same mark under multiple classes if applicable. Services are typically identified from the alphabetical list provided, using the divisions of operations indicated in the headers and their explanatory notes. For instance, rental facilities are categorized in the same class as the rented items. Multiple Classes for Comprehensive Protection Applicants can file for trademark protection under multiple classes if their goods or services span across different categories. For example, a business dealing in both clothing (Class 25) and retail services (Class 35) should register under both classes to ensure complete coverage. Importance of Trademark Classification The significance of a trademark class search to safeguarding a business’ intellectual property and brand cannot be overstated. In 2018, the Hon’ble Supreme Court highlighted the significance of categorizing trademarks under different classes in a landmark case involving the popular dairy brand “Nandhini Deluxe”1 in Karnataka. The court observed that two visually distinct and different marks cannot be called deceptively similar, especially when they are used for different goods and services. The Court also concluded that there is no provision of law that expressly prohibits the registration of a trademark which is similar to an existing trademark used for dissimilar goods, even when they fall under the same class. Benefits of Classification Preventing Conflicts: Using a trademark class search makes it easier to find already-registered trademarks that could clash with your intended mark. This averts any legal conflicts and expensive lawsuits. Registration Success: You increase the likelihood of a successful registration by classifying your trademark correctly. The possibility of being rejected by the trademark office is reduced with an appropriate categorization. Protection of Brand Identity: You may operate with confidence knowing that your brand is protected within your industry by registering it in the correct class. Market Expansion: When your company develops, you may use a well-classified trademark to launch additional goods and services under the... --- > Simply put, market size refers to the total number of potential customers/buyers for a product or service and the revenue they may generate. The broad concept of “market sizing” is broken down further into the following sets - Published: 2024-12-16 - Modified: 2025-08-07 - URL: https://treelife.in/startups/whats-your-market-size-understanding-tam-sam-som/ - Categories: Startups - Tags: market size, sam, som, tam DOWNLOAD FULL PDF What is Market Size? Simply put, market size refers to the total number of potential customers/buyers for a product or service and the revenue they may generate. The broad concept of “market sizing” is broken down further into the following sets in order to estimate what the total potential market is, vis-a-vis the realistic goals that the business can set by determining what is achievable and what can be potentially captured: (i) TAM - Total Addressable Market  (ii) SAM - Serviceable Available Market (iii) SOM - Serviceable Obtainable Market What is ‘Total Addressable Market’ (TAM)? TAM represents the total demand or revenue opportunity available for a product or service, in a specific market. It refers to the total market size without any consideration for competition or market share. TAM is an estimation of the maximum potential for a particular product or service if there were no constraints or limitations. Remember: TAM represents the total market size! What is ‘Serviceable Available Market’ (SAM)? SAM is a subset of the TAM and represents the portion of the total market that a business can realistically target and serve with its products or services. It takes into account factors such as geographical restrictions, customer segmentation, and the company's ability to reach and effectively serve a specific segment of the market. Remember: SAM represents the market that is within the reach of a business given its resources, capabilities, and strategy. What is ‘Serviceable Obtainable Market’ (SOM)? SOM represents a portion of the SAM that a business can realistically capture or obtain. It takes into account the company's competitive landscape, market share goals, and its ability to effectively position and differentiate itself in the market - i. e. , the unique selling point of this business. Remember: SOM represents the market share or percentage of the SAM that a business can potentially capture. How is Market Sizing Determined? Market sizing can be determined using either: (i) Top Down Approach; or (ii) Bottom Up Approach: (i) Top Down Approach The Top Down Approach starts with the overall market size (TAM) and then progressively narrows it down to estimate the target market or the company's potential market share. This method typically utilizes existing industry reports, market research data, and macroeconomic indicators to make assumptions and calculations. Steps for Top Down Approach : Identify Total Market Size (i. e. TAM) based on market research and publicly available information; Determine the relevant segments and target customer base for Company’s products and service out of the total market (i. e. SAM); and Estimate the percentage of serviceable market portion (SAM) that can be realistically captured and serviced (i. e. SOM). When to adopt Top Down Approach: Useful and feasible when comprehensive and exhaustive industry data and market research reports are readily available. (ii) Bottom Up Approach When detailed market data or industry research reports are not readily or easily available, a Bottom Up Approach to market sizing can be followed. It is more granular in nature and starts with a data driven approach. A bottom up analysis is a reliable method because it relies on primary market research to calculate the TAM estimates. It typically uses existing data about current pricing and usage of a product. Why to adopt Bottom Up Approach: The advantage of using a bottom up approach is that the company can explain why it selected certain customer segments and left out others. The company might be required to conduct its own market study and research for this purpose. Formula and Examples: Calculation of TAM, SAM and SOM Facts and Assumptions Identify specific customer segments or target markets. Let's consider three hypothetical segments - Segment A, Segment B, and Segment C: ParticularsABCNumber of potential customers10,0005,000500Estimated average revenue per customer$500$2,000$10,000Segment Market Size$5,000,000$10,000,000$5,000,000TAM$20,000,000 Calculation of segment market size: number of potential customers x average revenue per customer Total market size = market size of Segment A + market size of Segment B + market size of Segment C. Calculation of SAM and SOM SAM -  Represents the portion of TAM that a company can effectively target with its products of services. SAM = TAM x (Market Penetration Percentage/100) Market Penetration Percentage is the estimated percentage of the TAM that the business can realistically serve based on its resources and capabilities.   SOM - Represents the portion of the SAM that a business can realistically capture or obtain. SOM = SAM x (Market Share Percentage/100) Market Share Percentage is the estimated percentage of the SAM that the business can capture based on its competitive advantage, brand strength and market positioning. Illustration: Mepto’s Market Size Analysis This illustrative analysis provides a clear roadmap for Mepto (online grocery delivery startup) to strategically plan its market entry, marketing initiatives, and growth strategies within the competitive landscape of online grocery shopping in India: Particulars%DetailsTarget Cities - Major indian cities with high online shopping adoptionMumbai, Delhi, Bangalore, Gurgaon, Noida and HyderabadEstimated Urban households5 millionAverage Monthly Household Spend on GroceriesINR 6,000Average Annual Household Spend on GroceriesINR 72,000Annual Market Potential - Mepto’s TAM100%INR 360 billion(5,000,000 x 72,000)Online Shopping Penetration - Mepto’s SAM50%INR 180 billion(10% of INR 360 billion)Realistic Market Share (due to competition from players like BigBasket, BlinkIt, Swiggy Instamart and other quick commerce startups) Mepto’s SOM10%INR 18 billion(10% of INR 180 billion) Conclusion Market sizing is fundamentally, an analytical exercise to: (i) firstly determine the total available market size (TAM); (ii) secondly determine the serviceable market that can be realistically targeted (SAM); and (iii) lastly determine the serviceable obtainable market that can be realistically captured (SOM), by a business. This is a critical exercise to determine the viability of a business venture, the potential revenue and the existing competition that would impact the portion of the market size a particular business is able to achieve. It is crucial that businesses understand the fundamentals of market sizing in order to effectively market their products and services. Frequently Asked Questions on Market Size 1. What is market size, and why is it important? Market size refers to the... --- > Financial transactions involving two parties with distinct national bases—the payer and the recipient—are referred to as cross border payments. - Published: 2024-12-16 - Modified: 2025-07-21 - URL: https://treelife.in/finance/cross-border-payments-in-india/ - Categories: Finance - Tags: b2b cross border payments, cross border payment, cross border payment system, cross border payments, cross border transactions, retail cross border payment, wholesale cross border payment Introduction  Financial transactions involving two parties with distinct national bases—the payer and the recipient—are referred to as cross border payments. These transactions can be conducted through various methods, such as bank transfers, credit card payments, e-wallets, and mobile payment systems, and encompass wholesale payments and retail payments. What Are Cross-Border Payments in India? Cross-border payments refer to financial transactions where money is transferred from one country to another. In the context of India, cross-border payments involve the movement of funds across international borders for trade, remittances, investments, or other financial activities. These payments play a crucial role in facilitating global commerce and economic integration, enabling businesses, individuals, and governments to settle debts, transfer funds, or make investments beyond their national boundaries. Cross-border payments play an indispensable role in connecting businesses, governments, and individuals across the globe, enabling international trade, remittances, and financial cooperation. In India, the cross-border payments ecosystem has evolved significantly, influenced by regulatory changes, technological advancements, and global integration. This #TreelifeInsights article explores the current state of cross-border payments in India, the challenges faced, and the trends shaping the future of this critical sector. Cross Border Payments Ecosystem Types of Cross Border Payments in India Simply put, cross-border transactions are transfers of assets or funds from one jurisdiction to another. Correspondent banks, payment aggregators act as intermediaries between the involved financial institutions. The cross-border payments ecosystem includes B2B, B2P, P2B and P2P merchants. Common methods of cross-border payments include wire transfers, International Money Orders, Credit card transactions. In India, such payments encompass wholesale (between financial institutions and large corporates) and retail (individual and business transactions like e-commerce payments or remittances) payments: Wholesale Cross Border Payments Wholesale cross-border payments in India refer to large-value financial transactions made between financial institutions, businesses, and corporations across international borders. These payments typically involve high-value transactions for international trade, investment, and financing. In India, wholesale cross-border payments are vital for settling large sums related to imports, exports, corporate mergers, and foreign investments. Wholesale Cross Border Payments involve high-value transactions among financial institutions, corporates, and governments. These payments are critical for: (i) trade and commerce (including import and export); (ii) interbank settlements for foreign exchange and derivative trading; and (iii) government to government transactions, often tied to international aid or agreements.   Retail Cross Border Payments Retail cross-border payments in India refer to smaller financial transactions made by individuals or businesses for goods, services, or remittances across international borders. These payments typically involve lower amounts compared to wholesale payments and are commonly used for e-commerce purchases, international remittances, and payments for services like travel, education, and online subscriptions. Retail Cross Border Payments cater to smaller-scale transactions and include: (i) remittances; (ii) person-to-business payments (for e-commerce, online services or overseas educational expenses); and (iii) business-to-business payments between SMEs and international suppliers or partners. Benefits of Cross Border Payments in India Access to international markets: Reduces complexity related to international fund transfer, enabling accessibility on a real time basis  Cost savings: cross-border payment methods can be more cost effective than others, allowing businesses to save money on transaction fees, currency exchange rates, and other related costs Increased revenue and growth opportunities: By selling goods and services internationally, businesses can increase their revenue and tap into new growth opportunities. Features of Cross-Border Payments in India Currency Exchange: Cross-border payments often require conversion of local currency (INR) into foreign currencies like USD, EUR, or GBP, making foreign exchange a critical aspect of these transactions. Regulatory Framework: The Reserve Bank of India (RBI) plays a pivotal role in regulating and overseeing cross-border payment systems in the country. These regulations ensure transparency, security, and compliance with international financial standards. Payment Systems: Platforms such as SWIFT, NEFT, and RTGS are commonly used for cross-border transactions. The introduction of Blockchain technology and Real-Time Gross Settlement (RTGS) systems is further streamlining these payments in India. Key Roadblocks Regulatory compliances: Applicable laws, rules and procedures vary in every jurisdiction. As such, compliances may become challenging to follow.   Currency conversion risks: When conducting business in foreign currencies, companies are exposed to the risk of fluctuating exchange rates  Fraud and security risks: Lack of stringent laws to regulate banking institutions leads to organized criminals target vulnerabilities at certain banks in certain jurisdictions to use them to access wider networks. RBI Guidelines on Cross Border Payments India’s cross-border payment framework is heavily regulated by the Reserve Bank of India (RBI) to ensure transparency, compliance, and the safe movement of funds. This brings fintech platforms engaged in cross border payments within its ambit as well, and includes any Authorized Dealer (AD) banks, Payment Aggregators (PAs), and PAs-CB involved in the processing of cross-border payment transactions.   The important guidelines include: Payment Aggregators and Payment Gateways Regulation (2020)1: Payment aggregators (PAs) and gateways facilitating cross-border transactions must comply with stringent governance and net-worth criteria. PAs must ensure robust security measures and grievance redressal mechanisms. Latest Regulatory Update: Non-bank entities providing cross-border services must have a net worth of ₹25 crore by March 2026. Liberalized Remittance Scheme (LRS): Under the LRS, resident individuals can remit up to USD 250,000 annually for investments, travel, education, and gifting. Facilitates individual access to global markets and services2. Foreign Exchange Management Act (FEMA): FEMA governs the compliance of foreign exchange transactions, ensuring alignment with anti-money laundering (AML) and Know Your Customer (KYC) norms. Supports smooth cross-border fund transfers under permissible categories. Additional Measures: Mandatory reporting of cross-border transactions through authorized dealer banks. RBI approval required for startups and entities dealing with large-scale cross-border payments. Indian Landscape for Cross Border Payments India has witnessed a digital payments revolution. The ubiquitous Unified Payments Interface (UPI) has transformed domestic transactions, boasting transaction values reaching INR 200 lakh crore in FY 23-243. Some notable achievements include: Unified Payments Interface (UPI) Expansion: UPI-PayNow is a cross-border connection between India's Unified Payments Interface (UPI) and Singapore's PayNow that allows for real-time, cost-effective money transfers between the two countries. The UPI-PayNow collaboration with Singapore sets the stage for India’s digital payment... --- - Published: 2024-12-16 - Modified: 2025-08-07 - URL: https://treelife.in/legal/importance-of-trademark-registration-in-india/ - Categories: Legal In today’s competitive business landscape, protecting intellectual property is crucial for building a strong brand and maintaining a competitive edge. Trademark registration is one of the most effective ways to safeguard your brand’s identity, ensuring that it remains unique and protected from infringement. In India, where the economy is booming with startups, small businesses, and large corporations alike, understanding the importance of trademark registration is paramount. What is a Trademark? A trademark is a unique symbol, word, phrase, logo, design, or combination thereof that identifies and distinguishes the goods or services of one entity from others. It is a vital aspect of branding and helps create a distinct identity in the minds of consumers. For instance, iconic logos like the golden arches of McDonald’s or the swoosh of Nike are registered trademarks that symbolize their respective brands globally. Similarly, Indian brands like Tata, Reliance, and Flipkart rely heavily on trademarks to maintain their market dominance and consumer trust. Why is Trademark Registration Important in India? 1. Legal Protection Against Infringement Trademark registration provides legal protection under the Trademarks Act, 1999. If another business attempts to use your registered trademark without authorization, you can take legal action against them. This protection ensures that your brand’s identity remains intact and safeguarded. 2. Exclusive Rights A registered trademark grants the owner exclusive rights to use the trademark for the goods or services it represents. It also prevents competitors from using similar marks that could confuse consumers. 3. Brand Recognition and Goodwill A trademark acts as an asset that enhances brand recognition and builds consumer trust. Over time, a strong trademark becomes synonymous with quality and reliability, which contributes to long-term goodwill. 4. Market Differentiation In a saturated market, a trademark helps distinguish your products or services from those of competitors. It establishes your brand’s unique identity and strengthens customer loyalty. 5. Asset Creation A registered trademark is an intangible asset that can be sold, licensed, or franchised. This adds financial value to your business, making it an attractive proposition for investors or partners. 6. Global Expansion Trademark registration in India can serve as the foundation for international trademark registration under treaties like the Madrid Protocol. This is especially important for businesses planning to expand globally. Consequences of Not Registering a Trademark Failure to register a trademark can expose your business to several risks: Risk of Infringement: Without registration, proving ownership of a trademark becomes challenging. Brand Dilution: Competitors might use similar marks, leading to loss of distinctiveness and consumer trust. Limited Legal Remedies: Unregistered trademarks are harder to defend in court. Missed Opportunities: A lack of trademark protection can hinder global expansion plans. Steps to Register a Trademark in India Trademark Search: Conduct a thorough search to ensure that the trademark is unique and not already registered by someone else. Application Filing: Submit a trademark application with the necessary details, including the logo, class of goods or services, and owner details. Examination: The Trademark Registry examines the application to ensure compliance with legal requirements. Publication: The trademark is published in the Trademark Journal to invite objections, if any. Registration Certificate: If no objections are raised, or if objections are resolved, the trademark is registered, and a certificate is issued. Costs and Duration Trademark registration in India is a cost-effective process. The official fees depend on the nature of the applicant, with reduced fees for startups, individuals, and small businesses. The registration process typically takes 12-18 months, but the protection is valid for 10 years and can be renewed indefinitely. Key Industries Benefiting from Trademark Registration E-commerce and Retail: Trademarks protect brand identity in a highly competitive digital marketplace. Pharmaceuticals: Ensures safety and trust by preventing counterfeit products. Technology Startups: Safeguards innovations and unique business models. Food and Beverage: Builds trust and loyalty through distinctive branding. Conclusion Trademark registration is not just a legal formality but a strategic move to protect and enhance your brand’s value. In a thriving economy like India, securing a trademark ensures that your brand stands out, builds trust, and enjoys long-term growth. Investing in trademark registration today is a step toward safeguarding your business’s future. Don’t wait for competitors to claim what’s rightfully yours. Secure your brand’s identity and take it to new heights with the power of trademarks. If you’re ready to register your trademark or need expert guidance, reach out to Treelife for a consultation today. --- - Published: 2024-12-12 - Modified: 2025-08-07 - URL: https://treelife.in/finance/cash-flow-statement/ - Categories: Finance - Tags: cash flow statement, cash flow statement example, cash flow statement meaning Introduction to Cash Flow Statement What is a Cash Flow Statement? A cash flow statement (CFS) is a critical financial document that provides a detailed summary of the cash inflows and outflows within an organization over a specific period. It tracks how cash is generated and utilized through operating, investing, and financing activities. Unlike other financial statements, the cash flow statement focuses exclusively on cash transactions, making it a key indicator of a company’s liquidity and short-term financial health. Under Section 2(40) of the Companies Act, 2013, the CFS is included in the definition of a company’s “financial statement”, alongside balance sheet at the end of the financial year, profit and loss account/income expenditure account (as required), statement of changes in equity (if applicable) and an explanatory note for any of these documents. A company is statutorily mandated to maintain such financial statements as part of its annual compliance processes within the Indian legal framework, and consequently, the CFS is also mandated for registered companies under accounting standards like Accounting Standard III (AS-III) in India, required to be followed by companies under Section 133 of the Companies Act, 2013. It not only reveals the organization’s capacity to meet its obligations but also provides insights into its ability to fund operations, pay debts, and invest in future growth. Importance in Financial Analysis The cash flow statement plays a pivotal role in financial analysis for businesses, investors, and analysts. Here’s why: Liquidity Management: By showing real-time cash availability, the CFS helps businesses ensure they have enough liquidity to meet daily operational needs and obligations like salaries, vendor payments, and loan repayments. Operational Efficiency: Analyzing cash flows from operating activities can reveal whether a company’s core business operations are generating sufficient cash to sustain its growth. Investment Decision-Making: Investors use the cash flow statement to evaluate a company’s financial health and its ability to generate cash, which is crucial for assessing long-term sustainability. Debt Servicing and Capital Planning: The CFS provides a clear picture of a company’s ability to repay loans, pay dividends, or reinvest in the business. Transparency: It highlights discrepancies between reported profits and actual cash generated, offering an honest view of financial performance. Key Differences Between Cash Flow Statement, Income Statement, and Balance Sheet Understanding the differences between these three financial statements is essential for comprehensive financial analysis: AspectCash Flow StatementIncome StatementBalance SheetPurposeTracks cash inflows and outflows from operations, investing, and financing. Shows profitability over a specific period, including revenues and expenses. Displays the financial position (assets, liabilities, and equity) at a specific point in time. FocusRealized cash transactions. Both cash and non-cash transactions (accrual-based). Assets, liabilities, and equity balances. Key MetricsNet cash flow. Net income or loss. Total assets, liabilities, and shareholders’ equity. Insight ProvidedLiquidity and cash management. Profitability of operations. Financial health and solvency. Preparation BasisCash accounting. Accrual accounting. Snapshot as of a specific date. For instance, while the income statement may show a profit, the cash flow statement could reveal that the business is struggling with liquidity due to delays in receivables. Similarly, the balance sheet showcases the financial standing, but it doesn’t disclose the real-time movement of cash like the CFS does. Under law, any company carrying on activities for profit will prepare a profit and loss statement while a company carrying on any activity not for profit will prepare an income statement. By combining insights from all three statements, stakeholders can gain a holistic understanding of a company’s financial performance and stability. Why is a Cash Flow Statement Essential? A cash flow statement (CFS) is not just a financial document; it is a lifeline for understanding the financial health of a business. By providing a clear picture of where cash is coming from and where it is going, the CFS empowers businesses, investors, and stakeholders with actionable insights that drive informed decision-making. Let’s explore the key reasons why a cash flow statement is indispensable for any organization. Tracking Liquidity and Cash Position Liquidity is the backbone of any business, and the cash flow statement serves as its ultimate tracker. Unlike the income statement, which can include non-cash transactions, the CFS reveals the real-time cash position of the company. Monitoring Operational Cash: By analyzing cash flow from operating activities, businesses can ensure they have sufficient funds to cover day-to-day expenses like salaries, rent, and utilities. Identifying Cash Surpluses or Deficits: The CFS pinpoints periods of cash shortage or excess, enabling businesses to proactively manage their liquidity and avoid potential financial crises. Ensuring Solvency: A positive cash flow indicates that a company can meet its financial obligations, while a negative cash flow might signal trouble, prompting timely interventions. For example, a retail business might generate high revenue during the holiday season but struggle with liquidity due to delayed payments from customers. The cash flow statement highlights this disparity, allowing management to plan better. Aiding Short-term and Long-term Decision Making The cash flow statement is a strategic tool that aids both short-term planning and long-term growth strategies. Short-term Planning: Helps businesses forecast upcoming cash needs for operational expenses or loan repayments. Provides clarity on whether the company can afford immediate investments or needs to delay them. Long-term Growth: Guides decisions on capital expenditures, such as purchasing new equipment or expanding facilities. Helps assess the feasibility of entering new markets or launching new products by evaluating long-term cash availability. For instance, if a manufacturing company sees consistent cash outflows due to machinery upgrades, the CFS can help determine whether those investments are sustainable or if external funding is needed. Insights for Investors and Stakeholders Investors and stakeholders rely heavily on the cash flow statement to evaluate a company’s financial health and future prospects. Transparency in Financial Performance: The CFS bridges the gap between profitability and liquidity, giving investors a clear understanding of how well a company is converting revenue into cash. Evaluating Investment Viability: Investors use the cash flow statement to determine whether a company has the financial stability to deliver consistent returns and withstand market fluctuations. Stakeholder Confidence:... --- - Published: 2024-12-12 - Modified: 2025-08-07 - URL: https://treelife.in/legal/buyback-of-shares-in-india/ - Categories: Legal - Tags: advantages and disadvantages of buyback of shares, advantages of buyback of shares, benefits of buyback of shares, buyback of equity shares, buyback of shares companies act 2013, buyback of shares income tax, buyback of shares india, buyback of shares list, buyback of shares meaning, buyback of shares procedure, buyback of shares taxability, disadvantages of buyback of shares, tax on buyback of shares, what do you mean by buyback of shares Introduction In the dynamic world of corporate finance, the buyback of shares has emerged as a significant tool for companies to optimize their capital structure and reward shareholders. Simply put, a buyback of shares happens when a company repurchases its own shares from the market or its shareholders, usually at a higher price than issue. This action reduces the number of outstanding shares, effectively consolidating ownership and potentially enhancing shareholder value. Consequently, buyback of shares is subject to strict legal frameworks. The concept of buyback of shares plays a pivotal role in India's evolving corporate landscape, where businesses increasingly use this mechanism as an exit strategy to strengthen investor confidence and showcase financial stability. Whether you're an investor keen on maximizing returns or a company exploring strategic financial moves, understanding the meaning and relevance of buybacks is crucial. What is Buyback of Shares? Definition and Meaning A buyback of shares is a corporate action whereby a company reacquires its own outstanding shares from the market or existing shareholders. This reduces the number of shares available in the market, thereby increasing the proportional ownership of remaining shareholders and often boosting key financial metrics like Earnings Per Share (EPS). Example:Imagine a company has 1,000 outstanding shares, and its total profit is ₹1,00,000. The Earnings Per Share (EPS) would be ₹100 (₹1,00,000 ÷ 1,000 shares). If the company repurchases 200 shares through a buyback, the outstanding shares are reduced to 800. The EPS now becomes ₹125 (₹1,00,000 ÷ 800 shares), which enhances the value for the remaining shareholders. Importance of Buyback of Shares for Companies and Investors In India, buybacks have gained prominence due to their dual benefits: For Companies Enhanced Financial Ratios:A buyback increases EPS by reducing the number of shares in circulation, which can improve the perception of the company’s profitability. Efficient Use of Surplus Cash:Companies with excess reserves often prefer buybacks over dividends, as it avoids tax on dividends and optimizes shareholder returns. Signaling Confidence:By repurchasing its shares, a company conveys that its stock is undervalued, boosting market confidence and stabilizing share prices during volatility. Capital Structure Optimization:Companies use it to optimize their capital structure under the regulatory framework of the Companies Act, 2013, and SEBI guidelines. For Investors Opportunity for Higher Returns:Shareholders participating in a buyback often receive a premium over the prevailing market price, providing an attractive exit option. Ownership Consolidation:Fewer shares outstanding mean that each share represents a larger ownership stake in the company, benefiting long-term investors. Tax Benefits:Shareholders may find buybacks more tax-efficient compared to receiving dividends, especially in jurisdictions with high dividend taxes. Market Perception:A buyback of equity shares is often perceived as a positive move, signaling that the company is confident about its future prospects. The primary reasons behind a buyback include: Reducing the number of outstanding shares to increase Earnings Per Share (EPS). Signaling confidence in the company's intrinsic value. Utilizing surplus cash in a tax-efficient manner. Providing investors with an exit mechanism (especially when no other exit options are consummated). Buybacks are commonly executed in the Indian securities market, including by corporate giants like Infosys Ltd. , Tata Consultancy Services Ltd. , and Wipro Ltd. , emphasizing their importance in today’s financial ecosystem. The buyback of shares in India is a confidence-building measure for all stakeholders involved. This is not just a tactical financial decision; it is also a tool for strengthening a company’s relationship with its investors. From improving financial ratios to boosting shareholder value, the buyback of shares meaning extends beyond just repurchasing shares it reflects a company’s commitment to optimizing its capital structure and instilling market confidence. Reasons for Buyback of Shares  The buyback of shares has become a popular financial strategy for companies seeking to strengthen their market position and enhance shareholder value. Here are the key reasons for buyback of shares and the strategic benefits they offer: 1. Efficient Use of Surplus Cash One of the primary reasons for buyback of shares is to utilize surplus cash reserves effectively. Instead of letting idle cash accumulate, companies use buybacks as a way to reinvest in their own stock. This helps optimize their capital structure and deliver returns to shareholders. This strategy is derived from limitations prescribed under the Indian law as to the source of funds for the buyback of securities by a company. Example: If a company has significant cash reserves but limited high-yield investment opportunities, a share buyback is a strategic way to deploy that excess cash. Benefits of Buyback of Shares: Avoids inefficient use of capital. 2. Boosting Earnings Per Share (EPS) Reducing the number of outstanding shares through a buyback directly impacts a company’s EPS. A higher EPS often attracts investors by signaling improved profitability and financial health. Example: A company earning ₹10,00,000 annually with 1,00,000 shares outstanding, results in an EPS of ₹10. If the company buys back 20,000 shares, the EPS increases to ₹12. 5 (₹10,00,000 ÷ 80,000 shares). Benefits: Enhances shareholder value. Improves valuation metrics like Price-to-Earnings (P/E) ratio. 3. Indicating Stock Undervaluation A buyback often signals that the company believes its stock is undervalued in the market. By repurchasing shares, the company reinforces confidence in its intrinsic value, which can help stabilize or boost stock prices. Strategic Decision: This move not only supports the share price during market downturns but also builds investor trust. 4. Strengthening Market Perception Buybacks are seen as a positive indicator of a company’s financial strength, particularly in case of public listed companies. Investors interpret this move as a vote of confidence from the management about the company’s future growth and profitability. Benefits: Improves investor sentiment. Attracts long-term investors. 5. Adjusting Capital Structure Companies often aim to maintain an optimal balance between equity and debt. A buyback helps reduce equity capital, leading to better leverage ratios and overall financial efficiency. Strategic Financial Decision: By reducing equity, companies can enhance returns on equity (ROE) and improve their capital structure for sustainable growth. 6. Preventing Hostile Takeovers In some cases, public listed companies use buybacks as a defensive... --- > Environmental, Social, and Governance (ESG) principles have evolved from being a global framework for responsible business practices into a cornerstone of sustainable and ethical growth. - Published: 2024-12-11 - Modified: 2025-08-07 - URL: https://treelife.in/reports/environmental-social-and-governance-esg-in-india-handbook/ - Categories: Reports - Tags: Environmental Social and Governance, esg DOWNLOAD PDF Environmental, Social, and Governance (ESG) principles have evolved from being a global framework for responsible business practices into a cornerstone of sustainable and ethical growth. In India, the prominence of ESG is rapidly increasing, with the total assets under management (AUM) of ESG funds reaching substantial growth of USD 1. 17 billion (INR 9,753 crores) in March 2024. In fact, ESG could represent approximately 34% of the total domestic AUM by 2051.   These principles originated as a response to growing concerns on climate change, social equity, and corporate accountability. Today, they are critical for businesses aiming to align with international sustainability goals. Startups are uniquely positioned to integrate ESG frameworks into their operations from the outset, contributing to global sustainability objectives while enhancing financial performance. Improved risk management, operational efficiencies, and stronger stakeholder trust are among the many benefits of embedding ESG practices. Furthermore, companies with strong ESG performance are increasingly favored by investors, reflecting a global shift toward sustainable financing and prioritizing climate action. India’s ESG evolution mirrors international trends while addressing domestic opportunities and challenges. Initiatives such as the Business Responsibility and Sustainability Report (BRSR) framework and increasing green finance options have propelled India into the global spotlight. Startups can leverage these developments to scale responsibly, align with India's international commitments, and position themselves as leaders in the evolving ESG landscape. Tailored for practical insight, this handbook focuses on individual contributions to ESG as the building blocks for collective progress, enabling startups to align their practices with India’s international commitments and sustainability objectives, and to: (i) scale responsibly; (ii) contribute to global sustainability goals; and (iii) position themselves as leaders in India’s evolving ESG landscape.   This handbook is developed as a comprehensive look into the ESG framework in India covering the evolution of ESG in corporate governance, key components, the Indian regulatory landscape, accounting and reporting standards, and market trends. With case studies on Tata Power, Zomato and IKEA, the handbook also addresses challenges, investment opportunities, and the future of ESG in India. This handbook provides startups with practical strategies to integrate ESG principles into their operations, enabling them to align with India’s global sustainability goals and unlock opportunities for responsible growth. For further guidance or inquiries, reach out to us at garima@treelife. in --- - Published: 2024-12-10 - Modified: 2025-08-07 - URL: https://treelife.in/finance/forensic-accounting-in-india/ - Categories: Finance - Tags: advantages of forensic accounting, benefits of forensic accounting, forensic accounting, forensic accounting meaning, forensic accounting objectives, nature of forensic accounting, types of forensic accounting, what is forensic accounting Introduction to Forensic Accounting What is Forensic Accounting? Forensic Accounting is a specialized field of accounting that combines investigative techniques with financial expertise to analyze, interpret, and present complex financial data for legal purposes. Often described as the intersection of accounting, law, and investigation, it plays a crucial role in uncovering financial irregularities and resolving disputes. Often termed "financial sleuthing," forensic accounting bridges the gap between finance and law. Forensic Accounting Meaning & Definition Forensic Accounting can be defined as: "The specialized application of accounting principles and techniques to investigate financial discrepancies, resolve disputes, and support legal cases. " This field involves identifying, analyzing, and interpreting financial data to assist in litigation, fraud detection, and corporate investigations. Consequently, a forensic accountant is not just reading financial data but is an investigator who works to establish facts in financial disputes. Objectives and Role of Forensic Accounting The Need and Importance of Forensic Accounting in Today’s Business Environment In an era of increasing financial complexities and fraud, forensic accounting has evolved into a proactive tool for risk management, fraud prevention, and financial transparency, making it an essential service for businesses, governments, and legal systems alike. Consequently, the significance of forensic accounting cannot be overstated, with some of the key factors below: Fraud Detection and Prevention: With financial fraud on the rise, forensic accounting acts as a safeguard, identifying fraudulent activities and implementing preventive measures. Litigation Support: Forensic accountants provide credible, court-admissible evidence, making them vital for legal disputes and fraud cases. Corporate Governance: It ensures transparency, integrity, and accountability within organizations, strengthening investor and stakeholder confidence. Regulatory Compliance: Forensic accounting helps businesses comply with financial regulations and avoid penalties. Crisis Management: During instances of financial distress or fraud, forensic accountants provide solutions to mitigate losses and protect reputations. Role of Forensic Accountants in Uncovering Financial Irregularities Forensic accountants serve as financial detectives, blending accounting expertise with investigative skills to uncover irregularities. They are integral to maintaining financial accountability and assisting businesses in addressing complex financial challenges, with the following aspects forming part of their mandate: Fraud Investigation: Examine financial records to trace anomalies, fraudulent transactions, and mismanagement. Analyzing Evidence: Gather and interpret financial data to identify patterns of misconduct or fraud. Expert Testimony: Provide credible evidence and professional opinions in legal proceedings and court trials. Risk Assessment: Evaluate financial vulnerabilities and recommend preventive measures to minimize risks. Collaborating with Authorities: Work alongside law enforcement, regulatory bodies, and legal teams during investigations. Nature and Scope of Forensic Accounting Features of Forensic Accounting Forensic accounting is a specialized field that integrates accounting, auditing, and investigative skills to uncover financial irregularities. Here are the key features that define it: Investigative Nature: Forensic accounting involves a deep dive into financial records to detect fraud, embezzlement, or financial discrepancies. Legal Orientation: It often works within a legal framework, providing evidence admissible in courts of law. Precision and Detail: The work demands meticulous attention to detail to identify even the smallest irregularities. Interdisciplinary Approach: Combines expertise in accounting, law, and data analysis to provide comprehensive insights. Preventive and Reactive: While primarily used to uncover fraud, forensic accounting also helps in fraud prevention by identifying vulnerabilities in financial systems. Result-Oriented: Focuses on resolving disputes, whether through litigation support or out-of-court settlements. Nature of Forensic Accounting: Key Characteristics The nature of forensic accounting can be summarized through its distinctive characteristics: Proactive and Reactive Analysis: Forensic accountants not only investigate existing fraud but also design systems to prevent future occurrences. Legal and Financial Synergy: It bridges the gap between financial expertise and legal proceedings, providing crucial insights for litigation. Comprehensive Documentation: Forensic accountants prepare detailed reports that are clear, concise, and legally compliant, which can stand up in court. Ethical and Objective: Forensic accountants maintain a high degree of integrity, ensuring unbiased and accurate reporting. Data-Driven: Employ advanced tools and analytics to process large datasets and uncover hidden patterns in financial transactions. Scope of Forensic Accounting: Industries and Areas of Application Forensic accounting is a versatile tool that finds applications across a range of industries and scenarios: Corporate Sector: Investigating corporate fraud, such as misappropriation of funds and financial statement manipulation. Assisting in mergers, acquisitions, and due diligence by verifying the accuracy of financial records. Banking and Financial Institutions: Detecting money laundering, fraudulent loans, and embezzlement. Strengthening internal controls to minimize financial risks. Government and Public Sector: Assisting in tax fraud investigations and compliance checks. Identifying corruption and misuse of public funds. Legal and Judicial Processes: Supporting legal proceedings by providing expert testimony and forensic evidence. Helping in dispute resolution, such as divorce settlements and shareholder disputes. Insurance Industry: Verifying claims to prevent fraudulent payouts. Investigating suspected cases of insurance fraud. Healthcare: Identifying overbilling, kickbacks, and other forms of fraud in the healthcare sector. E-Commerce and Technology: Tracing digital financial fraud, including cyber theft and online payment scams. Non-Profit Organizations: Ensuring donor funds are utilized as intended and preventing misuse. Types of Forensic Accounting Services Forensic accounting services play a crucial role in uncovering financial discrepancies and ensuring legal compliance. These services can be broadly divided into two main categories: Fraud Detection and Fraud Examination. Each category caters to distinct aspects of financial investigation, making forensic accounting indispensable in today’s business landscape. Fraud Detection Fraud detection is a proactive forensic accounting service aimed at identifying fraudulent activities before they result in significant financial loss or damage. It involves the meticulous examination of financial records, transaction histories, and internal systems to uncover any irregularities, such as misappropriation of funds, embezzlement, or financial statement manipulation. Using advanced data analysis tools, auditors and forensic accountants can spot patterns that indicate suspicious behavior, such as unusual cash flows, unauthorized transactions, or discrepancies in financial reports. By detecting fraud early, businesses can implement corrective measures, strengthen internal controls, and mitigate risks, ultimately preventing further fraudulent activities and ensuring the integrity of financial operations. Involves identifying irregularities in financial records that may indicate fraudulent activities. Uses advanced data analysis tools, audits, and reviews to pinpoint inconsistencies. Focuses... --- - Published: 2024-12-09 - Modified: 2025-07-21 - URL: https://treelife.in/compliance/private-limited-vs-llp-vs-opc/ - Categories: Compliance - Tags: difference between PLC, difference between private limited company and llp, LLP and OPC, llp vs opc, llp vs private limited, llp vs pvt ltd, opc pvt ltd, opc vs llp, opc vs pvt ltd, partnership vs private limited, Private Limited vs. LLP vs. OPC, what is the difference between llp and pvt ltd Introduction Starting a business is an exciting journey, but one of the first critical decisions every entrepreneur faces is choosing the right business structure. This choice isn’t merely administrative; it lays the foundation for how the business will operate, grow, and be perceived. The corporate structure being selected can impact the business and founders’ liability, taxation, compliance requirements, and even the ability to raise funds. In India, the three most popular business structures are Private Limited Companies (PLC), Limited Liability Partnerships (LLP), and One Person Companies (OPC). Each has its unique advantages and limitations, catering to different types of entrepreneurs and business goals. A PLC offers a separate legal entity capable of scaling, credibility with investors, and with limited liability for shareholders. An LLP combines the flexibility of a partnership with the benefits of limited liability for the partners. An OPC is a perfect fit for solo entrepreneurs, offering the advantages of limited liability and a separate legal entity. Choosing an ill-suited structure can lead to unnecessary financial, legal, and operational complications. Conversely, choosing the right one can help a business thrive from the outset. A significant contributor to business struggles is rooted in a lack of understanding of the distinction between PLC, LLP and OPC structures. In this blog, we breakdown the key differences between these structures and facilitate entrepreneurs to make informed decisions that align with the business vision.   Understanding the Basics  What is a Private Limited Company? A Private Limited Company (PLC) is one of the most popular business structures in India, governed primarily by the Companies Act, 2013 and regulated by the Ministry of Corporate Affairs (MCA). It is a preferred choice for startups and growth-oriented businesses due to its structured ownership model, limited liability protection, and credibility among investors. Additionally, PLC startups are given certain concessions and favourable benefits under the regulatory framework, as part of an ongoing government initiative to foster growth, development and innovation - particularly in underrepresented sectors of the economy. Key Features of a Private Limited Company Liability: PLC’s formed can either be limited by shares or by guarantee. Consequently shareholders' personal assets are protected, as their liability is limited to their shareholding or the extent of their contribution to the assets of the company. PLCs can also be an unlimited company, which can attach personal assets of shareholders. Separate Legal Entity: The company is a distinct legal entity, capable of owning assets, entering contracts, and conducting business under its name. This distinction is critical where any penalties for contravention of the law are levied, as both the PLC and the officers in charge face penal action for default.   Ownership: Owned by shareholders with a statutory minimum requirement of two members. Ownership can be transferred through the sale of shares. Management: Managed by a board of directors, with operational decisions often requiring shareholder approval. Credibility: Given the robust regulatory framework governing their operation, PLCs are highly regarded by investors and financial institutions, making them suitable for fundraising. Registration Process for a Private Limited Company The MCA has simplified company incorporation through the SPICe+ (Simplified Proforma for Incorporating Company Electronically Plus) platform. A non-exhaustive list of certain mandatory compliances for incorporation of a PLC are: Obtain DSC: Secure a Digital Signature Certificate for directors. Name Approval: Reserve a company name using SPICe+ Part A. Submit Incorporation Forms: Complete Part B of SPICe+ to file for incorporation, including Director Identification Number (DIN), PAN, and TAN applications. This will also include the memorandum and articles of association of the company. Bank Account Setup: Open a current account in the company's name for business transactions. Commencement of Business: File Form INC-20A within 180 days of incorporation to begin operations officially. Upon successful approval, the Registrar of Companies issues a Certificate of Incorporation (COI) with the company's details. What is an LLP? A Limited Liability Partnership (LLP) blends the operational flexibility of a partnership with the limited liability advantages of a company. It is governed by the Limited Liability Partnership Act, 2008, making it a preferred structure for professional services, small businesses, and startups seeking simplicity and cost efficiency. Key Features of an LLP Limited Liability: Partners' liabilities are restricted to their capital contributions, ensuring personal asset protection. Separate Legal Entity: The LLP is treated as a body corporate, and is a legal entity separate from the partners. The LLP can own assets, enter contracts, and sue or be sued in its own name. Ownership: Owned by partners (minimum two partners required), with ownership terms and extent of contribution to capital being defined in the LLP agreement executed between them.   Management: Managed collaboratively, as detailed in the LLP agreement, with flexibility in decision-making. Every LLP shall have a minimum of 2 designated partners who are responsible for ensuring compliance with the applicable regulatory framework. Compliance: Requires annual return filings and maintenance of financial records, with lower compliance requirements than companies. Registration Process for an LLP The registration and governance of LLPs is also handled by the MCA, with a non-exhaustive list of certain mandatory compliances for incorporation of an LLP as follows: Obtain DSC: Secure a Digital Signature Certificate for designated partners. Name Reservation: Submit the LLP-RUN form to reserve a unique name. Incorporation Filing: File the FiLLiP form (Form for Incorporation of LLP) with required documents, including the Subscriber Sheet and partners' consent. LLP Agreement Filing: Draft and file the LLP Agreement using Form 3 within 30 days of incorporation. Upon approval, the Registrar of Companies issues a Certificate of Incorporation for the LLP. What is an OPC? A One Person Company (OPC) is a revolutionary business structure introduced under the Companies Act, 2013, catering to individual entrepreneurs. It combines the benefits of sole proprietorship and private limited companies, offering limited liability and a separate legal entity for single-owner businesses. Key Features of an OPC Single Ownership: Managed and owned by one individual, with a nominee appointed to take over in case of incapacity. Limited Liability: The owner's personal assets are protected... --- - Published: 2024-12-06 - Modified: 2025-08-07 - URL: https://treelife.in/calendar/gst-compliance-calendar/ - Categories: Calendar GST, or Goods and Services Tax, has significantly transformed the Indian tax landscape. However, staying compliant with its intricate rules and regulations can be a daunting task for businesses of all sizes. To help you streamline your GST compliance efforts, we've created a comprehensive checklist and calendar for 2025. Why GST Compliance Matters The Goods and Services Tax (GST) is a crucial aspect of India’s tax regime, ensuring seamless taxation across states. Non-compliance can lead to fines, interest charges, and legal scrutiny. Therefore, staying on top of deadlines and maintaining accurate records is vital for businesses of all sizes. Understanding GST Compliance Essentials Before we dive into the specifics, let's clarify the fundamental aspects of GST compliance GST Registration: Ensure your business is registered under GST if your annual turnover exceeds the prescribed threshold. Tax Invoice Issuance: Issue accurate tax invoices for all sales and purchases, including GSTIN, HSN code, and applicable tax rates. Return Filing: Regularly file GST returns (GSTR-1, GSTR-3B, and GSTR-9) within the specified deadlines. Record Keeping: Maintain detailed records of all GST-related transactions for a minimum of six years. Reconciliation: Reconcile your GST returns with your financial records to ensure accuracy. GST Compliance Checklist for 2025 TaskDescriptionFrequencyGST RegistrationEnsure your business is registered for GST if your turnover exceeds the threshold limit. Obtain a GSTIN. Once (Initial Registration)Accurate Tax InvoicingIssue GST-compliant invoices for all sales and purchases, including correct GSTIN, HSN codes, and GST rates. OngoingTimely Return Filing (GSTR-1, GSTR-3B)File GST returns like GSTR-1 (Sales), GSTR-3B (Tax Liabilities) regularly. Monthly – by 11th of the next month;Quarterly – by 13th of the next month following the quarter. Maintain GST RecordsKeep accurate records of sales, purchases, tax payments, and input/output tax credits for 6 years. OngoingFile Annual Return (GSTR-9)File an annual return GSTR-9 for the financial year. Yearly (By December 31st)Regular Updates on GST PortalCheck the GST Portal for updates on tax rates, changes in regulations, or new notifications. OngoingReconcile Invoices and PaymentsReconcile all invoices and payments with the GST Portal to ensure accuracy. Monthly/Quarterly This GST compliance checklist will help you maintain a streamlined process for managing your GST obligations. Whether it’s registering your business, maintaining proper records, or ensuring timely filing of returns, following this checklist ensures your business remains compliant with the law. GST Compliance Calendar for 2025 Staying on top of GST compliance dates is crucial for businesses to avoid penalties. Here’s a GST calendar for 2025 that highlights key important deadlines for return filing, tax payments, and more. MonthTaskDeadlineJanuaryGSTR-1 (Sales Return)11th of JanuaryGSTR-3B (Tax Payment and Return Filing)20th of JanuaryFebruaryGSTR-1 (Sales Return)11th of FebruaryGSTR-3B (Tax Payment and Return Filing)20th of FebruaryMarchGSTR-1 (Sales Return)11th of MarchGSTR-3B (Tax Payment and Return Filing)20th of MarchAprilGSTR-1 (Sales Return)11th of AprilGSTR-3B (Tax Payment and Return Filing)20th of AprilMayGSTR-1 (Sales Return)11th of MayGSTR-3B (Tax Payment and Return Filing)20th of MayJuneGSTR-1 (Sales Return)11th of JuneGSTR-3B (Tax Payment and Return Filing)20th of JuneJulyGSTR-1 (Sales Return)11th of JulyGSTR-3B (Tax Payment and Return Filing)20th of JulyAugustGSTR-1 (Sales Return)11th of AugustGSTR-3B (Tax Payment and Return Filing)20th of AugustSeptemberGSTR-1 (Sales Return)11th of SeptemberGSTR-3B (Tax Payment and Return Filing)20th of SeptemberOctoberGSTR-1 (Sales Return)11th of OctoberGSTR-3B (Tax Payment and Return Filing)20th of OctoberNovemberGSTR-1 (Sales Return)11th of NovemberGSTR-3B (Tax Payment and Return Filing)20th of NovemberDecemberGSTR-1 (Sales Return)11th of DecemberGSTR-3B (Tax Payment and Return Filing)20th of DecemberGSTR-9 (Annual Return)31st of December Note: Specific deadlines may vary based on GSTN notifications and updates. Always refer to the official GST portal for the most accurate information. Key GST Returns Overview GSTR-1: Filed monthly, capturing outward supplies (sales). GSTR-3B: Summary return for tax payment and input tax credit (ITC) utilization. GSTR-9: Annual return summarizing all GST transactions for the year. GSTR-9C: Audit form applicable for businesses with turnover exceeding ₹5 crores. Conclusion Maintaining GST compliance in 2025 is crucial for smooth business operations. By following the checklist and adhering to the compliance calendar, you can mitigate risks, avoid penalties, and focus on growing your business. For expert assistance in managing GST compliance or to automate your GST filings, Treelife is here to help. Reach out to us for tailored solutions. --- - Published: 2024-12-04 - Modified: 2025-08-07 - URL: https://treelife.in/finance/cash-flow-optimization/ - Categories: Finance - Tags: accounts receivable management for cash flow, cash flow forecasting india, cash flow optimization, cost control measures for cash flow, importance of cash flow for businesses, inventory management for cash flow optimization, techniques for cash flow optimization, working capital management for cash flow improvement Introduction What is Cash Flow Optimization? Cash flow optimization refers to the process of efficiently managing the movement of cash in and out of a business to ensure enough liquidity to meet obligations, invest in growth, and maximize profitability. It involves strategically improving cash inflows, managing outflows, and ensuring that working capital is effectively utilized. By optimizing cash flow, businesses can avoid financial shortfalls, reduce the risk of insolvency, and take advantage of new opportunities without relying on external funding. Why Cash Flow is Crucial for Business Success Cash flow is often regarded as the lifeblood of any business. Without a healthy cash flow, even profitable companies can face significant challenges, such as not being able to pay employees, suppliers, or invest in growth initiatives. Crucially, cash flow impacts day-to-day operations, long-term financial planning, and the overall financial health of a business. Effective cash flow management enables companies to: Meet Short-Term Financial Obligations: Paying bills, employees, and suppliers on time helps maintain good relationships and avoids penalties. Fund Operational Costs: A steady flow of cash allows businesses to maintain operations without disruption, even during lean periods. Invest in Growth: Positive cash flow opens up opportunities for reinvestment, product development, or expansion into new markets. Improve Business Valuation: A consistent track record of healthy cash flow boosts investor confidence and improves the overall valuation of the business. Importance of Cash Flow for Businesses in India In India, cash flow is particularly important due to the diverse economic landscape, varying market conditions, and the evolving regulatory environment. For small and medium enterprises (SMEs) and startups, cash flow management becomes even more critical. Many businesses in India face challenges such as delayed payments from customers, high operating costs, and unpredictable market conditions, all of which can impact cash flow. Moreover, with the rise of digital payments and financial technologies in India, businesses have greater access to tools for cash flow optimization, enabling faster transactions, real-time cash monitoring, and better financial forecasting. For businesses in India, understanding the importance of cash flow management and implementing cash flow optimization techniques can mean the difference between thriving and struggling in a competitive marketplace. Understanding Cash Flow and Its Components What is Cash Flow? Cash flow is the movement of money into and out of a business, reflecting its ability to generate revenue and manage its expenses including sustaining day-to-day operations, paying employees, and avoiding insolvency. In simple terms, it represents how much cash a business has available at any given time to meet its short-term liabilities and invest in growth opportunities.   Positive cash flow ensures that a business can continue to operate smoothly, while negative cash flow can signal financial difficulties. Key Components of Cash Flow:  Cash flow can be broken down into three key components: Operating Cash Flow (OCF): OCF is the money generated or used in a business’s core operations, such as selling products or services. It includes inflows from sales and outflows related to operating expenses like salaries, rent, and utilities. Healthy operating cash flow is crucial because it indicates that a business is making enough revenue to cover its essential operations without relying on external financing. Investing Cash Flow (ICF): ICF involves cash transactions related to the purchase and sale of long-term assets, such as property, equipment, or investments in other companies. While negative investing cash flow might indicate a business is investing in growth (e. g. , acquiring assets or expanding operations), positive cash flow could suggest the business is selling assets or receiving dividends and interest. Financing Cash Flow (FCF): FCF represents the cash raised through debt or equity financing, such as loans or investments from shareholders. This component also includes cash used to repay debt or distribute dividends to shareholders. A positive financing cash flow can indicate that a business is expanding or receiving external funding, while a negative financing cash flow may signal that it is paying off debt or repurchasing shares. How Optimized Cash Flow Drives Business Growth Optimizing cash flow ensures that a business has sufficient liquidity to meet its obligations while also investing in growth, by enabling businesses to: Invest in New Opportunities: seize new opportunities, such as expanding product lines, entering new markets, or upgrading technology, all of which contribute to growth. Improve Financial Stability: avoid cash shortages, reduce the need for external financing, and maintain a stable financial position. Increase Profitability: identify cost-cutting measures, streamline operations, and improve profit margins. Build Stronger Relationships with Stakeholders: maintain good relationships with suppliers, employees, and investors, which can result in better terms and more opportunities. Techniques for Cash Flow Optimization Techniques to Improve Cash Flow Management Speeding Up Receivables: This involves reducing the time it takes to collect payments from customers. Strategies include offering discounts for early payments, sending timely invoices, and implementing automated reminders for overdue accounts. By improving receivables, businesses can increase cash inflow and ensure smoother operations. Extending Payables Without Damaging Supplier Relationships: This involves negotiating longer payment terms with suppliers to keep cash within the business for an extended period of time. This helps optimize cash flow by allowing businesses to manage their cash outflows more effectively. However, this technique requires a balance to be maintained on the supplier relationship, to avoid disrupting operations. Fostering open communication and ensuring timely partial payments can help strike a balance. Reducing Inventory Costs: Optimizing inventory management by reducing stock levels, improving demand forecasting, and adopting just-in-time (JIT) inventory practices can help businesses free up cash. This reduces warehousing costs and minimizes the risk of obsolete inventory, ultimately improving cash flow. Benefits of Cash Flow Optimization for Small and Medium Enterprises (SMEs) Cash flow optimization can help SMEs to better manage their finances, strengthen their cash position, and position themselves for sustainable growth. Increased Liquidity: SMEs can ensure they have enough liquidity to cover operating costs and take advantage of new opportunities. Reduced Reliance on External Financing: Effective cash flow management reduces the need for loans or credit, helping SMEs maintain financial independence. Enhanced Business... --- - Published: 2024-12-04 - Modified: 2025-08-07 - URL: https://treelife.in/finance/difference-between-capital-expenditure-and-revenue-expenditure/ - Categories: Finance - Tags: accounting for capital expenditure, accounting for revenue expenditure, capital expenditure definition, capital expenditure vs revenue expenditure, capitalization threshold india, difference between capital expenditure and revenue expenditure, impact of capex on financial statements, revenue expenditure definition, types of capital expenditure, types of revenue expenditure Introduction: Capital Expenditure vs Revenue Expenditure Understanding the difference between Capital Expenditure (CapEx) and Revenue Expenditure also known as operational expenses (OpEx) is essential for businesses aiming to maintain financial health and make informed investment decisions. These two types of expenditures have distinct roles in a company’s financial structure, impacting how funds are allocated and reported. Capital Expenditure refers to long-term investments in assets that help a business grow or maintain its operations, such as purchasing equipment, property, or upgrading technology. Revenue Expenditure, on the other hand, covers the day-to-day operational costs necessary to keep the business running, like salaries, rent, and utilities. Grasping the difference between these two is crucial for financial planning and management, as it directly affects cash flow, profitability, and tax strategies. Businesses must track these expenditures carefully to ensure they are complying with accounting standards, optimizing resources, and fostering long-term growth. Properly classifying and managing CapEx and OpEx can significantly impact a company’s financial statements, making this knowledge a key factor in successful financial decision-making. What is Capital Expenditure? Capital Expenditure (CapEx) refers to the funds a business spends on acquiring, upgrading, or maintaining long-term assets that provide lasting benefits. These assets can be both tangible, such as buildings and machinery, or intangible, like patents or software. CapEx is crucial for a company’s growth and expansion, as it supports the acquisition of resources that will generate returns for years. Examples of Capital Expenditure: Purchasing Machinery: Buying new machines to increase production capacity. Land Acquisition: Purchasing land to expand operations or build new facilities. Software Development: Developing custom software to improve business processes and efficiency. Key Characteristics of Capital Expenditure: Long-Term Benefit: CapEx investments provide value over multiple years, improving business operations and profitability in the long run. For example, a new manufacturing plant may increase production capacity and revenue for decades. Impact on Financial Statements: CapEx affects both the balance sheet (as fixed assets) and the cash flow statement (as an outflow of funds). This spending is capitalized, meaning it's recorded as an asset rather than an expense. Capitalized and Depreciated Over Time: Instead of expensing the entire cost immediately, CapEx is capitalized and depreciated over the asset’s useful life. This allows businesses to spread the cost over several years, reducing the immediate financial impact. Types of Capital Expenditure Capital Expenditure can be categorized into several types, each serving a unique purpose in a business’s growth and operational needs. Understanding these types helps businesses allocate resources effectively and plan for long-term success. 1. Expansion CapEx Expansion CapEx focuses on increasing a company’s capacity or scope by investing in new production capabilities, facilities, or technology. This type of expenditure is aimed at scaling operations to meet growing demand or entering new markets. Examples: Building new manufacturing plants, purchasing additional equipment, or expanding office spaces. 2. Strategic CapEx Strategic CapEx involves investments made to achieve long-term business objectives, such as research and development (R&D), mergers, or acquisitions. These investments are often aligned with the company’s strategic growth plan and future positioning in the market. Examples: Acquiring another company, funding R&D projects, or investing in innovation for competitive advantage. 3. Compliance CapEx Compliance CapEx is spending to ensure a business meets legal or regulatory requirements. This type of expenditure is necessary to avoid penalties, maintain certifications, or meet industry standards. Examples: Upgrading equipment to comply with environmental laws or investing in safety improvements to meet health regulations. 4. Replacement CapEx Replacement CapEx occurs when a company replaces outdated, inefficient, or obsolete assets. This ensures that operations continue smoothly without disruption. Examples: Replacing old machinery, upgrading outdated software, or switching to energy-efficient equipment. 5. Maintenance CapEx Maintenance CapEx is spent on the upkeep and repair of existing assets to prolong their useful life and maintain operational efficiency. This is necessary to avoid costly breakdowns and ensure assets perform at their best. Examples: Regular maintenance of machinery, replacing worn-out parts, or updating software to keep it running smoothly. What is Revenue Expenditure or Operational Expenses (OpEx)? Revenue Expenditure or Operational Expenses (OpEx) refers to the costs a business incurs as part of its daily operations to maintain regular functioning. Unlike CapEx, which focuses on long-term investments, OpEx covers the expenses that are essential for short-term business activities and do not create long-lasting assets. These costs are fully deducted in the accounting period in which they occur. Examples of Revenue Expenditure: Salaries and Wages: Payments made to employees for their work. Rent: Regular payments for office or facility space. Utilities: Costs for electricity, water, internet, and other essential services. Repairs and Maintenance: Expenses for fixing equipment or facilities to keep operations running smoothly. Key Characteristics of Revenue Expenditure: Short-Term Benefit: Revenue Expenditure is tied to the current accounting period. These costs help maintain business operations but do not provide benefits beyond the period they are incurred. Recorded in the Income Statement: Unlike CapEx, OpEx is recorded directly in the income statement as an expense for the period. These expenditures are not capitalized, meaning they do not appear as assets on the balance sheet. Essential for Sustaining Operations: OpEx is crucial for the day-to-day management of a business. Without these ongoing expenses, a business cannot function efficiently or generate revenue in the short term. Types of Revenue Expenditure Revenue Expenditure includes the day-to-day costs a business incurs to maintain operations. These expenses are necessary for the ongoing functioning of a business and are deducted from profits in the current accounting period. There are several types of Revenue Expenditure, each associated with different aspects of business operations. 1. Production-Related Expenses These are direct costs incurred in the manufacturing process. They include all expenses directly tied to the creation of goods or services. Examples: Wages for factory workers or production staff Raw Materials required for production Freight Charges for shipping materials and finished products 2. Selling & Distribution Expenses These costs are associated with selling and delivering goods or services to customers. Selling and distribution expenses are essential for generating sales and revenue. Examples:... --- - Published: 2024-12-03 - Modified: 2025-08-07 - URL: https://treelife.in/finance/mis-report/ - Categories: Finance - Tags: how to prepare mis report, Management Information System, Management Information System Reports, Management Information Systems, mis report, mis report format in excel, mis report full form, mis report meaning, mis reports examples, types of mis reports, what is mis report Understanding MIS Reports In today’s fast-paced business world, data is king. But raw data alone isn’t enough — organizations need a way to utilize that data as actionable insights. This is where Management Information System reports (MIS reports) come into play. These essential tools aggregate data from various departments and present it in a clear, concise format, empowering management to make informed decisions that drive success. MIS reports are a critical tool in any company or investor’s belt to gather, process and present data that supports decision making and compliance. They provide structured insights into areas such as finance, operations, compliance and human resource management, and help monitor performance, identify trends and ensure adherence to statutory obligations. MIS reports are typically presented to the management team and are also often requested by investors to keep tabs on the company’s performance (and by extension their investment). These reports focus on raw data, trends, patterns within datasets, and relevant comparisons and consequently, enable the core team to make informed decisions, capitalize on current market trends, monitor progress and business management. What Is an MIS Report? A Management Information System (MIS) report is a data-driven document used by organizations to track and manage their operations. It consolidates information from various departments, such as finance, sales, inventory, and operations, to provide key insights for decision-making. MIS reports help managers monitor performance, identify trends, and make data-backed decisions that drive business efficiency and growth. Key Characteristics of MIS Reports Data AggregationMIS reports collect and combine data from multiple sources across an organization, such as sales figures, financial statements, and operational metrics. This aggregation ensures that management has a comprehensive view of the business at any given time. Timeliness and FrequencyTo be effective, MIS reports are generated at regular intervals — daily, weekly, monthly, or quarterly. The timeliness of these reports ensures that decision-makers have up-to-date information to act on quickly, improving the responsiveness and agility of the organization. Customization for Different Management LevelsMIS reports can be tailored to suit various levels of management. For example, executives may receive high-level summary reports with key performance indicators (KPIs), while department managers may need more detailed, operational data to optimize day-to-day functions. Analysis and InterpretationBeyond raw data, MIS reports offer analysis and interpretation to identify patterns, trends, and potential issues. This analysis helps managers not only understand what is happening within the organization but also why it's happening and what actions need to be taken. Historical Data and TrendsHistorical data is often included in MIS reports to allow for performance comparison over time. By analyzing trends, businesses can identify growth patterns, track goal progress, and forecast future performance, helping them plan more effectively. Visual RepresentationEffective MIS reports use visual elements like graphs, charts, and tables to present complex data in an easily digestible format. These visuals help management quickly interpret key insights, making the decision-making process more efficient and accessible. Features of an MIS Report MIS Reports are designed with several interconnected components that work synergistically to provide valuable insights for informed decision-making. These reports go beyond mere data presentation, offering a structured approach to information management. Key Components of an MIS Report A robust MIS report is built upon a foundation of critical components, each playing a vital role in its effectiveness and utility. Understanding these elements is crucial for leveraging the full power of an MIS system. Users: At the heart of any MIS report are its users, encompassing a wide range of stakeholders within and outside the organization. This includes company employees, line managers, senior executives, investors, and even individuals who indirectly interact with the organization (e. g. , auditors, regulatory bodies). The report's design and content must cater to the specific informational needs and decision-making levels of these diverse user groups. Data: The lifeblood of an MIS report is the data it processes. This data is meticulously collected from various internal and external sources across an organization. It can range from financial transactions and sales figures to operational metrics, customer interactions, and market trends. High-quality, accurate, and relevant data is paramount for generating reliable insights, supporting critical business decisions, facilitating marketing analysis, and enabling accurate target predictions. Business Procedures: These are the clearly defined methodologies and workflows that govern how data is systematically collected, rigorously analyzed, securely stored, and efficiently disseminated within the organization. Business procedures outline the step-by-step implementation of company policies related to information management, ensuring consistency, compliance, and data integrity. They define the rules and processes that transform raw data into actionable information. Software & Hardware: The technological infrastructure underpinning an MIS report is crucial for its functionality. This component encompasses the programs, applications, and physical equipment used to process, store, manage, and present data. Examples include sophisticated database management systems (DBMS) for organizing vast amounts of information, advanced data visualization tools for presenting complex data in an understandable format (e. g. , dashboards, charts), spreadsheets for ad-hoc analysis, enterprise resource planning (ERP) systems, customer relationship management (CRM) software, and the servers and networks that support these applications. The right combination of software and hardware ensures efficient data handling and report generation. Output/Reports: This refers to the final product of the MIS, which are the reports themselves. These can take various forms, including periodic reports (e. g. , daily, weekly, monthly sales reports), on-demand reports, summary reports, detailed reports, comparative reports, and exception reports. The output should be tailored to the specific needs of the users, providing clear, concise, and actionable information in an easily digestible format, often incorporating visual elements for enhanced understanding. The quality and relevance of the output directly determine the value derived from the MIS. Importance of MIS Reports in Business MIS reports are indispensable for businesses aiming to stay competitive and make informed decisions. These reports provide actionable insights by consolidating data from various sources, making them a cornerstone of decision-making and strategic planning. How MIS Reports Support Businesses: Data-Driven Decision-Making: MIS reports deliver real-time, accurate data, enabling leaders to make informed choices quickly. Strategic Planning:... --- - Published: 2024-12-03 - Modified: 2025-07-22 - URL: https://treelife.in/finance/cap-table-for-startups/ - Categories: Finance - Tags: Cap Table, cap table for startup, cap table management for startups, capitalization table for startup, CapTable download, CapTable sample sheet, CapTable working sheet What is a Cap Table? A capitalization table, or "cap table," is more than just a spreadsheet; it's a strategic tool that offers critical insights into the ownership structure and equity of a startup. This document becomes indispensable during fundraising, mergers, acquisitions, or IPOs, enabling startups to make informed, data-driven decisions. A well-maintained cap table not only tracks ownership but also supports scenario planning, ESOP management, and investor relations. Cap table for startups are essential in visualizing investment flows, ensuring transparency, and facilitating strategic growth. Whether you're a founder, investor, or advisor, understanding and maintaining a cap table is key to navigating equity management effectively. Importance of Cap Tables for Startups Cap tables simplify complex ownership structures and provide clarity in key areas such as: Ownership Visualization: Clear representation of shareholding, including founders, investors, and employees. Equity Monitoring: Helps track the value of debt and equity, ensuring an up-to-date financial overview. Informed Decision-Making: Assists in evaluating dilutions, fundraising impacts, and strategic decisions. ESOP Management: Simplifies allocation and management of employee stock options, ensuring alignment with company goals. A cap table acts as a "single source of truth," reflecting the startup's financial and ownership journey while empowering stakeholders to plan for future opportunities and challenges. Key Features of a Cap Table Cap tables typically include: Ownership Interest: Details on who holds what percentage of equity in the company. Voting Rights: Outlines who has decision-making authority for critical business actions. Share Types: Differentiates common and preferred shares, along with their unique rights (e. g. , liquidation preferences). Convertible Debt: Tracks debt that may convert into equity, offering a fully diluted ownership perspective. Valuation Metrics: Includes authorized shares, outstanding shares, and reserved shares for ESOPs. How to Create and Maintain a Cap Table Step-by-Step Guide Set Up the Basic Structure: Input company name, founders' details, and initial equity allocation. Define share types and ownership percentages. Track Equity Transactions: Document share transfers, ESOP allocations, and convertible securities. Update the table with each new fundraising round or significant equity-related event. Leverage Technology: Use tools like cap table management software to automate calculations, ensure accuracy, and support scenario planning. Regular Updates: Update the cap table for events like new hires, fundraising, or changes in valuation. Pro Tip: Use a Sample Cap Table Format Treelife offers a pre-designed cap table format that includes: Formula-driven calculations. Charts for quick visualization. Multiple scenarios like ESOPs and investment rounds. Download Cap Table Excel | PDF Types of Cap Tables: Explained Understanding the different types of capitalization tables (cap tables) is essential for managing a company’s equity at various stages of growth. Each type of cap table serves a specific purpose, depending on the company's funding stage and the complexity of its ownership structure. Below are the key types of cap tables you may encounter: 1. Standard Cap Table A Standard Cap Table offers a basic summary of a company’s ownership, listing all stakeholders and their corresponding shares. This type of cap table is typically used for a clear snapshot of who owns what in the company, whether it’s common stockholders, investors, or employees with stock options. It is commonly employed by companies at any stage to monitor ownership distribution and equity stakes, helping stakeholders keep track of their shares. 2. Pre-Seed Cap Table The Pre-Seed Cap Table is used by very early-stage companies, particularly during the pre-seed phase, before external investors come on board. It focuses primarily on the equity distribution between the founders and any early contributors, such as co-founders or initial team members. This cap table helps define the ownership percentages early on and sets the stage for any potential funding rounds. 3. Pre-Investment Cap Table A Pre-Investment Cap Table is designed for companies that have yet to secure external funding. It tracks the ownership distribution before any investment has been made by outside investors. This type of cap table is useful for founders who are preparing for a funding round, as it helps in determining how much equity they are willing to give up, while also clarifying the existing ownership structure for potential investors. 4. Post-Money Cap Table The Post-Money Cap Table reflects the ownership structure after a company has raised external capital. It shows the ownership stakes of existing shareholders and new investors post-funding round, allowing the company to compare ownership before and after the investment. This cap table is crucial for understanding how a funding round will dilute existing shareholders and provides transparency to both founders and investors about their respective stakes in the company following the investment. Cap Table TypeDescriptionPurposeStandard Cap TableA basic summary of shares and stock ownership in the company. Provides an overview of the equity distribution among founders, investors, and employees. Pre-Seed Cap TableFocuses on the equity distribution between founders and early contributors. Primarily used by very early-stage startups to outline ownership before external investments. Pre-Investment Cap TableShows ownership and equity structure before securing external funding. Helps founders and investors understand ownership stakes before raising capital. Post-Money Cap TableCompares ownership before and after a fundraising round. Used to track dilution and new ownership distribution after external investment is included. This table highlights the key differences and uses of each cap table type, providing clarity for different stages of a company's development. Utilizing a cap table Knowing Your Equity Cap table: One of the main purposes of the cap table is to illustrate how choices affect a company’s stock structure. Would you like the pool of staff options to be larger? Are you planning to raise money again? In any case, you can precisely observe how decisions will affect your shareholder groups. When raising capital for the first time, you must be well aware of the sacrifices you will be making. That’s exactly what the cap table will do—it will display the company’s planned new structure. To converse about the first equity payouts: A cap table, which is a written breakdown of your firm, is created when you create one. But from the outset, having a cap table can simplify your work since it may... --- - Published: 2024-12-02 - Modified: 2025-07-21 - URL: https://treelife.in/compliance/what-is-gst-compliance/ - Categories: Compliance - Tags: gst compliance audit, gst compliance calendar 2025, gst compliance checklist, gst compliance dates, gst compliance meaning, gst compliance rating, gst statutory compliance, gst tax compliance, what is gst compliance What is GST Compliance? GST Compliance refers to the adherence to the rules and regulations set under the Goods and Services Tax (GST) law in India. It involves businesses fulfilling all their tax-related obligations within the stipulated timelines. Compliance ensures that businesses stay within the legal framework and avoid penalties or audits. In simple terms, GST compliance requires a business to adhere to the tax procedures laid out by the government. This includes GST registration, timely return filing, maintaining accurate invoicing, and undergoing regular GST audits to ensure everything is in order.   Understanding GST Compliance GST Compliance ensures that businesses in India operate legally and efficiently, meeting their tax obligations on time, filing returns and maintaining proper records, to avoid penalties and legal issues. For businesses in India, GST compliance is crucial for operating legally and efficiently. Adhering to the GST framework allows businesses to stay on the right side of the law, avoid fines, and claim benefits such as Input Tax Credit (ITC). Non-compliance can lead to serious consequences, including penalties, audits, or even legal actions. Components of GST Compliance There are several key components of GST compliance that every business in India must follow: GST Registration Compliance: GST Registration is required for all businesses that meet the threshold turnover limit prescribed in the law. This registration gives businesses a unique GSTIN (Goods and Services Tax Identification Number), which is required to be reported when filing returns under the law. GST registration allows businesses to collect taxes from customers and pay taxes on their purchases. It also allows businesses to claim ITC, reducing tax liability. GST Tax Invoice Compliance: To maintain GST tax invoice compliance, businesses must issue GST-compliant invoices for all sales and purchases. These invoices should include necessary details like GSTIN, HSN codes, GST rates, and total amounts, ensuring transparency in transactions. Proper invoicing is essential for claiming Input Tax Credit (ITC), which can be used to offset the tax liability on goods or services purchased by the business. GST Return Filing Compliance: Businesses must file regular GST returns, including GSTR-1 (for sales), GSTR-3B (for tax liabilities), and GSTR-9 (annual return). Filing returns accurately and on time ensures GST return compliance and avoids penalties or legal issues. Timely filing also helps businesses keep track of their tax obligations, ensuring they do not miss payments or overpay taxes. The Importance of GST Compliance in India Why is GST Compliance Important? GST compliance is crucial for businesses in India because failure to adhere to GST laws can lead to severe legal consequences, including penalties and fines. Consequently, GST tax compliance becomes essential for several reasons: Legal Operations: Following the GST framework ensures your business operates within the legal tax structure, helping you avoid legal penalties and fines. Tax Credit Benefits: Businesses can claim Input Tax Credit (ITC) on taxes paid on business expenses, reducing the overall tax liability. Avoiding Penalties: Timely return filings and accurate invoicing can help businesses avoid penalties and interest charges. These penalties can damage a business’s finances and reputation. Smooth Business Operations: Proper compliance creates a transparent and efficient system, making it easier for businesses to manage finances and grow. Maintaining high GST compliance ensures that your business stays in good standing with the government and avoids any unnecessary legal hassles. A key factor in GST compliance is your GST compliance rating. A good rating shows that your business consistently follows tax regulations, which can help reduce scrutiny from tax authorities. Businesses with a strong compliance rating under GST are less likely to face audits, saving time and resources. Benefits of GST Compliance Enhanced Reputation: Businesses with a good GST compliance record enjoy increased trust from customers, suppliers, and partners. When your business follows GST laws properly, it signals reliability and professionalism. Customers are more likely to trust a business with a high GST compliance rating because it demonstrates that the business is legally sound and transparent. Reduced Audit Frequency: A high GST compliance rating significantly lowers the chances of being audited by tax authorities. When your business maintains consistent compliance, it shows the government that you are a low-risk entity. Fewer audits mean your business can focus on growth and operations instead of managing lengthy tax investigations. Access to Input Tax Credit (ITC): A high GST compliance rating also makes it easier for businesses to claim Input Tax Credit (ITC). ITC allows businesses to reduce their tax liability by offsetting taxes paid on purchases against the taxes collected on sales. With GST compliance, claiming ITC becomes a simplified process, improving cash flow and reducing overall tax burdens. GST Compliance Checklist and Calendar for 2025 GST Compliance Checklist for Businesses To ensure your business remains compliant with the GST regulations, follow this simple step-by-step checklist. Keeping track of these tasks will help you stay on top of your obligations and avoid penalties. GST Compliance Checklist TaskDescriptionFrequencyGST RegistrationEnsure your business is registered for GST if your turnover exceeds the threshold limit. Obtain a GSTIN. Once (Initial Registration)Accurate Tax InvoicingIssue GST-compliant invoices for all sales and purchases, including correct GSTIN, HSN codes, and GST rates. OngoingTimely Return Filing (GSTR-1, GSTR-3B)File GST returns like GSTR-1 (Sales), GSTR-3B (Tax Liabilities) regularly. Monthly - by 11th of the next month;Quarterly - by 13th of the next month following the quarter. Maintain GST RecordsKeep accurate records of sales, purchases, tax payments, and input/output tax credits for 6 years. OngoingFile Annual Return (GSTR-9)File an annual return GSTR-9 for the financial year. Yearly (By December 31st)Regular Updates on GST PortalCheck the GST Portal for updates on tax rates, changes in regulations, or new notifications. OngoingReconcile Invoices and PaymentsReconcile all invoices and payments with the GST Portal to ensure accuracy. Monthly/Quarterly This GST compliance checklist will help you maintain a streamlined process for managing your GST obligations. Whether it’s registering your business, maintaining proper records, or ensuring timely filing of returns, following this checklist ensures your business remains compliant with the law. GST Compliance Calendar for 2025 Staying on top of GST compliance... --- - Published: 2024-11-29 - Modified: 2025-07-21 - URL: https://treelife.in/finance/why-convertible-debentures-are-investor-friendly/ - Categories: Finance - Tags: convertible debenture types, convertible debentures, investors Introduction A convertible debenture is a debt instrument issued by a company that can be converted into equity shares of the issuing company after a specified period or upon the fulfillment of certain conditions. These instruments combine the features of debt (fixed interest payments) and equity (conversion option), making them attractive to both companies and investors. A convertible note or debenture is usually an unsecured bond or a loan as in there is no primary collateral interlinked to the debt. A convertible debenture can be transformed into equity shares after a specific period. The option of converting debentures into equity shares lies with the holder. A convertible debenture will provide regular interest income via coupon payments and repayment of the principal amount at maturity. Types of Convertible Debentures Convertible debentures can be used by companies to raise capital from both domestic and foreign investors and can adopt a variety of forms based on the terms and conditions attached to the issue of such instruments. This can take the form of debentures that fully or partially convert into debt, whether compulsorily or at the debenture holder’s option. Fully Convertible Debentures (FCDs): These can be entirely converted into equity shares after a specified period, with no remaining debt after conversion. Partially Convertible Debentures (PCDs): A portion of the principal is converted into equity shares, while the remaining debt continues to be paid with interest. Optionally Convertible Debentures (OCDs): These give the holder the option to convert the debentures into equity shares at their discretion, within a predetermined period. Compulsorily Convertible Debentures (CCDs): These must be converted into equity shares after a specified period, regardless of the holder's preference. Features of fully and partly convertible debentures ParametersFully Convertible DebenturesPartly Convertible DebenturesDefinition The value can be changed into the company’s equity shares. Only some portion of the debentures would convert to company’s equity shares. Flexibility in terms of financing They have a highly favourable debt-equity ratio. They have a favourable debt-equity ratio. Classification for calculationThey are classified as equity. The convertible portion is classified as equity, whereas, the non-convertible part is classified as debt. Suitability Fully convertible debentures are suitable for companies which do not have an established track record. Partly convertible debentures are suitable for those companies that have an established track record. PopularityThey are highly popular among investors. They are not very popular among investors. Legal Background Governed primarily by the Companies Act, 2013, the issue of convertible debentures is permitted under Indian law, subject to compliance with a robust framework (including mandatory filings with the competent Registrar of Companies and maintenance of the appropriate records by the company). Issue of debentures by public listed companies is also permitted, subject to conditions set out in the regulations issued by the Securities and Exchange Board of India (SEBI) from time to time. Indian law also permits foreign investors to invest in Indian entities against the issue and allotment of compulsorily convertible debentures, however the same is subject to regulatory processes set out in the Foreign Exchange Management Act, 1999 (FEMA) and the regulations issued from time to time by the Reserve Bank of India (RBI). Companies Act, 2013 Section 2(30) defines a ‘debenture’ to “include debenture stock, bonds or any other instrument of a company evidencing a debt, whether constituting a charge on the assets of the company or not. ” In other words, any debenture is a debt instrument for a company. Section 71 lays down the conditions attached to the issue of debentures by a company and permits the issue to be made with an “option to convert such debentures into shares, either wholly or partly at the time of redemption. ” However, where any debenture is to be converted into equity, the company is required to first obtain approval of its shareholders on the terms of issue and conversion, which necessitates the holding of a general meeting and form filing with the Registrar of Companies having competent jurisdiction. Debentures can be issued through private placement under Section 42 but are strictly subject to the corporate procedures set out in the provision (read with the relevant rules). It is pertinent to note that as per the Companies (Acceptance of Deposits) Rules, 2014 it is compulsory for the compulsorily convertible debenture into an equity share capital within a period of 10 years otherwise it will be viewed as a “deposit” under the Companies Act, 2013 and the provision of “deposit” will be taken into consideration in assessing the company’s compliance status with applicable laws.   SEBI Regulations The SEBI Issue of Capital and Disclosure Requirements Regulations mandate disclosure of conversion terms, pricing mechanism and timelines for conversion when convertible debentures are issued by any public listed company.   Such issues are further governed by: (i) the SEBI Listing Obligations and Disclosure Requirements Regulations, which mandates continuous reporting and compliance obligations; and (ii) SEBI Pricing Guidelines which set out pricing norms to ensure fairness and transparency in the issue process. FEMA and RBI Regulations Under the Foreign Direct Investment Policy, foreign investment can be made in shares, mandatorily and fully convertible preference shares, and mandatorily and fully convertible debentures. In other words, a foreign investor cannot subscribe to optionally convertible or partly convertible debentures under the FDI Policy and remain in compliance with the Foreign Exchange Management Act, 1999 and the regulations prescribed by RBI from time to time. Where the issue of any fully and mandatorily convertible debenture is made to a foreign investor and/or non-residents, such issue must comply with the pricing and conversion guidelines set out in FEMA. Further, such issues must be made in accordance with the norms contained in the FDI Policy published by the government of India from time to time1, and any convertible instruments with fixed returns may qualify as External Commercial Borrowings, requiring RBI approval.   Why Investors Prefer Convertible Debentures Investors typically prefer convertible debentures on the basis of the following factors: Balance of Risk and Reward: Investors receive fixed interest payments during the holding period, providing a steady... --- - Published: 2024-11-21 - Modified: 2025-08-07 - URL: https://treelife.in/startups/quick-commerce-in-india-disruption-challenges-and-regulatory-crossroad/ - Categories: Startups - Tags: quick commerce, quick commerce companies in india, quick commerce examples, quick commerce meaning, what is quick commerce India’s fast changing consumer landscape is best represented by the disruption caused by the quick commerce (“QCom”) sector. QCom has risen rapidly in the country post the Covid-19 pandemic, led by brands like BlinkIt, Swiggy Instamart and Zepto. Consequently, these QCom companies have seen rapid growth and success since 2020, attracting investors witnessing a slowdown in major sectors like fintech and online education. This shift has rattled established players and has created sizable challenges for traditional Kirana and mom-and-pop stores in the country. The rising pressure came to a head in August 2024, when the All India Consumer Products Distributors Federation (AICPDF) wrote to the Commerce and Industry Minister, Piyush Goyal, urging government security of quick commerce platform, citing threats to small retailers and potential FDI violations1. Seeking an immediate investigation into the operational models of these QCom platforms, the AICPDF urged implementation of protective measures for traditional distributors. With the release of a white paper by the Confederation of All India Traders (CAIT) alleging unfair trade practices and potential violation of Foreign Direct Investment (FDI) policy by QCom players, immediate regulatory intervention has been urged, leading to speculation on the continued growth of these QCom platforms2. In these Treelife Insights pieces, we break down how QComs like Blinkit and Swiggy Instamart work, the impact of this sector on traditional distributors, the issues raised by AICPDF and CAIT and what the future for QCom could hold. How does Quick Commerce work? Fundamentally, QCom is an innovative retail model that emphasizes speed and convenience in delivery of goods, designed to meet consumers’ immediate needs. The process chart below showcases how the QCom model operates: However, QCom is limited in its ability to replicate value focused items available in traditional stores or larger retailers, such as staples (with higher price sensitivity) or open stock keeping units, or personalized khata systems for customers3. Impact of QCom on Traditional Distributors The rapid expansion of QCom taps into the consumer’s need for instant gratification in the Fast Moving Consumer Goods (FMCG) sector. Leveraging significant funding, advanced technology, and a network of dark stores, these platforms expanded from metros to Tier-2 cities, offering essentials within 10–15 minutes, and eliminating the need to approach traditional mom-and-pop shops or kirana stores to purchase their daily needs. Loss of Business for Traditional Distributors: Given the consumer preference for convenience, wide product range and speedy delivery, there is a decline in foot traffic for traditional stores. Further, AICPDF in its August 2024 letter cited a shift in the FMCG distribution landscape itself, with QCom platforms being increasingly appointed as director distributors by major FMCG companies, sidelining traditional distributors4. Pricing Competition: When backed by heavy investment, QCom platforms are able to offer deep discounts on the products, which make it difficult for traditional distributors to compete. Inventory Turnover: Given the lack of sales, these traditional stores are sitting on high levels of inventory which results in delayed payments to distributors. This is impacted further by the fact that traditional stores cater to the impulse purchase vertical of consumers, who are now turning to QCom5. Technology Gap: QCom fundamentally employs advanced technology to analyze trends, manage inventory and logistics, and boost customer retention. Traditional stores are unable to invest in such infrastructural developments. Legal Background Further to its August 2024 letter, AICPDF filed a complaint with the Department of Promotion of Industry and Internal Trade (DPIIT) in September 2024, which was forwarded to the Competition Commission of India (CCI)6. AICPDF then formally complained to the CCI in October 20247 following which, CAIT released a white paper calling for a probe into the top 3 QCom players in the country8 for possible violations of the FDI Policy and the Competition Act, 20029. 10 Background of FDI Policy as applicable to e-commerce sector 1. Permissible Transactions Marketplace e-commerce entities are permitted to enter into B2B transactions with registered sellers. E-commerce marketplace entities may provide support services to sellers (e. g. , logistics, warehousing, marketing). 2. Ownership and Control Marketplace e-commerce entities must not exercise ownership over the inventory. Control is deemed if over 25% of a vendor's purchases are from the marketplace entity or its group companies. Entities with equity participation or inventory control by a marketplace entity cannot sell on that entity’s platform. 3. Seller Responsibility Seller details (name, address, contact) must be displayed for goods/services sold online. Delivery and customer satisfaction post-sale are the seller’s responsibility. Warranty/guarantee of goods/services rests solely with the seller. 4. Fair Competition Marketplace entities cannot influence pricing of goods/services and must ensure fair competition. Services like fulfillment, logistics, and marketing must be provided fairly and at arm’s length. Cashbacks by group companies must be fair and non-discriminatory. Sellers cannot be forced to sell products exclusively on any platform. 5. Restrictions FDI is not allowed in inventory-based e-commerce models. Alleged Violations of the FDI Policy Misuse of FDI Funds: The white paper states that the top 3 QCom platforms have collectively received over INR 54,000 crore in FDI, with only a minimal portion allocated to infrastructure development. Instead, a substantial amount is purportedly used to subsidize operational losses and fund deep discounts, which CAIT argues is a deviation from the intended use of FDI for asset creation and long-term growth. Inventory Control via Preferred Sellers: The white paper states that QCom platforms operate dark stores through a network of preferred sellers, effectively controlling inventory. This practice is seen as a circumvention of FDI regulations that prohibit foreign-backed marketplaces from holding inventory or influencing pricing directly. Alleged Violations of the Competition Act Predatory Pricing and Market Distortion: Through the deep discounts (funded by FDI) offered by these QCom players, CAIT alleges undermining of traditional retailers and distortion of fair market competition. Such practices are viewed as detrimental to the survival of small businesses, including the estimated 30 million kirana stores in India. Restricted Market Access: The white paper highlights that exclusive agreements with a select group of sellers limit market access for other vendors, thereby reducing competition and consumer... --- - Published: 2024-11-19 - Modified: 2025-03-05 - URL: https://treelife.in/news/fdi-in-ecommerce-under-ed-scrutiny/ - Categories: News The Enforcement Directorate (ED) has uncovered direct links between Amazon, Flipkart, and their preferred sellers, alleging violations of FDI rules. Key findings, on quizzing “top” five sellers, include: Preferred sellers are often linked to former employees or associates, with their inventory, profit margins, and even bank accounts allegedly controlled by the e-commerce giants. Sellers with massive turnovers report minimal profits, raising red flags about manipulated margins. Issues with the "Just in Time" (JIT) stock-gathering model, suggesting it violates FDI rules by reducing the marketplace to a multi-brand platform for the giants' benefit. By controlling inventory, warehouses, and profits, Amazon and Flipkart are accused of undermining the FDI norm’s purpose of fostering a fair marketplace for small retailers. ED plans to file a complaint within 3 months and summon top officials for questioning. Read more here - https://economictimes. indiatimes. com/epaper/delhicapital/2024/nov/19/et-comp/enforcement-directorate-uncovers-direct-links-between-amazon-flipkart-and-sellers/articleshow/115428846. cms  Need a quick refresher on FDI rules in e-commerce? We have created a handy cheat sheet to break it down here. FDI in E-Commerce – Guidelines B2B E-commerce activities (not retail) 100% FDI permitted under the automatic route Market place model of e-commerce 100% FDI permitted under the automatic route E-commerce Means buying and selling of goods and services, including digital products, over digital & electronic networks. 'Market place model of e-commerce' Means providing an information technology platform by an e-commerce entity on a digital and electronic network to act as a facilitator between buyer and seller. 'Inventory based model of e-commerce' Means an e-commerce activity where inventory of goods and services is owned by the e-commerce entity and is sold to the consumers directly. Permissible Transactions Marketplace e-commerce entities are permitted to enter into B2B transactions with registered sellers. E-commerce marketplace entities may provide support services to sellers (e. g. , logistics, warehousing, marketing). Seller Responsibility Seller details (name, address, contact) must be displayed for goods/services sold online. Delivery and customer satisfaction post-sale are the seller’s responsibility. Warranty/guarantee of goods/services rests solely with the seller. Ownership and Control Marketplace e-commerce entities must not exercise ownership over the inventory. Control is deemed if over 25% of a vendor’s purchases are from the marketplace entity or its group companies. Entities with equity participation or inventory control by a marketplace entity cannot sell on that entity’s platform. Fair Competition Marketplace entities cannot influence pricing of goods/services and must ensure fair competition. Services like fulfillment, logistics, and marketing must be provided fairly and at arm’s length. Cashbacks by group companies must be fair and non-discriminatory. Sellers cannot be forced to sell products exclusively on any platform. Restrictions FDI is not allowed in inventory-based e-commerce models. What's your thought? Reach out to us at priya. k@treelife. in for a deeper discussion or leave a comment below! --- - Published: 2024-11-14 - Modified: 2025-07-22 - URL: https://treelife.in/legal/jiohotstar-an-enterprising-case-of-cybersquatting/ - Categories: Legal - Tags: cybersquatting, cybersquatting cases in india, cybersquatting examples, cybersquatting meaning, domain name cybersquatting, jiohotstar, jiohotstar delhi guy, jiohotstar domain Introduction One of the most discussed media and entertainment industry developments since early 2023 is the merger of the media assets of Reliance Industries’ (“RIL”; including JioCinema) with Disney India’s (“Disney”; including Disney+Hotstar)1. The deal has continued to make headlines, with the latest being a series of developments in an enterprising case of ‘cybersquatting’ on the “JioHotstar. com” domain2. In this #TreelifeInsights piece, we break down the core legal issues surrounding this JioHotstar dispute: what cybersquatting is, why it is considered an infringement of intellectual property rights, and what the legal ramifications of the developer’s actions are. Timeline 2022 - Disney loses digital streaming rights for Indian Premier League to RIL’s Viacom18. Disney sees loss of subscriber revenue. February 2024 - Disney and Viacom18 sign contracts; Viacom18 and Star India to be integrated into a JV reportedly valued at INR 70,352 crores (post money). August 2024 - Competition Commission of India and NCLT approve the USD 8. 5 billion merger. October 2024 - Anonymous Delhi-based app developer reveals registration of “Jiohotstar. com” domain name; offers to sell to RIL in exchange for higher education funding. RIL responds threatening legal action.   October 26, 2024 - Reports emerge that domain name has been sold to a UAE-based sibling duo involved in social work. November 11, 2024 - UAE siblings reveal their refusal of sale of domain name; offers to legally transfer to RIL for free. Legal Backdrop: Intellectual Property Rights In order to better understand the implications of this ‘cybersquatting’, it is critical to recognise the intellectual property rights (‘IPR’) in question: Intellectual Property Rights (‘IPR’): legal right of ownership over the creation, invention, design, etc. of intangible property resulting from human creativity. A critical element to the protection of IPR is restraining other persons from using the protected material without the prior permission of the owner. Trademarks: a form of intellectual property referring to names, signs, or words that are a distinctive identifier for a particular brand in the market, protected in Indian law by Trade Marks Act 1999.   Domain names included in IPR: in today’s digital world, a web address that helps customers easily find the business/organization online - a domain - is also considered a brand that should be registered as a trademark to prevent misuse. Value: trademarks are a great marketing tool that make the brand recognizable to the consumers, and directly correlates to an increase in the financial resources of the business.   Consequences: breach of IPR can lead to monetary loss, reputational damage, operational disruptions or even loss of market access for a business. Infringement therefore attracts significant criminal and civil liability, as a means to dissuade unauthorized use and protect such IPR owners. In this regard, the positions adopted by RIL and the developer are briefly set out below:  What is Cybersquatting? ‘Cybersquatting’ or digital squatting refers to the action of individuals who register domain names closely resembling established brands, often with the intent to sell for profit or otherwise leverage for personal gain. Cybersquatting can take the following forms: Typo squatting/URL hijacking: Domains are purchased with a typographical error in the name of a well-known brand, with the intent to divert the target audience when they misspell a domain name. This could occur with an error as simple as “gooogle. com” instead of “google. com”. Identity Theft: Existing brand’s website is copied with the intent to confuse the target consumer.   Name Jacking: Impersonation of a celebrity/famous public figure on the internet (includes creating fake websites/accounts on social media claiming to be such public figure).   ‘Reverse’ Cybersquatting: False claim of ownership over a trademark/domain name and accusing the domain owner of cybersquatting.   Cybersquatting can be used as a form of extortion, an attempt to take over business from a rival, or even to mislead/scam consumers, but there is no law in India that specifically addresses such acts of cybersquatting. Since domains are considered ‘trademarks’ under the law, use of a similar or identical domain would render an individual liable for trademark infringement3, in addition to any other liabilities that may be applicable from the perspective of consumer protection laws. Legal Treatment of Cybersquatting Cybersquatting rose as an issue as more and more businesses began to realize the value of their online presence in the market. As the digital age unfolded, the Internet Corporation of Assigned Names and Numbers (ICANN) was founded in 1998 as a non-profit corporation based out of the United States with global participation. In 1999, the ICANN adopted the Uniform Domain Name Dispute Resolution Policy (UDRP) to set out parameters in which top level domain disputes are resolved through arbitration. It is important to note that the remedies available under UDRP are only cancellation or transfer of the disputed domain name and do not envisage monetary compensation for any loss suffered. This was ratified in India through the . IN Domain Name Dispute Resolution Policy (INDRP) which is available to all domains registered with . in or . bharat. Procedure under ICANN/UDRP File a Complaint: Approach a provider organization like the World Intellectual Property Organization (WIPO), Asian Domain Name Dispute Resolution Centre (ADNDRC), or the Arab Center for Dispute Resolution (ACDR). Complaints must demonstrate certain key elements. Submissions: The respondent is notified of the complaint and UDRP proceedings initiated. Respondents are given 20 days to submit a response to the complaint defending their actions. Ruling: A panel with 1 or 3 members is appointed to review the submissions and evaluate the complaint. The panel renders a decision within 14 days of the response submission deadline. Implementation and Judicial Recourse: 10 day period is given to the losing party to seek judicial relief in the competent courts. The Registrar of ICANN will implement the panel's decision on expiry of this period. Either party can seek to challenge the decision in a court of competent relief. The panel’s decision remains binding until overturned by a court order.   Key Elements to a Successful Complaint of Cybersquatting Identical or Confusingly... --- > India’s Fintech Report 2024-25 by Treelife provides a data-driven analysis of the fintech industry in India, highlighting key trends, growth drivers, and future opportunities. - Published: 2024-11-13 - Modified: 2025-08-07 - URL: https://treelife.in/reports/india-fintech-landscape-a-digital-revolution-in-motion/ - Categories: Reports - Tags: digital payment in india, fintech companies in india, fintech ecosystem, fintech india report, fintech industry in india, fintech industry report, fintech jobs in india, fintech laws in india, fintech market in india, fintech sector in india, fintech startups india, fintech stocks india, gift ifsc, ifsc gift city, india fintech report, india fintech report 2024-25, rbi launches upi, research paper on fintech in india, rupaycard, treelife india fintech report, upi market size, upi payment Treelife Fintech Report 2024-25 DOWNLOAD PDF India’s Fintech Report 2024-25 by Treelife provides a data-driven analysis of the fintech industry in India, highlighting key trends, growth drivers, and future opportunities. As the fintech market size in India continues to expand rapidly, this report offers a comprehensive view of how fintech companies and fintech startups in India are transforming the financial landscape. A major highlight of the India Fintech Report 2024-25 is the transformative role of India Stack in shaping the fintech ecosystem. India Stack, a government-backed digital infrastructure, provides a suite of open APIs that enable seamless integration between private companies and government services, paving the way for digital financial inclusion on an unprecedented scale. India Stack’s Four Layers Identity (Aadhaar): A unique digital identity for over 1. 3 billion Indians, facilitating secure, real-time identity verification. Aadhaar has been instrumental in enabling digital onboarding, reducing costs, and expanding access to financial services. Payments (UPI, AEPS): The Unified Payments Interface (UPI) and Aadhaar-enabled Payment System (AEPS) provide a secure, real-time digital payments system, transforming digital payments in India and making it accessible to both urban and rural populations. Paperless (DigiLocker): Digital management of documents through DigiLocker allows users to store, manage, and share official documents securely, supporting financial transactions and government interactions without physical paperwork. Data (DEPA): The Data Empowerment and Protection Architecture (DEPA) framework empowers individuals to securely share personal and financial data with their consent, enabling innovative fintech services and fostering data privacy. India Stack has been a game-changer for fintech companies in India, democratizing access to banking, insurance, lending, and wealth management services. It has supported the rapid expansion of fintech startups in India by reducing barriers to entry, lowering costs, and enabling interoperability across financial services. Impact of India Stack on Fintech in India The implementation of India Stack has not only increased the fintech market size in India but also boosted financial inclusion, particularly in rural areas where traditional banking access is limited. By facilitating over 63 billion Aadhaar authentications and enabling UPI to process billions of transactions annually, India Stack has become the backbone of India’s digital economy. Key Insights from the Report Market Growth: The fintech sector in India is projected to reach a valuation of $420 billion by 2029, with a compound annual growth rate (CAGR) of 31%. This growth is driven by digital innovations, increased internet penetration, and supportive regulatory frameworks. India has emerged as one of the top three fintech ecosystems globally, with over 3,000 fintech startups contributing to this growth. Digital Payments in India: Digital payment systems in India have witnessed exponential growth, largely powered by the Unified Payments Interface (UPI) and RuPay cards. In FY 2023-24 alone, UPI processed over 131 billion transactions, representing more than 80% of retail digital payments. The UPI market size is expected to increase significantly as UPI expands globally, positioning India as a leader in digital payments. Opportunities at GIFT IFSC: GIFT IFSC (Gujarat International Finance Tec-City) has become a key strategic location for fintech growth, offering a gateway to global markets. The report highlights the benefits for fintech firms establishing operations in IFSC GIFT City, including tax incentives and access to international markets. With over 55 fintech entities already operational in GIFT IFSC, it is fast becoming a preferred destination for new fintech startups in India. Investment and Funding Trends: The fintech market in India has attracted significant investment, with total funding peaking at $9. 6 billion in 2021. Although funding levels normalized to $6 billion in 2022 and $2. 7 billion in 2023, the report indicates that investor interest remains high, particularly in areas like digital lending, payments, and insurance technology. Fintech Job Market: The expansion of the fintech ecosystem has also spurred job creation. Fintech jobs in India are on the rise, with demand for talent in areas such as digital payments, data analytics, AI, and cybersecurity. This surge in job opportunities underscores the sector’s potential for sustained growth and innovation. Public Market Performance and Leading Companies: The Report 2024-25 also examines the public market performance of key fintech companies in India and compares it with traditional financial institutions. The report discusses how fintech companies, such as Paytm and Angel One, have navigated the challenges of going public, highlighting trends in valuation and market perception. While new-age fintech firms are driving innovation and growth, they face scrutiny around profitability and sustainability, which can impact stock performance in the public market. Top Companies in India’s Fintech Ecosystem: The report sheds light on leading players in the fintech sector in India, including Razorpay, PhonePe, Zerodha, and Cred, which are shaping the landscape across segments like digital payments, lending, and wealth management. These companies exemplify the rapid growth and transformative impact of fintech on India’s economy. Investment Landscape and Major Investors: The investment landscape in India’s fintech market has attracted some of the biggest names in venture capital and private equity. Key investors, including Blume Ventures, Accel, Matrix Partners India, and Kalaari Capital, have played a vital role in funding the growth of fintech in India. In 2021, fintech funding peaked at $9. 6 billion, and though it moderated to $6 billion in 2022, investor interest remains high, particularly in sectors like digital payments and LendingTech. Types of Fintech Covered in the Report The Treelife India Fintech Report 2024-25 covers a wide array of fintech segments that are driving innovation across the financial landscape in India: Digital Payments (PayTech): Exploring the growth of UPI and mobile wallets, which now dominate the digital payments system in India. LendingTech: Covering advancements in digital lending, Buy Now Pay Later (BNPL) models, and platforms providing seamless credit access to individuals and businesses. InsurTech: Examining technology-driven innovations in the insurance sector, including digital policy management and AI-powered risk assessments. WealthTech: Highlighting platforms that democratize investment, from robo-advisors to digital wealth management solutions. Fintech Infrastructure/SaaS: Analyzing backend technologies and SaaS solutions that support financial services, including Banking-as-a-Service (BaaS) and compliance tools. Each of these segments plays a pivotal role in... --- - Published: 2024-11-08 - Modified: 2025-08-07 - URL: https://treelife.in/reports/10-fascinating-facts-from-the-2024-us-elections/ - Categories: Reports - Tags: 2024 us election, polls us election, us election, us election 2024, us election 2024 date, us election 2024 polls, us election date 2024, us election day, us election map, us election odds, us election polls, us election polls 2024, us election results, us election results 2024 DOWNLOAD REPORT The 2024 U. S. presidential election was a highly anticipated and fiercely contested affair, with the outcome having far-reaching implications globally. As the nation grappled with a range of pressing issues, from the economy and healthcare to climate change and social justice, the political landscape was marked by a clash of ideologies and the continued influence of money and celebrity in the electoral process. Here are 10 fascinating facts about the 2024 US elections: Historic Comeback: Former President Donald Trump became the second U. S. president, after Grover Cleveland, to serve non-consecutive terms since 1897. His comeback bid was fueled by a loyal base and a message of "America First" policies. Divided Electorate: The 2024 U. S. election polls painted a picture of a deeply divided electorate, with the race for the White House too close to call. The Republican ticket of Trump and Ohio Senator JD Vance campaigned on a platform of limited government and a hardline stance on immigration, while the Democratic duo of Vice President Kamala Harris and Minnesota Governor Tim Walz put forward a progressive agenda. Record Voter Turnout: The 2024 election saw unprecedented voter participation, with over 160 million Americans casting their ballots. This high level of engagement underscored the profound political polarization and the high stakes involved in the outcome. Battleground States: As in previous elections, the 2024 U. S. election results hinged on the performance of the candidates in the key battleground states, such as Arizona, Georgia, Michigan, Nevada, North Carolina, Pennsylvania, and Wisconsin. On US election day, these states, with a combined 88 electoral votes, proved crucial in determining the overall outcome. Popular Vote vs. Electoral College: The 2024 election once again highlighted the discrepancy between the popular vote and the Electoral College system. While Harris and Walz secured a narrow majority in the Electoral College, Trump received the most votes nationally, with 74 million votes (50. 8%) compared to Harris' 67 million votes (47. 5%). Trump becomes the first Republican candidate to win the popular vote in 20 years. Youth Voter Engagement: One of the notable trends in the 2024 election was the increased voter turnout among individuals aged 18-29, which saw an 8% increase compared to the 2020 election. This younger generation of voters played a significant role in shaping the outcome. Celebrity Endorsements: High-profile figures, including musicians and actors, actively endorsed various candidates, underscoring the increasingly blurred lines between popular culture and the political sphere. Campaign Expenditures: The combined spending by both campaigns exceeded $5 billion, making the 2024 election one of the most expensive in U. S. history. This further highlighted the outsized influence of wealthy donors and special interests in the electoral process. Early Voting: Over 100 million votes were cast before Election Day through early and mail-in voting, accounting for more than 60% of the total votes. This trend, driven in part by the ongoing COVID-19 pandemic, reflected the evolving nature of the electoral process. Midnight Voting Tradition: Dixville Notch, a small New Hampshire town, continued its tradition of being the first to vote at midnight on US Election Day, showcasing the enduring commitment to the democratic process. These 10 fascinating facts from the 2024 U. S. elections provide a glimpse into the complex and dynamic landscape of American politics. As the nation moves forward, the key challenge will be to find ways to bridge the deep partisan divides and address the pressing issues facing the country. The success or failure of the incoming administration in navigating these challenges will have far-reaching implications for the future of American democracy. The 2024 election has once again demonstrated the resilience and adaptability of the U. S. electoral system, as well as the enduring passions and loyalties that shape the political landscape. As the nation looks ahead, the 2024 U. S. elections will undoubtedly be remembered as a pivotal moment in the country's history, one that will continue to shape the course of the nation for years to come. The path forward will require a renewed commitment to bipartisanship, civic engagement and preservation of democratic norms. --- - Published: 2024-11-08 - Modified: 2025-07-21 - URL: https://treelife.in/legal/enforceability-of-non-compete-clauses-in-india/ - Categories: Legal - Tags: employment non compete clause, enforcement of non compete clauses, is non compete clause enforceable in india, non compete clause, non compete clause in employment contract, non compete clause india, what is a non compete clause Introduction In June 2007, tech giant Infosys Ltd. introduced non-compete agreements for its employees1. The clause, which was subsequently made part of the employment agreements, required that post termination of an employee, such employee agrees to not accept any offer of employment from: (i) any Infosys customer (from the last 12 months); and (ii) a named competitor of Infosys (including TCS, Wipro, Accenture, Cognizant and IBM) if the employment would require work with an Infosys customer (from the last 12 months), for a period of 6 months. Following an increased attrition rate in Q4 of Financial Year 2022, the company began to implement this clause2, leading to the Nascent Information Technology Employees Senate (NITES), an IT workers union based out of Pune, filing a complaint with the Union Labour Ministry in April 20223. Deeming the application of the clause post exit of an employee from Infosys to be “illegal, unethical and arbitrary”, NITES demanded the removal of such clauses from the employment agreement. Defending the clause, Infosys issued a statement claiming that the non-compete clause was a “standard business practice in many parts of the world for employment contracts”, to include “controls of reasonable scope and duration” to protect the “confidentiality of information, customer connection and other legitimate business interests”4. While there is limited public information available on the outcome of the discussions between NITES, Infosys and the competent labor authorities, this throws light on an issue that has been the subject of legal discourse in India time and again: enforceability of non-compete contracts. In this piece, we break down what non-compete is; the legal framework governing such contractual provisions; and practical considerations for employers and employees, to facilitate informed decision making at all levels.   What is a Non-compete Clause? Non-compete clauses are a contractual provision whereby a person exiting a business typically agrees to not start a new business, take up employment in or otherwise engage in any manner with a competing entity. Also termed as “negative covenants”, these clauses impose a contractual obligation on the person to not undertake certain activities. Consequently, failure to abide by these contractual restrictions would result in a breach of the contract:  Duration: Non-compete clauses can be for the duration of the employment relationship but also are typically contemplated for a specific period post termination, i. e. , post exit of the individual from the business.   Limitations to Restrictions: These contractual restrictions are usually limited by geographical location or for a fixed period of time having the effect that the said person would be in breach of the non-compete agreement if they were to start a new business/engage with a competing entity within the same geographical area and within such time period. Who is Restricted: These clauses are typically built into employment agreements (particularly of founders and key managerial personnel) where access to confidential and proprietary information pertaining to a business (including with respect to intellectual property) is to be considered; if such information is used by the departing employee/founder/key employee, the likelihood of an unfair business advantage is increased. M&A perspective: Non-compete clauses are also seen in transaction documents executed in mergers and acquisitions, where the value of the investment can be impacted if exiting founders/key employees start or join a competing business, leading to loss of competitive advantage to the acquirer. Can non-compete contracts be enforced in India? Once a breach of contract is determined, the parties to such contract would have the appropriate remedial measures built in, which can typically include compensation for any loss suffered as a result of the breach. However, in order to be able to enforce such remedial measures, it is critical for the underlying contractual obligation itself to be enforceable.  It is against this backdrop that the provisions of the Indian Contract Act, 1872 (“ICA”) become relevant. Section 27 of the ICA stipulates that any agreement in restraint of trade is void. In other words, any agreement that restricts a person from exercising a lawful profession, trade or business of any kind is to that extent void5. Stemming from the fundamental right to practice any profession or occupation protected by Article 19(1)(g) of the Constitution of India, the intent  behind Section 27 of the ICA is to guard against any interference with freedom of trade even if it results in interference with freedom of contract.   However it is important to note that even within the Constitution, the freedoms protected by the fundamental rights are not absolute and can be limited within specified circumstances. Historically, the Supreme Court of India and various high courts across the country have consistently adopted the following approach towards enforceability of such negative covenants:  Reasonableness: The enforceability will be limited to the extent that such a negative covenant is reasonable6; and Legitimacy: The purpose of the negative covenant is to protect the legitimate business interests of the buyer. The restraint cannot be greater than necessary to protect the interest concerned7.   In light of the above, the Indian courts have adopted the approach that these restrictions during the period of employment are valid, as they can be considered legitimate for the protection of the business interests of the company. Against this reasoning, Section 27 would not be violated8. However, such obligations cannot be unconscionable, excessively harsh, unreasonable or one-sided, i. e. , satisfying the requirement of reasonableness and legitimacy. . The controversy associated with such negative covenants arises when they are sought to be enforced beyond the period of employment. In a high profile ruling, the Supreme Court held that a media management company’s non-compete clause that prevented a prominent Indian cricketer from joining their competitor for a specific period of time after their agreement had terminated, could not be enforced9. The principle that enforcement of non-compete beyond the period of employment is void under Section 27 has been well-settled10. In a pattern followed by high courts across the country, post-termination non-compete clauses have generally not been enforced on the rationale that the right to livelihood of a... --- - Published: 2024-10-29 - Modified: 2025-07-21 - URL: https://treelife.in/compliance/shutting-down-a-startup/ - Categories: Compliance - Tags: closing a startup, shut down a startup, shutting down a startup, winding a startup When and Why to Shut Down a Startup? While the startup journey can be exhilarating, as with any business venture, there may come a time when the path forward is a dead-end. Causes such as unsustainable business models, unforeseen market shifts, funding challenges, or a change in vision can impact the lifespan of a startup, leading to the difficult decision to shut down the business. Similar to setting up an enterprise, closing a business requires careful planning and execution, taking into account the applicable laws. This article aims to provide a quick reference guide to navigate the shutting down of an enterprise in compliance with the legal and regulatory framework in India.   Shutting Down a Startup -Step by Step Process The shutting down of an enterprise is a complex and layered process that not only requires strict compliance with the applicable legal framework but also requires structuring such that personal assets are protected and losses during the closure process are minimized. 1. Stakeholder Management Making the decision to shut down an enterprise requires a thorough evaluation of the company’s financial health and obligations, and consultation with key stakeholders (including shareholders and investors). Investors brought into the company as part of the funding process will typically have exit requirements that are contractually negotiated and recorded in the relevant transaction documents. The closure of the company will accordingly have to take into account any contractually agreed liquidation distribution preference. 2. Labour Law Compliance Labour disputes in India are largely governed by the Industrial Disputes Act, 1947 (“IDA”). Subject to the applicability of the IDA to the concerned employee, the company will be required to adhere with strict conditions stipulated by IDA in the event of closure of business. Accordingly, the company will be required to apportion for severance pay and settlement of any outstanding salary or social security contributions that are due and payable by the company. Compliance with the applicable labor laws may also impact the timelines set out for closure of the enterprise. For example, subject to the conditions set out in the IDA, the company may be required to obtain approval for the closure from the competent governmental authority and send prior notice of 60 days intimating employees of the intent of closure. Further, the amount of compensation payable to the employee is also impacted by the circumstances leading to closure. 3. Financial Management In the event of closure, it is mandatory that the creditors of the company (both contractual and statutory) are apportioned for. In this regard it is critical to note that the Indian courts have previously held that funds raised through a share subscription agreement bore the nature of a commercial borrowing, making a claim for unachieved exit/buyback admissible under the Insolvency and Bankruptcy Code, 2016. As such, a clear resolution plan that settles all statutory (including taxation and social security contributions) and contractual liabilities of the company will be required. 4. Closure Option under Company Law - Winding Up The Registrar of Companies (“ROC”) maintains records of incorporation and closing of companies (considered “juristic persons” in law). As such, closure of an enterprise attracts certain statutory processes dependent on the circumstances leading up to the closure. For companies that are yet to settle all liabilities, and further to the introduction of the Insolvency and Bankruptcy Act, 2016 (“IBC”), the companies can close their businesses under the Companies Act, 2013 (“CA”), through a winding up petition submitted to the National Company Law Tribunal (“NCLT”). This process requires a special resolution of the shareholders approving the winding up of the company.  The company (and such other persons as expressly permitted by the CA) will need to file a petition before the NCLT under Section 272 along with specified supporting documentation such as a ‘statement of affairs’ (format prescribed in the law). The petition will be heard by the NCLT, during the process of which the company will be required to advertise the winding up. Once the winding up is satisfied, the NCLT will pass a dissolution order, which dissolves the existence of the company and strikes off its name from the register of companies. This process is largely left up to the discretion of the NCLT, and the tribunal is empowered to appoint a liquidator for the company (through the IBC) or reject a petition on justifiable grounds. The company would be bound by the order of NCLT to complete the winding up and consequent dissolution. 5. Closure Option under Company Law - Strike Off For companies that are not carrying on any business for the two preceding financial years or are dormant, an application can be made directly to the ROC for strike off, thereby skipping the winding up process. However, this is subject to the conditions that the company has extinguished all liabilities and obtained approval of 75% of its shareholders for the strike-off. A public notice is required to be issued in this regard, and unless any contrary reason is found, the ROC will thereafter publish the dissolution notice in the Official Gazette and the company will stand dissolved. Startups are able to avail of a fast-track model implemented by the Ministry of Corporate Affairs, which would allow these companies to close their business within 90 days of applying for the strike-off process. This allows companies to achieve closure quickly, save on unnecessary paperwork and filings and avoid prolonged expenses.   6. Closing Action While the disposal of assets is often built into the resolution of creditor and statutory dues, it is crucial that the company also take steps to close all bank accounts maintained in its name, ensure that applicable registrations under tax and labor laws be canceled, and complete all closing filings with the ROC and competent tax authorities to record the closure and dissolution of the company. This will ensure that the company’s closure is sanctioned and appropriately recorded by the competent governmental authorities. Retaining for Future Legal Compliance Mere closure of the business does not alleviate data security obligations... --- - Published: 2024-10-28 - Modified: 2025-08-07 - URL: https://treelife.in/technology/spacetech-in-india/ - Categories: Emerging Technology - Tags: ISRO, spacetech, spacetech india What is Spacetech and What does it comprise?   Space technology, often shortened to spacetech, refers to the application of engineering and technological advancements for the exploration and utilization of space. It encompasses a vast array of disciplines, from designing and launching satellites to developing advanced propulsion systems for efficient space travel. Ground infrastructure, robotics, space situational awareness, and even life sciences for human spaceflight all fall under the umbrella of space-tech. Spacetech comprises: Upstream Segment: activities involving design, development and production processes necessary for creating space infrastructure and technology. This additionally encompasses material supply to the integration and launch of space vehicles, ensuring successful deployment and operation of spacecraft and satellites. Downstream Segment: activities involving utilization and application of space-based data and services, focusing on the development and deployment of satellite-based products for various sectors. Auxiliary Segment: activities related to space insurance services, space education, training and outreach programs, collaborations and technology transfers, and commercialization of spin-off products.   The space technology sector in India operates under a comprehensive legal and regulatory framework designed to promote innovation, facilitate private sector participation, and protect national interests. This framework is governed by several key regulatory bodies and policies that ensure the sector's growth and compliance with both national and international standards. This handy overview aims to provide a quick reference guide to understand the complex legal and regulatory framework governing India’s space sector.   Key Regulatory Bodies of Spacetech in India S. No. Regulatory Body Role1. Department of Space (DoS)1. The apex body for space activities in India, DoS oversees policy formulation and implementation. 2. DoS coordinates between ISRO, other government agencies, and private entities to ensure policies are in line with national objectives. It also represents India in international space forums. 2. Indian Space Research Organisation (ISRO)1. As India's premier space agency, ISRO is responsible for the planning and execution of space missions, satellite launches, and space research. 2. ISRO governs the operational aspects of space missions, including satellite deployment, mission planning, and research initiatives. It ensures adherence to safety protocols and technical standards. 3. Indian National Space Promotion and Authorization Center (IN-SPACe)1. IN-SPACe acts as a regulatory body to promote and authorize space activities by non-governmental entities. 2. Provides a single-window clearance for private sector space projects, ensuring they meet safety and compliance standards. IN-SPACe facilitates private sector participation by streamlining regulatory processes. 4. NewSpace India Limited (NSIL)1. The commercial arm of ISRO, NSIL is responsible for promoting Indian space capabilities globally. 2. Facilitates commercial satellite launches and space-related services, ensuring compliance with international trade laws. NSIL manages the commercialization of space products, technical consultancy services, and technology transfer. 5. Antrix Corporation Limited (ACL)1. The marketing arm of ISRO, Antrix Corporation Limited is responsible for promoting and commercially exploiting space products, technical consultancy services, and transfer of technologies developed by ISRO. 2. ACL deals with the commercialization of space products and services, including satellite transponder leasing, satellite launches through PSLV and GSLV, marketing of data from Indian remote sensing satellites, and the establishment of ground systems and networks. ACL ensures compliance with international trade and export control regulations. Key Legislations and Policies S. No. StatuePurposeProvision1.  ISRO Act (1969)The ISRO Act was enacted to establish the Indian Space Research Organisation (ISRO) as the primary body responsible for India's space program. The Act defines ISRO's mandate to conduct space research and exploration. It empowers ISRO to develop space technology, launch vehicles, and satellites, and to carry out research in space science. The Act also outlines the organizational structure and governance of ISRO, ensuring it operates under the guidance of the Department of Space. 2. Satellite Communication Policy (1997)This policy aims to foster the growth of a robust domestic satellite communication industry. The policy provides guidelines for satellite communication services, including licensing procedures, spectrum allocation, and operational standards. It promotes the use of satellite technology for telecommunications, broadcasting, and internet services. The policy encourages private sector participation and aims to enhance India's capabilities in satellite communication. 3. Revised Remote Sensing Data Policy (RSDP) (2011)The RSDP regulates the collection, dissemination, and use of satellite remote sensing data. The policy mandates that remote sensing data with a ground resolution of 1 meter or less be acquired only through government channels. It sets guidelines for data acquisition, processing, and distribution to ensure national security and strategic interests. The policy aims to balance data accessibility with security concerns, promoting the use of remote sensing data for sustainable development and disaster management. 4.  NRSC Guidelines (2011)Issued by: ISRO's National Remote Sensing Centre (NRSC)These guidelines focus on regulating the acquisition and dissemination of remote sensing data. The guidelines set standards for data handling, including data quality, accuracy, and security. They outline the procedures for data licensing, usage, and dissemination, ensuring that remote sensing data is used responsibly and in compliance with national policies. 5. ISRO Technology Transfer Policy and Guidelines (2020)To establish a framework for transferring technologies developed by ISRO and the Department of Space (DoS) to industry partners. The policy facilitates the commercialization of ISRO's technologies, promoting their wider application in various industries. It includes guidelines for licensing, royalty agreements, and intellectual property rights. The policy aims to foster innovation and support the growth of the Indian space technology ecosystem by enabling industry access to advanced space technologies. 6.  Geospatial Guidelines, 2021The Geospatial Guidelines aim to liberalize the geospatial data sector in India, promoting ease of access and utilization of geospatial data and private sector participation.  The Geospatial Guidelines, 2021, largely permit foreign investments up to 100% under the automatic route with limited foreign investment restrictions. These guidelines are relevant to satellite-generated data, a key component of the space-tech sector. Additionally, the guidelines remove specific restrictions on satellite-generated data, promoting the wider use of satellite imagery. The provisions also ensure alignment with national privacy laws and international treaties. 7. Foreign Direct Investment (FDI) PolicyAllow for higher FDI limits (up to 74% for satellites, 49% for launch vehicles, and 100% for components). The policy sets guidelines for foreign investments... --- - Published: 2024-10-28 - Modified: 2025-08-07 - URL: https://treelife.in/finance/sme-ipo-listing/ - Categories: Finance - Tags: IPO, sme, SME IPO India, sme ipo listing, SME IPO Platforms In recent years, the SME IPO listing in India has emerged as a vital avenue for small and medium enterprises (SMEs) to access capital and enhance their market presence. With a growing number of platforms facilitating these listings, SMEs can now tap into public funding more easily than ever. This blog will explore the various platforms available for SME IPOs, the eligibility criteria that businesses must meet, and the step-by-step process involved in listing on the stock exchange. Understanding these elements is crucial for entrepreneurs looking to leverage the benefits of going public and drive their growth in a competitive landscape. What are Small and Medium Enterprises (SME)? Small and Medium enterprises (SMEs) are classified as such through the Micro, Small and Medium Enterprises Development Act, 2006, wherein eligibility thresholds are prescribed for enterprises engaged in manufacture or production of goods in specified industries; or enterprises providing or rendering of services, as captured below: CategorySmall EnterpriseMedium EnterpriseEngaged in manufacture or production of goods in specified industriesInvestment in plant and machinery is more than INR 25,00,000 but does not exceed INR 5,00,00,000.  Investment in plant and machinery is more than INR 5,00,00,000 but does not exceed INR 10,00,00,000. Engaged in providing or rendering of servicesInvestment in equipment is more than INR 10,00,000 but does not exceed INR 2,00,00,000. Investment in equipment is more than INR 2,00,00,000 but does not exceed INR 5,00,00,000. Note: When calculating the investment in plant and machinery, the cost of pollution control, research and development, industrial safety devices and such other items as may be specified, by notification, shall be excluded. What is an IPO? Initial Public Offering (IPO) is the first invitation by a company to have their equity securities purchased by the general public. This allows the company to raise capital by inviting public investment into the company. Given that the general public is involved in the fund raising process, the IPO is subject to strict scrutiny and exhaustive regulatory compliances. This is typically undertaken by companies that have a large and established presence, and with a paid up share capital of at least INR 10,00,00,000. Such companies would be traded directly on the platforms hosted by the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE), and are required to strictly comply with regulations prescribed by the Securities and Exchange Board of India (SEBI) from time to time. Why should SMEs explore IPO? SMEs are the backbone of the Indian economy and play a crucial role in job creation, innovation, and overall economic growth. These companies often face challenges when it comes to raising capital for growth as they have limited access to capital. In this context, an IPO is extremely beneficial to an SME: Capital Injection: Public offerings attract a broader pool of investors, enabling SMEs to raise significant funds for growth initiatives like expanding operations, investing in research and development, or acquiring new technologies. Enhanced Credibility: A successful listing serves as a public validation of a company's financial health and governance practices. This newfound credibility can attract valuable partnerships, potential acquisitions, and a wider customer base. Increased Liquidity: Listing on an exchange creates a secondary market for the company's shares. This allows existing investors to easily exit their positions and attracts new investors seeking participation in the company's future. Improved liquidity benefits both the company and its shareholders. What are IPO Listing Platforms? Traditional listing platforms India as hosted on the BSE and NSE are subject to exhaustive regulatory compliances, including multiple layers of approval by SEBI, BSE and/or NSE (as chosen by the company). This can contribute to the inaccessibility of capital leading to the emergence of SME IPO Listing Platforms as a game-changer.   As on date, two IPO Listing Platforms are hosted in India exclusively for SMEs:  BSE SME Platform: Established by the Bombay Stock Exchange (BSE), this platform offers a dedicated marketplace for SMEs to list their shares. It provides a comprehensive support system, including guidance on regulatory requirements and listing procedures. NSE Emerge: This platform, operated by the National Stock Exchange of India (NSE), caters specifically to the needs of growing companies. It offers a transparent and efficient listing process, along with educational resources and investor outreach programs. Operating in accordance with relaxations on IPO processes prescribed for SMEs by SEBI, these platforms create an opportunity for SMEs to take advantage of the expedited process and increase their access to capital.   Why IPO Listing Platforms? To avail the core advantages of going for an IPO, SME IPO Listing Platforms offer a more streamlined and cost-effective path to going public compared to the traditional IPO route. Reduced regulatory requirements and simplified processes make it easier for promising SMEs to access the capital markets. In the following sections, we'll delve deeper into the specifics of these platforms, exploring the eligibility criteria for listing and also address potential challenges and considerations for SMEs contemplating this exciting funding option. These platforms operate on leading stock exchanges and provide a streamlined process for SMEs to go public. By listing their shares on these platforms, SMEs can: Raise capital: Public investors can purchase shares in the company, injecting much-needed funds for expansion and development. Enhanced credibility: A public listing demonstrates a company's financial transparency and stability, potentially attracting more business opportunities and partnerships. Increased liquidity: Shareholders can easily buy and sell shares, providing greater liquidity for the company's stock. Eligibility Criteria for Listing To be eligible for listing on an SME IPO Platform, companies must meet specific criteria established by the Securities and Exchange Board of India (SEBI) and the respective stock exchange. Here's a general overview: Company Type: The company must be a Public Limited Company incorporated under the Companies Act, 1956 or 2013. Track Record: A minimum track record of operations, typically 3-5 years, is often required. Financial Performance: The company must demonstrate consistent profitability and a healthy financial position. Specific requirements for minimum net worth and positive cash flow may apply. Post-Issue Capital: The paid-up capital of the... --- - Published: 2024-10-21 - Modified: 2025-07-21 - URL: https://treelife.in/legal/types-of-agreements-used-in-saas-industry/ - Categories: Legal - Tags: Agreements in SaaS Industry, B2B SaaS agreement, SaaS Agreements, SaaS industry, Software as a Service, Types of Agreements In the ever-evolving landscape of the SaaS industry, understanding the various types of agreements is crucial for businesses to operate effectively and legally. From customer contracts to partner agreements, these legal documents form the backbone of SaaS operations. By navigating the intricacies of these agreements, businesses can protect their intellectual property, establish clear terms of service, and mitigate potential risks. In this comprehensive guide, we will explore the key types of agreements used in the SaaS industry, providing valuable insights for both established companies and startups. What is SaaS?   Software as a Service (“SaaS”), is a way of delivering software applications over the internet. Instead of purchasing and installing software on your computer, you access it online through a subscription. This makes it easier to use and manage, as updates, security, and maintenance are handled by the service provider. Examples of SaaS include tools like Google Workspace or Microsoft 365, where everything is accessible from a web browser. This model is convenient for businesses because it reduces upfront costs and offers scalability based on their needs. What are SaaS Agreements?   However, beneath the surface of this convenient access lies a complex web of agreements that govern the relationship between SaaS providers and their customers, which are essential to ensuring a smooth and secure experience for all parties involved. These agreements outline the terms of using a cloud-based software service. These agreements specify the rights and responsibilities of both parties, covering aspects such as subscription fees, data privacy, service availability, support, and usage limitations. This article delves into the various types of agreements that form the backbone of the SaaS industry and it will explore their key components, importance, and how they work together to create a win-win situation for both SaaS providers and their subscribers. What are the types of Agreement in SaaS Industry In the SaaS industry, various types of agreements are commonly used to establish the terms of service, licensing, and other legal arrangements between the SaaS provider and its customers. Here are some key types of agreements used in the SaaS industry: Terms of Service (ToS) or Terms of Use (ToU) These agreements outline the terms and conditions under which users are allowed to access and use the SaaS platform. They typically cover aspects such as user obligations, limitations of liability, intellectual property rights, privacy policies, and dispute resolution procedures. Key Components: User obligations, limitations of liability, intellectual property rights, privacy policies, dispute resolution procedures. Importance: Provides clarity and sets apt expectations for users regarding acceptable use of the SaaS platform, protecting the provider from misuse and establishing guidelines for resolving disputes. Service Level Agreement (SLA) SLAs define the level of service that the SaaS provider agrees to deliver to its customers, including uptime guarantees, response times for support requests, and performance metrics. SLAs also often outline the remedies available to customers in the event that service levels are not met. Key Components: Uptime guarantees, response times for support requests, performance metrics, remedies for breaches. Importance: Defines the quality of service expected by customers, establishes accountability for the SaaS provider, and offers assurances to customers regarding system reliability and support responsiveness Master Services Agreement (MSA) An MSA is a comprehensive contract that governs the overall relationship between the SaaS provider and the customer. It typically includes general terms and conditions applicable to all services provided, as well as specific terms related to individual transactions or services. Key Components: General terms and conditions, specific terms related to individual transactions or services, payment terms, termination clauses. Importance: Forms the foundation of the contractual relationship between the SaaS provider and the customer, streamlining the process for future transactions and ensuring consistency in terms across multiple agreements. Subscription Agreement: This agreement outlines the terms of the subscription plan selected by the customer, including pricing, payment terms, subscription duration, and any applicable usage limits or restrictions. Key Components: Pricing, payment terms, subscription duration, usage limits, renewal terms. Importance: Specifies the terms of the subscription plan selected by the customer, including pricing and payment obligations, ensuring transparency and clarity in the commercial relationship. Data Processing Agreement (DPA) DPAs are used when the SaaS provider processes personal data on behalf of the customer, particularly in relation to data protection regulations such as GDPR. These agreements specify the rights and obligations of both parties regarding the processing and protection of personal data. Key Components: Data processing obligations, data security measures, rights and responsibilities of both parties regarding personal data as laid down in India’s Digital Personal Data Protection Act 2023, and GDPR compliance. Importance: Ensures compliance with data protection regulations, establishes safeguards for the processing of personal data, and defines the roles and responsibilities of each party in protecting data privacy. Non-Disclosure Agreement (NDA) NDAs are used to protect confidential information exchanged between the SaaS provider and the customer during the course of their relationship. They prevent either party from disclosing sensitive information to third parties without consent. Key Components: Definition of confidential information, obligations of confidentiality, exceptions to confidentiality, duration of the agreement. Importance: Protects sensitive information shared between parties from unauthorized disclosure, fostering trust and enabling the exchange of confidential information necessary for business collaboration. End User License Agreement (EULA) If the SaaS platform includes downloadable software or applications, an EULA may be required to govern the use of that software by end users. EULAs specify the rights and restrictions associated with the use of the software. Key Components: Software license grant, permitted uses and restrictions, intellectual property rights, termination clauses. Importance: Establishes the rights and obligations of end users regarding the use of software, ensuring compliance with licensing terms and protecting the provider's intellectual property rights. Beta Testing Agreement When a SaaS provider offers a beta version of its software for testing purposes, a beta testing agreement may be used to outline the terms and conditions of the beta program, including feedback requirements, confidentiality obligations, and limitations of liability. Key Components: Scope of the beta program, feedback requirements, confidentiality obligations,... --- - Published: 2024-10-21 - Modified: 2025-07-22 - URL: https://treelife.in/legal/board-observers-navigating-the-influence-without-the-vote/ - Categories: Legal - Tags: board observers In the complex world of corporate governance, the role of board observers has emerged as a key component, especially in the wake of increased investor scrutiny, particularly in the private equity (PE) and venture capital (VC) sectors. With growing financial uncertainty, investors are looking for ways to maintain a closer watch on companies without assuming directorial risks. One such method is by appointing a board observer, a role that, although devoid of statutory voting power, can wield significant influence. A board observer's position in the intricate realm of corporate governance is crucial and varied. With increased distress particularly in the private equity sector, we may see investors deploying various tools to keep a closer eye on the company’s financial performance. Appointing a board observer is one such tool. Despite not having statutory authority or the ability to vote, board observers have a special position of influence and can provide productive insights. Board observers quite literally are individuals who are fundamentally appointed with the task to ‘observe’. They act as representatives typically from major investors, strategic partners, or key stakeholders, and are granted access to board meetings. Understanding the Role of Board Observers Board observers are not formal members of the board, nor do they hold the power to vote on corporate decisions. However, their presence in board meetings is a tool used primarily by major investors, strategic partners, and other key stakeholders to monitor the company's strategic direction and financial health. These individuals are entrusted with providing valuable insights without the direct legal responsibilities that directors typically face. Although board observers do not have a formal vote, their influence can shape company strategies. This unique role enables them to represent the interests of investors or stakeholders while remaining free from the direct obligations of fiduciary duties. Board Observer Rights – How does it work? Investors involved in the venture capital (VC) and private equity (PE) spaces often negotiate for a board seat with the intent to contribute to the decision-making process and protect their interests by having representation on the board. A recent trend, however, indicates that these investors are reluctant to formally exercise their nomination rights owing to the possible risks/liabilities associated with directorships, such as fiduciary duties and vicarious liability that is often intertwined in the acts and omissions of the company, which can lead to such directors being identified as “officers in default”. The rights and responsibilities of a board observer are distinct from those of a nominee director, primarily due to the lack of formal voting authority. Accordingly, board observers are relieved from the direct fiduciary duties that are normally connected with board membership since their position is specified contractually rather than by statutory board responsibilities. Is a Board Observer an officer in default? The Act provides a definition for the term “Officer” which inter alia includes any person in accordance with whose directions or instructions the board of directors of the company or any one or more of the directors are accustomed to act. Additionally, the term “Officer in Default” states that an Officer of the company who is in default will incur liability in terms of imprisonment, penalties, fines or otherwise, regardless of their lack of an official position in the company. Accordingly, any person who exercises substantial decision-making authority on the board of the company may be covered as an Officer in Default. While board observers may not be equivalent to formal directors, the litmus test lies in determining where the decision-making power truly resides, leading to potential liabilities that may surpass the protections sought by investors.   Observers are not subject to a company's breach of any statutory provisions because their appointment is based on a contractual obligation rather than a statutory one, unlike nominee directors who are permitted to participate in board meetings. Even though board observers are not designated as directors, they run the risk of being seen as "Shadow Directors" if they have a significant amount of authority or influence over the decisions made by the company. The Legal Perspective on Board Observers Unlike nominee directors, who are formally appointed and legally bound to fulfill statutory responsibilities, board observers are appointed through contractual obligations. This shields them from liabilities tied to breaches of statutory provisions. However, as their influence grows, so does the risk of being classified as shadow directors, particularly if they are perceived as playing a significant role in decision-making. Conclusion Corporate Governance is an evolving concept, especially in the context of active investor participation. In order to foster a corporate environment that is legally robust, it will be imperative to strike a balance between active investor participation and legal prudence. That being said, as businesses continue to navigate complex and evolving landscapes, the value of a well-integrated board observer cannot be overstated. A board observer can bring clarity to the business and operations of an investee company without attaching the risk of incurring statutory liability for acts/omissions by the company. This is a significant factor that makes the option of a board observer nomination more attractive to PE and VC investors, vis-a-vis the appointment of a nominee director. FAQs on Board Observers What is a board observer in corporate governance? A board observer is an individual appointed by investors or key stakeholders to attend board meetings without having formal voting power. They offer insights and monitor the company's performance, primarily to protect the interests of those they represent. How do board observers differ from directors? Unlike board directors, board observers do not have the authority to vote on decisions or take on fiduciary duties. Their role is more about observation and providing feedback rather than participating in the decision-making process. What are the rights of a board observer? A board observer has the right to attend board meetings and access key company information, but they do not hold any voting rights. Their responsibilities and rights are typically outlined in a contractual agreement between the company and the observer's appointing party. Can board observers influence corporate decisions?... --- - Published: 2024-10-21 - Modified: 2025-07-22 - URL: https://treelife.in/compliance/navigating-the-cert-in-directions-implications-and-challenges-for-indian-businesses/ - Categories: Compliance - Tags: Cert In Directions, CERT-IN Introduction Reason for these Cyber Security Directions In an increasingly digital world, the threats posed by cyberattacks have become a significant concern for organizations worldwide. Recognizing the urgency of the situation, on April 28, 2022, the Indian Computer Emergency Response Team (“CERT-IN”) introduced new directives that mandate all cybersecurity incidents be reported within a stringent timeframe. This move marks a significant shift in India's approach to cybersecurity, underscoring the need for rapid response and heightened vigilance. Scenario before these Directions Prior to these directives, many organizations struggled with limited visibility into cybersecurity threats, leading to incidents that were either inadequately reported or overlooked altogether. The lack of comprehensive analysis and investigation of these incidents often left critical gaps in understanding and mitigating cyber risks. With the implementation of this directive, organizations are now compelled to reassess their internal cybersecurity protocols, ensuring that robust measures are in place to meet these new reporting requirements. Highlights of the CERT-IN Directions Applicability These directions cover all organisations that come within the purview of the Information Technology Act, 2000.   Individuals, Enterprises, and VPN Service Providers are excluded from following these directions.   Types of Incidents to be Reported The directions provide an exhaustive list of incidents that need to be reported within the timeframe mentioned (refer Annexure I). In addition to these directions, the entities to whom these directions are applicable also need to continue following Rule 12 of the Information Technology (The Indian Computer Emergency Response Team and Manner of Performing Functions and Duties) Rules, 2013, and report the incidents as elaborated therein.   Timelines and How to Report Timeline. All incidents need to be reported to CERT-IN within 6 (Six) hours from the occurrence of the incident or of the incident being brought to the respective Point of Contact’s (“POC”) notice.   Reporting. Incidents can be reported to CERT-IN via Email at ‘incidents@cert-in. org. in’, over Phone at ‘1800-11-4949’ or via Fax at ‘1800-11-6969’. Further details regarding reporting and the format to be followed are uploaded at ‘www. cert-in. org. in’. Designated Point of Contact (POC) The reporting entities are mandated to designate a POC to interface with CERT-IN. All communications from CERT-IN seeking information and providing directions for compliance shall be sent to the said POC. Maintenance of Logs The directions mandate the reporting entities to enable logs of all their information and communications technology systems (“ICT”) and maintain them securely for a period of 180 days. The ambit of this direction is broad and has potential of bringing in such entities who do not have physical presence in India but deal with any computer source present in India.   ICT Clock Synchronization Organizations are required to synchronize the clocks of all their ICT systems by connecting to the Network Time Protocol (“NTP”) Server provided by the National Informatics Centre (“NIC”) or the National Physical Laboratory (“NPL”), or by using NTP servers that can be traced back to these sources. The details of the NTP Servers of NIC and NPL are currently as follows: NIC – ‘samay1. nic. in’, ‘samay2. nic. in’ NPL – ‘time. nplindia. org’ However, the government has provided some relief, that not all companies are required to synchronize their system clocks with the time provided by the NIC or the NPL. Organizations with infrastructure across multiple regions, such as cloud service providers, are permitted to use their own time sources, provided there is no significant deviation from the time set by NPL and NIC. Challenges Faced and Recommendations Challenges Limited Infrastructure and Resources: Many companies, especially tech startups may struggle to develop the necessary capabilities for large-scale data collection, storage, and management needed to report incidents within a six-hour timeframe. Stringent Guidelines compared to International Standards: For example, Singapore’s data protection laws require cyber breaches to be reported within three days, which aligns with the General Data Protection Regulation (GDPR). Increasing complexity of Cybercrime Detection: Identifying cybersecurity breaches can take days or even months. Additionally, the new guidelines have expanded the list of reportable incidents from 10 to 20, now including attacks on IoT devices. Currently, many organizations do not have an integrated framework that can monitor breaches across different platforms and devices, making it even more challenging to detect and report incidents. Recommendations to comply with the 6 hours Timeframe Reassess Practices and Procedures: Organisations, especially tech startups should review and update their breach reporting protocols to align with CERT-IN directions. This includes evaluating breach severity, clarifying reporting responsibilities among involved parties, and planning for non-compliance risks. Enhance Organizational Capabilities: Startups need to strengthen their ability to quickly identify and report cyber breaches. This includes training staff, conducting regular security audits, and managing personal device use. Given their limited resources, robust cybersecurity practices are vital for startups to protect against attacks and ensure their growth. Enable and Maintain Logs: CERT-IN requires organizations to enable and maintain logs. Startups should carefully select which logs to maintain based on their industry to ensure they can promptly identify and report cyber incidents, staying compliant with the reporting timeframe. Consequences for Non-compliance Failure to comply with the directions can result in imprisonment for up to 1 year and/ or a fine of up to INR 1 Crore (approximately USD 1,20,000). Other penalties under the IT Act may also apply, such as the confiscation of the involved computer or computer system. If a company commits the offence, anyone responsible for the company's operations at the time will also be liable. Furthermore, if the contravention occurred with the consent, involvement, or neglect of a director, manager, secretary, or other officer, that individual will also be considered guilty and subject to legal action. Conclusion The CERT-IN Directions issued on 28th April 2022 mark a significant step towards strengthening India's cybersecurity framework. These directions introduce stringent reporting timelines, enhanced data retention requirements, and new compliance obligations for service providers, intermediaries, and other key entities. By mandating swift reporting of cyber incidents within 6 hours and enforcing strict penalties for non-compliance, CERT-IN aims to... --- - Published: 2024-10-18 - Modified: 2025-07-21 - URL: https://treelife.in/finance/difference-between-internal-audit-and-statutory-audit/ - Categories: Finance - Tags: Difference between Internal Audit And Statutory Audit, Internal Audit, Internal Audit vs Statutory Audit, Internal vs Statutory Audit, Statutory Audit In the accounting realm, there are two primary types of audits: internal audits and statutory audits. Both audits are essential for reviewing an organization’s financial records, but they differ significantly in their objectives, scope, and target audience. While we all know about Internal and Statutory audit, understanding the difference between internal audit and statutory audit is important because they serve different purposes and are crucial for businesses aiming to enhance their financial transparency and compliance. Internal audit is a form of assurance to the board and management of a company that the company’s processes, systems, operations, and financials are in compliance with the company’s policies and procedures. Statutory audit, on the other hand, is conducted to ensure that the company’s financial statements are true and fair, and comply with the relevant statutes and regulations. This article further elaborates the Difference between Statutory Audit and Internal Audit Internal Audit: Key Features and Importance An internal audit involves a thorough examination of an organization’s financial records and internal controls by an independent entity, typically an internal audit department. The primary aim of an internal audit is to provide an unbiased evaluation of an organization’s operations, helping management pinpoint areas for improvement. Here’s a closer look at the key features of internal audits: Objectives of Internal Audits The main goal of an internal audit is to ensure that an organization’s internal controls and risk management processes are operating effectively. These audits assess the efficiency, effectiveness, and economy of an organization’s operations, offering valuable insights into potential enhancements. Scope of Internal Audits The scope of an internal audit is defined by the organization’s internal audit department and can encompass all aspects of operations, including financial, operational, and compliance areas. This comprehensive approach ensures that all relevant risks and controls are evaluated. Frequency of Internal Audits Internal audits are generally conducted on a regular schedule, such as quarterly, semi-annually, or annually. This consistent oversight helps organizations maintain robust internal controls and adapt to changing risks. Reporting of Internal Audits After the audit is completed, reports are generated for management, outlining findings and recommendations. These insights are crucial for driving improvements in the organization’s operations, ensuring ongoing compliance and operational excellence. By understanding the significance of internal audits, organizations can better leverage these evaluations to enhance their financial integrity and operational efficiency. Statutory Audits: Key Features and Importance A statutory audit is a mandatory examination of an organization’s financial records conducted by an independent auditor appointed by a government or regulatory body. The primary goal of a statutory audit is to provide assurance that an organization’s financial statements present a true and fair view. Here’s an overview of the key features of statutory audits: Objectives of Statutory Audits The main objective of a statutory audit is to deliver an independent opinion on the organization’s financial statements. This opinion assures stakeholders—including shareholders, investors, and lenders—that the financial statements are accurate and reliable. Scope of Statutory Audits The scope of a statutory audit is defined by the relevant regulatory body or government agency that mandates the audit. Typically, it encompasses a thorough review of the financial statements and accompanying notes, ensuring comprehensive scrutiny of the organization's financial health. Frequency of Statutory Audits Statutory audits are generally conducted annually, although the frequency can vary based on specific regulatory requirements or the nature of the organization’s operations. Reporting of Statutory Audits After the audit is complete, the auditor prepares a report intended for stakeholders such as shareholders, investors, and lenders. The auditor’s opinion is included in the organization’s annual report, which is made publicly available, enhancing transparency and accountability. By understanding the importance of statutory audits, organizations can ensure compliance with regulatory standards and build trust with their stakeholders. This guide provides an overview of the differences between the two types of audits, including the scope and objectives of each. Internal Audit vs. Statutory Audit: Comparative Table Sr No. ParticularsInternal AuditStatutory Audit1MeaningInternal Audit is carried out by people within the Company or even external Chartered Accounts (CAs) or CA firms or other professionals to evaluate the internal controls, processes, management, corporate governance, etc. these audits also provide management with the tools necessary to attain operational efficiency by identifying problems and correcting lapses before they are discovered in an external auditStatutory Audit is carried out annually by Practising Chartered Accountants (CAs) or CA Firms who are independent of the Company being audited. A statutory audit is a legally required review of the accuracy of a company’s financial statements and records. The purpose of a statutory audit is to determine whether an organization provides a fair and accurate representation of its financial position2QualificationAn Internal Auditor need not necessarily be a Chartered Accountant. It can be conducted by both CAs as well as non-CAs. Statutory Audits can be conducted only by Practising Chartered Accountants and CA Firms. 3AppointmentInternal Auditors are appointed by the management of the Company. Form MGT-14 is to be filed with ROCStatutory Auditors appointed by the Shareholders of the Company in its Annual General Meeting. Form ADT-1 is to be filed with ROC. 4PurposeInternal Audit is majorly conducted to review the internal controls, risk management, governance, and operations of the Company and to try and prevent or detect errors and frauds. Statutory Audit is conducted annually to form an opinion on the financial statements of the Company i. e whether they give an accurate and fair view of the financial position and financial affairs of the Company. 5Reporting ResponsibilitiesReports are submitted to the management of the Company being audited. Reports are submitted to the shareholders of the Company being audited. 6Frequency of AuditConducted as per the requirements of the management. Conducted annually as per the statute. 7IndependenceAn internal auditor may or may not be independent of the entity being audited. A statutory auditor must always be independent. 8Removal of auditorInternal auditors can be removed by the managementStatutory Auditors can be removed by shareholders in an AGM only. 9Regulatory requirementsInternal audit is not a regulatory requirement for all private limited companies.... --- - Published: 2024-10-17 - Modified: 2025-08-07 - URL: https://treelife.in/reports/navigating-gift-city-a-comprehensive-guide/ - Categories: Reports - Tags: GIFT, GIFT city, IFSC, International Financial Services Centre DOWNLOAD FULL PDF As India marches towards its goal of becoming a $5 trillion economy, innovation and global connectivity in finance have become critical components of this journey. At the heart of this transformation lies the Gujarat International Finance Tec-City (GIFT City)—India’s first operational International Financial Services Centre (IFSC). Launched in 2007, GIFT City is not just a hub for international finance; it represents India’s vision of becoming a leader in global finance, technology, and innovation. GIFT IFSC provides a comprehensive platform for financial activities, including banking, insurance, capital markets, FinTech, and Fund Management Entities (FMEs). Its attractive tax incentives and solid regulatory framework make it a gateway for both inbound and outbound global investments, drawing businesses and investors from around the world. At Treelife, we are excited to present "Navigating GIFT City: A Comprehensive Guide to India’s First International Financial Services Centre (IFSC). " This guide offers insights into the current legal, tax, and regulatory framework within GIFT IFSC, highlighting the strategic advantages of establishing a presence here, with a focus on the FinTech and Fund Management sectors. Whether you’re an investor, financial institution, or corporate entity exploring opportunities, we believe this guide will be a valuable resource in navigating the exciting prospects within GIFT IFSC. What Does GIFT City Offer? GIFT City is positioned as a global hub for financial services, offering a range of services across banking, insurance, capital markets, FinTech, and Fund Management Entities (FMEs). By combining smart infrastructure and a favorable regulatory environment, GIFT City is becoming the go-to destination for businesses seeking ease of doing business, innovation, and access to global markets. Here are some key takeaways from the guide: 1. Introduction to GIFT City and IFSCA GIFT City is the epitome of India's ambition to establish a world-class international financial center. The International Financial Services Centres Authority (IFSCA) is the primary regulatory body that oversees operations within GIFT City, ensuring a seamless and globally competitive financial environment. IFSCA's unified framework offers businesses ease of compliance and flexibility, making it an attractive hub for both domestic and international entities. 2. Regulatory Framework for Permissible Sectors with Treelife Insights Our guide provides an in-depth look at the regulatory landscape governing GIFT City’s key sectors, including banking, insurance, capital markets, and many more, with a special focus on FinTech, and Fund Management Entities (FMEs). Alongside Treelife insights, we highlight how the city’s regulatory framework promotes innovation, offering businesses a fertile ground for growth.   3. Setup Process Our guide walks you through the step-by-step setup process for entities looking to establish operations. Whether you are a startup, a financial institution, or a multinational company, guide through GIFT City’s infrastructure and compliance processes. 4. Tax Regime One of the standout advantages of operating within GIFT City is its favorable tax regime. Businesses enjoy significant tax exemptions, including a 100% tax holiday on profits for 10 out of 15 years, exemptions on GST, and capital gains tax benefits. These incentives are designed to attract global businesses and investors, positioning GIFT City as a competitive alternative to other international financial hubs. Our guide details these tax benefits and how businesses can leverage them for maximum advantage. Why This Guide is Essential Our guide provides a comprehensive overview of the opportunities within GIFT City, focusing on FinTech and Fund Management sectors. It also includes a detailed analysis of the tax incentives, setup processes, and regulatory requirements that make GIFT City an attractive destination for global financial institutions. Whether you're an investor looking to tap into India’s expanding economy, or a business exploring new markets, this guide will serve as your roadmap to success within GIFT City. Download the Guide Discover how GIFT City is shaping the future of finance and how you can be part of this exciting journey. Download our guide to learn more about the opportunities, regulatory framework for the permissible sectors, incentives, and innovations that await in India’s first IFSC. For any questions or further information, feel free to reach out to us at gift@treelife. in. --- - Published: 2024-10-11 - Modified: 2025-08-07 - URL: https://treelife.in/legal/equity-dilution-in-india/ - Categories: Legal - Tags: Dilution of Equity in India, Equity Dilution in India, How Does Equity Dilution Work, What is Equity Dilution Equity dilution is a critical concept in the realm of finance, particularly in the context of corporate structures and investments. In the dynamic landscape of India's burgeoning economy where businesses constantly seek avenues for growth and expansion, understanding the intricacies of equity dilution becomes paramount for entrepreneurs, investors, and stakeholders alike. This article delves into the multifaceted aspects of equity dilution providing a comprehensive overview of its definition, mechanics, underlying causes, and real-life examples. By unraveling the complexities surrounding this phenomenon, the article will give valuable insights into its implications for companies, shareholders, and the broader market dynamics. What Is Equity Dilution? Equity dilution refers to the reduction in ownership percentage and/or value of existing shares in a company as a result of any circumstance resulting in either a drop in the valuation of the shares itself or upon new securities being issued, causing a decrease in the overall stake. Equity dilution is a mathematical consequence of commonly undertaken corporate decisions such as raising funding, incentivizing employees through stock options, or acquisition/liquidation of any businesses. While equity dilution is a common phenomenon in corporate finance, its implications can be far-reaching and have significant effects on the company's stakeholders.   In the context of India, where innovation, entrepreneurship and investment in the startup ecosystem are thriving, equity dilution plays a pivotal role in shaping the trajectory of businesses across industries. Founders often resort to equity dilution as a means to access much-needed capital for growth and expansion. By selling a portion of their ownership stake to investors, founders can infuse funds into the business, fueling innovation, scaling operations, and penetrating new markets. However, equity dilution is not without its challenges. For existing shareholders, the prospect of their ownership stake being diluted can be concerning, as it can dilute not only the impact of their voting rights and stake on future earnings, but also the value of the shares themselves, potentially triggering disagreements between shareholders and founders regarding the company's worth. When Does Equity Dilution Happen? Equity dilution or share dilution is a is caused by any of the following actions:  Conversion by holders of optionable securities: Holders of optionable securities (i. e. , securities they have a right to purchase and hold title in their name once successfully purchased) may convert their holdings into common shares by exercising their stock options, which will increase the company's ownership stake. This includes employees, board members, and other individuals. Mergers and acquisitions: In case of a merger of corporate entities or amalgamation/acquisition thereof, the resultant entity may buy out the existing shareholders or have a lower valuation, leading to a lower price per share and an economic dilution of the equity stake. Issue of new stock: A company may issue new securities as part of a funding round. Where any equity shares or equity securities are issued, the existing shareholders’ would see a dilution to their shareholding on a fully diluted basis (i. e. , all convertible securities are converted into equity shares for the purpose of calculation). Working of Equity Dilution Given the nuanced commercial terms involved, a company may opt to pursue any of the following in the ordinary course of business, and as a result experience equity dilution: Issuing New Shares for Capital: This is the most common cause of dilution. Companies raise capital by issuing new securities to investors. The more shares issued, the smaller the percentage of ownership held by existing shareholders ultimately becomes. Economic dilution happens here when the shares are issued at a lower price than the one paid by the existing shareholders. Employee Stock Options (ESOPs): When companies grant employees stock options as part of their compensation package, they are essentially creating a pool of shares that will only be issued in the future to employees. The right to purchase these securities (at a discounted price) is first granted to an employee, creating an option. Upon fulfillment of the conditions of the ESOP policy, employees exercise their options and purchase these shares in their name. The creation or increase of an ESOP pool will lead to a mathematical dilution in the overall percentage distribution, affecting a shareholder’s individual stake in the company. Convertible Debt: Some debt instruments, such as convertible notes or compulsorily convertible debentures, can be converted into equity shares at a later date and on certain predetermined conversion terms. This conversion leads to an increase in the total number of equity shares, leading to dilution of the individual percentage stakes. Depending on the terms of the convertible debt securities, there could also be an economic dilution of the value of the equity shares held by existing shareholders. Stock Splits: While a stock split doesn't technically change the total value of a company's equity, it does increase the number of outstanding shares. For example, a 2-for-1 stock split doubles the number of shares outstanding, which dilutes ownership percentages without affecting the overall company value. Acquisitions Using Shares: When a company acquires another company using its own shares as currency, it issues new shares to the acquired company's shareholders. This increases the total number of outstanding shares and dilutes existing shareholders' ownership. This is commonly seen with schemes of arrangement between two sister companies under common ownership and control. Reacquired Stock Issuances: If a company repurchases or buys back its own shares (reacquired stock) and then issues them later, it can dilute the existing shareholders' ownership. This impact can be both stake-wise and economic, especially if the shares are essentially reissued at a lower price than the original price. Subsidiary Formation: When a company forms a subsidiary and issues shares in that subsidiary, it technically dilutes its own ownership stake. However, this is usually done for strategic reasons and doesn't necessarily impact the value of the parent company. Example of Equity Dilution Infographic Illustration Fundamentally, each company is made of 100% shares (remember the one whole of something is always 100%). Let’s understand this with an example to get clarity. 2 Founders viz. A and B... --- - Published: 2024-10-11 - Modified: 2025-08-07 - URL: https://treelife.in/legal/dispute-resolution-in-the-articles-of-association/ - Categories: Legal - Tags: AOA, articles of association, dispute resolution, MOA Introduction As part and parcel of a transaction, companies seeking investment provide their investors with certain rights, which are contractually negotiated. These range from receiving periodic reports on the business and financials of the company to representation on the board of directors and the right to be involved in certain key decisions required to be taken by the company in the course of their growth. Such rights are typically requested by investors based on factors such as the nature of the investment (i. e. , financial or strategic) and the level of insight into the business, operations and management of the company required. In such transactions, these rights (and the extent) are agreed upon and captured in a shareholders' agreement ("SHA") between the parties, whereas the rights and obligations pertaining to the fundraising itself are governed by the investment agreement.  Typically, investors (especially foreign) and companies/founders agree to arbitrate any disputes arising from the investment agreement or the SHA. However, referring a dispute to arbitration is often not as clear-cut as a contractual agreement between parties. Indian courts have repeatedly been required to provide rulings on whether or not arbitration can be invoked by the parties to a SHA. This issue is complicated further by conflicting judicial precedents which have ultimately resulted in an unclear understanding of the law forming the basis of how parties can agree to arbitrate any disputes.  In this article Dispute Resolution in the Articles of Association (AOA), we have provided an overview of the contested legal position and our suggestions for navigating the murky landscape, with the fundamental goal of ensuring the parties' contractually documented intent is protected and legally enforceable. Relationship between a Shareholders’ Agreement and the Articles of Association (‘AOA’) What is the AOA? Similar to how the constitution of India forms the basis of Indian democracy, the memorandum of association ('MOA') and AOA form the basis for a company's legal existence. The MOA can be seen as the constitutional document that lays down the fundamental elements and broad scope within which the company, business, and operations will typically operate. However, it is the AOA that puts in place a 'rulebook', prescribing the regulations and by-laws that govern the company and in effect, enshrining and giving effect to the principles of the MOA. It is crucial to understand that because a company is seen as a separate legal person, the AOA is a critical document that establishes the legal relationship between the shareholders of the company inter se and with the company. In order to lay the framework for the operations of the company, an AOA will include provisions (in accordance with applicable laws) that:  (i) regulate internal affairs and operations of the company;  (ii) provide clarity on procedures the company must follow;  (iii) govern the issue/buyback of securities and clarify the legal rights and obligations of shareholders holding different classes of securities; and  (iv) legitimize the authority of the board of directors and their functions.   It is, therefore, a reasonable presumption that any action undertaken by a company must be authorised by the AOA/MOA. Any amendment or alteration to these documents would not only require the assent of the board, but also of the shareholders (i. e. , members of the company), and requires filing with the competent Registrar of Companies under the Companies Act, 2013. While these procedures are in place primarily to protect the shareholders from mischief by the company, the lengthy process involved in altering the AOA serves to highlight how essential a document it is for a company's action to hold legal justification. How does the shareholders’ agreement typically become enforceable?   Often in transaction documents, a critical mechanism that enables the enforcement of the investor rights agreed in the SHA is captured in the investment agreement, where as part of the conditions required to be satisfied upon receipt of the investment amount by the company, the company, and founders must also ensure that the AOA is suitably amended to codify the investor rights.   However, the legal justification for this action in itself finds a conflict between two different schools regarding the enforceability of provisions from the SHA that have not been incorporated into the AOA:  (i) The "incorporation" view – the prominent authority for this view is the ruling of the High Court of Delhi in World Phone India Pvt. Ltd. & Ors. v. WPI Group Inc. USA (the “World Phone Case”), where it was held that a board resolution passed without considering an affirmative voting right granted to a shareholder under a joint venture agreement, was legally valid in light of the company’s AOA, which contained no such restriction. Relying on the decision of the Supreme Court in V. B. Rangaraj v. V. B. Gopalakrishnan (the “Rangaraj Case”) and subsequent decision of the Bombay High Court in IL&FS Trust Co. Ltd. v. Birla Perucchini Ltd. (the “Birla Perucchini Case”), the Delhi High Court was of the view that the joint venture agreement could not bind the company unless incorporated into the AOA.   The Rangaraj Case is of particular interest in this school of thought because while the issue dealt with share transfer restrictions, the Supreme Court held that it was evident from the provisions of the erstwhile Companies Act, 1956 that the transfer of shares is a matter regulated by the AOA of the subject company and any restriction not specified in the AOA was not binding on the company or its shareholders. Crucially, the World Phone Case poses a problem in the legal interpretation of the "incorporation" view because the Delhi High Court has carried the ratio of the Rangaraj Case to a logical conclusion and observed that even where the subject company is party to an SHA, the provisions regarding management of affairs of the company cannot be enforced unless incorporated into the AOA.   (ii) the “contractual” view – the prominent authority for this view is the ruling of the Supreme Court in Vodafone International Holdings B. V. v Union... --- - Published: 2024-10-09 - Modified: 2025-07-21 - URL: https://treelife.in/legal/vesting-in-india/ - Categories: Legal - Tags: vested stock options, vesting, vesting period, vesting schedules What is Vesting? “Vesting” is a contractual structure to facilitate gradual transfer of ownership. It is a legal term referring to the process in which a person secures his ownership of (legally referred to as “title to”) certain assets over a period of time.   What is a Vesting Period? Vesting is a typical construct built around ownership of shares, and also refers to the process by which conditional ownership of such shares is converted to full ownership (including rights of transferability) over a fixed period of time. A critical feature of vesting is that the person will only have conditional ownership of such shares until the fixed period (legally referred to as the “Vesting Period”) is completed.   What are Vesting Schedules? Depending on the needs of the contractual relationship and subject to applicable laws, vesting can adopt many forms. However, a common element found in most forms of vesting is the “Vesting Schedule”, i. e. , the breakdown showing how the relevant assets/shares will be transferred to the ownership of the person over the Vesting Period.   Types of Vesting Schedules (i) Uniform or Linear Vesting - a simple process through which the person receives a percentage of their shares over a fixed period of time. Eg: if an employee is granted 10,000 options with 25% of them vesting per year for 4 years, then the employee will have vested 2,500 shares after 1 year and can exercise the rights to the same in accordance with the applicable policies.   (ii) Bullet Vesting - usually employed on a need-based circumstance in the event of any operational delay impacting the Vesting Schedule, bullet vesting works in one shot, completing the vesting in one instance. (iii) Performance-based Vesting - tied typically to the performance of an employee in relation to stock option grants, performance based vesting will depend on the satisfaction of a performance condition. This can be in the nature of milestones to be achieved by the employee or revenue goals to be achieved by the company. The critical feature here is that there is no fixed Vesting Period in such a model, and the vesting is instead directly tied to the achievement of performance goals. (iv) Hybrid Vesting - usually a combination of linear and performanced-based vesting, this type of vesting will often require the fulfillment of tenure and performance requirements. Eg: an employee is required to complete a four year tenure in addition to satisfying certain key performance indicators in order to receive the full set of options/benefits.   (v) Cliff Vesting - in such a model, no benefits are vested in a person until a certain predetermined point in time is reached. Once that time is met, all options/benefits become fully vested at once. Eg: if a 1-year cliff vesting is employed for grant of employee stock options, the employee will receive 100% of the options only once the full year has been completed with the company.   Examples of Vesting: Employee Stock Option Plans and Founder Vesting - Explained: Vesting is largely relevant to startups in two main areas: (i) employee stock option plans (“ESOP”); and (ii) lock-in of founder shares:  1. Employee Stock Option Plans: ESOPs are a vital component of modern employee compensation structures and prove a great tool for employee motivation and retention. Through an ESOP scheme, an employee is: (i) given the right to purchase certain shares in his name through the ESOP pool formulated by the employer company (“Grant of Option”); (ii) required to complete the Vesting Period during which the shares will vest in his name; and (iii) exercise the right to purchase the shares upon completion of the Vesting Schedule at a predetermined price (as per terms of the ESOP scheme). It is important to note here that under Indian law, the Securities Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 (applicable to listed public companies) and the Companies (Share Capital and Debentures) Rules, 2014 (applicable to private and unlisted public companies) both prescribe a mandatory minimum Vesting Period of 1 year from the date of Grant of Option. As such, any ESOP scheme formulated by an Indian company will need to comply with this requirement. ESOPs typically see use of any of the above described Vesting Schedules. This is because Vesting Schedules primarily serve as a great tool to employee motivation and retention, as when ESOPs are granted to employees, they become part owners of the company and consequently, aligning their performance and goals with those of the company over the Vesting Schedule proves beneficial for overall growth. Further, employee turnover is a huge cost incurred by a company and grant of ESOPs acts as a means to dissuade employees from leaving until their options/grants have fully vested. 2. Founder Vesting: In a funding round - especially where an institutional investor is brought onto the capitalisation table of a company for the first time, much of the trust forming the basis of the investment is rooted in the demonstrated results, passion, experience and skillset of the founders. Consequently, in order to secure the investment for a minimum period and to ensure the founders do not exit the company prematurely, the parties will typically agree to a lock-in of the founders’ shares, which will give them conditional ownership until completion of a Vesting Schedule, at which point in time the unconditional ownership of all their shares is restored to the founders. Founder Vesting typically sees use of linear, bullet or cliff vesting. Given that the founders are originally shareholders of the company who voluntarily accept restrictions on their shares for a fixed period of time, performance-based or hybrid vesting would not typically be accepted for release of these locked shares. Consequently, a clear Vesting Schedule that employs the linear, bullet or cliff vesting options provides greater clarity to the parties and offers a modicum of flexibility when determining the Vesting Schedule.   Frequently Asked Questions (FAQs) on Vesting in India: How long does a typical Vesting... --- - Published: 2024-10-09 - Modified: 2024-10-11 - URL: https://treelife.in/news/karnatakas-global-capability-centres-policy-a-game-changer-for-indias-tech-landscape/ - Categories: News - Tags: GCC, Karnataka GCC Karnataka, a state in India known for its vibrant tech industry, has recently unveiled its Global Capability Centres (GCC) Policy 2024-2029. This ambitious policy aims to solidify Karnataka's position as a leading hub for GCCs in India and propel the state's tech ecosystem to even greater heights. What are Global Capability Centres (GCCs)? For those unfamiliar with the term, GCCs are specialized facilities established by companies to handle various strategic functions. These functions can encompass a wide range of areas, including: Information Technology (IT) services Customer support Research and development (R&D) Analytics By setting up GCCs, companies can streamline operations, reduce costs, and tap into a pool of talented professionals. This allows them to achieve their global objectives more efficiently. Why is Karnataka a Major Hub for GCCs? India is a powerhouse for GCCs, boasting over 1,300 such centers. Karnataka takes the lead in this domain, housing nearly 30% of India's GCCs and employing a staggering 35% of the workforce in this sector. Several factors contribute to Karnataka's attractiveness for GCCs: Vast Talent Pool: Karnataka is home to some of India's premier educational institutions, churning out a steady stream of highly skilled graduates in engineering, technology, and other relevant fields. Cost-Effectiveness:India offers a significant cost advantage for setting up and operating GCCs, compared to other global locations. Key Highlights of Karnataka's GCC Policy 2024-2029 The recently unveiled GCC Policy outlines a series of ambitious goals and initiatives aimed at propelling Karnataka to the forefront of the global GCC landscape. Here are some of the key highlights: Establishment of 500 New GCCs: The policy sets a target of establishing 500 new GCCs in Karnataka by 2029. This aggressive target signifies the government's commitment to significantly expanding the state's GCC footprint. Generating $50 Billion in Economic Output: The policy envisions generating a staggering $50 billion in economic output through GCCs by 2029. This substantial economic contribution will be a boon for Karnataka's overall development. Creation of 3. 5 Lakh Jobs: The policy aims to create 3. 5 lakh (350,000) new jobs across Karnataka through the establishment and operation of new GCCs. This significant job creation will provide immense opportunities for the state's workforce. Centre of Excellence for AI in Bengaluru: Recognizing the growing importance of Artificial Intelligence (AI), the policy proposes establishing a Centre of Excellence for AI in Bengaluru. This center will focus on driving research, development, and innovation in the field of AI, fostering a robust AI ecosystem in Karnataka. AI Skilling Council: The policy acknowledges the need to equip the workforce with the necessary skills to thrive in the AI-driven future. To address this, the policy proposes the creation of an AI Skilling Council. This council will be responsible for developing and delivering AI-related training programs, ensuring Karnataka's workforce is well-prepared for the jobs of tomorrow. INR 100 Crore Innovation Fund: The policy establishes an INR 100 crore (approximately $12. 3 million) Innovation Fund. This fund will support joint research initiatives between academia and GCCs, fostering a collaborative environment that fuels innovation and technological advancements. The GCC Policy has a clear and ambitious goal: for Karnataka to capture 50% of India's GCC market share by 2029. Read more about the policy here. --- - Published: 2024-10-09 - Modified: 2025-02-20 - URL: https://treelife.in/news/ifsca-releases-consultation-paper-seeking-comments/ - Categories: News IFSCA listing regulations requires debt securities to adhere to international standards/principles to be labelled as “green,” “social,” “sustainability” and “sustainability-linked” bond. As of September 30, 2024, the IFSC exchanges boasted a listing of approximately USD 14 billion in ESG-labelled debt securities, a significant chunk of the total USD 64 billion debt listings in a short period. This rapid growth highlights the growing appetite for sustainable investments among global investors. Certain investors, particularly institutional ones like pension funds and socially responsible investment (SRI) funds, explicitly state in their investment mandates that they can only invest in ESG-labeled securities. To encourage and promote ESG funds, the IFSCA has waived fund filing fees for the first 10 ESG funds registered at GIFT-IFSC, to incentivize fund managers to launch ESG-focused funds. However, this rapid growth also comes with a significant risk of "greenwashing" where companies or funds exaggerate or falsely claim their environmental and sustainability efforts. What is "Greenwashing"? However, with this rapid growth comes a significant risk: greenwashing. Greenwashing occurs when companies or funds exaggerate or fabricate their environmental and sustainability efforts to project a greener image and attract investors. It's essentially a deceptive marketing tactic that undermines the true purpose of sustainable investing. IFSCA's Consultation Paper: Mitigating Greenwashing Recognizing the threat of greenwashing, the IFSCA has released a consultation paper seeking public comment on a draft circular titled "Principles to Mitigate the Risk of Greenwashing in ESG labelled debt securities in the IFSC. " This circular outlines principles that companies and funds issuing ESG-labelled debt securities on the IFSC platform must adhere to. Refer link for consultation paper: https://ifsca. gov. in/ReportPublication? MId=8kS3KLrLjxk= --- - Published: 2024-09-30 - Modified: 2025-01-06 - URL: https://treelife.in/news/major-boost-for-reverse-flipping-indian-startups-coming-home/ - Categories: News - Tags: reverse flipping, startups In recent years, a significant number of Indian startups have chosen to incorporate their businesses outside India, primarily in locations like Delaware, Singapore and other global locations. This trend, known as "flipping," offered advantages like easier access to foreign capital and tax benefits. However, the tide is starting to turn. We're witnessing a growing phenomenon of "reverse flipping," where these startups are now shifting their bases back to India. This shift back home is driven by several factors, including a booming Indian market, attractive stock market valuations, and a desire to be closer to their target audience – Indian customers. To further incentivize this homecoming, the Ministry of Corporate Affairs (MCA) has recently introduced a significant policy change. MCA Streamlines Cross-border Mergers for Reverse Flipping The MCA has amended the Companies (Compromises, Arrangements, and Amalgamations) Rules, 2016, to streamline the process of cross-border mergers. This move makes it easier for foreign holding companies to merge with their wholly-owned Indian subsidiaries, facilitating a smooth transition for startups seeking to return to their roots. Key Takeaways of the Amended Rules Here's a breakdown of the key benefits for startups considering a reverse flip through this streamlined process: Fast-Track Mergers: The Indian subsidiary can file an application under Section 233 read with Rule 25 of the Act. This rule governs "fast-track mergers," which receive deemed approval if the Central Government doesn't provide a response within 60 days. RBI Approval: Both the foreign holding company and the Indian subsidiary need prior approval from the Reserve Bank of India (RBI) for the merger. Compliance with Section 233: The Indian subsidiary, acting as the transferee company, must comply with Section 233 of the Companies Act, which outlines the requirements for fast-track mergers. No NCLT Clearance Required: This streamlined process eliminates the need for clearance from the National Company Law Tribunal (NCLT), further reducing time and complexity. The Road Ahead The MCA's move represents a significant positive step for Indian startups looking to return home. This policy change, coupled with a thriving domestic market, is likely to accelerate the trend of reverse flipping. This not only benefits returning companies but also strengthens the overall Indian startup ecosystem, fostering innovation and entrepreneurial growth within the country. --- > In a significant development for foreign investors, the Delhi High Court recently delivered a landmark judgment in favor of Tiger Global, a Mauritius-based investment firm. The case centered around the sale of Tiger Global's shares in Flipkart Singapore to Walmart and the applicability of tax benefits under the India-Mauritius Double Taxation Avoidance Agreement (DTAA). - Published: 2024-09-30 - Modified: 2025-01-21 - URL: https://treelife.in/taxation/delhi-high-court-upholds-tax-treaty-benefits-for-tiger-global-in-landmark-flipkart-case/ - Categories: Taxation - Tags: flipkart, tax treaty, tiger global DOWNLOAD PDF In a significant development for foreign investors, the Delhi High Court recently delivered a landmark judgment in favor of Tiger Global, a Mauritius-based investment firm. The case centered around the sale of Tiger Global's shares in Flipkart Singapore to Walmart and the applicability of tax benefits under the India-Mauritius Double Taxation Avoidance Agreement (DTAA). The crux of the matter revolved around the Indian tax authorities' attempt to deny Tiger Global treaty benefits by invoking the General Anti-Avoidance Rule (GAAR). This raised a critical question: can GAAR be used to negate treaty benefits for shares acquired before April 1, 2017, a date that marked significant changes to the India-Mauritius DTAA? Background: The India-Mauritius DTAA and GAAR The India-Mauritius DTAA is a tax treaty aimed at preventing double taxation on income earned by residents of either country in the other. This treaty provides benefits such as reduced or no withholding tax on capital gains arising from the sale of shares. The General Anti-Avoidance Rule (GAAR), introduced in India in 2013, empowers tax authorities to disregard arrangements deemed to be artificial or lacking genuine commercial substance. The purpose is to prevent tax avoidance schemes that exploit loopholes in the tax code. The Dispute: GAAR vs. Treaty Benefits In this case, Tiger Global had acquired shares in Flipkart Singapore before April 1, 2017. This was crucial because the India-Mauritius DTAA offered more favorable tax benefits for pre-2017 acquisitions. However, when Tiger Global sold its shares to Walmart, the Indian tax authorities sought to apply GAAR, arguing that the investment structure was merely a tax avoidance scheme. The Delhi High Court's Decision The Delhi High Court ruled in favor of Tiger Global, upholding its entitlement to treaty benefits under the DTAA. The Court's reasoning rested on several key points: Tax Residency Certificate (TRC): The Court acknowledged the Tax Residency Certificate (TRC) issued by the Mauritian government as sufficient proof of Tiger Global's tax residency in Mauritius. This reaffirmed the importance of TRCs as evidence of tax residency in India. Corporate Veil Principle: The Court recognized the legitimacy of complex corporate structures and upheld the "corporate veil principle. " This principle acknowledges that a company is a separate legal entity from its owners. Beneficial Ownership: The Court examined the concept of "beneficial ownership" and concluded that Tiger Global, not a US-based individual, held the beneficial ownership of the shares. This countered the argument that Tiger Global was merely a "see-through entity" established solely for tax avoidance. "Grandfathering Clause": The Court considered the "grandfathering clause" within the DTAA, which protected pre-2017 investments from changes introduced after that date. This clause played a significant role in securing treaty benefits for Tiger Global. Implications of the Decision This landmark judgment has several significant implications for foreign investors in India: Clarity on GAAR and Treaty Benefits: The Delhi High Court ruling provides much-needed clarity on the applicability of GAAR in relation to pre-2017 treaty benefits. Importance of Tax Residency Certificates: The emphasis on TRCs as reliable evidence of tax residency reinforces the importance of obtaining these certificates from the relevant authorities. Scrutiny of Complex Structures: While the Court upheld the "corporate veil principle," it highlights that complex structures may still face scrutiny from tax authorities. Looking Forward The Delhi High Court's decision is a positive development for foreign investors. It reinforces the sanctity of tax treaties and provides greater clarity on the role of GAAR in such scenarios. However, it is crucial to note that this is a single court judgment, and its interpretation by other courts and tax authorities remains to be seen. Foreign investors operating in India should stay informed of evolving tax regulations and seek professional advice to ensure their investments comply with all applicable tax laws. --- - Published: 2024-09-30 - Modified: 2025-07-22 - URL: https://treelife.in/legal/termination-clauses-in-a-contract/ - Categories: Legal - Tags: Breaking a contract, Contract cancellation, Contract termination conditions, Force majeure termination, Termination agreement, Termination clause examples, Termination clauses in a contract, Termination due to insolvency, Termination for breach, Termination for convenience, Termination notice period The cornerstone of any commercial agreement is a contract that has been validly executed in writing. They are critical to business relationships and provide a legal framework that captures the rights and obligations of the signatory parties. Consequently, commercial contracts can be complex and with exhaustive detail, capturing the parties’ agreement on various issues that can arise in the contract lifecycle. Further to the parties’ intent, contracts that satisfy the requirements of the Indian Contract Act, 1872 are therefore binding and can be legally enforced through a court of law. One key component of a contract is the termination clause, which outlines how and when the contract can be legally “ended”. These clauses are critical because they define the conditions under which a party can walk away from the binding nature of the contract, without breaching the terms thereof. Whether due to non-performance, changes in business needs, or unforeseen events, contracts may need to be terminated in the course of business and thus, having a clear termination clause in place protects a party from potential risks and ensures they are not locked into unfavorable situations. Based on the nature of the commercial relationship between the parties, there are several types of termination clauses which can be agreed, each serving a unique purpose. Termination clauses can allow for a party to end the agreement if the other fails to meet their obligations or breaches the contract, or even for termination by both parties on the basis of mutual convenience. Understanding termination clauses in a contract helps businesses avoid disputes and protect their interests when a contract must end. What is a Termination Clause? A termination clause is a critical provision in a contract that outlines the conditions under which one or both parties can end the agreement before its natural conclusion. It specifies the events or circumstances that allow for contract termination and often includes guidelines on the notice period, reasons for termination, and any potential penalties or obligations upon termination. Typically, termination clauses do not automatically end all obligations between the parties, and certain legal provisions (such as governing law and dispute resolution) would survive the termination of the agreement. Definition of a Termination Clause A termination clause legally defines how a contractual relationship between parties can be ended, by setting out pre-defined terms and conditions to be satisfied such that the termination itself does not amount to a breach of the contract. Depending on the nature of the underlying commercial relationship, termination clauses can be linked to performance, force majeure conditions that render performance impossible, mutual convenience, or even a unilateral right retained by one party (such as in investment agreements). Purpose of Including Termination Clauses in Contracts The primary purpose of a termination clause is to offer clarity on how the parties can end their contractual relationship and (to the extent feasible) protection from any claims of breach. It safeguards both parties by: Managing Risks: Helps to limit financial or operational damages if the business relationship is no longer viable. Ensuring Flexibility: Provides a means to break the contractual binds if the conditions become unfavorable, without triggering a dispute for breach of contract. Defining Responsibilities: Clearly outlines post-termination duties, such as settling payments or returning property. General Impact on Contractual Relationships Termination clauses have a significant impact on contractual relationships by: Fostering Accountability: Parties are aware of the consequences of failing to meet contractual obligations, promoting a higher standard of performance.   Reducing Uncertainty: Pre-defined termination conditions prevent conflicts, ensuring both sides know the terms of disengagement. Enabling Smooth Transitions: When included, these clauses ensure that relationships can end in a structured manner, reducing the risk of disputes. Relevance of Termination Clauses in Contracts Termination clauses play a vital role in ensuring clarity on how and when a contract can be legally ended, thus preventing misunderstandings and disputes. How Termination Clauses Prevent Disputes A well-structured termination clause helps prevent disputes by clearly outlining the conditions under which the contract can be terminated. By establishing specific scenarios such as non-performance, breach of contract, force majeure or for mutual agreement, both parties understand their rights and obligations, reducing the risk of legal battles. This clear guidance helps avoid confusion and ensures that the end of a contract is handled fairly and predictably. Importance in Managing Risks and Obligations Termination clauses are essential to manage risks in contracts. They protect both parties from being locked into unfavorable agreements or suffering financial losses due to unforeseen circumstances. For example, if one party fails to meet their obligations, the termination clause offers a legal avenue to separate from the commercial relationship without breaching the contract. This minimizes potential damage to the business, whether by way of financial loss or reputational harm. Influence on Contract Flexibility and Exit Strategies A termination clause provides much-needed flexibility in contracts by offering a clear exit strategy. Businesses can adjust or end their contractual relationships without fearing legal consequences, provided the termination aligns with the agreed-upon terms. This flexibility is crucial in dynamic business environments where conditions can change quickly, and the ability to terminate a contract allows companies to adapt without long-term obligations. Types of Termination Clauses in Contracts Termination clauses in contracts provide clear terms for ending an agreement, protecting both parties from legal issues. There are several types of termination clauses, each with specific purposes and implications. Here are the most common types: a. Termination for Convenience Explanation: This clause allows one party to terminate the contract without providing a specific reason or cause. It is often used to offer flexibility in long-term contracts. Typical Usage: Commonly found in government contracts, large-scale business agreements, and long-term partnerships where conditions may change over time. Benefits: Provides flexibility for businesses to exit a contract when needs or priorities shift, allowing them to avoid being bound to unfavorable terms. Challenges: Can be misused, leading to one-sided terminations or potential unfair treatment of the other party, especially if compensation for early termination is not properly addressed. b. Termination for... --- > As we are witnessing NIFTY 50’s 52-week high, it's a moment to reflect on the extraordinary journey this index has taken since its inception in 1996. Launched with an index value of 1000, NIFTY 50 has steadily grown, reaching an impressive 25,940.40 by September 2024—marking a growth of approximately 2,494%. This performance solidifies its place as a cornerstone of the Indian stock market. - Published: 2024-09-30 - Modified: 2025-08-07 - URL: https://treelife.in/reports/nifty-50-the-asset-class-killer-a-28-year-journey-of-growth/ - Categories: Reports - Tags: NIFTY 50 DOWNLOAD FULL PDF As we are witnessing NIFTY 50’s 52-week high, it's a moment to reflect on the extraordinary journey this index has taken since its inception in 1996. Launched with an index value of 1000, NIFTY 50 has steadily grown, reaching an impressive 25,940. 40 by September 2024—marking a growth of approximately 2,494%. This performance solidifies its place as a cornerstone of the Indian stock market. A Benchmark of Indian Financial Growth The NIFTY 50 index, short for National Stock Exchange Fifty, represents the performance of the top 50 companies listed on the NSE. It serves as a key benchmark for mutual funds, facilitates derivatives trading, and is a popular vehicle for index funds and ETFs. Over the last 28 years, it has been a testament to the robustness of the Indian economy, demonstrating the potential of long-term investment in the stock market. A Comparison Across Asset Classes Over the years, NIFTY 50 has outshined other traditional asset classes like gold, silver, and real estate. While these assets have held their value, particularly in times of economic volatility, NIFTY 50 has consistently delivered superior returns. NIFTY 50: A ₹1000 investment in NIFTY 50 in 1996 would have grown to ₹25,790. 95 by 2024, reflecting a 12. 31% CAGR. Gold: A similar investment in gold would have appreciated to ₹14,193. 80, giving a 10. 72% CAGR. Silver: Investing ₹1000 in silver in 1996 would be worth ₹12,591. 89 today, with a 10. 30% CAGR. Real Estate: A standard 9. 3% CAGR would take ₹1000 to ₹10,903, reflecting real estate’s slower but steady growth in India. These figures showcase how NIFTY 50 has not only matched but outpaced traditional safe-haven assets. While gold and silver offer reliability during economic uncertainty, they cannot compete with the compounding returns offered by the stock market. Sectoral Shifts Reflecting India’s Growth The sectoral composition of NIFTY 50 has evolved significantly. In 1995, Financial Services contributed just 20% of the index. Fast forward to 2024, and they now dominate with 32. 6%. The rise of Information Technology, which was non-existent in 1995, grew to 20% by 2005 but has slightly reduced to 14. 17% today. This shift from manufacturing and resource-based sectors to services and technology highlights India’s transformation into a modern, service-driven economy. Resilience Through Market Challenges NIFTY 50’s journey has not been without challenges. The index has weathered multiple crises, including the Dot-com bubble (2000-2002), Sub-prime crisis (2007-2008), Demonetization (2016), and the COVID-19 pandemic (2020). Despite these hurdles, NIFTY 50 has shown resilience, rebounding stronger each time and proving to be a robust long-term investment option. Conclusion As NIFTY 50 celebrates 28 years of excellence, its consistent returns and ability to outperform other asset classes make it a dominant force in India’s financial markets. For investors looking to balance risk and reward, NIFTY 50 remains a reliable choice, reflecting the strength and potential of India’s growing economy. --- - Published: 2024-09-26 - Modified: 2025-01-06 - URL: https://treelife.in/news/sovereign-green-bonds-in-the-ifsc/ - Categories: News - Tags: GIFT, IFSC, Sovereign Green Bonds In recent years, the global investment landscape has shifted dramatically, with sustainability becoming a central theme in financial markets. As nations and corporations commit to net-zero emissions, innovative financial instruments are emerging to facilitate this transition. One of the most promising of these instruments is Sovereign Green Bonds (SGrBs). Recently, the International Financial Services Centres Authority (IFSCA) in India introduced a scheme for trading and settlement of SGrBs in the Gujarat International Finance Tec-City International Financial Services Centre (GIFT IFSC), marking a significant step towards attracting foreign investment into the country’s green infrastructure projects. Understanding Sovereign Green Bonds SGrBs are debt instruments issued by a government to raise funds specifically for projects that have positive environmental or climate benefits. The proceeds from these bonds are earmarked for green initiatives, such as renewable energy projects, energy efficiency improvements, and sustainable infrastructure development. As global awareness of climate change grows, SGrBs are gaining traction as a viable investment option for those seeking to align their portfolios with sustainable development goals. The Role of IFSCA The IFSCA’s initiative to facilitate SGrBs in the GIFT IFSC is a strategic move that aligns with India’s commitment to achieving net-zero emissions by 2070. The GIFT IFSC has been designed as a global financial hub, offering a regulatory environment that supports international business and financial services. By introducing SGrBs, the IFSCA aims to create a robust platform for sustainable finance in India. Key Features of the IFSCA’s SGrB Scheme 1. Eligible Investors The IFSCA’s scheme allows a diverse range of investors to participate in the SGrB market. Eligible investors include: Non-residents investors from jurisdictions deemed low-risk can invest in these bonds. Foreign Banks’ International Banking Units (IBUs): These entities, which do not have a physical presence or business operations in India, can also invest in SGrBs. 2. Trading and Settlement Platforms: The IFSCA has established electronic platforms through IFSC Exchanges for the trading of SGrBs in primary markets. Moreover, secondary market trading will be facilitated through Over-the-Counter (OTC) markets.   3. Enhancing Global Capital Inflows: One of the primary objectives of introducing SGrBs in the GIFT IFSC is to enhance global capital inflows into India. With the global community increasingly prioritizing sustainable investment opportunities, India stands to benefit significantly from the influx of foreign capital. The availability of SGrBs provides a unique opportunity for investors looking to contribute to environmental sustainability while achieving financial returns. The IFSCA’s introduction of SGrBs in the GIFT IFSC is a forward-thinking initiative that aligns with global sustainability goals. By facilitating access for non-resident investors and creating robust trading platforms, India is positioning itself as a leader in sustainable finance. As the world moves toward a greener future, the role of SGrBs will become increasingly important. For investors, these bonds not only represent a chance to achieve financial returns but also to make a meaningful impact on the environment.   --- - Published: 2024-09-26 - Modified: 2025-02-07 - URL: https://treelife.in/startups/sebi-regulations-for-angel-fund-investments-in-india/ - Categories: Startups - Tags: Angel fund, angel fund investment, sebi The Indian startup ecosystem is a vibrant space brimming with innovation and potential. Fueling this growth engine are angel investors and angel funds, who provide crucial seed capital to early-stage startups. This article dives into the key regulations laid out by the Securities and Exchange Board of India (SEBI) for angel fund investments in India.   Eligibility for Angel Fund Investments SEBI guidelines specify the kind of startups that are eligible for angel fund investments. Here are some key points: Independent Startups: The company must not be promoted or sponsored by, or related to, an industrial group with a group turnover exceeding INR 300 crore. Avoiding Familial Conflicts: Angel funds cannot invest in companies where there's a family connection between any of the investors and the startup founders.   Investment Thresholds, Lock-in Period, Restrictions and Global Investment  SEBI regulations further outline the minimum and maximum investment amounts, along with a lock-in period: Minimum Investment: Angel funds must invest a minimum of INR 25 lakhs (INR 2. 5 million) in any venture capital undertaking. Maximum Investment: The investment in any single startup cannot exceed INR 10 crore (INR 100 million). This encourages diversification across various promising ventures. Lock-in Period: Investments made by angel funds in a startup are locked-in for a period of one year. Restrictions on Investments: To ensure responsible investment practices, SEBI imposes specific restrictions: Investing in Associates: Angel funds are not permitted to invest in their associates.   Concentration Risk: Angel funds cannot invest more than 25% of their total corpus in a single venture. Global Investment Opportunities:While the focus remains on nurturing Indian startups, SEBI allows angel funds to invest in the securities of companies incorporated outside India. However, such investments are subject to conditions and guidelines stipulated by RBI (Reserve Bank of India) and SEBI. This flexibility allows angel funds to explore promising global opportunities while adhering to regulatory frameworks. Unlisted Units: It's important to note that units of angel funds are not permitted to be listed on any recognized stock exchanges. This is because angel investments are typically illiquid, meaning they are not easily tradable like publicly traded stocks. SEBI regulations play a critical role in fostering a healthy and transparent environment for angel fund investments in India. These regulations attract investors, protect startups, and ultimately contribute to the growth of the Indian startup ecosystem.   --- - Published: 2024-09-26 - Modified: 2025-02-10 - URL: https://treelife.in/news/ifscas-single-window-it-system-swit-a-game-changer-for-businesses-in-gift-city/ - Categories: News - Tags: GIFT, IFSC, SWIT  Prime Minister Narendra Modi's recent launch of the IFSCA's Single Window IT System (SWIT) marks a significant milestone for businesses looking to set up operations in India's International Financial Services Centre (IFSC) at GIFT City. This unified digital platform promises to revolutionize the ease of doing business in this burgeoning financial hub. What is the IFSC and Why is SWIT Important? The International Financial Services Centres Authority (IFSCA) was established to develop a world-class financial center in India. Located in Gujarat's GIFT City, the IFSC aims to attract international financial institutions and businesses by offering a global standard regulatory environment. However, setting up operations in the IFSC previously involved navigating a complex web of approvals from various regulatory bodies, including IFSCA itself, the SEZ authorities, the Reserve Bank of India (RBI), the Securities and Exchange Board of India (SEBI), and the Insurance Regulatory and Development Authority of India (IRDAI). This process could be time-consuming and cumbersome for businesses. SWIT: Streamlining the Application Process The SWIT platform addresses this challenge by creating a one-stop solution for all approvals required for setting up a business in GIFT IFSC. Here's how SWIT simplifies the process: Single Application Form: Businesses no longer need to submit separate applications to various authorities. SWIT provides a unified form that captures all the necessary information. Integrated Approvals: SWIT integrates with relevant regulatory bodies – RBI, SEBI, and IRDAI – for obtaining No Objection Certificates (NOCs) seamlessly. SEZ Approval Integration: The platform connects with the SEZ Online System for obtaining approvals from the SEZ authorities managing GIFT City. GST Registration: SWIT facilitates easy registration with the Goods and Services Tax (GST) authorities. Real-time Validation: The system verifies PAN, Director Identification Number (DIN), and Company Identification Number (CIN) in real-time, ensuring data accuracy. Integrated Payment Gateway: Applicants can make payments for various fees and charges directly through the platform. Digital Signature Certificate (DSC) Module: The platform enables users to obtain and manage DSCs, a crucial requirement for online submissions. Benefits of SWIT for Businesses The introduction of SWIT offers several advantages for businesses considering the IFSC: Reduced Time and Cost: By consolidating the application process into a single platform, SWIT significantly reduces the time and cost involved in obtaining approvals.   Enhanced Transparency: SWIT provides a transparent and user-friendly interface that allows businesses to track the progress of their applications in real-time.   Improved Ease of Doing Business: This makes GIFT City a more attractive proposition for global investors and businesses. Looking Ahead: The Future of GIFT City The launch of SWIT is a significant step forward in positioning GIFT City as a leading international financial center. By streamlining the application process and promoting ease of doing business, SWIT paves the way for increased investment and growth in the IFSC. This, in turn, will contribute to India's ambition of becoming a global financial hub. --- > Mumbai-based brand ‘Shaadi.com’ was launched in 1997 by Anupam Mittal and cousins, founders of People Interactive (India) Private Limited (“Company”). Since its introduction into the “matrimonials market”, the brand has become a prominent online matchmaking platform with international repute and presence. - Published: 2024-09-20 - Modified: 2025-07-21 - URL: https://treelife.in/legal/shaadi-com-investor-dispute-a-case-study/ - Categories: Legal - Tags: shaadi.com, shaadi.com investor dispute DOWNLOAD FULL PDF Mumbai-based brand ‘Shaadi. com’ was launched in 1997 by Anupam Mittal and cousins, founders of People Interactive (India) Private Limited (“Company”). Since its introduction into the “matrimonial market”, the brand has become a prominent online matchmaking platform with international repute and presence. However, in early 2024, news broke about a messy legal battle between Anupam Mittal (by this time, serving as managing director for over 15 years) and WestBridge Ventures II Holdings, a Mauritius-based private equity fund (“WestBridge”), from whom the Company had secured funding in 2006. Spanning proceedings before courts in India and Singapore, the case is poised to become a landmark moment in the evolution of international arbitration law and intra-corporate disputes. Involving allegations of forced transfer to competitors and an expensive series of litigations, this dispute necessitates that potential investors and investee companies (and their founders) glean an understanding of the key takeaways. Background of the Relationship between the Parties TimelineEvent1997People Interactive (India) Private Limited (“Company”) founded and Mumbai-based “sagaai. com” launched by Anupam Mittal and family (“Founders”), offering an online matchmaking platform for Indians around the world.  2001The platform is renamed to “Shaadi. com” and becomes the Company’s flagship brand. October 2004Anupam Mittal appointed as Managing Director of the Company. February 10, 2006WestBridge Ventures II Holdings, a Mauritius-based private equity fund (“WestBridge”) invests INR 165,89,00,000 (Rupees One Hundred Sixty Five Crores Eighty Nine Lakhs) in the Company (“Investment”). Company, Founders and WestBridge sign a shareholders’ agreement.  Parties agree on exit rights for WestBridge, which includes the following options:(i) an Initial Public Offering (IPO) to be completed within 5 years of closing;(ii) sale of WestBridge shares to third parties (excluding significant competitors);(iii) redemption or buyback provisions if the IPO was not completed within 5 years; and(iv) drag-along rights if the Company fails to buyback shares within 180 days of exercising the buyback option (“Drag Along”).  If an IPO was not completed within 5 years, WestBridge could redeem all its shares and if necessary, “drag along” all other shareholders (including Founders) to sell their shares to a third party. Parties agree in the SHA that:(i) the SHA is governed by the laws of India; (ii) any disputes arising from the agreement would be resolved through arbitration as per the International Chamber of Commerce Rules (“ICC”) with seat of arbitration in Singapore; and (iii) the enforcement of arbitration award would be subject to Indian laws. 2006Consequent to the investment, WestBridge holds 44. 38% and Anupam Mittal holds 30. 26% of the shareholding of the Company. 2011Contractually agreed period to complete IPO expires. 2017 - 2019WestBridge seeks to exit the Company by allegedly entering into discussions to sell its shares to a direct competitor, Info Edge India Limited (“Info Edge”), owner of matchmaking platform ‘Jeevansathi’. Tensions between the parties continue, with alleged acts of oppression and mismanagement by WestBridge “facilitated” by other Founder directors , including a joint requisition to the Company to convene an extraordinary general meeting of the Company. The agenda for such meeting involves replacing Anupam Mittal as the managing director. December 2020WestBridge exercises its buyback option, requiring that the Company: (i) convert the 1,000 Series A1 preference shares into 580,779 equity shares; and then, (ii) effect a buyback of said equity shares. Company converts the preference shares, but is unable to offer the buyback price for the converted equity shares.  October 2021WestBridge issues a drag-along notice compelling the sale of shares to a “significant competitor”, relying on the SHA which states that if the buyback could not be completed, the Drag Along rights would be triggered, which included the right to have the holding of the minority shareholders (including founders) liquidated and sold to any party without restriction.   Jurisdiction is Key - India v/s Singapore: This dispute has highlighted significant challenges in cross-border legal disputes and the complexities of enforcing shareholder agreements in international fora. Despite litigation stretching on since 2021, the issue of oppression and mismanagement has yet to be ruled on, and the current issue before the courts is actually of: (i) jurisdiction, i. e. , determining the competent authority to adjudicate on the SHA and allegations of oppression and mismanagement; and (ii) enforceability of foreign arbitration awards: Singapore Jurisdiction: WestBridge argued that since the SHA stipulated that arbitration would be governed by International Chamber of Commerce (ICC) rules with Singapore as the arbitration seat, the dispute was to be heard and adjudicated in Singapore. The Singapore courts upheld this on the basis of: (i) the composite test, ruling that whether a dispute is arbitrable or not will be determined by the law of the seat as well as the law governing the arbitration agreement; and (ii) oppression/mismanagement disputes being arbitrable under Singapore law. Indian Jurisdiction: Mittal argued that jurisdiction to hear issues of corporate oppression and mismanagement is exclusively vested with the NCLT under Sections 241-244 of the Companies Act, 2013 and are not arbitrable under Indian law, in accordance with Section 48(2) of the Indian Arbitration & Conciliation Act, 1996 (“A&C Act”), which is briefly excerpted below: “Enforcement of an arbitral award may also be refused if the Court finds that— (a) the subject-matter of the difference is not capable of settlement by arbitration under the law of India; or (b) the enforcement of the award would be contrary to the public policy of India. Explanation 1: For the avoidance of any doubt, it is clarified that an award is in conflict with the public policy of India, only if - (i) the making of the award was induced or affected by fraud or corruption or was in violation of section 75 or section 81; or (ii) it is in contravention with the fundamental policy of Indian law; or (iii) it is in conflict with the most basic notions of morality or justice. ” (emphasis added) It is crucial to note that the provisions of the A&C Act have been interpreted to limit the arbitrability of intra-company disputes and consequently, provide Mittal with the legal grounds to resist enforcement of... --- - Published: 2024-09-20 - Modified: 2024-09-20 - URL: https://treelife.in/news/introducing-bhaskar-transforming-indias-startup-ecosystem/ - Categories: News The Department for Promotion of Industry and Internal Trade (DPIIT), Ministry of Commerce and Industry, is all set to unveil a revolutionary digital platform - Bharat Startup Knowledge Access Registry (BHASKAR) under the flagship Startup India program. BHASKAR aims to bring together key stakeholders and address challenges in the entrepreneurial ecosystem. With over 1,46,000 DPIIT-recognized startups in India, BHASKAR seeks to harness the potential by offering access to resources, tools, and knowledge. It bridges the gap between startups, investors, mentors, and stakeholders, promoting interactions and collaborations. By providing a centralized platform, BHASKAR facilitates quicker decision-making, scaling, and personalized interactions through unique BHASKAR IDs. The platform is pivotal in driving India's innovation narrative and fostering a more connected, efficient, and collaborative environment for entrepreneurship. Key Features of BHASKAR Networking and Collaboration: BHASKAR bridges the gap between startups, investors, mentors, and various stakeholders, enabling seamless interactions and collaborations across different sectors. Centralized Access to Resources: By consolidating resources, BHASKAR provides startups with immediate access to essential tools and knowledge, facilitating faster decision-making and scaling. Personalized Identification: Each stakeholder is assigned a unique BHASKAR ID, promoting personalized interactions and tailored experiences across the platform. Enhanced Discoverability: With powerful search functionalities, users can effortlessly locate relevant resources, collaborators, and opportunities, leading to quicker decision-making and action. BHASKAR: Pioneering the Future of India's Startups BHASKAR is poised to reshape India's startup arena, fostering a more efficient, connected, and collaborative environment for entrepreneurship. The launch of BHASKAR underscores the Government of India's commitment to catapulting India as a leader in global innovation, entrepreneurship, and economic growth. Read More - https://www. pib. gov. in/PressReleasePage. aspx? PRID=2055243 --- - Published: 2024-09-05 - Modified: 2025-07-22 - URL: https://treelife.in/finance/challenges-in-overseas-direct-investment-odi/ - Categories: Finance - Tags: ODI, open direct investment While ODI offers opportunities for persons resident in India to expand their market reach in bona fide businesses, access new resources, and achieve economies of scale, it also comes with significant challenges that can affect the success of such investments. Key challenges and recommendations ● Identification of First Subscriber of Foreign Entity: First subscribers to be identified at the time of incorporation of the foreign entity, to avoid additional undertakings by CA/CPAs. ● Documentation to entail recent Forex Rate: Check with your AD bank at what rate the transaction will go through. Exchange rate volatility can affect the value of investments and returns when converted back to INR and AD banks usually insist on putting recent dates in all their documents. ● Certification Complexity: Obtaining various certifications from Chartered Accountants to verify investment limits, source of funds, and compliance with both Indian and foreign regulations adds to administrative burden. Bankers typically require Audited Financials not older than six (6) months or CA Certified provisional statements and interim reports in addition to Section E certification & host country compliances certification. ● Financial commitment Cap: Financial commitments of an Indian Entity must not exceed 400% of the net worth from the latest audited balance sheet (within 18 months) or USD 1 billion per year, whichever is lower. Resident individuals can invest in equity capital up to the Liberalized Remittance Scheme limit of USD 250,000 annually. ● Deferred Payment Agreement (DPA): Mandatory requirement if securities are not subscribed to immediately upon incorporation of Foreign Entity. ● Submission of Evidence of Investment: Share certificate to be submitted as a proof of investment within six months of the generation of UIN. ● Permissibility of ODI in specific cases: If there are outstanding reports or submissions such as APR, Share Certificate, Foreign Liabilities & Assets (FLA), LSF payment for that Foreign Entity, ODI will not be permitted. ● All ODIs under the same UIN: All future ODIs must be processed through the same AD Bank that issued the UIN. Transactions through a different AD Bank are only possible after transferring the UIN, which is a complex and cumbersome process. Conclusion Foreign Exchange Management (Overseas Investment) Directions, 2022 (dated August 22, 2022) offers Indian companies significant opportunities for growth and expansion. However, the process is complex and requires careful navigation of legal, regulatory, and financial challenges. Success in overseas investment requires careful planning and a good grasp of both Indian and international regulations. Overall, the ODI process requires meticulous planning, adherence to regulatory requirements, and coordination between various stakeholders. Therefore, Indian businesses looking to venture abroad must engage with legal and financial experts who can guide them through these challenges, ensuring compliance with all relevant regulations and maximizing the potential return on their investments. With the right strategy, businesses can seize global opportunities, minimize risks, and expand their international footprint. --- - Published: 2024-09-05 - Modified: 2025-07-21 - URL: https://treelife.in/compliance/incorporation-of-a-wholly-owned-subsidiary-wos-under-companies-act-2013/ - Categories: Compliance - Tags: wholly owned subsidiary, wholly owned subsidiary in india by foreign company, WOS, WOS in India DOWNLOAD PDF A Wholly Owned Subsidiary (WOS) is a company whose entire share capital is held by another company, known as the holding or parent company. The process of incorporating a wholly-owned subsidiary in India is governed by the Companies Act, 2013. The application is processed by the Central Registration Centre (CRC), Ministry of Corporate Affairs. Prerequisites for setting up a WOS (Private Company) in India Holding Company to pass a resolution authorising the setup of a WOS in India and identifying the proposed name(s); paid up capital and authorised signatories / nominees of the WOS Check if RBI/Government approval is required for receiving Foreign Direct Investment (FDI) Identify minimum 2 directors, 1 of whom shall be a Resident Director Identify an Authorised Representative on behalf of Holding Company to sign documents to be submitted for incorporation Identify a Nominee Shareholder of the Holding Company who will hold minimum shares in the WOS on behalf of the Holding Company Note: The Authorised Representative and Nominee Shareholder cannot be the same person --- - Published: 2024-09-05 - Modified: 2025-02-05 - URL: https://treelife.in/compliance/key-regulations-to-help-companies-manage-loan-requirements/ - Categories: Compliance Loan from Directors or Relatives and Compliances involved In urgent situations, companies often seek to quickly augment their working capital by sourcing funds from their Directors in the form of loans. This approach provides a rapid solution for meeting immediate financial needs. However, it is crucial to ensure that such transactions comply with the provisions outlined in the Companies Act, 2013 (the “Act”). Key Compliance Points 01. Board Approval RequiredAccording to Section 179(3)(d) of the Act, any loan from Directors or their relatives must be approved by a formal Board resolution. This means that the company must convene a Board Meeting and pass a resolution authorizing approval of these loans. 02. Declaration of Source of FundsUnder Rule 2(c)(viii) of the Companies (Acceptance of Deposits) Rules, 2014 (“Deposit Rules”), the Director or their relatives must provide a declaration stating that the funds are not sourced from loans or deposits accepted from other parties. 03. Permissible LoansThe Deposit Rules outline specific conditions for permissible loans that are not classified as deposits. Compliance with these conditions is crucial to ensure proper categorization and regulatory adherence. 04. Disclosure in Financial Statements and Director’s ReportAny loans received must be appropriately disclosed in the notes to the Financial Statements and the Director’s Report, ensuring transparency and compliance with regulatory requirements. --- > The Reserve Bank of India has updated its Master Directions on Foreign Investment in India (FED Master Direction No.11/2017-18) as of August 08, 2024, introducing key definitions and clarifying various provisions. - Published: 2024-09-05 - Modified: 2025-03-05 - URL: https://treelife.in/compliance/update-in-master-directions-on-foreign-investment-in-india/ - Categories: Compliance DOWNLOAD FULL PDF The Reserve Bank of India has updated its Master Directions on Foreign Investment in India (FED Master Direction No. 11/2017-18) as of August 08, 2024, introducing key definitions and clarifying various provisions. Among these updates, the validity of the Valuation Certificate is particularly noteworthy. --- - Published: 2024-09-05 - Modified: 2024-09-11 - URL: https://treelife.in/news/ifsca-informal-guidance-framework/ - Categories: News The IFSCA issued a consultation paper yesterday proposing an “informal guidance” framework, summarized below: Who can request: Existing players in IFSCA Persons intending to undertake business in IFSC Others as may be specified Types of guidance: No-Action Letters: Request IFSCA to indicate whether or not it would take any action if the proposed activity/ business/ transaction is carried out Interpretive Letters: Request for IFSCA’s interpretation of specific legal provisions Process: Application fee: USD 1,000 IFSCA aims to respond to requests within 30 days The consultation paper invites stakeholders / public to submit feedback by September 10, 2024 via email This is a proactive approach by the IFSCA to foster transparency and provide support to entities operating or looking to operate within the IFSC, ensuring that they have the necessary guidance to comply with the evolving regulatory landscape. --- - Published: 2024-09-05 - Modified: 2025-07-22 - URL: https://treelife.in/finance/fdi-odi-swap-following-budget-2024/ - Categories: Finance Following the recent budget announcement, which aimed to simplify regulations for Foreign Direct Investment (FDI) and Overseas Investment (ODI), the Department of Economic Affairs has amended the FEMA (Non-debt Instruments) Rules 2019. A significant aspect of this amendment is the introduction of a new provision that enables FDI-ODI swaps.  We have curated a slide below to help you understand this better. Broad Mechanics Foreign Company A holding shares in Foreign Company B. Foreign Company A transferring shares of Foreign Company B to Indian Company. Indian Company issuing its shares to Foreign Company A as consideration for acquiring shares of Foreign Company B. Indian Company is the new holding company of Foreign Company B. Indian Company now permitted to acquire shares of a Foreign Company under ODI Rules via the swap route. i. e. , Consideration for purchase of shares of Foreign Company B from Foreign Company A can be discharged by way of issuing its own equity shares to Foreign Company A. 𝘖𝘵𝘩𝘦𝘳 𝘢𝘮𝘦𝘯𝘥𝘮𝘦𝘯𝘵𝘴: 1. Investment by OCIs on non-repat basis 𝐞𝐱𝐜𝐥𝐮𝐝𝐞𝐝 from calculation of indirect foreign investment. Earlier only NRI investment was excluded. 2. Aggregate FPI cap of 49% of paid-up capital on a fully diluted basis has now been removed.  FPIs now required to 𝐨𝐧𝐥𝐲 𝐜𝐨𝐦𝐩𝐥𝐲 𝐰𝐢𝐭𝐡 𝐬𝐞𝐜𝐭𝐨𝐫𝐚𝐥 𝐨𝐫 𝐬𝐭𝐚𝐭𝐮𝐭𝐨𝐫𝐲 𝐜𝐚𝐩. 3. 'White Label ATM Operations' has been recognized as a new sector, with 100% 𝐅𝐃𝐈 𝐧𝐨𝐰 𝐚𝐥𝐥𝐨𝐰𝐞𝐝 𝐮𝐧𝐝𝐞𝐫 𝐭𝐡𝐞 𝐚𝐮𝐭𝐨𝐦𝐚𝐭𝐢𝐜 𝐫𝐨𝐮𝐭𝐞. Key Indian players in this sector: India1 Payments, Indicash ATM (Tata Communications), Vakrangee, and Hitachi Payments. 4. NR to NR transfer will require prior Govt approval 𝐰𝐡𝐞𝐫𝐞𝐯𝐞𝐫 𝐚𝐩𝐩𝐥𝐢𝐜𝐚𝐛𝐥𝐞. In the erstwhile provisions, it was required only if investment in the specific sector required prior Govt approval. 5. Definitions - Control now defined in Rule 2, and definition of "startup company" has been aligned with "startups" recognised by DPIIT vide notification dated February 19, 2019. Definitions of "control" and "startup company" elsewhere have been deleted. --- > The Companies Act, 2013 (the “Act”), has introduced significant changes to the rules governing application monies received by companies through private placement and preferential allotment of shares, aiming at enhanced transparency, protection of investor interests, and ensuring timely utilization of funds. - Published: 2024-09-05 - Modified: 2025-08-07 - URL: https://treelife.in/legal/refund-of-application-monies-a-critical-aspect-of-corporate-governance/ - Categories: Legal DOWNLOAD FULL PDF The Companies Act, 2013 (the “Act”), has introduced significant changes to the rules governing application monies received by companies through private placement and preferential allotment of shares, aiming at enhanced transparency, protection of investor interests, and ensuring timely utilization of funds. This article outlines the key provisions and implications of non-compliance regarding the refund ofapplication monies under the Act. --- - Published: 2024-08-29 - Modified: 2025-03-11 - URL: https://treelife.in/news/update-in-the-capital-gains-tax-regime-proposed-in-the-union-budget/ - Categories: News The Union Budget 2024, announced on July 23, 2024, proposed a significant change in the long-term capital gains tax regime. The long-term capital gains tax rate is set to be reduced from 20% to 12. 5%. However, this proposal included removal of the indexation benefit for long-term capital gains on the sale of assets, including real estate. Initially, this removal of indexation benefit was to apply to properties acquired after 2001. In a relief to real estate owners, it has now been proposed to extend the option of availing indexation benefit to properties purchased until July 23, 2024. Taxpayers selling property purchased before July 23, 2024 will have two options to compute their long term capital gains tax: - Continue under the old tax regime : Pay a 20% long-term capital gains tax with the indexation benefit - Opt for the new tax regime: Pay a lower tax rate of 12. 5% without any indexation benefit But what happens in case of a long term capital loss? Will the loss on account of indexation benefit be allowed to be carried forward? Let us know your thoughts in the comments below or reach out to us at priya. k@treelife. in for a detailed discussion. Stay tuned for further insights on this! --- - Published: 2024-08-20 - Modified: 2025-07-22 - URL: https://treelife.in/news/proposed-platform-play-framework-for-fund-managers-in-gift-ifsc/ - Categories: News The International Financial Services Centres Authority (IFSCA) has proposed amendments to the FME Regulations to introduce a Platform Play framework, discussed below: What? Fund Management Entities (FMEs) operating in GIFT IFSC may extend their fund management platforms to other clients. Who? All FMEs registered with IFSCA can manage schemes (funds) for other clients, up to an AUM of USD 10 million per fund. How? - Adequate disclosures in offer documents - Appointment of distinct Principal and Compliance Officers for each strategy. - Implementation of a comprehensive risk management framework. - Regular internal audits and reviews. - A robust mechanism to address investor complaints and disputes. - Operational independence for each strategy. Why? This framework draws inspiration from the Luxembourg ManCos model, managing more than EUR 100 bn in AUM, where investment funds are managed on behalf of others, handling key tasks such as portfolio management, risk control, compliance, and investor relations. The proposed Platform Play framework will allow fund managers to explore opportunities in GIFT IFSC by using the platform of an existing FME. Additionally, this framework offers existing FMEs the opportunity to expand their service offerings to other funds. General public and stakeholders are requested to forward their comments/suggestions on this framework on or before August 26, 2024. What do you think of this? Reach out to us at @priya. k@treelife. in for a deeper discussion or leave a comment below. --- > A guide to help you manage the process of the intricate landscape of share transfers efficiently and comply with the legal requirements under The Companies Act, 2013, and The Foreign Exchange Management Act, 1999. - Published: 2024-08-14 - Modified: 2025-03-05 - URL: https://treelife.in/compliance/understanding-share-transfers-guide-for-startups-and-businesses/ - Categories: Compliance DOWNLOAD FULL PDF We at Treelife have compiled a guide to help you manage the process of the intricate landscape of share transfers efficiently and comply with the legal requirements under The Companies Act, 2013, and The Foreign Exchange Management Act, 1999. Key Highlights: 1. Form SH-4 Submission2. Board and RBI Approvals3. Documentation --- > At Treelife, we believe that financial literacy is the cornerstone of business success. Understanding key financial concepts can empower you to make informed decisions and drive your business forward. We’ve created this post to help you get familiar with 10 essential financial terms that every professional should know. - Published: 2024-08-14 - Modified: 2025-08-07 - URL: https://treelife.in/finance/unlocking-financial-literacy-10-key-financial-terms-you-should-know/ - Categories: Finance DOWNLOAD FULL PDF At Treelife, we believe that financial literacy is the cornerstone of business success. Understanding key financial concepts can empower you to make informed decisions and drive your business forward. We’ve created this post to help you get familiar with 10 essential financial terms that every professional should know. Swipe through to enhance your financial knowledge! --- > We're thrilled to share the remarkable growth in fund management activities at GIFT-IFSC! Our latest infographic highlights the significant increase in the number of FMEs and funds, investment commitments, and quarterly growth. This impressive surge underscores the expanding scale and acceptance of GIFT-IFSC as a premier fund management hub. - Published: 2024-08-14 - Modified: 2025-03-05 - URL: https://treelife.in/news/exciting-growth-in-fund-management-at-gift-ifsc/ - Categories: News DOWNLOAD FULL PDF We're thrilled to share the remarkable growth in fund management activities at GIFT-IFSC! Our latest infographic highlights the significant increase in the number of FMEs and funds, investment commitments, and quarterly growth. This impressive surge underscores the expanding scale and acceptance of GIFT-IFSC as a premier fund management hub. --- > Our latest document provides comprehensive insights into the various types of meetings mandated by the Act, including the crucial first board meeting for private companies. - Published: 2024-08-14 - Modified: 2025-03-05 - URL: https://treelife.in/compliance/understanding-meetings-as-per-the-companies-act-2013/ - Categories: Compliance DOWNLOAD FULL PDF Our latest document provides comprehensive insights into the various types of meetings mandated by the Act, including the crucial first board meeting for private companies. Key topics covered include:1. Board Meetings2. Annual General Meetings (AGM)3. Extraordinary General Meetings (EGM)4. First Board Meeting for Private Companies --- - Published: 2024-08-14 - Modified: 2025-07-21 - URL: https://treelife.in/compliance/circular-resolution-understanding-meaning-process-structure/ - Categories: Compliance DOWNLOAD FULL PDF Circular resolutions, as per Section 175 of the Companies Act, 2013, allow the Board of Directors to make urgent decisions without formal meetings. This method is quick, efficient, and essential for time-sensitive matters. Key Points: 1. Process: Circulate the draft to all directors via hand delivery, post, or electronic means. 2. Approval: Resolution passes with majority approval. 3. Exclusions: Certain significant decisions like issuing securities or approving financial statements must be made in formal meetings. --- > Who is a Company Secretary? Appointment criteria as per the Companies Act, 2013. Penalties for non-compliance. - Published: 2024-08-14 - Modified: 2025-03-05 - URL: https://treelife.in/compliance/informatory-note-on-appointment-of-company-secretary/ - Categories: Compliance DOWNLOAD FULL PDF Swipe to view more detailed information on: 1. Who is a Company Secretary? 2.  Appointment criteria as per the Companies Act, 2013. 3. Penalties for non-compliance. 4. Key insights and compliance tips. --- - Published: 2024-08-09 - Modified: 2025-08-07 - URL: https://treelife.in/startups/essential-terms-you-need-to-know-startup-ecosystem-edition/ - Categories: Startups DOWNLOAD FULL PDF Navigating the startup ecosystem can be a daunting task, especially for new entrepreneurs trying to turn innovative ideas into viable businesses. Understanding key terms and concepts in the startup world is essential for anyone aiming to succeed in this dynamic environment. Here, we break down some of the most important terms that every startup founder, investor, and enthusiast should be familiar with. 1. Product-Market Fit: This term refers to the degree to which a product satisfies a strong market demand. Achieving product-market fit is crucial for the success of any startup, as it signifies that the product meets the needs of the target audience. An example of this is Zomato, which successfully identified the need for a reliable platform for restaurant discovery and food delivery, thereby catering to the urban consumer's demand for convenience and variety. 2. Minimum Viable Product (MVP): MVP is the simplest version of a product that can be launched to test a new business idea and gauge consumer interest. The goal is to validate the product concept early in the development cycle with minimal investment. Paytm is a prime example, initially launching as a simple mobile recharge platform before expanding into a full-fledged digital wallet and financial services provider. 3. Go-To-Market Strategy: This strategy outlines how a company plans to sell its product to customers, including its sales strategy, marketing, and distribution channels. It is essential for effectively reaching and engaging the target market. For instance, a well-known ride-hailing company used aggressive marketing and deep partnerships with banks and manufacturers to penetrate the Indian market by offering significant discounts and loans to drivers. 4. Customer Acquisition Cost (CAC): CAC is the total cost incurred by a company to acquire a new customer, including expenses related to marketing, advertising, promotions, and sales efforts. It is a critical metric for assessing the efficiency of a startup’s customer acquisition strategies. According to a 2022 report by IMAP India, the average CAC for Indian startups across various sectors is approximately ₹1,200-1,500. 5. Lifetime Value (LTV): LTV represents the total revenue a business can expect from a single customer account over the entirety of their relationship with the company. For instance, Swiggy evaluates LTV through its Swiggy One membership, analyzing factors such as average order value, order frequency, and subscription renewals to determine the enhanced value brought by members compared to typical customers. 6. Freemium Model: This business model offers basic services for free, with advanced features or functionalities available for a fee. LinkedIn is a prominent example, providing free networking services while offering premium subscriptions for enhanced job search features and LinkedIn Learning. 7. Runway: The runway is the length of time a company can continue operating before needing additional funding, based on its current cash reserves and burn rate. For instance, Unacademy recently made financial adjustments that reduced its cash burn by 60%, securing a financial runway of over four years. 8. Burn Rate: Burn rate refers to the rate at which a company spends its cash reserves or venture capital to cover operating expenses before achieving positive cash flow. Monitoring burn rate is crucial for ensuring a startup's long-term sustainability. A notable example is WeWork, which in 2018 lost $1. 6 billion despite generating $1. 8 billion in revenue, indicating a burn rate that far exceeded its ability to generate profit. 9. Fundraising: This is the process of securing financial investments from investors to support and expand business operations. A significant example is Flipkart's $2. 5 billion investment in August 2017, which played a critical role in scaling its operations and strengthening its position in the competitive e-commerce market against global players like Amazon. By understanding these essential terms, startup founders can better navigate the complexities of the entrepreneurial landscape, make informed decisions, and increase their chances of building a successful business. --- - Published: 2024-08-07 - Modified: 2025-07-21 - URL: https://treelife.in/compliance/convening-and-holding-a-general-meeting-at-a-short-notice/ - Categories: Compliance Looking at the title above, the meaning of same may not be clear because it includes two technical terms: General Meeting Shorter Notice So, what is a General Meeting? Going by the technical terms, a General Meeting is defined as a “a duly convened, held and conducted Meeting of Members”. In common words, a General Meeting is a gathering where the Shareholders of a Company meet to discuss and take decisions on important matters concerning the Company.   and what is a shorter notice? Further, as per the provisions of Section 101(1) of Companies Act, 2013, a General Meeting may be called by giving a notice of 21 clear days (meaning the day of sending the notice and the day of the meeting are excluded from calculation of 21 days). Any notice not confirming with above requirement is a shorter notice. However, MCA has granted a special exemption for Private Limited Companies in this case through its notification dated June 5, 2015. These companies can have a notice period shorter than 21 clear days, provided their Articles allow for it. A General Meeting may be called at shorter notice if consents for the same have been received from the required number of shareholders in writing or in electronic mode, as further explained below: Type of MeetingAnnual General Meeting(In general terms, the meeting where annual financial statements are approved by Shareholders)Other General MeetingsConsent RequiredAtleast 95% of the members entitled to vote at the meetingMajority of Voting Members Holding not less than 95% of the Paid-up Share Capital that gives Right to Vote Are we required to file the above consents for shorter notice anywhere? There is no legal provision that necessitates the requirement to file the consents of members with the registrar for holding a meeting at shorter notice. However, a recent adjudication order no. ROCP/ADJ/Sec-101(1)/(JTA(B)/24-25/17/422 to 425 issued by the Registrar of Companies, Pune on May 28, 2024, highlighted a case where a company filed a resolution in Form MGT-14 without furnishing consents of members for shorter notice. The officer concluded this omission as a default under Section 101(1) of the Companies Act, 2013, treating it similarly to holding a General Meeting at shorter notice without proper consent from members.   Consequently, a penalty of Rs. 3,00,000 (Three Lakh Rupees) was imposed on the company and its directors Therefore, it is advisable to attach these consents with Form MGT-14 when filing a resolution passed at such a meeting. --- - Published: 2024-08-07 - Modified: 2025-07-21 - URL: https://treelife.in/compliance/rights-issue-by-way-of-renunciation/ - Categories: Compliance Rights issue is a process of offering additional shares to the existing equity shareholders (“Shareholders”) of the Company at a pre-determined price which is generally lower than the market value of shares. The concept of a rights issue stands out as a significant mechanism for raising capital. One unique feature of a rights issue is providing the right to shareholders to renounce the shares offered to them in favour of any other person who may or may not be an existing shareholder of the Company. This article explores the process and implications of rights issue by way of renunciation under the Companies Act, 2013.   Overview Rights issue helps companies raise additional capital while giving preference to current shareholders. The key points regarding a rights issue under the Companies Act, 2013, includes: Proportionate Allotment: Shares are offered to existing shareholders in proportion to their current holdings. Price: Typically, shares are offered at a price lower than the prevailing market price or at any price decided by the Board of Directors of the Company. Fixed Time Frame: Shareholders are given a specific period to exercise their rights (minimum 7 days to maximum 30 days).   Provisions for Renunciation: The Companies Act, 2013 outlines the procedures for rights issue and renunciation. Section 62 of the Companies Act, 2013 governs the rights issue and Section 62(a)(ii) permits the renunciation of these rights in favour of any other person.   Procedure for Renunciation The process of renunciation involves several steps: Offer Letter: An offer letter is circulated to existing shareholders with details on the rights issue, including shares offered, price, terms, offer period, and options to accept or waive or renounce. Acceptance or Renunciation: Shareholders are given the option to either partially or wholly renounce their rights. To renounce their rights, shareholders must submit the renunciation form within the stipulated time.   In case the shares are renounced to foreign investors, the Company will need a valuation report. Subscription by Renouncee: The new holder (renouncee) can subscribe to the offered shares by paying the requisite amount. Allotment: The Board allot the shares to the renouncee after receiving acceptance letter and payment. Conclusion The rights issue mechanism under the Companies Act, 2013, with its provision for renunciation, provides a balanced approach for companies to raise capital while offering flexibility to shareholders. By understanding and effectively utilizing these provisions, companies can enhance their financial strategies, and shareholders can make informed decisions to optimize their investment portfolios. The renunciation process, governed by clear legal guidelines, ensures transparency and efficiency, contributing to the overall stability and growth of the capital markets in India. --- - Published: 2024-08-07 - Modified: 2025-07-21 - URL: https://treelife.in/compliance/investment-activities-by-the-limited-liability-partnership/ - Categories: Compliance The Limited Liability Partnership Act, 2008 (LLP Act) has truly transformed how businesses operate in India, offering the best of both worlds by combining the benefits of companies and partnership firms. One fantastic feature of the LLP Act is its broad definition of "business". According to section 2(e) of the LLP Act, "Business" covers every trade, profession, service, and occupation, except for those activities the Central Government specifically excludes through notifications. This expansive definition shows off just how flexible and adaptable the Limited Liability Partnership (LLP) structure is, making it a great fit for all sorts of business activities. But hey, setting up an LLP comes with its own set of rules, especially for certain sectors. If you're in banking, insurance, venture capital, mutual funds, stock exchanges, asset management, architecture, merchant banking, securitization and reconstruction, chit funds, or non-banking financial activities, you gotta get that in-principle approval from the relevant regulatory authority. Investment activities fall under non-banking financial activities, so if an LLP wants to jump into the investment game, it needs the thumbs up from the Reserve Bank of India (RBI).   RBI's Stance on LLPs Engaging in Investment Business Activities The RBI, the big boss of financial and banking operations in India, keeps a close eye on non-banking financial activities to make sure they play by the rules and keep the financial system rock solid. When it comes to setting up entities with a main gig in investment, India has some pretty tight regulations, all under the watchful eye of the RBI. This is super important for Limited Liability Partnerships (LLPs) looking to jump into the investment game. The RBI's guidelines, along with the Reserve Bank Act, 1934, lay down the law on who can get in and what they need to do to stay legit in the world of non-banking financial activities, including investment business.   Key Provisions of the Reserve Bank Act, 1934 Defining: Business of Non-Banking Financial Institution: Section 45-I (a) of the RBI Act, 1934“Business of a Non-Banking Financial Institution” means carrying on of the business of a financial institution referred to in clause (c) and includes business of a non-banking financial company referred to in clause (f);   Defining: Non-Banking Institution and Financial Institution Section 45-I (e) of the RBI Act, 1934Non-Banking Institution has been defined as a “Company, Corporation, or Co-Operative Society”Section 45-I (c) of the RBI Act, 1934Financial Institution” means any non-banking institution which carries on as its business or part of its business any of the following activities, namely: — The financing, whether by way of making loans or advances or otherwise, of any activity other than its own; The acquisition of shares, stock, bonds, debentures or securities issued by a government or local authority or other marketable securities of a like nature; *The definition is very exhaustive so we have kept it limited to our topic   Defining: “Non-Banking Financial Company’’ Section 45-I (f) of the RBI Act, 1934‘‘Non-Banking Financial Company’’ Means– (i) A financial institution which is a company; (ii) A non-banking institution which is a company, and which has as its principal business the receiving of deposits, under any scheme or arrangement or in any other manner, or lending in any manner; (iii) Such other non-banking institution or class of such institutions, as the bank may, with the previous approval of the central government and by notification in the official gazette, specify;   Mandates by the RBI Section 45-IA of the RBI Act, 1934This section mandates that no non-banking financial company shall commence or carry on business without: Obtaining a certificate of registration from the RBI. Maintaining a net owned fund of at least twenty-five lakh rupees or as specified by the RBI, up to two hundred lakh rupees.   Implications for LLPs Given the definitions and requirements stipulated by the Reserve Bank Act, it becomes clear that the RBI's regulatory framework is tailored to companies as defined under the Companies Act, 2013. This specific requirement means that only entities registered as companies under the Companies Act, 2013, are eligible for registration with the RBI to conduct non-banking financial activities, including investment businesses. Here are some of the reasons as to why the LLPs are in-eligible for carrying on the business of Investment Activities: Legal Structure: LLPs, while flexible and beneficial for many business activities, are distinct from companies in their legal structure and registration under the LLP Act, 2008. Regulatory Compliance: The RBI's regulatory provisions explicitly require the registration of non-banking financial companies (NBFCs) to be entities formed under the Companies Act. This ensures that such entities adhere to the rigorous compliance, reporting, and governance standards applicable to companies. Notification and Specificity: The RBI, through its notifications and the provisions of the Reserve Bank Act, explicitly delineates the types of entities that can engage in non-banking financial activities. LLPs do not meet these criteria due to their differing legal status and operational framework.   Conclusion In summary, while the LLP Act, 2008, provides a robust framework for various business activities, it falls short when it comes to non-banking financial activities, specifically investment businesses. The RBI's regulations necessitate that only companies registered under the Companies Act, 2013, are eligible for registration and approval to operate as NBFCs. Therefore, LLPs cannot be registered as NBFCs for the purpose of carrying out investment activities. This clear demarcation ensures that the financial sector remains regulated and compliant with the highest standards set forth by the RBI, maintaining the stability and integrity of the financial system. --- - Published: 2024-08-07 - Modified: 2025-07-22 - URL: https://treelife.in/legal/demystifying-the-transaction-flow-of-vc-deals/ - Categories: Legal The ‘transaction flow’ refers to the various stages involved in a Company obtaining funding from an Investor. Given that this imposes numerous obligations on the Company and the Founders, it becomes critical for Founders to have a clear understanding of the steps involved in receiving funding from an Investor. However, fledgling startups often find the complex terms involved overwhelming and are thus unable to gain a clear picture of the process flow involved in raising funding.     Important Steps Term Sheet - a non-binding agreement that outlines the basic terms and conditions of the transaction.   Transaction Documents - refers to the agreements required to be entered into between the parties to lay down the governing framework of the investment. This would typically take the form of a securities subscription agreement (“SSA”) and a shareholders’ agreement (“SHA”), or a variation of the same known as a securities subscription and shareholders’ agreement (“SSHA”). These agreements will contain detailed language on the nature of each party’s rights and obligations under the contract and will be binding on the parties. Execution - refers to the stage where the parties actually sign and ‘execute’ the Transaction Documents, validating the same and binding the parties to the terms agreed. Conditions Precedent - refers to the conditions required to be completed by the Company and/or Founders to the Investor’s satisfaction before the investors wire the funds to the Company’s bank account (also referred to as Closing). The conditions precedent shall be completed in parallel with execution of transaction documents so that there is no delay in Closing.   Closing - refers to the stage at which the funds are received by the company and securities are allotted to the Investors. Conditions Subsequent - refers to the conditions required to be completed by the Company and/or Founders after Closing, typically include conditions arising out of due diligence of the company and other compliance related steps.   The ‘Transaction Flow’ - A Founders’ perspective Important TermsPoints to bear in mind for FoundersTerm SheetA Term Sheet helps layout the structure for the Transaction Documents and can help establish the negotiated position on critical terms early in the process, which in turn, enables a quick flow from drafting and vetting of agreements to Execution. Term Sheets are non-binding and the terms, although not advisable, but, can vary in the transaction documents.  Due DiligenceA due diligence exercise reviews the records maintained by the Company to ascertain whether the Company’s operations are in accordance with the applicable law. The findings are then highlighted to the Investors basis the magnitude of risk involved in a due diligence report.   Typically, startups have trouble ensuring the secretarial compliances prescribed under Companies Act, 2013 (and relevant rules thereunder) or compliances prescribed under labour legislations, and rectifying the same is made a Condition Precedent or a Condition Subsequent. This would vary from Investor to Investor, based on how risk averse they are.   Transaction DocumentsIn the event that the Company has already completed previous round(s) of funding, Founders must pay heed to the rights of existing Investors and ensure that the appropriate waiver of rights (as applicable) is captured in the agreements. Further, in case of an existing SHA with Investors from earlier rounds of funding, the parties would execute an amendment to SHA or a complete restated SHA, which would be signed by all shareholders of the Company, in addition to the incoming Investors. Consequently, the transaction documents would require consensus of terms from both existing and incoming Investors. It is also important to note that employment agreements between the Founder(s) and the Company (sometimes prescribing specific conditions of employment by Investors) are often made part of this stage. ExecutionEvery agreement would require payment of stamp duty to the competent state government. The duty payable varies from state to state and agreement to agreement, and is either a fixed value or a percentage (%) value of the investment amount (i. e. , the ‘consideration’). The Stamp papers are required to be procured prior to the execution of the transaction documents. Execution can be done through either wet ink or digital signatures.   Conditions PrecedentThis usually encompasses a variety of obligations on the Company/Founders. Typically, completion of this stage is marked by a “Completion Certificate” issued by the Company. We can broadly categorise Conditions Precedent into two headings: (a) statutorily mandated conditions; and (b) Investor mandated conditions.   Statutorily mandated conditions - this would include actions such as passing board and shareholders’ resolutions for increasing authorised capital of the Company and issuance of shares, circulation of offer letters and filing the legally mandated forms for private placement of securities (such as SH-7, MGT-14), procuring requisite valuation reports, et al.   Investor mandated conditions - this would typically arise from a due diligence exercise undertaken by the Investors of the Company. Legal and/or financial issues in the operations of the Company would be actioned for resolution here. However, based on the regulatory requirements applicable to a foreign Investor, sometimes satisfaction of certain compliances that would ordinarily be undertaken later, are included in this stage. ClosingThis stage is marked by movement of funds from the Investors and related compliances to be undertaken under law/the Transaction Documents to complete the allotment of securities, such as: filing of PAS-3, issue of share certificates, amending the articles of association, compliance with Foreign Exchange Management Act, 1999 (including filing form FC-GPR reporting the remittance received), appointment of directors, etc.   It is critical to understand that this is the stage at which the Investors actually become shareholders of the Company. Conditions SubsequentConditions subsequent are usually required to be completed within a specific period after the Closing Date (i. e. , the date on which Closing takes place). These can include items such as amendment of articles of association and memorandum of association of the Company or even statutory filings (such as under Companies Act, 2013 or Foreign Exchange Management Act, 1999). However, this can also include special items mandated by the... --- - Published: 2024-07-26 - Modified: 2025-03-04 - URL: https://treelife.in/case-studies/we-streamlined-financial-operations-for-an-insurance-tech-company-in-record-time/ - Categories: Case Studies In just a few weeks, Treelife transformed the financial infrastructure of an innovative SaaS company. We set up efficient accounting systems, ensured seamless bookkeeping, and provided critical fundraising support. Discover how our strategic approach reduced their operational burden and enhanced their financial management.   Business Overview An innovative insurance-tech company using technology and innovation to transform the traditional insurance model. The company offers a cloud-based platform that connects distributors to the insurance ecosystem.   Project Undertaken Setting up systems for HR, accounting, and payroll Ongoing bookkeeping, tax compliance, and payments Fundraising and due diligence support   How We Helped? Setting Up: Treelife took ownership and set up the entire accounting system for the company from inception using Zoho Books and Zoho Payroll. Assisted in migrating from Zoho Payroll to Keka, ensuring a smooth transition. Effective implementation of software and processes reduced the time and effort required by the founders. Bookkeeping and Accounting: Timely updating of accounting entries and filing, ensuring compliance with regulatory requirements. Completion of requisite regulatory compliances, reducing TAT for payments and MIS processing. Fundraising & Vendor Due Diligence: Represented the company during the due diligence process conducted by investors, assisting them in understanding the business model and transaction workflow. Submitted data in the requisite formats and seamlessly resolved queries from the diligence team regarding finance and tax-related areas promptly. By leveraging our expertise in financial management, Treelife significantly improved the company's operational efficiency and supported its growth journey. Our comprehensive services ensured that the company was well-prepared for investor scrutiny and ongoing financial challenges. --- - Published: 2024-07-26 - Modified: 2025-03-04 - URL: https://treelife.in/case-studies/we-facilitated-a-seamless-global-expansion-for-an-indian-company/ - Categories: Case Studies Treelife played a pivotal role in helping an Indian private limited company transition to a US-headquartered structure. By setting up an LLP in India and guiding the investment process under the ODI route, we ensured compliance with FEMA and income-tax regulations. Our strategic approach enabled the company to raise funds from foreign investors and expand globally with minimal tax implications.   Business Overview Indian individual promoters had established a private limited company in India and sought to expand their business globally. They aimed to raise funds from foreign investors and transition to a US-headquartered structure.   Project Undertaken Setting up an LLP in India Investment in a newly incorporated US entity under the ODI route Acquisition of Indian entity shares by the US entity from the promoters   Structure Mechanics: Indian individual promoters set up an LLP in India. The LLP makes investments in a newly incorporated US entity under the ODI route. The US entity acquires the shares of the Indian entity from the promoters, adhering to FEMA and income-tax regulations. A benchmarking study is undertaken for all ongoing transactions between the US entity and the Indian entity.   Parameters: The gift structure used under the erstwhile ODI rules was no longer possible, as Indian resident founders can now receive gifts of shares from their relatives. Recently revamped ODI rules by RBI do not permit a foreign company to set up an Indian subsidiary where the Indian promoters control such a foreign company. Any transaction between the offshore company and its Indian subsidiary needs to be benchmarked from a transfer pricing perspective. Minimal income-tax implications and adherence to FEMA pricing norms.   Facts: Indian promoters aimed to expand their business globally and raise funds from foreign investors. They sought to move to a US-headquartered structure to facilitate this expansion. By strategically structuring the investment and ensuring compliance with the latest ODI rules and FEMA pricing norms, Treelife enabled the company to achieve its global expansion goals. Our financial advisory services provided the necessary support to navigate complex regulatory landscapes and optimize tax implications, ensuring a smooth transition for the company's international growth. --- - Published: 2024-07-26 - Modified: 2025-03-04 - URL: https://treelife.in/case-studies/streamlining-financial-compliance-for-a-health-tech-innovator/ - Categories: Case Studies Business Overview A health-tech company operating a digital clinic under the brand name ‘Proactive For Her’, providing a digital platform to offer accessible, personalized, and confidential healthcare solutions for women.   Project Undertaken Review of accounting records and tax filings on a monthly basis Compliance assistance for fundraising   How We Helped? Review of Accounts and Tax Filing: Treelife conducted a thorough review of the monthly accounting books to ensure accuracy and completeness, helping the company maintain precise financial records. We ensured GST payments and returns were filed timely and accurately, reducing the risk of non-compliance and potential penalties for the company. Our team streamlined and regularized tax returns, annual filings, and other statutory compliances according to applicable due dates, ensuring the company met all regulatory requirements promptly. Fundraising (Compliance Advisor): Treelife provided compliance advisory services for the company's fundraising efforts, ensuring that all financial records and compliance requirements were up-to-date. We assisted with the timely updating of accounting entries and filings, completing requisite regulatory compliances efficiently. Our involvement ensured a reduction in the turnaround time (TAT) for payments and MIS processing, facilitating smoother financial operations and improved investor confidence. By leveraging our expertise in financial and compliance advisory, Treelife enabled 'Proactive For Her' to maintain accurate financial records, meet all compliance requirements, and support its fundraising activities. Our comprehensive support helped the company focus on its core mission of providing accessible and personalized healthcare solutions while ensuring robust financial and compliance management. --- - Published: 2024-07-24 - Modified: 2025-08-07 - URL: https://treelife.in/reports/union-budget-2024-gearing-up-for-viksit-bharat-2047/ - Categories: Reports DOWNLOAD FULL PDF The Union Budget 2024 marks a significant milestone in India's economic journey. This Budget underscores the Government's commitment to maintaining fiscal prudence while driving substantial investments in critical sectors. Despite global economic challenges, the Indian economy has fared well, maintaining stability and growth. For 2024-25, the fiscal deficit is expected to be 4. 9% of GDP, with a target to reduce it below 4. 5% next year. Inflation remains low and stable, moving towards the 4 percent target, with core inflation (non-food, non-fuel) at 3. 1 percent. The theme of the Budget focuses particularly on employment, skilling, MSMEs, and the middle class. This budget outlines the roadmap to Viksit Bharat 2047 focusing on nine priority areas to generate ample opportunities for all: productivity and resilience in agriculture, employment and skilling, inclusive human resource development and social justice, manufacturing and services, urban development, energy security, infrastructure, innovation and R&D, and next-generation reforms. The Budget introduces several pivotal reforms aimed at simplifying tax structures, incentivizing investments, and promoting sustainable growth. The abolition of angel tax, reduction in corporate tax rates for foreign companies, and comprehensive review of the Income-tax Act, 1961 in the coming days are expected to bolster the startup ecosystem and attract international investments. The subsequent sections of this Budget document provide an in-depth analysis and key highlights related to personal taxation, business reforms, investment opportunities, and developments in GIFT-IFSC. Personal taxation changes include revised income tax slabs, increased deductions, and adjustments in Taxes Collected at Source (TCS) and Taxes Deducted at Source (TDS) regulations. Business reforms cover the abolition of the angel tax, reduction in corporate tax rates for foreign companies, and measures to enhance ease of doing business. Investment opportunities are improved through rationalization of the capital gains tax regime, changes in holding periods and tax rates, and amendments related to buyback taxation and Securities Transaction Tax (STT) rates. GIFT-IFSC developments include tax exemptions for Retail Schemes and Exchange Traded Funds (ETFs), removal of surcharges on specified income, and other measures. These sections provide a comprehensive overview of the Union Budget 2024's measures to support individuals, businesses, and investors, and to enhance India's position as an attractive destination for global investment and financial activities. The Union Budget 2024 is a balanced and forward-looking document, reflecting the Government's resolve to steer the economy towards sustainable growth, innovation, and inclusiveness. This detailed presentation analysis aims to provide a comprehensive analysis of the Budget’'s key highlights, policy changes, and their implications for various sectors of the economy. Overview  Key Macroeconomic Indicators from Budget 2024  Key indicators Budget 2024-25 Budget 2023-24 Total Receipts (other than borrowings) ⬆INR 32. 07 lakh crore INR 27. 2 lakh crore Net Tax Receipts ⬆INR 25. 83 lakh crore INR 23. 3 lakh crore Total Expenditure ⬇INR 48. 21 lakh crore INR 45 lakh crore Fiscal Deficit (as % of GDP) ⬇4. 9%  5. 90% Gross Market Borrowings ⬇INR 14. 01 lakh crore INR 15. 4 lakh crore Net Market Borrowings ⬇INR 11. 63 lakh crore INR 11. 8 lakh crore Notes: 1. Inflation: Low, stable and moving towards the 4 per cent target, 2. Core inflation (non-food, non-fuel): 3. 1 per cent Key Policy Highlights - Budget 2024 1. Employment and Skilling Provides wage support and incentives for first-time employees and job creation in manufacturing, along with employer reimbursements for EPFO contributions. Expected to benefit 2. 1 crore youth, 30 lakh manufacturing jobs, and incentivize 50 lakh employees. Internships for 1 crore youth in 500 top companies over 5 years, with INR 5,000 monthly allowance along with one-time assistance of INR 6,000. Companies eligible to cover training costs and 10% of internship costs from their CSR funds. 2. MSMEs and Manufacturing Credit Guarantee and Support: The Credit Guarantee Scheme facilitates term loans for machinery and equipment purchases without collateral, covering up to INR 100 crore per applicant. Additionally, a new mechanism will ensure continued bank credit to MSMEs during stress periods, supported by a Government-promoted fund. New Assessment Model for MSME Credit: Public sector banks to develop new credit assessment models based on digital footprints rather than traditional asset or turnover criteria. 3. Ease of Doing Business (Tax and Compliance) Angel Tax Abolished: Abolishment of angel tax for all classes of investors to boost the startup ecosystem and entrepreneurial spirit. Income Tax Reforms: Comprehensive review of the Income-tax Act, 1961 in the coming days to reduce disputes and litigation. Variable Capital Company (VCC) Structure: Legislative approval sought for providing an efficient and flexible mode for financing leasing of aircrafts and ships and pooled funds of private equity through a ‘variable company structure’. Stamp Duty Reduction: Encouraging states to moderate high stamp duty rates and consider further reductions for properties purchased by women. Foreign Direct Investment (FDI) and Overseas Investment: The rules and regulations for FDI and Overseas Investments will be simplified to facilitate foreign direct investments, nudge prioritization, and promote opportunities for using Indian Rupee as a currency for overseas investments. 4. Space Economy and Technology A venture capital fund of INR 1,000 crore to expand the space economy by five times in the next decade.   Full exemption of customs duties on 25 critical minerals and reduction on two others to support sectors like space, defense, and high-tech electronics. 5. Services Development of Digital Public Infrastructure (DPI) applications at population scale for productivity gains, business opportunities, and innovation by the private sector. Planned areas include credit, e-commerce, education, health, law and justice, logistics, MSME services delivery, and urban governance. An Integrated Technology Platform will be set up to improve the outcomes under the Insolvency and Bankruptcy Code (IBC) for achieving consistency, transparency, timely processing, and better oversight for all stakeholders. 6. Others Urban Land Related Actions: Land records in urban areas will be digitized with Geographic information system (GIS) mapping. An IT-based system for property record administration, updating, and tax administration will be established. These will also facilitate improving the financial position of urban local bodies. 9 Pillars to Viksit Bharat 2047... --- - Published: 2024-07-15 - Modified: 2024-08-21 - URL: https://treelife.in/news/regulatory-update-from-ifsca-international-financial-services-centres-authority/ - Categories: News IFSCA has released a Circular prescribing the fees for the newly introduced Book-keeping, Accounting, Taxation, and Financial Crime Compliance Services (BATF) Regulations. 𝐅𝐞𝐞 𝐒𝐭𝐫𝐮𝐜𝐭𝐮𝐫𝐞:– 𝐀𝐩𝐩𝐥𝐢𝐜𝐚𝐭𝐢𝐨𝐧 𝐅𝐞𝐞𝐬: $1,000 per activity– 𝐑𝐞𝐠𝐢𝐬𝐭𝐫𝐚𝐭𝐢𝐨𝐧 𝐅𝐞𝐞𝐬: $5,000 𝐀𝐧𝐧𝐮𝐚𝐥 𝐅𝐞𝐞𝐬 𝐟𝐨𝐫 𝐒𝐞𝐫𝐯𝐢𝐜𝐞 𝐏𝐫𝐨𝐯𝐢𝐝𝐞𝐫𝐬:– Less than 500 employees: $5,000 per activity– 500 to 1,000 employees: $7,500 per activity– More than 1,000 employees: $10,000 per activity 𝐊𝐞𝐲 𝐏𝐨𝐢𝐧𝐭𝐬 𝐟𝐨𝐫 𝐄𝐱𝐢𝐬𝐭𝐢𝐧𝐠 𝐀𝐧𝐜𝐢𝐥𝐥𝐚𝐫𝐲 𝐒𝐞𝐫𝐯𝐢𝐜𝐞 𝐏𝐫𝐨𝐯𝐢𝐝𝐞𝐫𝐬 (𝐀𝐒𝐏𝐬):– Existing ASPs rendering BATF services under the IFSCA ASP Framework are not required to pay the application fee for the same activity under BATF regulations. – Annual/recurring fees will be adjusted for the fees already paid under the ASP framework. 𝐈𝐦𝐩𝐨𝐫𝐭𝐚𝐧𝐭 𝐃𝐚𝐭𝐞:– Existing ASPs must communicate their willingness to operate under the new BATF regulations for bookkeeping, accountancy, and taxation services by August 2, 2024. 𝘍𝘰𝘳 𝘮𝘰𝘳𝘦 𝘥𝘦𝘵𝘢𝘪𝘭𝘴, 𝘤𝘩𝘦𝘤𝘬 𝘰𝘶𝘵 𝘵𝘩𝘦 𝘊𝘪𝘳𝘤𝘶𝘭𝘢𝘳 𝘩𝘦𝘳𝘦: http://surl. li/yxvqex --- - Published: 2024-07-10 - Modified: 2024-09-04 - URL: https://treelife.in/news/foreign-liabilities-and-assets-fla-annual-date-approaches/ - Categories: News Don’t forget, the FLA annual return under FEMA 1999 is due by 𝐉𝐮𝐥𝐲 15. Ensure timely submission to avoid penalties. 𝐖𝐡𝐨 𝐍𝐞𝐞𝐝𝐬 𝐭𝐨 𝐅𝐢𝐥𝐞? All India-resident companies, LLPs, and entities with FDI or overseas investments. 𝐊𝐞𝐲 𝐃𝐚𝐭𝐞𝐬:1. Submission Deadline: July 152. Revised Return Deadline: September 30 𝐇𝐨𝐰 𝐭𝐨 𝐅𝐢𝐥𝐞:1. Register on the RBI portal: FLA Registration Link2. Submit the required verification documents. 3. Log in and complete the form. --- - Published: 2024-07-08 - Modified: 2025-02-07 - URL: https://treelife.in/reports/navigating-indias-labour-law-a-comprehensive-regulatory-guide-for-startups/ - Categories: Reports - Tags: India’s Labour Law, Labour Law, Labour Law India DOWNLOAD FULL PDF The "Navigating Labour Laws: A Comprehensive Regulatory Guide for Startups” by Treelife offers a comprehensive overview of India's intricate labour law landscape, emphasising the significance of these compliances for startups. Rooted in the fundamental rights (specifically, the Rights to Equality; to Freedom; and against Exploitation) and the directive principles of state policy (contained in Articles 38, 39, 41, 42, and 43) enshrined in the Indian Constitution, labour laws in India are fundamentally welfare legislations, imposing significant compliance responsibility on employers as a result of a socialist outlook seeking to protect the dignity of human labour. Given the dual role played by central and state governments in labour law, startups are oftentimes unaware of applicable compliances or are under-equipped to navigate the complex framework, lacking the deep technical understanding required. It is this gap in understanding that this Regulatory Guide attempts to bridge, with the major highlight being a quick reference guide for startups to identify critical compliances at both levels of governance. Other key highlights include: Complex Regulatory Framework: A breakdown of the multifaceted compliance environment, highlighting for instance, added layer of compliance as seen in the Industrial Employment (Standing Orders) Act, 1946, which dictates terms of employment, and the relevant state-specific Shops and Establishments Acts, which also prescribe similar conditions but with variations, necessitating detailed assessments to determine applicable compliances. Critical Central Legislations: In order to ensure complete clarity of compliances at the central level, the Regulatory Guide highlights the critical legislations that are typically applicable across industries/sectors to startups, applicability factors, compliance requirements and penalties for violation. Notwithstanding the inconsistent enforcement in these laws, it is pertinent to note that many of these legislations prescribe imprisonment for the officer in default, as potential penalty for failure to comply. State-Specific Regulations: Beyond central laws, startups must navigate state-specific legislations, which can provide detailed provisions governing the terms of employment and service and even tax obligations, and impose additional compliance requirements. Statutory Leave Entitlements: A critical point for any startup formulating a leave policy, the Regulatory Guide provides a quick reference to the types of and minimum number of leaves that are mandated by laws. Typically, this can flow from a central legislation (like in the case of maternity benefits) or from state-specific legislations (such as each state’s Shops and Establishments Act, the mandates under which can vary from state to state). Upcoming Labour Codes: While highlighting the structural issues in the Indian labour law framework, the Regulatory Guide also provides an overview of the proposed Labour Codes, which aim to simplify and reduce ambiguities in law enforcement across states, making it easier for startups to understand and comply with labour regulations, thereby fostering a more straightforward regulatory environment conducive to business operations and growth. The Indian government is consolidating existing the labour laws into four new codes:i) Code on Wagesii) Occupational Safety, Health and Working Conditions Codeiii) Social Security Codeiv) Industrial Relations Code Challenges and Recommendations: In addition to navigating the two-level governance required, the Regulatory Guide also identifies some critical challenges faced by startups in complying with the applicable labour laws which include:i) Lack of technical expertise to understand the critical distinctions in certain legally defined terms, such as "workman" and "employee" which have similar meaning outside of the legal parlance, but which can have varying definitions across laws, affecting the applicability of protections and remedies.  ii) Requirement for proactive compliance, which can help startups avoid legal pitfalls but which may result in increased compliance costs. The Labour Law Handbook by Treelife is an essential guide for businesses navigating India’s complex labour law framework. Tailored for startups and growth-focused enterprises, this report simplifies intricate compliance requirements, offering actionable insights into central and state-specific regulations, statutory obligations, and upcoming labour code reforms. With detailed explanations of critical laws, practical compliance checklists, and expert recommendations, this handbook empowers businesses to mitigate legal risks, ensure workforce welfare, and operate confidently in a dynamic regulatory environment. --- - Published: 2024-07-05 - Modified: 2025-07-22 - URL: https://treelife.in/technology/the-role-of-large-language-models-llms-in-the-legal-and-financial-sectors/ - Categories: Emerging Technology - Tags: AI for financial institutions, AI for law firms, large language models finance applications, large language models legal applications, LLM, LLM assisted due diligence, LLM financial analysis, LLM for financial risk assessment, LLM for legal document automation, LLM for regulatory compliance in finance, LLM in fraud detection for finance, LLM legal research Introduction Artificial Intelligence (AI), especially Large Language Models (LLMs) are transforming the legal and financial sectors. These models enhance efficiency, accuracy, and decision-making through advanced natural language processing (NLP) and text generation. LLMs are built on deep learning architectures and trained on vast datasets to understand, interpret, and generate human-like text and thereby support professionals by automating routine tasks. This article explores how LLMs are transforming both the legal and financial industries, their applications, benefits, challenges, and future implications.   Understanding Large Language Models LLMs are AI systems designed to understand, generate, and respond to human language in a manner that mimics human-like understanding and reasoning. These models are trained on vast amounts of textual data, allowing them to learn patterns, relationships, and nuances in language. Recent advancements have expanded the capabilities of LLMs beyond simple language understanding to complex tasks such as language generation, translation, summarization, and even dialogue.   Applications of LLM in the Legal Sector With these developments, LLMs have been given the challenge of revolutionizing the legal sector by offering advanced capabilities in natural language processing (NLP) and understanding legal texts. Here’s how LLMs are being applied in the legal sector, at relatively small scales (at present): Automating Routine Tasks LLMs are transforming legal practices by automating routine tasks such as document review, legal research, and case analysis. They can sift through extensive legal databases, extract relevant information from case law, statutes, and regulations, and provide summaries or insights that aid legal professionals in decision-making. Streamlining Contract Analysis and Due Diligence In contract law and due diligence processes, LLMs streamline the analysis of contracts by extracting key terms, identifying risks, inconsistencies, or anomalies, and suggesting revisions based on predefined legal criteria, and also provide significant support contract management by analyzing contracts, extracting key points, and categorizing them based on legal issues, thereby saving time on administrative tasks. This reduces the time and effort required for contract review and enhances accuracy in identifying potential legal issues. Moreover, LLMs assist in legal compliance by monitoring legislative updates, identifying pertinent legal developments, and providing insights to mitigate risks and ensure regulatory adherence. Compliance Monitoring and Regulatory Analysis LLMs assist legal departments in compliance monitoring by analyzing regulatory texts, monitoring changes in laws and regulations, and ensuring adherence to compliance requirements. They facilitate the preparation of compliance reports, regulatory filings, and disclosures, thereby improving efficiency and reducing compliance-related risks.   Case Studies and Examples for Legal Sector Examples of successful integration of LLMs into legal practices include the use of AI-powered platforms for legal research and contract management by law firms and corporate legal departments. These platforms leverage LLMs to enhance productivity, accuracy, and decision-making capabilities in handling legal documents and regulatory requirements. Some examples wherein LLMs have been opined on or even used by Indian Judiciary include: In 2023, the Delhi High Court issued a temporary injunction, commonly known as a "John Doe" order, prohibiting social media platforms, e-commerce websites, and individuals from using actor Anil Kapoor’s name, voice, image, or dialogue for commercial purposes without authorization. The Court specifically banned the use of Artificial Intelligence (AI) tools to manipulate his image and the creation of GIFs for monetary gain. Additionally, the Court directed the Union Ministry of Electronics and Information Technology to block pornographic content that features altered images of the actor. Since 2021, the Supreme Court has employed an AI-powered tool designed to process and organize information for judges' consideration, though it does not influence their decision-making process. Another tool utilized by the Supreme Court of India is SUVAS (Supreme Court Vidhik Anuvaad Software), which facilitates the translation of legal documents between English and various vernacular languages. In the case of Jaswinder Singh v. State of Punjab, the Punjab & Haryana High Court put the question of the worldwide view on bail for assaults with cruelty to ChatGPT, and included the excerpt of the response from ChatGPT as a part of the order. While no reliance was placed on the response from ChatGPT itself, the excerpt was in support of the honorable court’s findings and explained that “if the assailants have been charged with a violent crime that involves cruelty, such as murder, aggravated assault, or torture, they may be considered a danger to the community and a flight risk”. AI-powered platforms have enabled law firms and corporate legal departments to enhance productivity and accuracy in legal research and contract management, including players such as Harvey AI, Leya AI, Paxton AI, DraftWise, Robin, etc. , all of which use LLMs and other technologies to provide support to legal professionals to assist lawyers with drafting, negotiating, reviewing, and summarizing legal documents, and to provide more useful legal research and contract management tools. Moreover, within the Indian Judiciary, LLMs have been employed for tasks ranging from issuing injunctions to aiding in translation and providing broader insights into legal considerations.   These advancements underscore the growing role of AI technologies in augmenting judicial processes while maintaining clarity on their role in supporting, rather than determining, legal outcomes. As AI continues to evolve, its integration promises to further streamline legal operations and foster more informed and equitable judicial decisions.   Impact of LLM on Financial Services The finance sector faces a deluge of data, including filings, reports, and contracts, requiring meticulous scrutiny due to the high stakes involved. Errors are not an option when handling finances. The recent integration of Large Language Models (LLMs) represents a transformative shift. LLMs have the capability to rapidly process and generate extensive text, automate repetitive tasks, and condense information into accessible formats. Functions such as fraud detection, anomaly analysis, and predictive modeling can now leverage AI and machine learning techniques effectively.   Risk Assessment and Fraud Detection Machine-learning AI models analyze large datasets in real-time to quickly spot potential fraud by learning from past data. Trained on both fraudulent and legitimate examples, these models categorize transaction patterns, improving fraud detection. Processing insurance claims for property and casualty involves complex assessments to determine validity and cost,... --- - Published: 2024-07-02 - Modified: 2025-01-21 - URL: https://treelife.in/legal/demystifying-legal-metrology-rules-in-india-ensuring-fairness-in-everyday-transactions/ - Categories: Legal - Tags: legal metrology In the bustling markets and stores of India, where buying and selling happens every day, there's a set of rules quietly at work to make sure you get what you pay for. These acts and rules are colloquially known as ‘Legal Metrology’. The rules are intended to make sure that measurements and weights used in trade are accurate and fair, and are represented to the consumer clearly. The rules are enforced by the Legal Metrology Division, which is managed by the Department of Consumer Affairs under the Ministry of Consumer Affairs, Food & Public Distribution.   What is Legal Metrology? Legal Metrology sets out to ensure that whatever you buy (whether it’s rice, oil, fruits, cosmetics, backpacks, electronics, or any other packaged goods or commodities) is in compliance with requirements and guidelines about the quantity, weight, measurements, expiry date, origin, manufacturer, etc. , and is also packaged in a manner that these details are captured and made available to you. It's like having referees in the game of trade, making sure everyone plays fair.   How Does It Work? Ensuring Accuracy: You might notice a stamp or mark on the weighing/measuring devices/equipments, this is to show that they’ve been verified and are accurate. In fact, the Legal Metrology department also issues Licenses to manufacturers, dealers and repairer of weighing/measuring devices for dealing with such instruments.   Packaged Goods: Ever look at a pack of biscuits or a bottle of shampoo and see all those details like MRP, manufacturing date, expiry date, consumer care information as well as the quantity of the package? Legal Metrology rules make it mandatory for companies to give you this information in the manner prescribed under the Legal Metrology Act, 2009 as well as the Legal Metrology (Packaged Commodities) Rules, 2011 so you are aware of the contents of the package and of your mode of communication with the company in case of any complaints.   What a Consumer Should Know? Rights as a Consumer: You have the right to get what you pay for. If you feel something is not right, like the weight of a product or the information on the pack, you can file a complaint through the online platform - https://consumerhelpline. gov. in/ , which will be forwarded to the appropriate officer for grievance redressal. One can register complaints by call on 1800-11-4000 or 1915 or through SMS on 8800001915. Checking for Stamps: Next time you buy something by weight, look for the stamp or mark on the scale or the measuring device. It means it’s been checked and is okay to use   What a Business Owner (For Consumer Goods) Should Know? Product Packaging and Labelling: You must ensure that all products intended for retail sale are accurately weighed or measured and are packaged as per the prescribed standards. This includes providing essential information such as net quantity, MRP (Maximum Retail Price), date of manufacture, expiry date, and consumer care details on the packaging. Weighing and Measuring Instruments: Businesses using weighing and measuring instruments (like scales, meters, etc. ) must ensure these instruments are verified and stamped by authorized Legal Metrology officers. Regular calibration and maintenance of these instruments are essential to maintain accuracy and compliance. Compliance and Audits: Regular audits and inspections are conducted by Legal Metrology authorities to verify compliance with Legal Metrology rules. Non-compliance can lead to penalties, fines, seizure of goods or even legal repercussions, which can impact a company's reputation and operations.   Challenges and Moving Forward Offences relating to weights and measures are punished with fine or imprisonment or with both depending on the offence committed. The government is working on making these rules easier to understand and ensuring everyone follows them correctly.   Conclusion Legal Metrology rules are not just about weights and measures; they are about fairness and trust in every transaction you make. By making sure everything is measured and packaged correctly, these rules protect you as a consumer and ensure that businesses play by the rules. So, next time you shop, remember these rules are on your side to make sure you get what you deserve! --- - Published: 2024-07-02 - Modified: 2025-07-21 - URL: https://treelife.in/legal/doctrine-of-work-for-hire/ - Categories: Legal - Tags: doctrine of work for hire, work for hire The doctrine of “work for hire” is a legal concept that determines the ownership of a copyrighted work when it is created in the context of an employment relationship or under a specific contractual arrangement. The purpose of this doctrine is to establish clarity regarding the rights and ownership of creative works, particularly when multiple parties are involved in the creation process.   Criteria for Work to Qualify as a “Work for Hire” To qualify as a “work for hire,” certain criteria must be met, although the specifics may vary depending on the jurisdiction. Generally, the following elements are considered: Employee-Employer Relationship: In an employment scenario, the work created by an employee within the scope of their employment duties is automatically considered a “work for hire. ” The employer is deemed the legal author and owner of the copyright. Commissioned Works: In some cases, a work may be commissioned from an independent contractor, such as a freelancer or consultant. For such works to be categorized as “works for hire,” there must be a written agreement explicitly stating that the work is a “work for hire” and that the commissioning party will be considered the legal owner of the copyright. It is important to note that different jurisdictions may have variations in the specific requirements and definitions of a “work for hire. ” Therefore, it is essential to consult the copyright laws of the relevant jurisdiction for a comprehensive understanding.   “Work for Hire” In The United Kingdom In collaborative scenarios, where multiple parties contribute to the creation of a work, it becomes necessary to ascertain the ownership of the copyright. The terms of the collaboration agreement and the intentions of the parties involved play a crucial role in such cases. The case of Creation Records Ltd v. News Group Newspapers Ltd EMLR 444 shed light on this issue. The court considered a situation where a photograph was taken by a photographer for a newspaper article. The court emphasized the importance of the contractual arrangements and the intention of the parties involved in determining the ownership of the copyright. The photographer, in this case, retained the copyright as the collaboration agreement did not clearly transfer it to the newspaper.   “Work for Hire” In The United States In the United States, the concept of “work for hire” is extensively addressed under the Copyright Act of 1976. According to Section 101 of the Act, a work qualifies as a “work for hire” if it is: Prepared by an Employee: The work must be created by an employee within the scope of their employment duties. In such cases, the employer is considered the legal author and owner of the copyright. The landmark case of Community for Creative Non-Violence v. Reid (490 U. S. 730, 1989) explored the scope of an employment relationship and ownership of a work. The Supreme Court considered factors such as the control exerted by the employer, the provision of employee benefits, and the nature of the work to determine whether the work was a “work for hire. ” The court ultimately ruled that the work in question did not meet the criteria for a “work for hire,” and the copyright ownership remained with the creator.   “Work for Hire” In India In India, the concept of “work for hire” is not explicitly defined in copyright legislation. However, the Copyright Act, 1957, does provide provisions related to the ownership of copyright in works created in the course of employment. The case of Eastern Book Company v. D. B. Modak (2008) addressed the ownership of copyright in works created by employees. The court held that if an employee creates a work during the course of their employment and it falls within the scope of their duties, the employer will be considered the first owner of the copyright unless there is an agreement to the contrary. When it comes to works created by freelancers or under contractual arrangements, the ownership of copyright is typically determined by the terms of the agreement between the parties involved. In the case of Indian Performing Right Society v. Eastern Indian Motion Pictures Association (2012), the court emphasized the importance of contractual arrangements and the intent of the parties involved in determining copyright ownership. The court ruled that the ownership of copyright rests with the party who commissions the work unless otherwise specified in the agreement.   Similarities and Differences between U. K. , U. S. , and Indian Approaches The U. K. , U. S. , and India have different approaches to the “work for hire” doctrine. While all jurisdictions consider the employment relationship and written agreements as important factors, the specific criteria and legal provisions differ. The U. S. has a more detailed statutory framework for “works for hire,” while the U. K. and India rely on case law and contractual agreements to determine copyright ownership.   Emerging Trends and Future Outlook Evolving Nature of Employment Relationships: The nature of employment relationships is undergoing significant changes, driven by factors such as the gig economy, remote work, and freelance culture. These developments pose new challenges in applying the doctrine of “work for hire. ” The line between employee and independent contractor can become blurred, making it more complex to determine copyright ownership. As the workforce becomes more flexible and diverse, legal frameworks may need to adapt to address these evolving employment relationships. Influence of Technology and Remote Work: Advancements in technology have transformed the creative industries, enabling collaboration and work across geographical boundaries. Remote work has become more prevalent, and creative projects often involve contributors from different locations. This raises questions about jurisdictional issues and the application of copyright laws in cross-border collaborations. Clear contractual agreements and international harmonization of copyright laws may be necessary to provide guidance and ensure fair treatment of creators.   Practical Considerations for Creators and Employers Clear Contractual Agreements: Creators and employers should prioritize clear and comprehensive contractual agreements that address the issue of copyright ownership explicitly. These agreements should clearly... --- - Published: 2024-07-02 - Modified: 2025-01-08 - URL: https://treelife.in/news/batf-regulations/ - Categories: News The International Financial Services Centres Authority (IFSCA) has recently rolled out the 𝐁𝐨𝐨𝐤-𝐤𝐞𝐞𝐩𝐢𝐧𝐠, 𝐀𝐜𝐜𝐨𝐮𝐧𝐭𝐢𝐧𝐠, 𝐓𝐚𝐱𝐚𝐭𝐢𝐨𝐧, 𝐚𝐧𝐝 𝐅𝐢𝐧𝐚𝐧𝐜𝐢𝐚𝐥 𝐂𝐫𝐢𝐦𝐞 𝐂𝐨𝐦𝐩𝐥𝐢𝐚𝐧𝐜𝐞 𝐒𝐞𝐫𝐯𝐢𝐜𝐞𝐬 (𝐁𝐀𝐓𝐅) 𝐑𝐞𝐠𝐮𝐥𝐚𝐭𝐢𝐨𝐧𝐬 𝐢𝐧 𝐉𝐮𝐧𝐞 2024. We are thrilled to share a snapshot of the permissible activities and essential considerations to keep in mind before setting up a BATF unit. Permissible Activities Book-keeping Services Inclusion: Classify and record transactions, including payroll ledgers in books of account Exclusion: Does not include payroll management and taxation services Accounting Services (excluding audit) Inclusion: Review, compilation, preparation, and analysis of financial statements Exclusion: Audit; Review and compilation without any assurance and attestation Taxation Services Offer tax consultation, preparation, and planning Advise on all forms of direct and indirect taxes Prepare and file various tax returns Financial Crime Compliance Services Render compliance services of AML/CFT measures, FATF recommendations, and related activities Additional Requirements Legal Form: Company or LLP Service Recipient: Non-resident and does not reside in a high-risk jurisdiction identified by FATF. * Minimum Office Space Criteria: 60 sq. ft. per employee *Please refer to the list of High-Risk Jurisdictions – February 2024. --- - Published: 2024-07-01 - Modified: 2025-07-21 - URL: https://treelife.in/legal/vitality-of-disclaimer-of-warranty-clause-in-saas-agreements/ - Categories: Legal - Tags: Warranty Clause, Warranty Clause in SaaS Agreements Software as a Service (SaaS) agreements have become increasingly prevalent in the digital era, especially in India, where the technology sector is rapidly expanding. These agreements typically involve the provision of software applications hosted on cloud-based platforms to users on a subscription basis. One critical aspect of SaaS agreements is the disclaimer of warranty clause, which plays a pivotal role in defining the rights and responsibilities of both the service provider and the user. In this article, we delve into the significance of the disclaimer of warranty clause in SaaS agreements under Indian contract law, exploring its implications, legal framework, and practical considerations.   Contextualizing the Disclaimer of Warranty Clause   At its essence, the disclaimer of warranty clause embodies the principle of caveat emptor - let the buyer beware. In the realm of SaaS agreements, this clause assumes paramount significance as it pertains to the assurances and guarantees, or lack thereof, regarding the performance, functionality, and suitability of the software platform provided by the service provider. By disclaiming certain warranties, the provider seeks to mitigate legal exposure and shield itself from potential claims arising from performance discrepancies, operational disruptions, or functional inadequacies inherent to software solutions.   Providing Platform on an "As Is" Basis Central to the disclaimer of warranty clause is the provision of the SaaS platform on an "as is" basis. This legal construct signifies that the service provider makes no representations or warranties regarding the platform's fitness for a particular purpose, merchantability, or non-infringement of third-party rights. Essentially, the platform is delivered in its current state, devoid of any implicit or explicit assurances regarding its performance, reliability, or compatibility with the user's specific requirements.   Waiving Off All Warranties By waiving off warranties of merchantability, fitness for purpose, and infringement, the service provider seeks to insulate itself from potential liabilities stemming from software deficiencies, operational disruptions, or intellectual property conflicts. This blanket waiver underscores the contractual understanding that the user assumes all risks associated with platform utilization, including but not limited to data loss, system incompatibility, or third-party claims arising from intellectual property violations.   Legal Framework in India Under Indian contract law, SaaS agreements are governed primarily by the Indian Contract Act, 1872, which provides the legal framework for the formation, interpretation, and enforcement of contracts. Section 16 of the Act specifies that contracts which are entered into by parties under a mistake of fact or under certain misrepresentations may be voidable at the option of the aggrieved party. However, the Act also recognizes the principle of freedom of contract, allowing parties to negotiate and agree upon the terms of their agreement, including limitations of liability and disclaimer of warranties.   Implications and Importance Limitation of Liability: The disclaimer of warranty clause serves to limit the liability of the service provider in case of software defects, performance issues, or service interruptions. By explicitly stating that the platform is provided "as is" and disclaiming certain warranties, the service provider seeks to shield itself from potential claims or lawsuits arising from user dissatisfaction or system failures. Risk Allocation: In SaaS agreements, the disclaimer of warranty clause helps to allocate risks between the parties more equitably. It puts the onus on the user to assess the suitability of the platform for their intended purposes and acknowledges that the service provider cannot guarantee flawless performance or absolute compatibility with the user's specific requirements. Clarity and Transparency: Clear and explicit disclaimer of warranty clauses promote transparency and facilitate informed decision-making by apprising users of the inherent risks associated with platform utilization. Users are empowered to assess the platform's suitability for their specific requirements and risk tolerance, thereby fostering a relationship grounded in mutual understanding and transparency. Further, a well-drafted disclaimer of warranty clause ensures compliance with Indian contract law principles, particularly regarding the requirement of clear and unambiguous contractual terms. Indian courts generally uphold the principle of freedom of contract and give effect to the intentions of the parties as expressed in their agreement, provided that such terms are not contrary to public policy or statutory provisions. Flexibility and Innovation: By disclaiming warranties of merchantability and fitness for purpose, service providers are afforded greater flexibility and autonomy to innovate and iterate upon their software solutions without the burden of implicit contractual obligations. This fosters an environment conducive to continuous improvement and technological advancement, thereby enhancing the platform's competitiveness and value proposition in the marketplace.   Conclusion In the ever-evolving landscape of SaaS agreements, the disclaimer of warranty clause emerges as a cornerstone of legal protection, risk mitigation, and transparency. By delineating the scope of warranties provided and waiving off certain assurances, service providers and users alike navigate the SaaS ecosystem with prudence, clarity, and mutual understanding. As digital solutions continue to redefine business paradigms and empower enterprises with unprecedented capabilities, embracing the nuances of the disclaimer of warranty clause becomes indispensable for fostering resilient, mutually beneficial contractual relationships in the digital age. --- - Published: 2024-07-01 - Modified: 2025-07-21 - URL: https://treelife.in/legal/unconscionable-contracts-and-related-principles/ - Categories: Legal - Tags: Unconscionable Contracts The Doctrine of Unconscionable Contract stands as a vital safeguard in the realm of Indian contract law, aiming to prevent exploitation and injustice arising from unfair or oppressive contractual agreements. Unconscionability is a legal concept rooted in fairness, particularly within contractual relationships. It allows a party to challenge a contract if it contains excessively harsh or oppressive terms or if one party gains an unjust advantage over the other during negotiation or formation. This principle has been acknowledged by the Law Commission of India in its 199th report on Unfair (Procedural & Substantive) Terms in Contract. The Doctrine of Unconscionable Contract serves as a mechanism to rectify these imbalances by empowering courts to scrutinize contractual agreements and invalidate provisions that contravene principles of fairness and equity. In addition to unconscionability, the principles of non est factum offer further protection to individuals against unfair contracts. Non est factum, meaning "it is not the deed," applies when a party signs a document under circumstances where they are mistaken as to its nature or contents. This principle recognizes that individuals should not be bound by contracts they did not understand or intend to enter into. Indian courts have invoked non est factum to set aside contracts in cases of fraud, misrepresentation, or extreme misunderstanding, thereby safeguarding individuals from unjust contractual obligations. Furthermore, the doctrines of coercion and undue influence provide additional safeguards against unfair contractual practices. Coercion refers to situations where one party compels another to enter into a contract through threats, undermining the voluntariness of the agreement. Undue influence, on the other hand, occurs when one party having apparent authority of a fiduciary relationship exploits a position of power or trust to exert undue pressure on the other party, thereby influencing their decision-making. Indian courts scrutinize contracts for signs of coercion or undue influence, and contracts tainted by these factors may be declared void or unenforceable.   UK and Indian Law In the United Kingdom, scholars have associated "exploitation" with the concept of unconscionability. They distinguish between unconscionable enrichment and unjust enrichment, with the former focusing on preventing exploitation and providing restitution for damages caused by exploitative bargains. Courts assess whether one party has taken advantage of the other, often due to factors like immaturity, poverty, or lack of adequate advice. Indian law, while not explicitly codifying the doctrine of unjust enrichment, embodies principles that align with its core tenets. Within Indian jurisprudence, concepts of undue influence and unequal bargaining power, as delineated in Sections 16 (Undue Influence) and 19 (Voidability of Agreements without Free Consent) of the Indian Contract Act 1872, establish a foundation for equitable treatment in agreements. Unjust enrichment, though not codified, encapsulates the essence of retaining benefits unjustly at another's expense, contravening principles of justice and fairness. Despite the absence of specific legislative mandates, Indian courts possess inherent authority to order restitution, aiming to dismantle unjust gains and restore fairness. This empowerment enables courts to fashion remedies tailored to the unique circumstances of each case, ensuring that aggrieved parties are made whole again.   Landmark Judgments in India: The evolution of unconscionability in Indian contract law is punctuated by landmark judgments that have shaped its contours and applications. In Central Inland Water Transport Corporation v. Brojo Nath Ganguly (1986 SCR (2) 278), the Supreme Court of India set a precedent by declaring a clause in an employment contract, which waived an employee's right to sue for breach of contract, as unconscionable and therefore void. Similarly, in Mithilesh Kumari v. Prem Behari Khare (AIR 1989 SC 1247), the court deemed a lease agreement clause requiring exorbitant security deposits as unconscionable and unenforceable. These judgments underscore the judiciary's commitment to upholding fairness and equity in contractual relationships, irrespective of the parties' relative bargaining positions.   Recent judicial pronouncements further illuminate the significance of the Doctrine of Unconscionable Contract in protecting vulnerable parties from exploitation. In Surinder Singh Deswal v. Virender Gandhi (2020 (2) SCC 514), the Supreme Court struck down a clause in a promissory note that deprived the borrower of due process rights, reaffirming the judiciary's commitment to rectifying injustices arising from unconscionable contracts.   Broader Implications and Legal Perspectives: The Doctrine of Unconscionable Contract transcends its immediate legal implications, embodying broader principles of distributive justice and societal welfare. By addressing power imbalances and ensuring equitable outcomes in contractual relationships, unconscionability contributes to a legal framework that prioritizes fairness and integrity. Moreover, the doctrine underscores the judiciary's role as a guardian of individual rights and a bulwark against exploitative practices in commercial transactions.   Conclusion: In conclusion, the Doctrine of Unconscionable Contract serves as a cornerstone of Indian contract law, safeguarding individuals against exploitation and injustice in contractual agreements. Through landmark judgments and insightful analyses, Indian courts have reaffirmed the legality and relevance of unconscionability, underscoring its pivotal role in upholding fairness and equity in contractual relationships. By promoting principles of distributive justice and societal welfare, unconscionability contributes to a legal landscape that fosters integrity, equality, and justice for all parties involved. --- - Published: 2024-07-01 - Modified: 2025-08-07 - URL: https://treelife.in/legal/significance-of-governing-law-and-jurisdiction-in-international-commercial-contracts/ - Categories: Legal In today's interconnected global economy, businesses engage in cross-border transactions and collaborations, necessitating robust legal frameworks to govern contractual relationships and resolve disputes. Governing law and jurisdiction clauses play pivotal roles in international commercial contracts, providing clarity, predictability, and mechanisms for effective dispute resolution. This comprehensive guide delves into the intricacies of governing law and jurisdiction clauses, offering insights from legal principles, industry best practices, and relevant regulatory frameworks.   Understanding Governing Law Clauses Definition and Purpose: Governing law clauses, commonly included in commercial agreements, specify the legal system and laws that will govern the interpretation, validity, and enforcement of contractual rights and obligations. These clauses serve to provide certainty and predictability to parties involved in international transactions, ensuring uniformity in legal interpretation and dispute resolution. The selection of a governing law in international contracts assumes paramount significance, as it delineates the legal framework governing the formation, performance, and termination of contractual relationships. Failure to specify the governing law can culminate in costly jurisdictional disputes, highlighting the indispensability of clear and unequivocal clause articulation. Through diligent consideration of factors such as suitability, parties' jurisdictions, and intellectual property protection, stakeholders can strategically align the governing law with their commercial imperatives, thereby bolstering contract enforceability and mitigating legal risks.   Importance of Governing Law The selection of an appropriate governing law is crucial for several reasons: Consistency and Predictability: By designating a governing law, parties ensure consistency and predictability in the interpretation and application of contractual terms, thereby reducing uncertainty and potential conflicts. Enforcement of Rights: Understanding the governing law facilitates the effective enforcement of contractual rights and obligations, enabling parties to seek legal remedies in a familiar legal environment. Mitigation of Legal Risks: Parties can mitigate legal risks associated with unfamiliar legal systems by selecting a governing law that aligns with their business objectives and risk tolerance.   English law is widely preferred in international commercial contracts due to its: Predictability: English law offers a well-established and predictable legal framework, providing parties with clarity and certainty in contractual matters. Commercial Expertise: The city of London, renowned as a global financial center, boasts a sophisticated legal infrastructure and expertise in commercial law, making it an attractive jurisdiction for international business transactions. Arbitration Facilities: London is home to prestigious arbitration institutions like the London Court of International Arbitration (LCIA), offering efficient and impartial dispute resolution mechanisms for international disputes.   Exploring Jurisdiction Clauses Definition and Scope: Jurisdiction clauses, often coupled with governing law provisions, determine the forum where disputes arising from the contract will be adjudicated and the procedural rules that will govern the resolution process. These clauses play a crucial role in establishing the legal framework for dispute resolution and clarifying the parties' rights and obligations. Absence of a jurisdiction clause can precipitate jurisdictional ambiguities, exacerbating legal costs and impeding timely resolution of disputes. Through meticulous consideration of factors such as geographical locations, dispute resolution mechanisms, and governing law recognition, stakeholders can strategically align the jurisdiction clause with their commercial objectives, thereby facilitating efficient and cost-effective dispute resolution.   Key Considerations in Jurisdiction Clause Drafting Type of Jurisdiction: Parties must decide whether to opt for exclusive, non-exclusive, or one-sided jurisdiction clauses, each with distinct implications for dispute resolution. Geographical Factors: Considerations such as the location of parties, performance of contractual obligations, and the subject matter of the contract influence the selection of an appropriate jurisdiction. Enforcement Considerations: Parties should assess the enforceability of judgments and awards in potential jurisdictions, considering factors such as reciprocal enforcement treaties and local legal practices. Best Practices for Clause Selection Clarity and Precision: Drafting governing law and jurisdiction clauses requires clarity and precision to avoid ambiguity and potential disputes over interpretation.   Conclusion Navigating governing law and jurisdiction issues in international commercial contracts requires careful consideration of legal principles, industry best practices, and regulatory frameworks. By selecting appropriate governing law and jurisdiction clauses that align with their commercial objectives and risk tolerance, parties can mitigate legal risks, enhance contractual certainty, and foster successful business relationships on a global scale. With a comprehensive understanding of the complexities surrounding these clauses and adherence to best practices, businesses can navigate the challenges of international commerce with confidence and resilience. --- - Published: 2024-06-28 - Modified: 2025-08-07 - URL: https://treelife.in/legal/consequences-of-an-unstamped-or-insufficiently-stamped-contracts-on-dispute-resolution-clause/ - Categories: Legal In April 2023, the five-judge constitution bench of the Supreme Court of India (“Supreme Court”), in M/s NN Global Mercantile Private Limited (“NN Global”) v. M/s Indo Unique Flame Limited (“Indo Unique”) & Ors. ,1 has held that an unstamped instrument (including an arbitration agreement contained in it) which is otherwise exigible to stamp duty is non-existent in law and must be impounded by the Court before appointing an arbitrator. In respect of such unstamped agreements, the rights of the parties will remain frozen, or they would not exist until the defect is cured. In July 2023, the Delhi High Court in Arg Outlier Media Private Limited v. HT Media Limited,2 while considering a challenge to an arbitral award passed on an unstamped agreement held that although in terms of NN Global, the agreement not being properly stamped could not have been admitted in evidence; however, once having been admitted in evidence by the arbitrator, the award passed by relying on such agreement cannot be faulted on this ground. Similar view has been expressed by the Delhi High Court in SNG Developers Limited v. Vardhman Buildtech Private Limited (initially by the Single Judge,3 and later confirmed by the Division Bench4). In another recent judgment in August 2023, the Delhi High Court in Splendor Landbase Ltd. (“Splendor”) v. Aparna Ashram Society & Anr. (“Aparna Ashram”),5 has laid down the guidelines for expeditiously carrying out the process of impounding the agreement, and determining the stamp duty (and penalties, if applicable) payable. The judgment is in the context of appointment of the arbitrator under Section 11 of the Arbitration Act, and as such, not a binding precedent, as clarified by the Supreme Court in State of West Bengal & Ors. v. Associated Contractors. 6 BACKGROUND TO THE DISPUTE Indo Unique was awarded a work order and entered into a sub-contract with NN Global. The work order (which included the sub-contract) contained an arbitration agreement. A dispute arose in relation to encashment of a bank guarantee between NN Global and Indo Unique. NN Global filed a suit against Indo Unique. Indo Flame applied under Section 8 of the Arbitration and Conciliation Act, 1996 (“Arbitration Act”) for referring the dispute to arbitration. The application was rejected on the ground that the work order was unstamped, and therefore, unenforceable under Section 357 of the Indian Stamp Act, 1899 (“Stamp Act”). Indo Flame filed a writ petition challenging the order of rejection. The Bombay High Court allowed the writ. Subsequently, NN Global approached the Supreme Court, where the primary issue was whether an arbitration clause, contained in an unstamped work order, can be acted upon. A three-judge bench of the Supreme Court, vide its judgment dated 11 January 2021 in NN Global vs. Indo Unique,8 held that an arbitration agreement is a distinct and separate agreement, and can be acted upon even if contained in an unstamped instrument. ISSUE BEFORE THE SUPREME COURT As there existed contrary judgments of the Supreme Court on this issue, the three-judge bench referred the question of law (reproduced below) to be conclusively decided by the five-judge constitutional bench of the Supreme Court: “Whether the statutory bar contained in Section 35 of the Stamp Act, 1899 applicable to instruments chargeable to stamp duty under Section 3 read with the Schedule to the Act, would also render the arbitration agreement contained in such an instrument, which is not chargeable to payment of stamp duty, as being non-existent, unenforceable, or invalid, pending payment of stamp duty on the substantive contract/instrument? ” DISCUSSION BY THE SUPREME COURT Existence vs. validity of the arbitration agreement The Supreme Court discussed the purpose of insertion of Section 11(6A) in the Arbitration Act. 10 Noting that under Section 11(6A), Courts must confine their examination to the existence of an arbitration agreement in proceedings under Section 11 of the Arbitration Act, it held that the examination of the existence of an arbitration agreement under Section 11(6A) does not mean mere “existence in fact”. In enquiry under Section 11, the Courts must see if the arbitration agreement exists in law, i. e. , the arbitration agreement must be enforceable in the eyes of the law. Reliance was placed on Vidya Drolia & Ors. vs. Durga Trading Corporation (“Vidya Drolia”),11 where it was held that for an arbitration agreement to “exist”, it should meet and satisfy the requirements under both Arbitration Act and the Indian Contract Act, 1872 (“Contract Act”). 12 Therefore, an arbitration agreement must be a valid and enforceable contract under the law. The phrase “arbitration agreement” under Section 11(6A) of the Arbitration Act must mean a contract, by meeting the requirements under Section 2(h) & (j) of the Contract Act. 13 Any agreement that cannot be enforced under law cannot be said to be a valid contract and therefore cannot be said to “exist”. Effect of non-stamping of a document under the Stamp Act It was held that under Section 35 of the Stamp Act, an unstamped agreement cannot be “acted upon” by the Courts. Relying on the judgment in Hindustan Steel Limited vs. Dilip Construction Company,14 it was held that to “act upon” an instrument or document would mean to give effect to it or enforce it. Therefore, an unstamped agreement, which is otherwise exigible to stamp duty, cannot be enforced by the Courts and cannot be said to have any existence in the eyes of the law. Further reliance was placed on Mahanth Singh vs. U Ba Yi15 to observe that Section 2(j) of the Contract Act would only be attracted when a contract is rendered unenforceable by application of a substantive law. While the Stamp Act is a fiscal statute, it was held to be substantive law. Therefore, any unstamped contract exigible to stamp duty shall be rendered void under Section 2(j) of the Contract Act. It was further observed that the rights of the parties under an unstamped agreement would remain frozen or rather would not exist until such an agreement is duly stamped. 16... --- - Published: 2024-06-28 - Modified: 2025-07-22 - URL: https://treelife.in/legal/importance-of-service-level-agreements-sla/ - Categories: Legal - Tags: Service Level Agreement, Service Level Agreements, SLA What is an SLA? SLA stands for service level agreement. It refers to a document that outlines a commitment between a service provider and a client, including details of the service, the standards the provider must adhere to, and the metrics to measure the performance.   Typically, it is IT companies that use service-level agreements. These contracts ensure customers can expect a certain level or standard of service and specific remedies or deductions if that service is not met. SLAs are usually between companies and external suppliers, though they can also be between departments within a company.   Why are SLAs important? Service Level Agreements (SLAs) are essential in the B2B (Business-to-Business) SaaS (Software as a Service) industry for several reasons: Customer Expectations: SLAs help set clear and specific expectations for customers regarding the level of service they can expect. This transparency is crucial in B2B SaaS, where businesses rely on the software for critical operations. Clear expectations reduce misunderstandings and improve customer satisfaction. Quality Assurance: SLAs provide a framework for measuring and maintaining the quality of service. By defining metrics, response times, and availability requirements, B2B SaaS companies can ensure that their software consistently meets or exceeds customer needs and industry standards. Risk Mitigation: SLAs also serve as risk mitigation tools. They outline what happens in the event of service disruptions, downtime, or other issues. This helps both parties understand their rights and responsibilities, reducing legal disputes and financial liabilities. Service Improvement: SLAs encourage continuous improvement. When B2B SaaS companies commit to specific performance metrics, they have a strong incentive to invest in infrastructure, monitoring, and support to meet these commitments. Regular performance evaluations can lead to service enhancements and increased customer satisfaction. Competitive Advantage: Having well-crafted SLAs can be a competitive advantage. B2B customers often compare SLAs when evaluating SaaS providers. Companies that offer more robust and reliable service levels are more likely to win and retain customers. Trust and Credibility: B2B SaaS companies build trust and credibility by adhering to their SLAs. Meeting or exceeding the agreed-upon service levels demonstrates a commitment to customer success and reliability. Compliance Requirements: In some industries, regulatory requirements demand that service providers maintain certain service levels and provide documentation of compliance. SLAs serve as the basis for demonstrating adherence to these regulations. Scalability: As a B2B SaaS company grows and serves a larger customer base, SLAs can help ensure that the quality of service remains consistent and can be scaled to meet increasing demand. Communication and Accountability: SLAs provide a structured means of communication between the service provider and the customer. They help define roles and responsibilities, making it clear who to contact in case of issues and who is accountable for specific aspects of service delivery. Customer Satisfaction and Retention: Meeting SLAs leads to higher customer satisfaction and loyalty. Satisfied customers are more likely to renew their subscriptions and recommend the service to others, contributing to long-term business success. --- - Published: 2024-06-28 - Modified: 2025-07-21 - URL: https://treelife.in/legal/contractual-requirements-under-dpdp-act-2023/ - Categories: Legal - Tags: 2023, Contractual Requirements, DATA PROCESSING AGREEMENT, Digital Personal Data Protection Act, DPDP Act, gdpr, General Data Protection Regulation BACKGROUND Under India’s new Digital Personal Data Protection Act, 2023 (the “DPDP Act”), entities which process any personal data in digital form will be required to implement appropriate technical and organizational measures to ensure compliance. In addition, entities will remain responsible for protecting such data as long as it remains in their possession or under their control, including in respect of separate processing tasks undertaken by data processors on their behalf. These overarching responsibilities will extend to taking reasonable security safeguards and procedures to prevent data breaches, as well as complying with prescribed steps if and when a breach does occur. Importantly, compared to its predecessor draft and unlike the General Data Protection Regulation (“GDPR”) of the European Union which places direct regulatory obligations on data processors, the DPDP Act appears to attribute sole responsibility upon the main custodians of data vis-à-vis the individuals related to such data – as opposed to a mechanism of ‘joint and several’ or shared liability with contracted data processors – even when the actual processing may be undertaken by the latter pursuant to a contract or other processing arrangement. This position appears to be based on the principle that an entity which decides the purpose and means of processing should be held primarily accountable in the event of a personal data breach. Such liability may also be invoked when an event of non-compliance arises on account of the negligence of a data processor. While processing tasks can be delegated to a third party, such delegation and/or outsourcing needs to be made under a valid contract in specified cases. Further, organizations need to ensure that their own compliance requirements and other statutory obligations remain mirrored in their supply chain in terms of (i) implementing appropriate technical and organizational measures, as well as (ii) taking reasonable security safeguards to prevent a personal data breach. This parallel compliance regime will extend to the actions and practices of data processors, including in terms of rectifying or erasing data. For example, when an individual withdraws a previously issued consent with respect to the processing of personal data for a specified purpose, all entities processing their data – including contracted data processors – must stop, and/or must be made to stop, the processing of such information – failing which the primary entity may be held liable.     CONTRACTUAL ARRANGEMENTS Although the term ‘processing,’ as defined in the DPDP Act, involves automated operations, such operations can be either fully or partially automated. Besides, the definition includes any activity among a wide range of operations that businesses routinely perform on data, including the collection, storage, use and sharing of information. Thus, even those business operations which involve some amount of human intervention and/or stem from human prompts will be covered under the definition of ‘processing,’ and thus, the DPDP Act will remain applicable in all such cases. A “data fiduciary” (i. e. , those entities which determine the purpose and means of processing personal data, including in conjunction with other entities) can engage, appoint, use or otherwise involve a data processor to process personal information on its behalf for any activity related to the offering of goods or services to “data principals” (i. e. , specifically identifiable individuals to whom the personal data relates) as long as it is done through a valid contract. However, irrespective of any agreement to the contrary, a data fiduciary will remain responsible for complying with the provisions of the law, including in respect of any processing undertaken on its behalf by a data processor.     DUE DILIGENCE AND RISK ASSESSMENT Given that data fiduciaries may be ultimately responsible for the omissions of data processors, contracts between such entities need to be negotiated carefully. In this regard, the risks associated with such outsourced data processing activities need to be taken into account by data fiduciaries, including in respect of risks related to the following categories: Compliance: where obligations under the DPDP Act with respect to implementing appropriate technical and organizational measures, preventing personal data breach and protecting data are not adequately complied with by a data processor; Contractual: where a data fiduciary may not have the ability to enforce the contract; Cybersecurity: where a breach in a data processor’s information technology (“IT”) systems may lead to potential loss, leak or breach of personal data; Legal: where the data fiduciary is subjected to financial penalties due to the negligence or omission of the data processor; and Operational: arising due to technology failure, fraud, error, inadequate capacity to fulfill obligations and/or to provide remedies. Thus, data fiduciaries need to (1) exercise due diligence, (2) put in place sound and responsive risk management practices for effective supervision, and (3) manage the risks arising from outsourced data processing activities. Accordingly, data fiduciaries need to select data processors based on a comprehensive risk assessment strategy. A data fiduciary may need to retain ultimate control over the delegated data processing activity. Since such processing arrangements will not affect the rights of an individual data principal against the data fiduciary – including in respect of the former’s statutory right to avail of an effective grievance redressal mechanism under the DPDP Act – the responsibility of addressing such grievances will rest with the data fiduciary itself, including in respect of the services provided by the data processor. If, on the other hand, a data fiduciary outsources its grievance redressal function to a third party, it needs to provide data principals with the option of accessing its own nodal officials directly (i. e. , a data protection officer, where applicable, or any other person authorized by such data fiduciary to respond to communications from a data principal for the purpose of exercising their rights). In light of the above, before entering into data processing arrangements, a data fiduciary may want to have a board-approved processing policy which incorporates specific selection criteria for: (i) all data processing activities and data processors; (ii) parameters for grading the criticality of outsourced data processing; (iii) delegation of authority... --- - Published: 2024-06-28 - Modified: 2025-08-07 - URL: https://treelife.in/legal/employment-agreements-in-india-clauses-enforceability-negotiability/ - Categories: Legal - Tags: Employment Agreements, Employment Agreements Clauses, Employment Agreements Enforceability, Employment Agreements in India, Employment Agreements Negotiability DOWNLOAD PDF Employment Agreements Clauses In employment agreements in India, certain clauses often give rise to more debate or controversy compared to others. These contentious clauses, their significance, and aspects of their enforceability and negotiability are as follows: Non-Compete and Non-Solicitation: Importance: Restricts employees from working with competitors or soliciting clients or other employees after leaving the company. This helps employers safeguard their trade secrets and customer relationships. Enforceability: Non-solicit clauses are generally valid. However non-compete clauses are generally not enforceable post-termination of employment, except in special circumstances with limited scope and duration. Negotiability: Scope and duration can sometimes be negotiated. Confidentiality: Importance: Ensures protection of sensitive business information. Enforceability: Strongly upheld, often extending beyond the employment tenure. Negotiability: Generally non-negotiable due to its critical nature for safeguarding business interests. Intellectual Property Rights (IPR): Importance: If done correctly, automatically transfers rights of employee inventions created during employment to the employer. Enforceability: Widely enforced, especially in roles involving research and development. Negotiability: Typically not negotiable. Termination Clauses: Importance: Defines conditions for ending employment, either ‘at-will’, for cause, or by resignation. Enforceability: Enforceable when compliant with labor laws (such as the reason for termination). Negotiability: Limited, as it usually aligns with statutory requirements. Probationary Period: Importance: Establishes a trial period to evaluate the employee’s suitability. Enforceability: Standard practice, conditions usually enforced as stated. Negotiability: Duration or terms may be negotiable. Salary and Compensation: Importance: Details salary, bonuses, and other benefits. Enforceability: Highly enforceable as per agreed terms. Negotiability: Often negotiable, dependent on the role and candidate’s experience. Working Hours and Leave: Importance: Specifies expected working hours, workdays, and leave entitlements. Enforceability: Generally enforceable within labor law guidelines. Negotiability: Limited, generally adheres to company policy. Appointment and Position: Importance: Specifies role, designation, and key responsibilities. Enforceability: Generally binding but subject to changes in organizational structure. Negotiability: Limited, often aligned with organizational needs. Dispute Resolution: Importance: Outlines how employment disputes will be resolved. Enforceability: Generally upheld, often includes arbitration clauses. Negotiability: May be negotiable but usually follows standard legal practices. Governing Law and Jurisdiction: Importance: Indicates the legal jurisdiction and laws governing the agreement. Enforceability: Standard and enforceable. Negotiability: Typically non-negotiable, aligns with the company’s operational jurisdiction.   In these agreements, the most contentious clauses tend to be those that limit future employment opportunities (non-compete and non-solicitation) and protect business secrets (confidentiality and IPR). While clauses like salary and probation can be more open to negotiation, those related to legal compliance and the company’s proprietary rights are usually firmly set. Employment Agreements Importance Protecting Business Interests: These clauses are crucial for employers to safeguard their business interests, including trade secrets, customer relationships, and market position. Restricting Future Employment: Non-Compete clauses prevent employees from joining competitors or starting a competing business for a specified period post-employment. Preventing Talent Poaching: Non-Solicitation clauses help companies prevent ex-employees from poaching their clients and current employees. Employment Agreements Enforceability Reasonableness of Terms: The Indian Contract Act, 1872, governs these clauses. A Non-Compete clause is generally not enforceable post-termination of employment if it is overly restrictive or unreasonable in terms of duration, geographic scope, and the nature of restrictions. During Employment: However, during the term of employment, such restrictions are usually considered reasonable and enforceable. Judicial Interpretation: Courts in India have often held that any clause which 'restrains trade' is void to the extent of the restraint, post-termination of employment, as per Section 27 of the Indian Contract Act. However, a balance is sought between the employee’s right to earn a livelihood and the employer's right to protect its interests. Employment Agreements Negotiability Depends on Bargaining Power: The scope for negotiation often depends on the employee's bargaining power, which varies based on seniority, uniqueness of skills, and market demand. Customization for High-Value Employees: For senior-level employees or those with access to sensitive information, these clauses are often tailored more specifically and may involve negotiations. Clarity and Fairness: Prospective employees can negotiate for clarity, a reasonable duration, and a specific scope to ensure the clauses are fair and not overly burdensome. Compensation in Lieu of Restrictions: Sometimes, negotiations can include compensation for the period during which the employee is restricted from certain activities post-termination. --- - Published: 2024-06-28 - Modified: 2025-07-21 - URL: https://treelife.in/legal/understanding-the-doctrine-of-severability-and-the-blue-pencil-rule-in-indian-contract-law/ - Categories: Legal - Tags: Blue Pencil Rule, Blue Pencil Rule in Indian Contract Law, Doctrine of Severability, indian contract law Introduction In the intricate realm of Indian Contract law, the doctrine of severability and the Blue Pencil Rule serve as vital tools in ensuring fairness and enforceability in agreements. When confronted with contracts containing both legal and illegal provisions, courts employ these doctrines to salvage the valid portions while nullifying the illegal ones. This article delves into the principles behind severability and the Blue Pencil Rule, their application in various jurisdictions, and their significance in modern contract law.   The Doctrine of Severability At the heart of the contract law lies the Doctrine of Severability, which dictates that if any provision of a contract is deemed illegal or void, the remaining provisions should be severed and enforced independently, provided such severance does not thwart the original intentions of the parties. This principle, embodied in the Severability Clause, safeguards the validity of contracts by allowing courts to salvage the enforceable portions while disregarding the unlawful ones. The Severability Clause is based on the ‘Doctrine of Severability’ or ‘Doctrine of Separability’, according to which, if any provision of a contract is rendered illegal or void, the remaining provisions shall be severed and enforced independent of the unenforceable provision, ensuring the effectuation of the parties' intention.   The Blue Pencil Rule The Blue Pencil Doctrine, rooted in the principle of severability, offers a solution to this dilemma by allowing courts to strike out the illegal, unenforceable, or unnecessary portions of a contract while preserving the remainder as enforceable and legal. The term "blue pencil" originates from the practice of using a blue pencil for editing or censoring manuscripts and films. In contract law, the doctrine gained prominence through the case of Mallan v. May (1844) 13 M and W 511, initially applied in disputes over non-compete agreements. Subsequently, the doctrine received broader application through cases like Nordenfelt v. Maxim Nordenfelt Guns and Ammunitions Co. Ltd. A. C. 535, extending its reach beyond non-compete agreements. The concept was officially named in the case of Atwood v. Lamont 3 K. B. 571. Grounded in the principle of severability, the Blue Pencil Doctrine operates in common law jurisdictions, allowing courts to salvage valid contractual terms by excising the problematic ones. In India, the Blue Pencil Doctrine finds expression in Section 24 and Section 27 of the Indian Contract Act, 1872. Section 24 states that if any part of the consideration in a contract is unlawful, the entire contract becomes void. Similarly, Section 27 provides that any restraint on lawful profession or trade is void to that extent. Initially applied in cases involving non-compete agreements, the doctrine has since been expanded to cover various aspects of contracts, including arbitration agreements, memorandum of understanding, sale of real estate, and contracts against public policy.   Judicial Pronouncements and Principles Judicial pronouncements, particularly in landmark cases like Shin Satellite Public Co. Ltd. v. Jain Studios Limited, have elucidated the principles underlying severability. The Supreme Court of India has emphasized the doctrine of substantial severability, focusing on retaining the core aspects of contracts while disregarding trivial or technical elements. Furthermore, principles governing statutory provisions, as outlined in cases like R. M. D. Chamarbaugwalla & Anr. v. Union of India & Anr. , provide a roadmap for the application of severability in contractual contexts. The landmark case of Shin Satellite Public Co. Ltd. v. Jain Studios Limited, AIR 2006 SC 963, underscores the significance of the Blue Pencil Doctrine in Indian jurisprudence. The court emphasized the principle of "substantial severability" over "textual divisibility," highlighting the importance of preserving the main or substantial portion of the contract while excising trivial or unnecessary elements. For the Blue Pencil Doctrine to be applied, substantial severability is essential, and it is incumbent upon the court to carefully assess the contract to determine its validity.   Importance of Express Severability Clauses The insertion of express Severability Clauses in contracts serves to clarify the intentions of the parties regarding the enforceability of contractual provisions. While such clauses are invaluable in eliminating ambiguity, their absence does not preclude the application of severability principles. Courts rely on established tests and principles to determine the validity and enforceability of contracts, even in the absence of explicit Severability Clauses.   Conclusion In conclusion, the doctrines of severability and the Blue Pencil Rule stand as bulwarks of fairness and equity in contract law. These principles enable courts to navigate complex contractual disputes, ensuring that valid agreements remain enforceable while invalid clauses are appropriately disregarded. As contract law continues to evolve, the application of these doctrines remains essential in preserving the integrity of contractual relationships and upholding the principles of justice and fairness. --- - Published: 2024-06-27 - Modified: 2025-07-21 - URL: https://treelife.in/legal/validity-of-penalty-clauses-in-india/ - Categories: Legal - Tags: concept of penalty clause, indian contract law, penalty clause, penalty clause in india, validity of penalty clause Introduction While liquidated damages refer to the amount of damages which the party estimates for the breach of the contract. On the other hand, Penalty is damages which are additional to the liquidated damages. The expression ‘penalty’ is an elastic term with many different shades, but it always involves an idea of punishment. The Purpose of a Penalty clause is not to ensure compensation in case of a breach but the performance of a contract. In English Law, the penalty clause is against Public Policy. However, the Indian Courts have been silent on this particular aspect. Section 23 of the Indian Contract Act states that Agreements whose object is opposed to Public Policy is void. The Indian statue has made a classification on Liquidated Damages and Penalty with reasonability. It means that liquidated damages are reasonable whereas anything which is unreasonable and excessive of the amount of breach is penalty. Liquidated damages or Penalty act as a penalty beyond which the Court cannot give reasonable compensation.   Current legislation governing penalty clauses regulation The legislature in India has not stated the validity of penalty clauses. These clauses are governed under Chapter VI of the Indian Contract Act, 1872.   Section 73 of the Act states that compensation for loss is caused by breach of contract. It is defined as “When a contract has been broken, the party who suffers by such breach is entitled to receive, from the party who has broken the contract, compensation for any loss or damage caused to him thereby, which naturally arose in the usual course of things from such breach, or which the parties knew, when they made the contract, to be likely to result from the breach of it. Such compensation is not to be given for any remote and indirect loss or damage sustained by reason of the breach. ” It is clear from this Section that the loss should be natural and should arise directly out of the breach of this contract. Further, this Section also discusses the remoteness of damage. Remoteness refers to whether the said damage was directly related to the breach. In cases where the damage is indirect and remote, the Court shall not give compensation to the defaulting party. Penalty clauses on the other hand are penal damages which are more than the loss which is incurred. Section 74 of the Act defines Compensation for breach of Contract where penalty is stipulated for. Contracts in which there is a penalty clause, the aggrieved party can only ask for a reasonable compensation from the parties. The word reasonable is not stated but shall be taken up on a case-to-case basis looking at the circumstances of the case, the amount of default, paying capabilities of the parties etc. Both liquidated damages and penalty follow the doctrine of reasonable compensation. Doctrine of Reasonable Compensation refers to when the compensation is “reasonable”. Reasonability is determined by the facts and circumstances of each case. In case of a breaching party, reasonability may mean the damage suffered. The Supreme Court of India in various judgements has mentioned the importance of reasonable compensation. In the case of Construction & Design Services v. Delhi Development Authority , the Court stated that the Court must determine the reasonable compensation and then grant it to the injured party.   Enforceability of a penalty clause In India, the Validity of Penalty Clauses was questioned in various Supreme Court judgements. Generally, penalty clauses are taken in consideration with liquidated damages. In ONGC v Saw Pipes, the Court laid down certain observations referring to Section 73 and 74 of the Act one of which was that “If the terms are clear and unambiguous stipulating the liquidated damages in case of the breach of the Contract unless it is held that such estimate of damages/compensation is unreasonable or is by way of penalty, the party who has committed the breach is required to pay such compensation and that is what is provided in Section 73 of the Contract Act. ” The Law not only decides the amount of liquidated damages but also the compensation which is ‘likely’ to arise from the breach of the Contract. Therefore, the Apex Court had explicitly stated that liquidated damages unless unreasonable or penalty shall be allowed. It further stated that even in case of unliquidated damages, if it is not unreasonable or penal then the Court shall allow compensation which is a genuine pre-estimate of the loss.   In Fateh Chand v Balkishan Das, the Supreme Court similarly stated that the “Duty not to enforce the penalty clause but only to award reasonable compensation is statutorily imposed upon Courts by Section 74. ” Contracts with penalty clauses often are unreasonable and put a burden on the defaulting party. Parties in case of wilful default might suffer consequences which are much more than their default. It can be said that putting unreasonable penalties on the defaulting party is against Public Policy. In Central Inland Water Transport Corpn. Ltd. V Brojo Nath Ganguly , the Supreme Court said that “Public Policy” and “Opposed to Public Policy” is not defined under the Indian Contract Act and is incapable of a precise definition. Therefore, what is injurious to public good can be the basic definition of ‘Opposed to Public Policy’. Contracts with Penalty Clauses can be said to be against Public Policy because it is harmful to the parties who have defaulted even in cases when the default is not wilful.     Conclusion Damages are of two types - liquidated and unliquidated. Liquidated damages are defined at the start of the Contract whereas the unliquidated damages refer to when damages have not been pre-estimated but are equal to the amount of breach. Penalty on the other hand is often added to the Agreement in order to deter the parties to not perform their part of the obligation. In the common law jurisdictions, penalty clauses are not valid. However, the amount of penalty should be excessive and unreasonable.  ... --- - Published: 2024-06-27 - Modified: 2025-02-10 - URL: https://treelife.in/legal/what-are-restrictive-covenants/ - Categories: Legal - Tags: restrictive covenants Introduction Advancements in technology and the expansion of global markets have introduced more intricate challenges, necessitating the businesses take steps to safeguard their rightful interests. To maintain and secure assets like confidential data, unique concepts, and trade secrets, parties entering into contracts frequently find it necessary to incorporate restrictive clauses, which limit the freedom of the other party to utilize confidential information or engage in a particular profession, trade, or business with other parties. However, it is pertinent to note that these are often a subject of debate since these covenants contradict Section 27 of the Indian Contract Act, 1872 (ICA), which sets out that any agreement restraining someone from engaging in a legal profession, trade, or business is void to that extent. Since the legal framework addressing these conflicts is still in its early stages in India, judicial rulings and established legal principles have been crucial in shaping a jurisprudence that balances the competing interests and rights inherent in restrictive covenants and the provisions of Section 27 of the Indian Contract Act, 1872. Nevertheless, conflicting interpretations continue to arise, making it necessary to thoroughly review the developments and validity of restrictive covenants in light of Section 27 of the Act.   What are restrictive covenants? Restrictive covenants typically form a part of most agreements and aims to prevent employees from sharing confidential or valuable information which they gain access to during the term of their employment, a restrictive covenant is a provision that restricts an employee from seeking new employment for a specified period after leaving a company or organization. Notable examples of such restrictive clauses include contracts related to maintaining confidentiality, refraining from disclosing sensitive information, and avoiding solicitation of former colleagues or clients. Restrictive covenants in employment agreements are contractual obligations placed on employees prohibiting them from engaging in certain actions/activities. The most common kinds of restrictive covenants in the employment context are: Exclusivity Clauses: These obligations are coterminous with employment and prohibit employees from taking up any other employment or engagements without the express permission of the employer. Non-Compete Clauses: Employers use these clauses to bar employees during and post-termination from taking up employment or engagements with competitors or from conducting business that would compete with the employer. Non-Solicit Clauses: These clauses typically restrict an employee from soliciting the employer’s and clients post cessation of the employee’s employment with the organization. Confidentiality Clauses: These clauses protect trade secrets or other proprietary information from unauthorized disclosure by an employee during and after employment. A confidentiality clause usually defines what information should be considered confidential, the temporal and geographical scope of the obligation, and related rights and consequences for breach of the obligation. Types of Restrictive Covenants Points to Remember Is it lawful for the employers to use restrictive covenants beyond the termination of the employment of the employee? No. Any agreement which restrains a person from exercising a lawful profession, trade or business of any kind is, to that extent, void under the Indian Contract Act, 1872. The only statutory exception to this rule applies to agreements involving the sale of goodwill, wherein the seller and the buyer may agree to certain reasonable restrictions on carrying out a similar trade or business within a certain geographic area. In interpreting this provision, Indian courts have consistently held that while restrictive covenants operating during the term of the employment contract are valid, any clauses restricting an employee’s activities post-employment would be in restraint of trade How to ensure that the Restrictive Covenants are not in contradiction to Section 27 of the Act? It is advisable that restrictive covenants are drafted narrowly to ensure their enforceability. However, even if restrictions are drafted broadly, the courts ordinarily use the principle of severability to invalidate the restrictions only to the extent that they are excessively broad. The courts can do this whether or not the contract contains a severability clause, although it is advisable to include such a clause in the interests of clarity. An excessively broad restriction may not render the covenant unenforceable in its entirety. For example, it is common for contracts to include restrictive covenants protecting the business of group companies, but the courts will enforce such a clause only to the extent that the employer can demonstrate a reasonable nexus between its business and that of the company concerned. If an employee is dismissed or the employee resigns in response to a repudiatory breach, will the employee be still bound by any restrictive covenants? The restrictive covenants of non-solicitation, confidentiality and misrepresentation would survive a repudiatory breach or wrongful dismissal and would continue to be enforceable.   --- - Published: 2024-06-27 - Modified: 2025-07-22 - URL: https://treelife.in/legal/what-do-consequential-damages-mean/ - Categories: Legal - Tags: Consequential Damages Consequential damages, as the name suggests, refer to the compensation granted to one party for the harm or loss they experience as a result of a breach of the terms in an agreement. These damages are primarily linked to financial losses suffered by the party, including but not limited to potential profits delayed due to the breach or expenses incurred to address the harm caused by the agreement breach. One of the essential conditions for claiming consequential damages is that they should be clearly and undoubtedly linked to the breach of the contract, rather than being remotely related. It is necessary for the plaintiff to demonstrate that the pecuniary loss or expenses incurred are a direct consequence of the other party's breach of the agreement.   Important considerations in determination of consequential damages When determining the extent of consequential damages, several important aspects must be considered: Proximity/Natural ConsequenceThe first step in assessing consequential damages is to establish that the loss being claimed by the plaintiff is a direct result of the contract breach. Section 73 of the Indian Contract Act, 1872 emphasizes that damages cannot be sought for losses that are remote or indirect. To determine proximity, the concept of the remoteness of damages is applied. According to the Indian Contract Act, for damages to be awarded, it is essential that the loss or damage "arose in the usual course of things from such breach, or the parties knew that such loss or damage could reasonably occur at the time of entering into the contract. "Consequently, the defendant would not be held responsible for damages that are not closely connected to the breach of the contract. The landmark case of Hadley v. Baxendale provided guidelines for assessing the remoteness of damages. According to this case, a party suffering from a contract breach can only recover damages that can reasonably be considered as naturally arising from the breach, following the usual course of events, or that both parties could have reasonably anticipated as the likely result of the breach when making the contract. In summary, consequential damages must be a direct and foreseeable consequence of a contract breach, and damages for remote or indirect losses are generally not recoverable, as established by the Indian Contract Act and the principles outlined in the Hadley v. Baxendale case. Reasonable ContemplationIn order to understand the remoteness of damage, the first thing which is needed to be determined is whether such loss on the event of a breach was contemplated or anticipated by the party while entering into a contract. When the terms of the agreement are formulated the parties envisage the possible/potential outcomes arising out of the breach of contract. If such loss for which the consequential damages are claimed, was genuinely contemplated by both the parties, then the defendant party cannot evade liability to pay consequential damages by saying that such loss was remote or indirect. This is the unique thing about consequential damages, that even after the apprehension of the possibility of such loss, it is not explicitly mentioned in the contract but the claim can be raised for such loss because it seems plausible to seek damages for such loss. TestTo establish the connection between default committed and loss is suffered is the necessary concomitant for claiming damages, the breach has to have the real and effective cause for the loss. So basically, the impact of the breach which transcends actual loss and causes other ancillary damages closely related to the subject matter of contract can be recovered in the name of consequential damages. To ascertain the link between breach and injury, the English Courts introduced the “But For” test. In this test, the court discerns on a simple question, whether the loss would have taken place if it weren’t for the wrongful acts/omission by the defendant. The test was first applied in Reg Glass Pty Ltd v. Rivers Locking Systems Ltd, the defendant did not insert the locks on the doors in accordance with the terms of the agreement, later a robbery took place in the house of the plaintiff. The court held that if it weren’t for the defendant’s failure in putting locks in accordance with the agreement the robbery could have been precluded. The same test of “but for” test was applied by the Hon’ble Supreme Court of India in a landmark case “but for” test, the Hon’ble Supreme Court had stated that neglect of duty of the defendant to keep the goods insured resulted in a direct loss of claim from the government (there was an ordinance that the government would compensate for damage to property insured wholly or partially at the time of the explosion against fire under a policy covering fire risk). The Supreme Court concluded that “But for the appellants’ neglect of duty to keep the goods insured according to the agreement, they (the respondents) could have recovered the full value of the goods from the government”.   --- - Published: 2024-06-27 - Modified: 2025-07-21 - URL: https://treelife.in/legal/what-is-proof-of-concept-poc-meaning-clauses-benefits/ - Categories: Legal - Tags: PoC, PoC Agreement, Proof of Concept, Proof of Principle What is POC? Proof of Concept (‘PoC’) can also be called as ‘Proof of Principle’, it can be explained as a realization of a particular method/ idea in direction to demonstrate or determine its feasibility or determination or demonstration in principle with the aim of verifying that the concept or theory of the particular agenda has some practical potential. A Proof of Concept is an exercise in which focus is on determining whether an idea/ agenda can be turned into a practicality/ reality. For example, in Software Development, PoC would examine whether an idea is practically feasible from a technology viewpoint. A PoC is usually small, crisp study and incomplete. In simple terms, a Proof of Concept (PoC) is like a plan to test if an idea, product, or design can actually be made into a reality. It's a way to check if something is doable before committing to full production. It doesn't deal with things like finding a market for the product or figuring out the best way to make it. One important thing to remember is that a PoC doesn't focus on what you'll get in the end but rather on whether the project can work. It's not meant to figure out if people want the idea or to find the most efficient way to make it. Instead, it's all about testing if the idea is feasible – giving the people involved a chance to see if it can be developed or built.   Important Considerations for POC Agreement When creating a Proof of Concept agreement, there are a few things to consider: Duration of the contract; Defining the criteria for considering the product or service a success; Deciding how to evaluate the PoC; Planning what to do next if the PoC either succeeds or fails.   Benefits of Proof of Concept (PoC) Proof of Concept (PoC) plays a crucial role in product development due to its significant benefits. It aids in problem identification, leading to resource savings. Products subjected to PoC tend to have a higher likelihood of success, as extensive testing during this phase minimizes business risks. This holds particular significance in today's fiercely competitive business environment. Some of the advantages of PoC include: Time and resource conservation for businesses; Assessing market feasibility; Detecting technical challenges and offering remedies; Enhancing product quality; Offering alternatives through market research.   Key Clauses in a PoC Agreement DefinitionsThis section defines and clarifies the terms used in the agreement to ensure a clear understanding of their exclusivity and scope. It typically serves as the opening clause of the agreement and helps prevent potential ambiguities in the future. DurationThis clause outlines the period of validity for the Proof of Concept agreement, specifying when it begins and ends. It provides exact dates for the agreement's effectiveness and termination. TerminationThe Termination clause is a critical part of any legal agreement, allowing for the agreement's termination under specified circumstances or in case of breaches of obligations. It is usually included alongside the terms and conditions. Performance ObligationThis section details the product or service for which the agreement is executed. The specifics of the performance clause may vary depending on the industry and the products or services involved. It typically addresses questions such as the target audience, the nature and purpose of the product or service, desired outcomes, accident prevention measures, and any product/service-specific information. OwnershipThe ownership clause is one of the most important clauses in the Proof of Concept Agreement and that is imperative to the agreement. This clause declares that notwithstanding anything mentioned in any other clause the rights to the product or service mentioned in the agreement belong to its manufacturer. The rights mentioned above include all rights such as copyright, patent, trademark, trade secrets and any other intellectual property rights. It includes all copies, modifications, changes made in the product or service by either of the parties to the agreement. Any new product/service that is resultant from the existing product or service mentioned in the agreement that shall also be the property of the manufacturer and no receiving party shall have any obligations or rights on it. The receiving party shall use the product or service only in the manner as specified in the general performance clause of this agreement; however, if the manufacturer creates or invents any other product or service to aid such usage or add value to the mentioned product or service then the additional product or service also belongs to the manufacturer along with all its rights. Payment TermsThe payment terms outline the compensation or payment to be made by the recipient to the manufacturer in return for the services they have utilized. The payment provision should encompass the following elements: The specified remuneration, service fee, or consideration to be paid; Any additional charges or reimbursements, if applicable; Provisions for compensating damages in the event of product or service damage or deviations; Penalties for delayed delivery; and Interest penalties for late payments.   Conclusion A Proof of Concept (PoC) is a valuable tool utilized across various sectors such as science, engineering, drug discovery, hardware, software, and manufacturing. Its primary purpose is to evaluate the feasibility of an idea before committing to full-scale production. In a PoC, it is essential to clarify how the product or service will be employed, define the objectives to be accomplished, and address any other business requirements. It's important to note that the effectiveness of a Proof of Concept greatly hinges on the specific business environment in which it is tested. When a PoC is not evaluated in a realistic business setting, the results it yields may lack accuracy. This doesn't necessarily mean replicating the entire market environment, but rather creating a close approximation to enhance result accuracy. The PoC Agreement template is designed for situations where more protection is needed than in a final decision, yet it doesn't constitute a full commitment or engagement. To determine the appropriateness of using the PoC template, a three-step evaluation process is required to ascertain whether... --- - Published: 2024-06-25 - Modified: 2025-08-07 - URL: https://treelife.in/finance/understanding-form-15ca-15cb-for-nro-account-payments/ - Categories: Finance 𝐃𝐨 𝐘𝐨𝐮 𝐍𝐞𝐞𝐝 𝐭𝐨 𝐅𝐢𝐥𝐞 𝐅𝐨𝐫𝐦 15𝐂𝐀 – 15𝐂𝐁 𝐰𝐡𝐞𝐧 𝐦𝐚𝐤𝐢𝐧𝐠 𝐚 𝐩𝐚𝐲𝐦𝐞𝐧𝐭 𝐭𝐨 𝐍𝐑𝐈𝐬 𝐰𝐢𝐭𝐡 𝐚𝐧 𝐍𝐑𝐎 𝐀𝐜𝐜𝐨𝐮𝐧𝐭? Under ordinary circumstance, when a person is making any payment to a non-resident, the AD Banker mandates such person to furnish Form 15CA and / or Form 15CB for the transaction before releasing any payment to non-residents in their foreign currency account / offshore bank account. This is because the AD Banker is mandated by the RBI to obtain a certain set of documents (which includes Form 15 CA and / or Form 15 CB) 𝐛𝐞𝐟𝐨𝐫𝐞 𝐩𝐫𝐨𝐜𝐞𝐬𝐬𝐢𝐧𝐠 𝐚𝐧𝐲 𝐫𝐞𝐦𝐢𝐭𝐭𝐚𝐧𝐜𝐞𝐬 𝐨𝐮𝐭𝐬𝐢𝐝𝐞 𝐈𝐧𝐝𝐢𝐚. Now, here’s the tricky part, what happens if you are making a payment to a non-resident who has an NRO account (for example, NRIs or Person of Indian origin)? Let’s first understand what is an NRO account? NRO accounts are a popular way for NRIs to manage their deposits or income earned in India such as dividends, pension, rent, sale proceeds, etc. in INR. If you end up making a payment to an NRO account holder, technically, there is no money going outside India. Hence, the AD Banker is not involved and the remittance can happen directly from the payer’s Indian bank account to the NRO account holder like any other day-to-day transaction. But, does that mean there is no obligation on the payer to file Form 15CA and / or Form 15CB since there is no money going outside India? 𝐓𝐡𝐞 𝐚𝐧𝐬𝐰𝐞𝐫 𝐭𝐨 𝐭𝐡𝐚𝐭 𝐢𝐬 𝐍𝐨. The obligation on the payer to file Form 15CA and / or Form 15CB stems from Section 195 of the Income-tax Act, 1961 read with Rule 37BB of the Income-tax Rules, 1962. The section requires any person responsible for making a payment to a non-resident / foreign company to file Form 15CA and / or Form 15CB 𝐩𝐫𝐢𝐨𝐫 𝐭𝐨 𝐫𝐞𝐦𝐢𝐭𝐭𝐢𝐧𝐠 𝐭𝐡𝐞 𝐩𝐚𝐲𝐦𝐞𝐧𝐭. In layman terms, the obligation to file Form 15CA and / or Form 15CB is not associated with remittance of funds outside India but actually associated with making 𝐩𝐚𝐲𝐦𝐞𝐧𝐭𝐬 𝐭𝐨 𝐧𝐨𝐧-𝐫𝐞𝐬𝐢𝐝𝐞𝐧𝐭𝐬, a fact that is often overlooked by most players. So keep this in mind 𝐛𝐞𝐟𝐨𝐫𝐞 making your next remittance to a NRO account holder, be it for rent or sale proceeds on transfer of property / shares even if your banker does not mandate as the penalty for non-filing / filing inaccurately is ₹ 1 𝐥𝐚𝐤𝐡! ! --- - Published: 2024-06-24 - Modified: 2025-02-07 - URL: https://treelife.in/taxation/insights-on-equity-share-transfers/ - Categories: Taxation Do you hold equity shares in a private limited company that has invested in immovable property or shares of another company? It’s essential to understand how Fair Market Value (FMV) is calculated for equity share transfers of such private limited company. Under the Income Tax Act, equity share transfers must be executed at FMV, as determined by Rule 11UA. According to Rule 11UA of the Income Tax Rules, the FMV is calculated based on the Net Asset Value (NAV). The NAV is calculated by subtracting total liabilities from total assets. However, special consideration is required for:1. Investments in Shares and Securities: These must be valued at their fair market value, not book value. 2. Investments in Immovable Property: The value should be the stamp duty value adopted or assessed by any governmental authority. This necessitates obtaining a valuation report from a registered valuer (L&B). For companies and stakeholders, understanding these nuances is crucial. --- > Stay ahead of the curve with our insights on FLA reporting, mandated by the Reserve Bank of India (RBI) under the Foreign Exchange Management Act (FEMA),1999. - Published: 2024-06-24 - Modified: 2025-03-05 - URL: https://treelife.in/finance/decoding-flas-foreign-liabilities-and-assets/ - Categories: Finance DOWNLOAD FULL PDF Stay ahead of the curve with our insights on FLA reporting, mandated by the Reserve Bank of India (RBI) under the Foreign Exchange Management Act (FEMA),1999. What is covered? 1. Understanding the purpose of FLA Reporting2. Annual filing requirements for Indian companies and LLPs3. Step-by-step guide to key FLA filing requirements4. Penalties for non-compliance --- - Published: 2024-06-15 - Modified: 2025-01-21 - URL: https://treelife.in/taxation/an-event-of-indirect-transfer-tax/ - Categories: Taxation Did you know that transfers of shares in a foreign company can be taxable in India if they derive substantial value from Indian assets? Here’s how: Tax Event: Shares of a foreign company are deemed to derive its value substantially from India, if on the specified date, the value of shares of Indian company:- exceeds INR 10 crore (approx. USD 1. 2mn); and- represent at least 50% of the foreign company's asset value Key Exemptions- Small Shareholders: Shareholders holding 5% or less, directly or indirectly- Category I FPIs BackgroundThe landmark Vodafone case brought this issue to the forefront. This case involved Vodafone's acquisition of Hutchison's stake in a Cayman Islands company, indirectly owning substantial assets in India. The Indian tax authorities claimed tax on the transaction, arguing that the transfer derived significant value from Indian assets. Vodafone contended that the transaction was not taxable under existing laws. The Supreme Court of India ruled in Vodafone's favor in 2012. However, in response, the Indian government introduced a retrospective amendment to the Income Tax Act, 1961 allowing taxation of such indirect transfers, thereby overturning the Supreme Court's decision and leading to prolonged legal disputes. --- > Starting June 18, 2024, all advertisers and advertising agencies must upload a " - " before publishing ads on TV, radio, print, or online platforms, as per the . Ensure your ads comply with all guidelines! - Published: 2024-06-15 - Modified: 2025-03-05 - URL: https://treelife.in/news/self-declaration-certificate-new-advertising-compliance/ - Categories: News DOWNLOAD FULL PDFStarting June 18, 2024, all advertisers and advertising agencies must upload a " - " before publishing ads on TV, radio, print, or online platforms, as per the . Ensure your ads comply with all guidelines! --- - Published: 2024-06-11 - Modified: 2025-08-07 - URL: https://treelife.in/finance/understanding-ebitda-definition-formula-calculation/ - Categories: Finance - Tags: accounting ebitda, calculating adjusted ebitda, calculating ebitda example, ebidta meaning, ebitda, ebitda as a percentage of sales, ebitda finance, ebitda from operating income, ebitda target, profit ebitda, projected ebitda, reported ebitda In the realm of financial analysis, a metric known as EBITDA holds significant weight. EBITDA stands for Earnings Before Interest, Taxes, Depreciation, and Amortization. It is an additional measure of profitability that strips out non-cash expenses (depreciation and amortization), taxes, and interest expenses, which depend on the company's capital structure. It aims to display cash profit that is generated by the company's operations. This article covers the definition, calculation, and insights EBITDA offers into a company's financial well-being. What is EBITDA? EBITDA is a financial metric used extensively by companies to measure their financial performance. It provides a distinct idea to investors and lenders about a company's profitability. However, EBITDA can be misleading as it does not reflect the company's cash flow. EBITDA assesses a company's operating profitability by stripping away the influence of financing decisions, tax implications, and non-cash accounting expenses. This offers a clearer picture of a company's ability to generate cash flow from its core business activities. Imagine a company's profitability as a tree. The core business activities, like selling products or services, represent the roots that generate the company's lifeblood – cash. EBITDA helps us understand the strength of these roots, independent of how the company finances its operations (interest), the tax environment it operates in (taxes), or how it accounts for the gradual decline in asset value over time (depreciation and amortization). Calculation of EBITDA There are two primary ways to calculate EBITDA: 1. The Net Income Approach This method starts with the company's net income, which is the profit after accounting for all expenses. Non-cash expenses (depreciation and amortization) and financing costs (interest and taxes) are added back to arrive at EBITDA. EBITDA = Net Income + Interest Expense + Taxes + Depreciation + Amortization Example Calculation: Company ABC accounts for their 15,000 depreciation and amortization expense as a part of their operating expenses. Calculate their Earnings Before Interest Taxes Depreciation and Amortization: Company ABC Income StatementRevenue  Less: Cost of Goods Sold 1,00,000  20,000 Gross Profit  Less: Operating Expenses 80,000  15,000 Operating Profit  Less: Interest Expenses 65,000  10,000 Profit Before Taxes  Less: Taxes 55,000  5,000 Net Income 50,000  Here, EBITDA = Net Income + Tax Expense + Interest Expense + Depreciation & Amortization Expense = 50,000 + 5,000 + 10,000 + 15,000 = 80,000.   2. The Operating Income Approach This approach utilizes the company's operating income, which represents the profit before interest and taxes. Since operating income already excludes these factors, we simply add back the non-cash expenses (depreciation and amortization) to reach EBITDA. EBITDA = Operating Income + Depreciation + Amortization   EBITDA as a Financial Metric  EBITDA shows a company’s financial performance without considering capital investments, such as plant, property, and equipment. It does not account for expenses related to debt and emphasizes the firm’s operating decisions. All these reasons highlight why it may not be an accurate measure of profitability. Additionally, it is often used to conceal poor financial judgment, like availing of a high-interest loan or using fast-depreciating equipment that comes with a high replacement cost. Nevertheless, it is still considered to be an important financial metric. It offers a precise idea of a company’s earnings before financial deductions are made or how accounts are adjusted.   What is EBITDA Margin?   EBITDA margin is a key profitability ratio that measures a company's earnings before interest, taxes, depreciation, and amortization as a percentage of its revenue. It provides insight into how much cash profit a firm can generate in a year, which is particularly useful for comparing a firm’s performance to that of its contemporaries within a specific industry.   However, EBITDA is not registered in a company’s financial statement, so investors and financial analysts are required to calculate it on their own. It is calculated using the formula below -  EBITDA Margin = EBITDA / Revenue  Notably, a firm with a relatively larger margin is more likely to be considered a company with significant growth potential by professional buyers.   For instance, the EBITDA of Company A is ascertained to be ₹800,000, while their aggregate revenue is ₹7,000,000. On the other hand, Company B registered ₹900,000 as EBITDA and ₹12,000,000 as their aggregate revenue. So as per the formula:  Company NameEBITDA Total  Revenue EBITDA Margin Calculation EBITDA MarginA ₹800,000 ₹7,000,000 ₹800,000 / ₹7,000,000 11. 43%B ₹900,000 ₹12,000,000 ₹900,000 / ₹12,000,000 7. 50% Therefore, despite having a higher EBITDA, Company B has a lower EBITDA margin when compared to Company A. This means Company A is financially more efficient and hence more likely to be favored by potential investors.   Importance of EBITDA  EBITDA serves as a valuable metric for several reasons:  Operational Efficiency: By focusing solely on a company's core operations, EBITDA helps assess its operational efficiency and profitability without the impact of financing decisions, tax rates, or accounting methods.   Comparability: Since EBITDA eliminates non-operating expenses, it allows for comparisons between companies within the same industry or sector thereby evaluating investment opportunities or conducting industry benchmarks.   Financial Health: EBITDA provides insights into a company's financial health and its ability to generate cash from its core business activities. A consistently positive EBITDA indicates robust operational performance, while negative EBITDA may signal underlying operational challenges.   Valuation: EBITDA is often used in financial modeling and valuation techniques such as the EBITDA multiple or Enterprise Value (EV) to EBITDA ratio. These methods help investors estimate the intrinsic value of a company and determine whether a company is overvalued (high ratio) or undervalued (low ratio) relative to its earnings potential. Example of EBITDA Used in Valuation (EV/EBITDA Multiple):  Company X and Company Y are competing consulting companies that operate in Mumbai. X has an enterprise value of 5,00,000 and an EBITDA of 25,000, while firm Y has an enterprise value of 6,00,000 and an EBITDA of 50,000. Which company is undervalued on an EV/EBITDA basis?    Company X Company YEV 5,00,000 6,00,000EBITDA 25,000 50,000EV/EBITDA 20x 12x On an EV/EBITDA basis, company Y is undervalued because it has a lower ratio. Limitations of EBITDA  While EBITDA offers valuable insights into operational performance, it has limitations:  Exclusion of Important Expenses:... --- - Published: 2024-06-03 - Modified: 2025-08-07 - URL: https://treelife.in/reports/indian-spacetech-industry/ - Categories: Reports - Tags: india, spacetech DOWNLOAD FULL PDF India’s Space Technology Sector: An Industry Overview The Indian space sector is currently undergoing a significant transformation, driven by increased private sector participation and substantial government support. With over 523 private companies and research institutions now actively contributing, India's space economy is projected to reach $44 billion by 2033, capturing nearly 10% of the global market. This manual aims to provide comprehensive insights into the industry overview, investment landscape, legal considerations, tax incentives, and intellectual property rights essential for stakeholders in the space tech ecosystem. Government Initiatives and Investment Landscape The government has allocated nearly $1. 6 billion for the Department of Space (DoS), which oversees the Indian Space Research Organisation (ISRO) and other space-related activities. Since 2014, there has been a notable increase in private investments, particularly in satellite manufacturing and launch services, amounting to $233 million across more than 30 deals by July 2023. Key Participants and Activities The Indian spacetech ecosystem comprises a mix of public and private entities working collaboratively to advance the country's space capabilities. Key activities include: Satellite manufacturing Launch services Space research Space-based applications Space exploration Space debris management Commercial spaceflight Development of space law and policy Regulatory Framework India's space sector operates under a comprehensive legal and regulatory framework designed to promote innovation and facilitate private sector participation. Key regulatory bodies and agencies include: Department of Space (DoS) Indian Space Research Organisation (ISRO) Indian National Space Promotion and Authorization Center (IN-SPACe) NewSpace India Limited (NSIL) Antrix Corporation Limited (ACL) Foreign Direct Investment (FDI) Policy The existing FDI policy allows up to 100% foreign investment in satellite establishment and operation through the government route. Proposed amendments aim to further liberalize the sector, but gaps and ambiguities remain, particularly regarding compliance with sectoral guidelines and definitions of key terms. Tax Incentives and Government Schemes To encourage private participation, several tax measures have been implemented, including GST exemptions for satellite launch services and income tax exemptions for R&D expenditures. Key government schemes supporting the sector include: Startup India Seed Fund Scheme Technology Development Fund under DRDO iDEX (Innovations for Defence Excellence) Atal Innovation Mission (AIM) GIFT City IFSC: A Gateway to Global Markets GIFT City (Gujarat International Finance Tec-City) provides a favorable regulatory environment, cutting-edge infrastructure, and a robust ecosystem for space tech companies. It facilitates funding, international collaboration, and regulatory support, making it an ideal gateway for scaling operations and innovation. Anticipated Developments The Indian space tech sector is poised for significant growth, driven by increased FDI, public-private partnerships, advanced technologies, and upcoming incentives. The development of reusable launch vehicles and the Gaganyaan mission, slated for 2025, are set to showcase India’s capabilities and bolster its position in the global space community. Conclusion India’s space technology sector is at a pivotal moment, characterized by unprecedented growth, innovation, and collaboration. This report serves as a comprehensive guide for industry players, investors, policymakers, and legal professionals navigating the landscape of India's space tech ecosystem. The combined efforts of public and private entities are driving the sector's ascent, positioning India as a major player in the global space economy. --- - Published: 2024-06-01 - Modified: 2025-03-11 - URL: https://treelife.in/news/100-nri-investments-now-permitted-in-fpis-based-in-gift-ifsc/ - Categories: News In line with the consultation paper issued by SEBI in August 2023, the SEBI and IFSCA have now permitted 100% participation of NRIs, OCIs, and RIs individuals for certain funds set up as SEBI registered FPIs based in IFSC. This amendment marks a significant enhancement in facilitating the involvement of the NRI community in the Indian financial markets. However, it is important to note that the formal amendment to the SEBI FPI Regulations is yet awaited. Let us know your thoughts in the comments below or reach out to us at priya. k@treelife. in for a detailed discussion. --- > As we navigate the complexities of tax season, ITR Filing is crucial for individuals and businesses alike. Here's what we cover in our detailed guide: - Published: 2024-05-25 - Modified: 2025-03-05 - URL: https://treelife.in/taxation/importance-of-itr-filing-all-you-need-to-know/ - Categories: Taxation DOWNLOAD FULL PDF As we navigate the complexities of tax season, ITR Filing is crucial for individuals and businesses alike. Here's what we cover in our detailed guide:1. Understand why filing ITR is essential2. Who needs to file an ITR3. Filing requirements4. Benefits of timely filing & more --- > A Statement of Financial Transaction (SFT) is a mandatory report required by the Indian Income Tax Department under the Income Tax Act, 1961. - Published: 2024-05-24 - Modified: 2025-08-07 - URL: https://treelife.in/finance/uncovering-statement-of-financial-transactions-sft/ - Categories: Finance DOWNLOAD FULL PDF SFT is a critical tool for tax compliance, designed to monitor and report high-value financial transactions within the Indian financial system. Here's what you will learn in our detailed guide:1. Introduction to SFTs and their role in the financial system2. Entities required to file SFTs3. Key filing requirements4. Consequences of non-compliance5. Advantages of timely filing --- - Published: 2024-05-23 - Modified: 2025-07-21 - URL: https://treelife.in/legal/all-about-advisor-equity/ - Categories: Legal - Tags: advisor equity, equity advisor, private capital advisory, private equity advisors, startup advisor compensation, stock trading advisor In the ever-evolving landscape of entrepreneurship, startups and established companies alike seek guidance and mentorship from seasoned advisors, often industry experts or business leaders. Advisor equity has emerged as a powerful mechanism that aligns the interests of these advisors with the success of the company. By offering equity, startups can tap into the expertise of advisors who contribute their knowledge in exchange for potential future ownership. This not only creates a strong incentive for advisors to provide ongoing support but also fosters a deeper commitment to the company's long-term success. This article delves into the intricacies of advisor equity, exploring its benefits, types, and the key players involved in its issuance.   What is Advisor Equity? Advisor equity refers to a form of compensation offered to company advisors in the form of stock or stock options. This incentivizes advisors by aligning their interests with the long-term success of the company. Unlike a traditional retainer fee, the value of advisor equity is directly tied to the company's growth and potential future acquisition or IPO. Advisor equity, also referred to as advisory shares, are a form of equity compensation given to company advisors in place of (or in addition to) a professional fee. They serve as a means of rewarding advisors for providing valuable insights, guidance, and connections to a startup, especially during the early stages. They provide no formal ownership rights like voting or dividends but allow advisors to benefit from the future success of the company. Advisory shares can be stock options or other forms of equity and are often used when startups require expertise but are low on funds.   Types of Advisor Equity Stock Options: The advisor receives the right to buy shares of company stock at a predetermined price in the future. The advisor only profits if the company's stock price increases. Restricted Stock Units (RSUs): The advisor receives actual shares of company stock that vest over time according to a predetermined schedule. This gives the advisor a stake in the company's success even if the stock price doesn't rise. Who issues advisor equity? The issuance of advisory equity typically comes from the company itself. When a company decides to compensate advisors with equity, it typically involves the company's founders, board of directors, or executive team making the decision to allocate a certain percentage of the company's ownership to advisors in exchange for their services, expertise, or guidance. This issuance is usually documented through legal agreements such as advisory agreements or equity compensation plans outlining the terms and conditions of the equity grants, including vesting schedules, rights, and responsibilities.   The Granting Process of Advisor Equity Board Approval: The startup's board of directors, which usually consists of the founders and potentially some investors, needs to approve the issuance of advisor equity. They will consider factors like the advisor's experience, the value they bring to the company, and the overall equity pool available. The Granting Process: Once approved, the startup and the advisor will sign a formal equity grant agreement. This document outlines the specific details of the advisor equity, including: Type of Equity: Stock options (right to buy shares) or restricted stock units (actual shares vesting over time). Number of Shares: The total number of shares granted to the advisor. Vesting Schedule: The timeframe over which the advisor gains full ownership of the shares (e. g. , 4 years with 25% vesting each year). Exercise Price: The price the advisor pays to purchase the shares (applicable only to stock options). Exercise Window: The timeframe during which the advisor can buy the shares (applicable to stock options). Vesting Acceleration Clauses (Optional): Allow faster vesting under specific conditions (e. g. , company acquisition). Advisor's Role and Responsibilities: This outlines the specific services or guidance the advisor will provide in exchange for the equity. Issuing Equity: Once the agreement is signed, the company will officially issue the advisor equity through a process determined by the company's jurisdiction and chosen equity management platform. This might involve electronically recording the shares or issuing stock certificates. Note: It's important to note that advisor equity is not a replacement for traditional compensation methods. Advisors might still receive retainer fees for ongoing services or project-based payments for specific deliverables. However, equity offers the potential for a significant long-term reward if the startup succeeds. Who Receives Advisor Equity? Advisory equity is granted to startup advisors, typically not full-time employees. These advisors bring a wealth of experience and connections to the table, helping founders navigate the complexities of running a startup. Types of Startup Advisors Who Might Receive Equity Industry Experts & Subject Matter Specialists: These advisors possess deep knowledge in a specific field relevant to the startup's business, such as marketing strategy or intellectual property law. Their expertise can be invaluable, and equity incentivizes their ongoing commitment. Business Mentors: Seasoned entrepreneurs who have successfully built companies can provide invaluable guidance on strategy, fundraising, and overcoming common challenges. Equity allows the startup to show appreciation and keep these mentors invested in the company's success. Strategic Investors: Some investors, particularly angel investors who provide early-stage funding, might receive a small amount of equity in exchange for their expertise and network. This creates a win-win situation, aligning the investor's interests with the long-term success of the startup. How Much Equity for Advisors? The amount of equity offered to an advisor typically falls within a range of 0. 25% to 5% of the company's total ownership. This range depends on several factors: Advisor's Contribution: Advisors who actively participate and provide significant value to the company's growth can expect a higher equity stake. This could include board advisors who offer strategic guidance or industry experts with deep market knowledge. Conversely, general advisors with a less hands-on role might receive a lower percentage. Advisor Expertise: The specific expertise and experience an advisor brings to the table also influences their equity grant. Advisors with highly sought-after skills or a proven track record of success may command a larger ownership stake. Company's Willingness: Ultimately,... --- > What TDS is and why it matters. When it applies to you & the different forms involved. How to file & the benefits of proper TDS compliance. Avoiding penalties for non-compliance - Published: 2024-05-13 - Modified: 2025-08-07 - URL: https://treelife.in/taxation/unveiling-tds-understanding-tax-deducted-at-source/ - Categories: Taxation DOWNLOAD FULL PDF This post unpacks the essentials of Tax Deducted at Source (TDS). We'll guide you through: 1. What TDS is and why it matters2. When it applies to you & the different forms involved3. How to file & the benefits of proper TDS compliance 4. Avoiding penalties for non-compliance Master your tax knowledge & share with your network who might benefit. --- > However, a successful strike-off requires a clear understanding of its different facets. This article delves into the types of Strike-Offs for Companies in India, the process involved, and the key requirements companies must meet to ensure a smooth and compliant closure. - Published: 2024-05-03 - Modified: 2025-07-21 - URL: https://treelife.in/compliance/strike-offs-for-companies-in-india/ - Categories: Compliance - Tags: company strike off meaning in hindi, fast track exit, FTE, meaning of strike off, strike off, strike off company meaning in hindi, strike off for llps, strike off for plcs, strike off list, Strike-Offs for Companies in India Introduction The business landscape is ever-evolving, and companies may face economic downturns, strategic shifts, or other reasons that necessitate closure. In India, the strike-off process provides a clear path for companies to formally shut down and remove their names from the Register of Companies (RoC). This mechanism offers a more efficient and cost-effective alternative to the lengthier winding-up process. However, a successful strike-off requires a clear understanding of its different facets. This article delves into the types of Strike-Offs for Companies in India, the process involved, and the key requirements companies must meet to ensure a smooth and compliant closure. What is a strike off? In India, a company strike-off refers to the formal process of removing a company’s name from the official RoC. It’s an alternative method for closing a company’s operations compared to the traditional, lengthier winding-up process.   Note: The Ministry of Corporate Affairs (MCA) in India has established the Centre for Processing Accelerated Corporate Exit (C-PACE) to handle the process of striking off companies.  This initiative aims to make company closure faster and more efficient. The C-PACE may initiate the strike-off for non-compliance, or the company itself can apply for voluntary strike-off. Section 248 to 252 of the Companies Act, 2013 (hereinafter the ‘Act’) define the procedures for striking off a company’s name. This process offers a faster and simpler way to dissolve a defunct company. Types of Strike Off In India, there are indeed two main types of strike offs for companies: Voluntary Strike Offs and Mandatory Strike Offs Voluntary Strike-Off This is when the company itself decides to close down and takes the initiative to initiate the strike-off process. It’s ideal for companies that are: No longer operational or have no plans to operate in the future. Financially sound with no outstanding debts or liabilities. Prepared to meet specific eligibility criteria set by the Act. Key Requirements for Voluntary Strike-Off: Settled Finances: All dues like taxes, loans, and employee salaries must be paid off. Clean Legal Status: No ongoing lawsuits or government penalties should be present. Shareholder Approval: A special resolution passed by at least 75% of shareholders is required. Inactivity or Dormancy: The company may need to demonstrate it hasn’t been actively trading for a while. In some cases, obtaining “dormant company” status might be necessary. Mandatory Strike-Off This is when the C-PACE initiates the strike-off process due to the company’s non-compliance with regulations: Failure to File Financial Statements: The company fails to file its annual financial statements (balance sheet and profit & loss) for consecutive years. This indicates a lack of transparency about the company’s financial health. Inactivity in the Business: The C-PACE suspects the company hasn’t conducted any business activities for a significant period. This might be identified during physical verification by the C-PACE. A company that isn’t actively conducting business goes against its purpose of registration. Dormant Functions: The company hasn’t commenced business operations within one year of incorporation. This suggests the company might have been registered for illegitimate purposes or simply never got off the ground. Which companies can go for Strike off? The strike-off process in India allows companies to formally close their operations and remove their names from the RoC (Registrar of Companies). However, not all company types are eligible for this option. Eligible Companies: Private Companies: These companies with a limited number of shareholders (maximum 200) can initiate a voluntary strike off if they meet the eligibility criteria. One Person Companies: Similar to private companies, but with a single shareholder-director, OPCs can also undergo a voluntary strike off if they qualify. Section 8 Companies: These non-profit companies can also pursue strike off if they comply with the regulations. Ineligible Companies: Public Companies : Due to their larger size and public accountability, public companies with more than 200 shareholders cannot utilize the strike off process. They must follow the more complex winding-up procedure. Limited Liability Partnerships (LLPs): India has a separate legal structure for LLPs, which are not eligible for company strike-off. They have their own dissolution process. Additional Considerations: Regardless of the company type, both voluntary and mandatory strike-off (initiated by the C-PACE) are subject to specific eligibility criteria defined in the Act. These conditions include financial solvency, shareholder approval (for voluntary strike-off), and business inactivity. Companies that are not eligible for strike off Listed Companies Delisted companies due to non-compliance Vanishing Companies – Companies that cease to file their statements of return after raising capital, and whereabouts of their registered office or directors are not known. Companies that are subject to investigation or have pending cases in court Companies that have outstanding public deposits, or defaulted in repayment Companies that have secured a loan or where repayment of debt is outstanding to banks or other financial institutions and in this regard no objection certificate is not obtained Companies with pending charges Companies with outstanding tax dues Procedure for Striking Off  The procedure for striking off a company in India involves several steps, whether it’s a voluntary strike-off initiated by the company itself or a compulsory strike-off initiated by the (C-PACE) due to non-compliance or other legal reasons. Here’s a comprehensive outline of the process: Procedures for Voluntary Strike-Off The procedure for striking off a company in India involves several steps, depending on whether it’s a voluntary strike-off initiated by the company itself or a compulsory strike-off initiated by the C-PACE due to non-compliance with regulations. Here’s a comprehensive outline of the process: 1. Board Meeting and Resolution: Convene a board meeting to pass a resolution authorizing the strike-off. This resolution will require approval of the majority of the Directors through a board meeting. 2. Extinguishment of all the Liabilities: Following the board’s approval for striking off the Company, the Company shall be required to extinguish all its liabilities. 3. General Meeting and Special Resolution: Hold a General Meeting (AGM or EGM) where shareholders approve a special resolution for strike-off by a 75% majority vote or obtain consent of 75% of the shareholders in terms of Paid-up share capital... --- > Ensuring financial transparency, accuracy, and regulatory compliance while boosting stakeholder confidence! - Published: 2024-05-02 - Modified: 2025-08-07 - URL: https://treelife.in/finance/unveiling-statutory-audits-ensuring-financial-transparency/ - Categories: Finance DOWNLOAD FULL PDF Statutory Audits help Ensuring financial transparency, accuracy, and regulatory compliance while boosting stakeholder confidence! In this post, learn about how we uphold financial integrity and drive operational improvements through meticulous auditing practices. --- > Compliances for One Person Company (OPC) in India are legal requirements that every company with a single owner must meet to maintain its status as a separate legal entity. - Published: 2024-05-02 - Modified: 2025-07-21 - URL: https://treelife.in/compliance/compliances-for-one-person-company/ - Categories: Compliance - Tags: annual compliance for one person company, annual compliance for opc, compliance for one person company, compliance for opc, compliance for opc company, compliance of opc company, mandatory compliance for opc, one person company compliance, opc compliance What is a One Person Company (OPC) in India? A One Person Company (OPC) in India is a business structure that allows a single individual to establish and operate a company under the provisions of the Companies Act, 2013. This concept was introduced to support entrepreneurs who are capable of starting a venture by allowing them to create a single-person economic entity. Before this Act, at least two directors and shareholders were required to form a company. Here are some key features of an OPC: Single Shareholder: An OPC has only one member or shareholder, distinguishing it from other types of companies which require at least two shareholders. Management and Ownership: The same individual holds complete control over the company, managing its operations while also owning all the company's shares. Directors: While an OPC can have only one member, it can appoint up to fifteen directors to facilitate its business operations, a number that can be increased beyond fifteen through a special resolution. Legal Status: An OPC is registered as a private limited company. This classification subjects it to all legal provisions applicable to private limited companies, including specific compliance requirements related to annual filings, financial statement audits, and more. Advantages Over Sole Proprietorship: An OPC provides limited liability protection to its sole owner, separating personal assets from the business's liabilities. This is a significant advantage over a sole proprietorship, where personal assets can be at risk in case of business failure. Compliance Requirements: Like other private limited companies, an OPC must comply with various statutory requirements set out by the Companies Act. These include filing annual returns, maintaining books of accounts, and other regulatory compliances. In essence, an OPC combines the simplicity of a sole proprietorship with the protective features of a company, making it an attractive option for entrepreneurs who prefer to work independently while enjoying the corporate veil.   What are Compliances for One Person Company (OPC) in India? Compliances for a One Person Company (OPC) in India are legal requirements that every company with a single owner must meet to maintain its status as a separate legal entity. These obligations, overseen by the Ministry of Corporate Affairs (MCA), are essential for the company to uphold its operational integrity and meet the regulatory standards established by the government. Annually, every registered OPC is required to fulfill these duties, which include the filing of an annual return and audited financial statements that provide a detailed account of the company's activities and financial status over the previous financial year. The deadlines for these filings are determined by the date of the Annual General Meeting (AGM). Failure to comply can result in severe repercussions, including the removal of the company from the Registrar of Companies (RoC) register and the disqualification of its directors. Therefore, adhering to these annual compliance requirements is crucial for the sustainability and legal compliance of an OPC in India.   List of Important Compliances for One Person Company in India Compliance NameCompliance DescriptionAssociated FormsDeadlinePenaltyAdditional NotesAppointment of First AuditorAppoint a practicing Chartered Accountant as the first auditor within 30 days of incorporation. ADT-1 (for subsequent auditors only)Within 30 days of incorporationNot Applicable (for first auditor) Commencement of Business (Form INC-20A)File a declaration for commencement of business within 180 days of OPC incorporation. INC-20AWithin 180 days of incorporationThe Company shall be liable to a penalty of Rs. 50,000/- and every officer who is in default shall be liable to a penalty of Rs. 1,000/- for each day during which such default continues but not exceeding Rs. 1,00,000/-.   If no such declaration has been filed with the RoC and the RoC has reasonable cause to believe that the Company is not carrying on any business or operations, he may initiate action for the removal of the name of the Company From the register of Companies  Annual Board MeetingsConduct a minimum of one board meeting in each half of the calendar year, with a gap of at least 90 days between the meetings. Not Applicable- At least once a year - Minimum 90 days gap between meetings- Every officer whose duty was to give notice of Board Meeting and who fails to do so shall be liable to a penalty of Rs. 25,000/- Rs. 25,000 for the company - Rs. 5,000 for officer in defaultNot mandatory to hold Board Meeting where there is only one director in such One Person Company Not mandatory to hold an AGM, but recommended for good corporate governance. Annual Return (Form MGT-7A)File the annual return with the Registrar of Companies (ROC) within 60 days 180 days of the September 30 of every year financial year-end. Includes details about shareholders/members and directors. MGT-7AWithin 60180 days of September 30financial year-endCompany and every officer who is in default shall be liable to a penalty of Rs. 10,000/- and in case of continuing failure, with a further penalty of Rs. 100/- for each day during which such failure continues subject to a maximum of Rs. 2,00,000/- in case of Company and Rs. 50,000/- in case of an officer who is in default. Not Specified Appointment of Subsequent AuditorAppoint a new auditor using Form ADT-1 within 15 days of the conclusion of the first Annual General Meeting (AGM). ADT-1Within 15 days of concluding the first AGMThe Company shall be punishable with fine which shall not be less than Rs. 25,000/- but which may extend to Rs. 5,00,000/- and every officer who is in default shall be punishable with fine which shall not be less than Rs. 10,000/- but may extend to Rs. 1,00,000/-Not Applicable Auditor TenureThe appointed auditor holds office until the conclusion of the 6th AGM. Not ApplicableNot ApplicableAuditor rotation provision doesn't apply to OPCs.  Commencement of Business (Form INC-20A)File a declaration for commencement of business within 180 days of OPC incorporation. INC-20AWithin 180 days of incorporationThe Company shall be liable to a penalty of Rs. 50,000/- and every officer who is in default shall be liable to a penalty of Rs. 1,000/- for each day during which such default continues... --- - Published: 2024-05-01 - Modified: 2025-08-07 - URL: https://treelife.in/legal/term-sheets-in-india/ - Categories: Legal - Tags: binding term sheet meaning, binding term sheet template, legally binding term sheet, non binding term sheet, non binding term sheet template, term sheet binding, term sheet for equity investment india, term sheet india, term sheets In the business landscape, term sheets play a vital role in facilitating agreements, particularly for investments and acquisitions. In the event of any corporate action, a term sheet is one of the vital documents that is executed by both the Parties to capture the important provisions and the basic framework of the proposed transaction. It lays down a broader framework for the parties to have meaningful commercial discussions towards the execution of definitive agreements and eventually, the closure of the transaction. While typically non-binding, certain provisions within the term sheet can be enforceable, making it a key element in the negotiation process. But what exactly are they, and how legally binding are they? This article dives into the world of term sheets in India, explaining the concept and the distinction between binding and non-binding versions. What is a Term Sheet? A term sheet is a pre-contractual agreement that outlines the key terms of a proposed transaction between two parties. It is generally non-binding. Nevertheless, term sheets frequently include legally binding clauses to protect sensitive information and prevent either party from pursuing other options during the negotiation period, often related to non-solicitation, exclusivity, secrecy, and more. Before signing final agreements, a term sheet is created. Think of a term sheet as a handshake that signifies a mutual interest in moving forward with a deal. It summarizes the core principles agreed upon by both sides, paving the way for a more comprehensive contract. The first crucial stage in a transaction is the creation of a term sheet.   What Does Term Sheets typically contain? The specific content of a term sheet will vary depending on the nature of the transaction. For instance, an angel investment term sheet will differ significantly from a Series B and above transaction round. However, some common elements are frequently included in investment-related term sheets: Type of SecurityIt is important to determine the type of security, whether equity, debt, derivatives, or hybrid securities, to be offered to the other party in a deal. Capital StructureThis clause contains the paid-up capital, share capital which include face value of equity, preference shares, etc. It also mentions the shareholding pattern of the company as on the effective date of the term sheet. ValuationThis clause mentions the valuation of the company prior to the investment or financing, for the purpose of the proposed transaction. Investment AmountThis clause sets out the proposed amount to be invested into the company where post investment shareholding structure is also laid down. Stake PercentageThis specifies the ownership stake the investor will receive in the company in exchange for their investment. Conversion RightsThis clause gives the shareholders the ability to convert preferred shares to equity where the investor would get certain key rights. Anti-Dilution ProtectionThis right protects the investor from dilution of equity from future issues of stock if the stock is sold at a lower price than the initially invested price.  Board CompositionThis clause mentions the composition of board members immediately after closing the deal where the investor may be given the right to nominate directors. Transfer RestrictionsThis clause provides any condition or restriction on the ability of the shareholder to sell or transfer such securities, protecting the interests of the investors. Conditions PrecedentThis clause mentions the list of conditions or obligations that need to be performed by the obligated party prior to a certain date, as agreed, to give effect to the term sheet. Pre-emptive RightsThis clause provides a right to the investors to participate in the future fund raise, where the first option is given to buy before public offering or whatsoever the case may be. ConfidentialityThis clause obligates the parties to maintain confidentiality with respect to the term sheet, its terms, negotiations, and such other details. Anti-dilutionThese clauses protect investors from their ownership stake being reduced if the company issues new shares at a lower valuation in future funding rounds. Voting RightsThe term sheet may outline the voting rights associated with the investor's stake. This can be a point of negotiation, particularly for startups where venture capitalists might seek greater control over decision-making. Liquidation PreferenceThis provision specifies how proceeds from the sale of the company or its assets will be distributed among shareholders in the event of a liquidation event. Governing Law and JurisdictionThis clause would determine the jurisdiction governing the term sheet as it may be entered between companies governed under the laws of two different jurisdictions. Binding and Non-Binding Term Sheets in India A common misconception surrounds term sheets in India - are they legally binding or not? The answer is nuanced. While a term sheet typically isn't enforceable in its entirety, it can contain pockets of legally binding provisions. Non-Binding Term Sheets In India, a non-binding term sheet is typically used in the early stages of negotiation to outline the broad terms of a potential deal, such as a business partnership, investment, or acquisition. This document serves as an expression of intent rather than a legally enforceable agreement. Non-binding term sheets are instrumental in facilitating discussions between parties by identifying key deal points and areas of agreement and divergence without committing either party to final terms. Although the term sheet itself is non-binding, it often contains a few binding clauses related to confidentiality, exclusivity, and sometimes, dispute resolution mechanisms to protect the interests of the parties during negotiations. The primary advantage of a non-binding term sheet is its flexibility, allowing parties to explore potential cooperation with minimal legal risk and costs before committing significant resources to due diligence and contract drafting. This is the more prevalent type of term sheet in India. It serves as a roadmap for negotiations, outlining key deal points without legal enforceability. Both parties have the flexibility to walk away or renegotiate terms before finalizing a binding contract. However, some clauses within a non-binding term sheet can be legally binding. These typically include: Confidentiality: Protects sensitive information disclosed during negotiations. Non-Solicitation: Prevents either party from soliciting business from the other's counterparties during the negotiation period. Exclusivity: Limits... --- - Published: 2024-04-26 - Modified: 2025-08-07 - URL: https://treelife.in/legal/buyback-from-foreign-shareholders/ - Categories: Legal - Tags: buy back, buy back of shares, Buyback from foreign shareholders, buyback of listed shares, buyback of shares 2022, buyback of shares by indian companies, buyback of shares process, share buyback meaning, stock buyback Introduction In the world of corporate finance, buybacks are a tactical instrument that businesses use to maximize shareholder value and optimize their capital structure. The complexities of buyback transactions, however, increase when foreign shareholders are involved, requiring a careful comprehension of regulatory frameworks and tax ramifications. Such transactions are governed by the Foreign Exchange Management Act (FEMA), which places stringent compliance measures in place to guarantee legality and transparency in cross-border transactions. A further degree of complexity is added by the tax treatment of repurchase profits, which takes into account dividend income and capital gains. This necessitates careful navigating of tax regulations and double taxation avoidance agreements (DTAA). In light of this, businesses need to approach buyback from foreign shareholders thoughtfully and strategically. Companies can unlock value for shareholders and ensure compliance with legal demands while navigating the regulatory maze and optimizing tax efficiency by adopting transparency, adhering to compliance standards, and obtaining expert help. Companies and shareholders alike may handle repurchase transactions in the global arena with confidence and clarity by having a thorough awareness of the regulatory subtleties and tax ramifications, which will ultimately encourage sustainable growth and shareholder value. Buyback by a private company from its shareholders Private companies can buy back their own shares from foreign shareholders, but the process is subject to specific regulations depending on the jurisdiction. In India, for example, the Reserve Bank of India (RBI) has streamlined the process, making it automatic for companies to buy back shares from foreign investors under certain conditions. Section 68 of the Companies Act, 2013 This section outlines the legal framework for buybacks by Indian companies. It specifies requirements such as shareholder approval, funding sources, and limitations on the amount of shares that can be repurchased. Additionally, it mandates disclosures that the company must make to its shareholders and regulatory authorities. The Buyback Process from Foreign Shareholders in India Indian companies often utilize share buybacks to enhance shareholder returns and optimize their capital structure. In cases where a company has foreign shareholders, the buyback process is governed by relevant regulations and carries unique complexities. Let's break down the steps involved: 1) Determining Eligibility Company Eligibility:Indian companies must meet specific criteria outlined by SEBI and the Companies Act, 2013, to conduct a buyback. These include sufficient free reserves, limited debt-to-equity ratio, and compliance with previous buyback conditions. Foreign Shareholder Eligibility:Foreign shareholders must confirm their eligibility to participate. Regulations generally permit participation, but there may be specific restrictions depending on the shareholder's investment structure. 2) Choosing the Buyback method Tender Offer:The company makes a direct offer to foreign shareholders to purchase their shares at a predetermined price within a specified time frame. This method is often used for targeted buybacks from a select group of shareholders. Open Market Purchase:The company buys back shares through the stock exchange over a period of time. This method offers flexibility, but the company cannot guarantee the number of shares it will repurchase or the price. 3) Regulatory Approvals Board consent: To start the repurchase program, the board of directors of the company's consent. Get shareholder approval for the repurchase program by submitting a special resolution to the shareholders. RBI and FEMA: In accordance with the provisions of the Foreign Exchange Management Act (FEMA), clearances from the Reserve Bank of India (RBI) may be necessary, contingent upon the extent of the repurchase and the characteristics of the foreign shareholders. 4) Execution of the Buyback Tender Offer Execution:If using the tender offer method, the company will formally announce the offer to foreign shareholders with details on pricing, timeline, and documentation requirements. Shareholders would need to respond within the stipulated time frame. Open Market Execution:If proceeding with the open market route, the company engages brokers to buy back shares on the stock exchange over time. 5) Repatriation of Funds Foreign shareholders can repatriate the proceeds of the buyback after the necessary tax deductions, subject to certain RBI guidelines. Exchange rate fluctuations at the time of repatriation may impact the amount finally received by shareholders in their home currency. Compliance under FEMA When a private company in India intends to buy back shares held by foreign shareholders, compliance with the Foreign Exchange Management Act (FEMA) becomes crucial. Here's a breakdown of the key aspects: Automatic Route:The Reserve Bank of India (RBI) has placed buybacks from foreign investors on an automatic route, eliminating the need for prior approval. However, this route comes with certain conditions. FEMA Regulations:The buyback must comply with the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident Outside India) Regulations, 2017 (FEMA 20(R)/2017-RB). These regulations specify the manner of fund receipt, pricing, and reporting requirements for buybacks involving foreign investors. FDI Policy:The buyback should not violate the existing Foreign Direct Investment (FDI) policy applicable to the specific sector in which the company operates. Certain sectors like defense, media, etc. , have specific restrictions on foreign shareholding. Form FC-TRS:The company must file Form FC-TRS (Transfer of Shares) with an authorized dealer within 30 days of the buyback transaction. This form reports the details of the transaction, including the number of shares bought back, the price paid, and the foreign investor's information. Additional Considerations:a) Valuation: The buyback price must be determined based on an independent valuation conducted by a registered valuer. The valuation report should be submitted to the authorized dealer along with Form FC-TRS. b) Who needs valuation? Valuation is mandatory for all buybacks from foreign investors, regardless of the size of the transaction or the company's listing status. c) Limitations: This automatic route is not available for companies with specific restrictions under FEMA or facing any enforcement action by the RBI. Tax Implications When a buyback transaction occurs, tax implications take place for both the Company as well as the Investors. Here’s a breakdown of the key points :- Company’s Tax Liabilities Buyback Tax (BT):The company is liable to pay Buyback Tax (BT) on the amount paid to shareholders for buyback. The current rate is 20%, with surcharges and cess,... --- - Published: 2024-04-24 - Modified: 2025-07-21 - URL: https://treelife.in/legal/legality-of-sex-toys-in-india/ - Categories: Legal - Tags: adult toys in india, are sex toys legal in india?, dildos in india, legal provisions for sex toys in india, legality of sex toys in india, sex doll laws in india, sex doll laws order, sex doll legislation in india, sex toys in india Introduction to Indian Market Growth and Trends Despite the social taboos associated with the purchase and use of adult toys in India, a market survey found a 65% increase in the sale of these products on online marketplaces within the first six months of 2020. As the world’s 7th largest market for e-commerce, changing consumer attitudes and increased accessibility to the sex toy business in India has propelled a meteoric boom, with the market value for adult toys in India estimated at around USD 112. 45 Million in 2023 and growing at a compounded annual growth rate (CAGR) of 15. 24% during the forecast period of 2025-2029.   With the global market for sex toys projected to reach USD 54. 6 Billion by 2026, the Indian market shows no sign of slowing this tremendous growth, making this an attractive business venture for a rising number of startups. However, the legal landscape surrounding the manufacture, import, storage, marketing, sale and distribution of adult toys in India is murky and complex, leading to numerous challenges for companies seeking to capitalise on the increasing demand for quality products and sex positive marketing. This article Legality of Sex Toys in India, sheds light on recent developments that signal a shift in the legal and social understanding of sex toy business in India. It aims to navigate the complex regulatory environment, offering insights into the challenges and solutions for adult toy sellers in this evolving landscape. The adult toys market in India is experiencing a period of significant growth, fueled by a number of social and economic trends.   Shifting Attitudes: Social media and increased openness about sex are leading to a normalization of adult toys, particularly among younger generations. This is chipping away at traditional stigmas. E-commerce Boom: The rise of shopping platforms to purchase sex toys online in India provides a discreet and convenient way for people to purchase adult toys, bypassing potential embarrassment in physical stores. Increasing Disposable Income: A growing middle class with more spending power creates a larger market for these products. Focus on Sexual Wellness: Adult toys are increasingly seen as tools for enhancing sexual pleasure and intimacy, not just taboo items. Dominant Products and Users: Vibrators currently hold the largest market share, but rings and other male-oriented products are showing promising growth. Women are the primary users, but the male segment is catching up. Distribution Channels: Purchasing sex toys online in India is the preferred method of purchase, accounting for over 59% of the market. Discreet packaging and secure transactions are key factors. Key players include Besharam, Snapdeal, LoveTreats, and ThatsPersonal. Legal Framework for Sex Toys in India While there is no express legislation banning the manufacture/import and sale of adult toys in India, the applicable regulatory framework relies primarily on obscenity laws, followed by laws which generally regulate the quality of goods and protect consumer interests. In India, the topic of sex doll laws order is characterized by a lack of clear legal guidelines, resulting in an ambiguous status for these products. The fundamental challenge under this framework is that these legislations contain language that is sufficiently vague enough that authorities are left to exercise their own discretion in its interpretation, often leading to an adverse outcome: Indian Penal Code, 1860 (“IPC”):Section 292(1) of the IPC deems an object to be ‘obscene’ if “it is lascivious or appeals to the prurient interest” or if its effect is “such as to tend to deprave and corrupt a person”. In essence, an object is considered obscene if it’s seen as offensive or appeals to sexual desires in a way that could harm people’s morals. This includes selling, distributing, or advertising these objects. The sale, distribution, import, conveyance, profit from and advertisement of “obscene objects” is also punishable by fine and imprisonment, upon conviction under Section 292(2) of the IPC. Given the inherent subjectivity in determining whether content is “obscene”, Indian courts have adopted a ‘Community Standard Test’ to determine whether a product and its marketing caters to such a deviant mindset. The problem is that what’s “obscene” can be a matter of opinion. Indian courts consider what most people in India would think, not just a small group of susceptible or sensitive people. Consequently what’s considered obscene can change over time. However, many people in India still see sex and obscenity as the same thing; this continues to present a challenge in determining an objective standard of obscenity. Indecent Representation of Women (Prohibition) Act, 1986 (“IRW”):The IRW explicitly defines “indecent representation of women” to mean a “depiction in any manner of the figure of a woman, her form or body or any part thereof in such a way as to have the effect of being indecent, or derogatory to, or denigrating women, or is likely to deprave, corrupt or injure the public morality or morals”, with the promotion of such representation (through books, pamphlets, etc. ) being punishable under Section 4 of IRW with imprisonment and fine (including upon a company and its directors/key managerial personnel). The problem is, what’s “indecent” can be a matter of opinion. The law also says this kind of content can’t harm public morals and consequently impacts the manner in which sex toys - especially how sex dolls and dildos in India are marketed to the consumer base. Information Technology Act, 2000 (“IT Act”) and Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021 (“ IT Rules”):Section 67 of the IT Act expressly prohibits the publication or transmission of “lascivious or prurient material” (defined as material that is sexually explicit or arousing in nature) in electronic form. The responsibility to prevent such publication or transmission is further imposed specifically on intermediaries (i. e. , online platforms listing adult toys in India, in the present case) in the IT Rules, where intermediaries are required to not only prevent obscene materials from being hosted on their platform, but requires implementation of effective content removal mechanisms. Customs Act, 1962 (“CA”):Section 11 of the CA empowers... --- - Published: 2024-04-23 - Modified: 2025-07-22 - URL: https://treelife.in/legal/msme-registration-benefits/ - Categories: Legal - Tags: micro small and medium enterprises registration, msme, msme benefits for startups, msme business registration, msme online registration, msme register online, msme registration benefits, msme udyam registration, tax benefits for msme, udyam registration, udyog aadhar, udyog aadhar registration benefits The MSME Sector: Powering India's Growth Micro, Small and Medium Enterprises (MSMEs) contribute significantly to the nation's GDP, generate vast employment opportunities, and foster innovation across various industries. Recognizing their critical role, the Government of India established the National Board for Micro, Small and Medium Enterprises (NBMSME) under the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act). MSMEs are the backbone of the Indian economy, playing a vital role in production, exports, and overall economic health. Their contributions are essential for the nation's success. Recognizing this immense potential, the Government of India (GOI) has actively supported the MSME sector through various initiatives in recent years. In this article ahead, we explore various MSME Registration Benefits & Tax Benefits for Businesses in India. These maybe established business organizations or startups. The NBMSME serves a three-fold purpose: Examining Growth Factors: The NBMSME acts as a strategic advisor, constantly examining factors that impact MSME growth. This includes analyzing market trends, infrastructure needs, and policy regulations. By understanding these growth drivers, the NBMSME can advocate for policies and initiatives that directly benefit MSMEs. Facilitating Benefits: Businesses registering under the MSME Act gain access to a multitude of advantages, including: Easier Access to Credit: While not all MSME loans are collateral-free, the NBMSME's advocacy has led to schemes offering easier credit access with relaxed collateral requirements. This can significantly improve your MSME's financial flexibility. Reduced Interest Burden: Some loan schemes provide exemptions on overdraft interest, easing your financial burden and allowing you to reinvest profits back into the business. Protection Against Delayed Payments (for Micro and Small Enterprises): Late payments can cripple cash flow. The NBMSME works towards initiatives that safeguard MSMEs from delayed customer payments, ensuring a smoother financial flow. A Voice for MSMEs: The NBMSME acts as a bridge between the government and MSMEs. By representing various MSME segments, including women entrepreneurs and regional associations, the NBMSME ensures your concerns are heard. This allows the government to tailor policies and programs that directly address the needs of MSMEs. MSME Classification and Support The MSMED Act further categorizes MSMEs based on their investment in plant and machinery (for manufacturing enterprises) or investment in equipment (for service enterprises), along with their annual turnover. This classification system allows the government to tailor support initiatives and benefits to the specific needs of each category. Here's a breakdown of the MSME classification: Enterprise CategoryInvestment in Plant & Machinery/EquipmentTurnoverMicroDoes not exceed INR 1 CroreDoes not exceed INR 5 CroreSmallDoes not exceed INR 10 CroreDoes not exceed INR 50 CroreMediumDoes not exceed INR 50 CroreDoes not exceed INR 250 Crore   What is MSME Udyam Registration? Udyam Registration is a free, online, and mandatory process for all MSMEs in India. It eliminates the complexities of earlier registration procedures by implementing a self-declaration system. There's no need to submit any documents or verification for registration. To streamline the registration process for MSMEs, the Government of India (GOI) implemented a user-friendly online system called Udyam Registration. Following the notification issued under the MSMED Act, any aspiring MSME owner can apply for a Udyam Registration Certificate (URC) – essentially an MSME registration certificate – through the Udyam registration portal.   Steps for Udyam Registration: The Udyam Registration process is simple and can be completed online through the official Udyam Registration portal (https://udyamregistration. gov. in/). Here's a basic overview of the steps involved: Visit the Udyam Registration portal. Enter your Aadhaar number and PAN details. Fill in the required information about your business, including its nature, activity, and investment details. Self-declare your business category (Micro, Small, or Medium) based on the prescribed turnover criteria. Submit the online application. Upon successful registration, you'll receive a URN electronically. This registration never expires, eliminating the need for renewals. What is the Benefit of MSME Registration in India? To empower these crucial businesses, the Indian government offers a compelling incentive: MSME registration. From easier access to credit to financial grants and subsidies, MSME registration offers a significant edge in today's competitive marketplace. MSME registration unlocks a multitude of advantages designed to empower your business. These benefits can be categorized into key areas: Financial Advantages: Reduced Interest Rates: MSMEs benefit from lower interest rates on loans and overdrafts compared to unregistered businesses. Government programs further subsidize interest costs, easing financial burdens. Easier Access to Credit: Registration facilitates access to collateral-free loans and government credit guarantee schemes, making it easier to secure funding at competitive rates. Operational Improvements: Free or Discounted ISO Certification: Government schemes offer financial assistance for obtaining ISO Certification, a globally recognized symbol of quality that enhances brand image.   Electricity Bill Rebates: Reduce operational costs with rebates on electricity bills offered to registered MSME. Feasible Complaint Portal: The MSME Samadhan Portal empowers you to file complaints against delayed payments, ensuring a healthy cash flow. Market Expansion Opportunities: Government Tender Participation: Registration facilitates participation in government tenders and e-Procurement marketplaces, expanding your customer base. Reduced Government Security Deposits: Waived security deposits for tenders ease the financial burden of bidding on government projects. International Trade Facilitation: Government support includes funding for attending international trade fairs, providing opportunities to gain global exposure. Marketing and Technology Upgradation: Government initiatives offer assistance with marketing and technology upgrades, propelling your business towards greater success. Additional Benefits: Industrial Promotion Subsidy: This subsidy assists in acquiring new technology and machinery, enhancing production processes, efficiency, and market competitiveness.   By leveraging these comprehensive benefits, MSME registration empowers you to overcome financial hurdles, foster innovation, enhance credibility, and unlock new market opportunities.   Tax Benefits of MSME Registration in India MSME registration unlocks a treasure trove of tax benefits designed to incentivize and support small businesses in India. These advantages translate to significant cost savings, improved cash flow, and a more competitive business environment. Let's delve deeper into some key tax benefits: Reduced Taxable Income: Interest on business loans is deductible under Section 36(1)(iii) of the Income Tax Act, 1961, effectively reducing taxable income and potentially the overall tax liability. Increased Depreciation Benefits: For... --- - Published: 2024-04-19 - Modified: 2025-08-07 - URL: https://treelife.in/legal/understanding-anti-dilution/ - Categories: Legal - Tags: anti dilution, anti dilution clause for founders, anti dilution clause sample, anti dilution clause startup, anti dilution protection for common stock, anti dilution protection for founders, anti dilution provision, anti dilution provisions in term sheet, anti dilution rights venture capital, anti dilution term sheet What is Anti-Dilution? An anti-dilution clause is a contractual provision typically found in investment agreements, particularly in the context of equity financing for startups. Its primary purpose is to protect existing investors from the dilutive effects of subsequent equity issuances at a lower valuation. Anti-dilution provisions are incorporated in a company's transactional documents that aim at protecting the value of an investor's shares in the event of a future equity financing round. The anti dilution provisions in the term sheet often state that when an investor invests in a company, they are designed to protect the investor's equity stake in the company if the company issues additional shares at a lower price in the future.   Why is the Anti-Dilution Clause Important? Anti-dilution provisions play a crucial role in safeguarding the interests of both startups and investors within the dynamic world of startup financing. Benefits of anti-dilution clause for startups: Preserves Founder Control: By granting founders additional shares at a lower price point in a down round, anti-dilution clauses for founders help maintain a significant ownership stake. This ensures they retain control over company decisions and guide the venture towards its goals. Attracts and Retains Talent: Equity-based compensation plans are essential for attracting top talent in the startup ecosystem. Anti-dilution provisions mitigate excessive dilution, ensuring these equity incentives remain valuable and motivating for employees, thereby minimizing the risk of talent loss. Enhanced Investment Appeal: The stability and fairness instilled by anti-dilution clauses make the startup more attractive to potential investors and strategic partners, facilitating future fundraising efforts. Benefits for anti-dilution clause for Investors: Protects Stake Value: These clauses shield investors from a decrease in ownership percentage (dilution) when a company issues new shares at a lower valuation in a subsequent financing round. Maintains Investment Worth: They play a major role in ensuring the value of an investor's stake remains stable even if the company's overall valuation goes down. This is particularly crucial for investors making significant investments. Increased Confidence: Anti-dilution provisions offer investors a level of protection and predictability, fostering greater confidence in their investment decisions.   What does an anti-dilution clause include? Anti-dilution clauses for a startup or an investor typically include several key elements: Trigger Events: Anti-dilution clauses are activated by specific trigger events, most commonly subsequent equity financings at a lower valuation than the original investment. These trigger events can also include stock splits, mergers, or acquisitions that may dilute the ownership stakes of existing investors. Adjustment Mechanism: Once triggered, the anti-dilution clause adjusts the number of shares or the conversion price of existing investor holdings to compensate for the dilution. The adjustment mechanism aims to maintain the proportional ownership of existing investors relative to the new shares issued. Full Ratchet vs. Weighted Average: There are two primary types of anti-dilution mechanisms which acts as an essential for the corporation while incorporating such a clause: full ratchet and weighted average. a) Full Ratchet: This type of anti-dilution clause typically functions to adjust the conversion price of existing holdings to the price of the new issuance, essentially providing the most protection to existing investors by completely offsetting the dilution. b) Weighted Average: This type mainly takes into account both the price and the number of shares issued in the new financing round, offering a more balanced approach to anti-dilution protection. It considers the dilution on a weighted average basis, mitigating the severity of adjustment compared to full ratchet. Exceptions and Limitations: Anti-dilution clauses may include exceptions or limitations to their application. For example, certain issuances, such as employee stock options or convertible debt, may be excluded from triggering the clause. Additionally, there may be caps or limits on the extent of adjustment to prevent excessive dilution of future investors. Negotiation and Customization: Anti-dilution clauses are subject to negotiation between the company and investors. The specific terms and conditions, including the type of anti-dilution mechanism used, the trigger events, and any exceptions or limitations, are customized based on the negotiating leverage and preferences of the parties involved.   Types of Anti-Dilution Provisions There are two main types of anti-dilution provisions: full-ratchet and weighted average. Full-Ratchet: For investors seeking maximum protection against dilution, full-ratchet anti-dilution provisions provide the most comprehensive safeguards. They fully compensate an investor for dilution caused by a future equity financing round by adjusting the investor's share count and conversion price to the same extent as the dilution caused by the new financing round. For example, if a company issues new shares at a price that is 50% lower than the price at which the investor's shares were issued, a full-ratchet provision would adjust the investor's share count and conversion price by 50%. This means that the investor's share count would increase by 50% and the conversion price would decrease by 50%, effectively nullifying the dilution caused by the new financing round. Weighted-Average: Weighted average anti-dilution provisions are less protective for investors than full-ratchet provisions, but they are also less disruptive to a company's capital structure. These provisions adjust the investor's share count and conversion price based on a formula that takes into account the size of the new financing round and the price at which the new shares are issued. The formula used to calculate the adjustment may vary, but it typically involves multiplying the investor's existing share count by a weighted average of the old and new share prices, and then dividing the result by the new share price. This results in a smaller adjustment to the investor's share count and conversion price than a full-ratchet provision would provide. The weighted average provision uses the following formula to determine new conversion prices:C2 = C1 x (A + B) / (A + C)Where:C2 = new conversion priceC1 = old conversion priceA = number of outstanding shares before a new issueB = total consideration received by the company for the new issueC = number of new shares issuedBoth full-ratchet and weighted average anti-dilution provisions are designed to protect the value of an investor's equity stake in a... --- - Published: 2024-04-18 - Modified: 2025-07-21 - URL: https://treelife.in/legal/rbi-outsourcing-of-information-technology-services-master-directions-2023/ - Categories: Legal - Tags: RBI (Outsourcing of Information Technology Services), RBI Outsourcing, RBI Outsourcing 2023, RBI Outsourcing IT, RBI outsourcing IT Services, Reserve Bank of India Outsourcing, Reserve Bank of India Outsourcing 2023, Reserve Bank of India Outsourcing IT, Reserve Bank of India Outsourcing IT Services The Reserve Bank of India issued the Reserve Bank of India (Outsourcing of Information Technology Services) Directions, 2023 (“Directions”), which have come into effect on and from October 1st, 2023 and are applicable to Schedule Commercial Bank including Foreign Banks located in India, Local Banks, Small Finance Banks, and Payments Banks but excluding Regional Rural Banks, Primary (Urban) Co-operative Banks excluding Tier 1 and Tier 2 Urban Co-operative Banks, Credit Information Companies (CICs), Non- Banking Financial Companies (“NBFCs”) but excluding Base Layer NBFCs and All India Financial Institutions (EXIM Bank, NABARD, NaBFID, NHB and SIDBI) (“REs”). It is essential to note that foreign banks operating in India through branch mode must interpret references to the 'Board' or 'Board of Directors' as pertaining to the head office or controlling office overseeing branch operations in India.   RETROSPECTIVE AND PROSPECTIVE EFFECT Outsourcing AgreementsParticularsTimelinesExisting AgreementsDue for renewal before October 1, 2023Must comply with the Directions on the renewal date (preferably) but no later than April 9th, 2024. Due for renewal on or after October 1, 2023Must comply with the Directions on the renewal date or by April 9th, 2026, whichever is earlier. New AgreementsWill come into force before October 1, 2023Must comply with the Directions as on the effective date of the agreement (preferably) or by April 9th, 2024, whichever is earlier. Will come into force on or after October 1, 2023Must comply with the Directions from the effective date of the agreement.   APPLICABILITY These Directions shall apply to Material Outsourcing of IT Services arrangements entered by the REs. The term “Material Outsourcing of IT Services” shall include any such services which:  (a) if disrupted or compromised will significantly impact the RE’s business operations; or  (b) may have material impact on the RE’s customers in the event of any unauthorised access, loss or theft of customer information.   The “Outsourced IT Services” will include the following: S. No. IT ServicesInclusions (not an exhaustive list)1. IT infrastructure management, maintenance and support (hardware, software or firmware)Hardware/ Software installation and configuration, OS management, network setup and configuration, server management, data backup and recovery, technical support services, security management, performance monitoring and optimization, IT asset management and vendor management2. Network and security solutions, maintenance (hardware, software or firmware)Firewall, IDS/IPS, VPN, NAC and WAF management, network monitoring and traffic analysis, patch management, security policy management and security audits and compliance3. Application Development, Maintenance and Testing; Application Service Providers (ASPs) including ATM Switch ASPsRequirements analysis, application design and architecture, programming and development, software testing, bug fixing and maintenance, performance optimization, version development, application security and hosting, application development, integration and customization4. Services and operations related to Data CentresInstallation, setup, design, consulting, networking, security, compliance and auditing, maintenance and upgrades and server and storage management of Data Centres. 5. Cloud Computing ServicesSaaS, PaaS, IaaS, DBaaS, cloud storage, monitoring and management, cloud networking, IAM management and data analytics and machine learning6. Managed Security ServicesSecurity monitoring and incident response, vulnerability management, security device management, security assessments and audits, security incident handling and forensics, security policy and governance and managed encryption services7. Management of IT infrastructure and technology services associated with payment system ecosystemPayment Gateway management, merchant account management, fraud detection and prevention, payment processor management and infrastructure management   ROLES AND RESPONSIBILITIES OF THE REs The guidelines underscore the critical responsibility of REs in overseeing outsourced activities. The Board and Senior Management bear ultimate accountability and must ensure that service providers adhere to the same standards and obligations as the REs themselves. To this end, REs are mandated to maintain a robust grievance redressal mechanism and compile an inventory of services provided by service providers. Governance Framework: A comprehensive governance framework is essential for effective oversight of outsourcing activities. REs intending to outsource IT activities must formulate a board-approved IT outsourcing policy encompassing roles and responsibilities, selection criteria for service providers, risk assessment methodologies, disaster recovery plans, and termination processes. The Board is entrusted with approving policies and establishing administrative frameworks, while Senior Management is responsible for policy formulation and risk evaluation. Evaluation and Engagement of Service Providers: Prior to engaging service providers, REs must conduct meticulous due diligence to assess their capabilities and suitability. Evaluation criteria should span qualitative, quantitative, financial, operational, legal, and reputational factors. The subsequent agreement between REs and service providers should be legally binding and encompass critical aspects such as service level agreements, data confidentiality, and liability clauses. Risk Management: Mitigating risks associated with outsourcing activities requires a robust risk management framework. REs must identify, measure, mitigate, and manage risks comprehensively. Additionally, they are required to establish business continuity plans (BCP) and disaster recovery plans (DRP) to ensure uninterrupted operations during emergencies. Monitoring and Control of Outsourced Activities: Maintaining effective oversight of outsourced IT activities is paramount for REs. Regular audits, performance monitoring, and periodic reviews of service providers are essential components of this oversight. Access to relevant data and business premises must be granted for oversight purposes. Outsourcing within a Group / Conglomerate: While REs are permitted to outsource IT activities within their business group or conglomerate, they must ensure the adoption of appropriate policies and service level agreements. Maintaining an arm's length relationship with group entities and adhering to identical risk management practices is imperative. Cross-Border Outsourcing: Engaging service providers based in different jurisdictions necessitates a thorough understanding of associated risks. REs must closely monitor country risks, political, social, economic, and legal conditions, and ensure compliance with regulatory requirements. Contingency and exit strategies must be in place to mitigate potential disruptions. Exit Strategy: Incorporating a clear exit strategy in outsourcing policies is essential for ensuring business continuity during and after termination of outsourcing arrangements. Alternative arrangements and procedures for data removal, transition, and cooperation between parties must be clearly defined.   EXCLUSIONS The following services/ activities are excluded from the ambit of “Outsourcing IT Services” (non-exhaustive list): Corporate Internet Banking services obtained by regulated entities as corporate customers/ sub members of another regulated entity External audit such as Vulnerability Assessment/ Penetration Testing (VA/PT), Information... --- - Published: 2024-04-18 - Modified: 2025-08-07 - URL: https://treelife.in/legal/privacy-policy-as-per-the-digital-personal-data-protection-act-2023/ - Categories: Legal - Tags: 2023, Digital Personal Data Protection Act, Privacy Policy In today's digital landscape, where personal data is both a valuable asset and a subject of concern, a robust privacy policy is paramount. A well-crafted privacy policy serves as a guiding document outlining how an organization collects, uses, and protects user information. Let's delve into the intricacies of a privacy policy, drawing insights from a comprehensive framework commonly found in such documents. Introduction: A privacy policy typically begins with an introduction that underscores the organization's commitment to safeguarding user privacy and complying with relevant laws and regulations. This section aims to establish trust and transparency from the outset, laying the foundation for user confidence in the organization's data practices. Consent and Updates: User consent forms the cornerstone of data collection and processing activities. A robust privacy policy should clarify that by using the organization's services or accessing its platform, users implicitly agree to its terms. Furthermore, the policy should outline procedures for notifying users of any material changes, ensuring ongoing consent and transparency. Opt-Out Provision: Respecting user autonomy is paramount. A privacy policy should include provisions for users to opt out of data collection and processing activities. By providing clear instructions on how to do so, organizations empower users to assert control over their personal information. Collection of Personal Information: The policy should detail the types of personal information collected and the methods used for its acquisition. Importantly, it should clarify that only information provided voluntarily or available in the public domain is collected, fostering transparency and user trust. Use of Personal Information: The policy should articulate the purposes for which personal information is collected and used, ensuring alignment with specific organizational objectives. By providing clarity on data usage, organizations demonstrate transparency and accountability in their data practices. Sharing Personal Information with Third Parties: Instances where personal information may be shared with third parties should be clearly delineated in the policy. By stipulating the conditions under which data is shared, organizations establish transparency and accountability in their data-sharing practices. Use of Cookies: If cookies are used for enhancing user experience or analyzing site traffic, the policy should address their usage and implications for user privacy. By informing users about cookie management options, organizations empower users to make informed decisions about their privacy preferences. Retention and Security of Personal Information: The policy should outline the organization's approach to data retention and the security measures employed to protect user information. By reassuring users of robust security measures, organizations foster trust and confidence in their data handling practices. International Data Transfer: If data processing involves international transfer, the policy should clarify the jurisdictions involved and the measures taken to ensure compliance with relevant laws and regulations. Transparent communication about data transfer practices enhances user trust and confidence. Disclaimers and Limitations of Liability: The policy may include disclaimers regarding external links and user-contributed content, mitigating the organization's liability for third-party actions. By setting clear boundaries, organizations minimize legal risks associated with user-generated content and external links. User Rights: Users should be empowered with rights to access, rectify, and erase their personal information, as well as to withdraw consent and lodge complaints. The policy should pledge to facilitate the exercise of these rights while upholding legal obligations, fostering trust and accountability. Grievance Officer: Designating a grievance officer to address user concerns and complaints promptly demonstrates the organization's commitment to resolving privacy-related issues effectively. Providing a dedicated point of contact enhances accountability and transparency in conflict resolution. Legal Compliance: In compliance with relevant legislation, such as the Digital Personal Data Protection Act of 2023, organizations should ensure that their privacy policy aligns with stipulated requirements for data protection and privacy. Adhering to legislative provisions enhances legal compliance and user trust in the organization's data handling practices.   In conclusion, a comprehensive privacy policy plays a pivotal role in navigating the complexities of data protection and privacy regulation in the digital age. By prioritizing transparency, user consent, and data protection, organizations can foster trust, enhance user experiences, and maintain compliance with regulatory standards. In doing so, they uphold privacy as a fundamental right in the modern digital landscape. --- - Published: 2024-04-12 - Modified: 2025-07-21 - URL: https://treelife.in/finance/phantom-stock-in-india/ - Categories: Finance - Tags: phantom equity, phantom equity plan, phantom share scheme, phantom shares, phantom shares of stock, phantom stock, phantom stock agreement, phantom stock india, phantom stock options, phantom stock plan, phantom stock plan example, shadow equity What is Phantom Stock? Phantom stock, also known as shadow stock, is a financial incentive mechanism designed for companies—especially those that are privately held—to reward selected employees with the benefits of stock ownership, without the actual transfer of company stock. This approach has been increasingly adopted by various firms aiming to compensate senior management and key employees, thus offering them a stake in the company’s future success without diluting the equity of existing shareholders. By aligning the interests of employees with the goals of the company and its shareholders, phantom stock motivates employees to contribute actively to the company’s success. It works by granting participants “phantom shares” that mimic the performance of the company’s actual stock, thereby allowing employees to enjoy financial rewards parallel to those of shareholders. These rewards are typically doled out in cash or cash equivalents, based on the number of phantom units awarded and the stock’s price at the end of a vesting period. This innovative compensation strategy not only incentivizes employees by tying their rewards directly to the company’s growth and success but also fosters a strong sense of ownership and dedication towards achieving corporate objectives. With its built-in vesting period, phantom stock encourages a long-term commitment, rewarding employees for their loyalty and contributions towards the company’s enduring success. As a strategic tool for retention and motivation in competitive markets, it presents a flexible solution for companies looking to customize their compensation plans to meet specific corporate goals, while also navigating the unique tax implications associated with such programs. Why do Indians companies use phantom stock? Companies in India are increasingly turning to phantom stock plans as a strategic tool for employee compensation, offering significant advantages both for the organization and its workforce.   Alignment of Interests: Phantom stock plans align employees’ interests with the company’s objectives, motivating them to work harder for the collective success of the organization. Employee Loyalty: By feeling financially invested in the company’s future, employees are likely to develop a sense of loyalty, increasing their tenure with the firm to maximize their compensation through phantom stock. Avoidance of Share Dilution: Companies opt for phantom stock plans when they wish to incentivize employees without issuing additional shares, thus avoiding dilution of existing shareholders’ equity. Legal Flexibility: Phantom stock provides a viable alternative in situations where legal constraints might limit the issuance of actual equity to employees. Merit-based Compensation: The allocation of phantom shares can be based on an employee’s role, seniority, and performance, promoting a culture of meritocracy within the organization. Long-term Incentives: With payouts often scheduled over a period of years and possibly contingent upon reaching certain milestones, phantom stock plans incentivize long-term commitment and contribution to the company’s goals. Types of phantom stocks in India In the dynamic startup landscape, attracting and retaining top talent is crucial. To address this challenge, companies are increasingly turning to innovative compensation structures. Among these, phantom stock plans are gaining significant traction due to their versatility. This flexibility allows companies to design plans that cater to their specific needs, each with distinct mechanisms and advantages. Full Value Phantom Stock Plans: Under this type, employees receive the full value of the stock at the time of payout, reflecting the stock’s appreciation from the grant date. For instance, if an employee receives phantom units corresponding to 100 shares at a grant price of ₹100 per share, and the stock price climbs to ₹150 per share at vesting, the employee would be entitled to a cash payout of ₹5,000 (₹150 – ₹100) multiplied by 100 units.   Appreciation Only Phantom Stock Plans: This type of plan focuses solely on the appreciation in the stock price, not the full value at the time of grant. Employees benefit solely from the increase in the stock price upon vesting. This structure proves advantageous for startups seeking to reward employees for their contribution to the company’s growth trajectory, while mitigating the initial financial burden associated with issuing full-value stock options. How Phantom Stock Works? Phantom stock plans offer a unique way for employees to gain the financial benefits of stock ownership without holding actual shares in the company. Through a formal agreement, employees are granted phantom stock units that mirror the performance of the company’s real stock. As the company’s stock value increases, so does the value of the phantom shares.   The key difference between phantom stock and traditional stock options lies in the nature of ownership and compensation. While stock options may lead to actual equity ownership upon exercise, phantom stock always results in cash compensation, without transferring any company shares to the employees. This mechanism benefits both the company, by avoiding equity dilution, and the employee, by offering a simplified and direct financial reward tied to the company’s performance.   Granting Units: Employees are awarded a specific number of phantom units. These units don’t translate to ownership rights in the company.   Vesting Schedule: A vesting schedule dictates when employees gain the right to receive the phantom stock payout. This period can range from a few years to the entirety of their employment.   Performance Metric: The most common performance measure is the stock price appreciation. Some plans might consider other factors like company profitability.   Payout Calculation: Upon vesting, the employee receives a cash payment based on the predetermined number of units multiplied by the difference between the grant price (stock price at the time of grant) and the exercise price (stock price at the time of vesting). What is a Phantom Stock Agreement? A phantom stock agreement is a legal contract between an employer and employee, allowing the latter to benefit from stock ownership perks without holding actual company shares. The agreement details how phantom shares track the company’s stock price and the process for calculating payouts. Importantly, these payouts don’t affect shareholder equity. This document acts as a guide for its execution and administration. Employees receive artificial shares that track the actual stock’s price movements, providing payouts from profits without affecting shareholder equity. Phantom... --- - Published: 2024-04-11 - Modified: 2025-08-07 - URL: https://treelife.in/legal/difference-between-copyrights-trademarks-and-patents/ - Categories: Legal - Tags: copyright trademark and patent in india, copyright vs patent vs trademark, copyright vs trademark vs patent, Copyrights, difference between copyright patent and trademark, difference between copyright trademark and patent, difference between patent and copyright, difference between trademark and trade secret, patent vs copyright, patents, Trademarks Introduction In the ever-evolving landscape of innovation, intellectual property rights (IPR) serve as the cornerstone of creativity and progress. It's the shield that protects original ideas, inventions, and brand identity, to reap the rewards of one's hard work and rightfully enjoy the reputational credit of being the first, original creator of a certain intangible property. India's decision to be a signatory to international intellectual property conventions, like the Berne Convention for the Protection of Literary and Artistic Works and the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), signifies its commitment to upholding a global framework for protecting creativity and innovation. These conventions establish a set of rules and minimum standards that member countries, including India, agree to implement within their legal systems. This article aims to explain Difference between Copyrights, Trademarks and Patents and their associated legal intricacies which are the three most widely implemented types of intellectual property protection. From safeguarding original works of authorship to securing exclusive rights for groundbreaking inventions, and establishing a recognizable brand identity, this research article will equip you to choose the most effective form of IP protection for the specific needs of your creation. What is Intellectual Property? Intellectual property (IP) refers to creations of the mind. These creations are intangible, meaning they can't be physically held and can include inventions; literary and artistic works; designs; and symbols, names, and images used in commerce, as defined by the World Intellectual Property Organization (WIPO). Intellectual property rights (IPR) serve as the cornerstone for fostering innovation and creativity across various industries, by providing legal protection to inventors, creators, and businesses for their unique ideas and creations. The importance of intellectual property rights lies in their ability to promote a fair competitive environment, encouraging the development of new technologies, artistic expressions, and brands. By securing exclusive rights to use, share, and monetize their creations, individuals and companies are incentivized to invest in research and development, leading to economic growth and the advancement of human knowledge. A) Types of Intellectual Property: The most common types of Intellectual Property Rights (IPR) include: Copyright: Protects original works of authorship like books, music, software, and artistic designs. Patents: Grants exclusive rights for new and inventive products or processes. Trademarks: Distinguishes the source of goods or services, allowing consumers to identify a particular brand. Trade secrets: Confidential information that provides a competitive advantage, such as a unique formula or manufacturing process. B) Importance of Intellectual Property: IPR protection plays a vital role in: Protects Innovation and Creativity: IPR incentivizes people to create new things by giving them control over their inventions, designs, and creative works. Knowing their work is protected encourages investment in research and development, which fosters innovation. Competitive Advantage: IPR can be a significant source of competitive advantage for businesses. A unique product design protected by a trademark or a groundbreaking invention with a patent can set a business apart from competitors. Monetization: IPR can be a way to generate income. Owners can license their rights to others for a fee, or they can sell their rights altogether. This can be a valuable revenue stream for individuals and businesses. Builds Brand Reputation: Strong trademarks can help build brand recognition and customer loyalty. Customers associate a trademark with a certain level of quality and trust, and IPR helps ensure that only the authorized owner can use that mark. Promotes Fair Trade: IPR enforcement helps prevent counterfeiting and piracy. This protects consumers from getting lower-quality goods and helps ensure that creators are fairly compensated for their work. What is copyright? Copyright © is a right given by the law protecting the original form or expression to creators of literary, dramatic, musical, and artistic works and producers of cinematograph films and sound recordings. Copyright does not protect brands or names, short word combinations, slogans, short phrases, methods, plots, or factual information. Copyright also does not protect ideas or concepts. The meaning of copyright is mentioned under the Indian Copyright Act, 1957 (hereinafter ‘Copyright Act’) in Section 14 which essentially states that exclusive rights are granted to the owner of a copyright. Section 14: Meaning of copyright - This section defines the exclusive rights granted to copyright owners. These rights typically include reproduction, distribution, public performance, and adaptation of the copyrighted work. Section 13: Acts not infringing copyright - This section outlines certain actions that don't constitute copyright infringement. These may include fair dealing for purposes like research, criticism, or review. Sections 15-21: Deal with specific rights and limitations - These sections cover various aspects of copyright ownership and limitations on those rights. They delve deeper into specific rights for certain types of creative works, like cinematograph films, sound recordings, and performer's rights. What are the rights protected under copyright? Here are the main types of rights protected by copyright: Reproduction rights: This allows the copyright owner to control how their work is copied, whether in physical form (printing a book) or digital form (downloading music). Distribution rights: This grants the copyright owner control over how copies of their work are distributed to the public. This could include selling books, distributing movies, or making music available online. Public performance or communication rights: The copyright owner controls how their work is performed or communicated to the public. This could involve public readings of a book, screenings of a film, or online transmissions of music. Adaptation rights: This allows the copyright owner to control the creation of derivative works based on their original work. This could include translations, adaptations for films, or other modifications.   Copyright primarily protects two main categories of rights: economic rights and moral rights.  Economic rightsThese are the exclusive rights that allow the copyright owner to financially benefit from their work. They encompass the reproduction, distribution, public performance, and adaptation rights as mentioned earlier. Moral rightsMoral rights are distinct. These rights are personal and non-economic. They protect the creator's non-financial interests in their work:a) The right of attribution: This ensures the creator is identified as the author of the... --- - Published: 2024-04-10 - Modified: 2025-07-22 - URL: https://treelife.in/legal/angel-tax-exemption/ - Categories: Legal - Tags: angel investors, angel tax, angel tax benefits, Angel Tax Exemption, angel tax exemption for startups, angeltax India's startup landscape has become an ongoing global success story, attracting a swarm of investors eager to tap into its potential. From angel investors to venture capitalists, everyone's looking for the next big thing. But there's a hidden hurdle for young companies: the angel tax. Angel tax was introduced in the Finance Act, 2012 and came into force post-April 2013. It requires startups to pay taxes on the difference between the investment amount they receive and the fair market value determined by the government. The difference between the issue price of the shares and the FMV as determined by the tax authorities is treated as income from other sources and taxed at the prevailing income tax rate. This can be a significant financial burden for startups, especially those in their early stages. Determining a fair market value for a budding startup is notoriously difficult. While the government introduced some exemptions in the Union Budget of 2019, strict conditions apply. This has created a situation where a well-intended tax regulation aimed at curbing money laundering has unintentionally become a roadblock for many legitimate startups. In this article, we will understand the intricacies of angel tax, the exemptions allowed under India’s tax regime, and the potential reasons behind angel tax becoming a breakthrough in the fast-paced entrepreneurial spirit of our country. What is Angel Tax? The angel tax, introduced by Section 56(2)(viib) of the Income Tax Act, 1961, applies to unlisted companies (startups whose shares aren't publicly traded) that receive funding exceeding the Fair Market Value (hereinafter ‘FMV’) determined by the government. This excess investment is considered "income from other sources" and is taxed at a rate of 30. 9% (inclusive of a 30% income tax rate and 3% cess). Section 56(2)(viib) of the Income Tax Act 1961 encompasses a provision that pertains to closely-held companies issuing shares to resident investors at a value exceeding the “fair market value” of those shares. In such cases, the surplus amount of the issue price over the fair value is subject to taxation as the income of the company issuing the shares. Hence, angel tax is a built-up concept inculcated in the Finance Act, 2012 over the foundational block of provisions of the Income Tax Act, 1961. The core issue lies in determining a startup's FMV. Unlike established companies with a track record, startups are young and often lack a readily available market value. This makes the government's FMV assessment subjective and potentially inaccurate. Imagine a scenario where an investor believes your innovative idea has immense potential and offers ₹15 crore for shares whose FMV is estimated at ₹10 crore by the government. Under the angel tax, that ₹5 crore difference would be taxed, creating a significant financial burden on an early-stage company. Which investment falls under the angel tax category? Any funding a startup receives from an investor, if it exceeds the FMV determined by the government, falls under the angel tax category. This can include investments from angel investors, individuals who provide early-stage capital, or even venture capitalists if the startup is still unlisted. The key factor is the difference between the investment amount and the government's FMV assessment, not the specific type of investor. What is an Angel Tax Exemption? The Indian government has introduced exemptions to the angel tax. The new policy exempts startups registered under the Department for Promotion of Industry and Internal Trade (DPIIT) from the angel tax. The primary route to tax benefits lies in obtaining recognition from the Department for Promotion of Industry and Internal Trade (DPIIT). This involves submitting an application along with supporting documents to the Central Board of Direct Taxes (CBDT). Once approved, your startup can breathe a sigh of relief and be shielded from the angel tax. Eligibility Criteria for Angel Tax Exemption: In order to get an exemption, the government has laid down eligibility criteria for angel tax exemption in a two-fold structure. A startup has to be first recognized and registered as prescribed under G. S. R. notification 127 (E) are eligible to apply for recognition under the program. The two-fold structure includes: Eligibility Criteria for Startup Recognition Eligibility Criteria for Tax Exemption under Section 56 of the Income Tax Act, 1961 Eligibility Criteria for Startup Recognition (DPIIT) While DPIIT (Department for Promotion of Industry and Internal Trade) recognition for a startup unlocks the exemption door, there are specific criteria a startup needs to fulfill: The company must be incorporated as a private limited company or registered as a partnership firm or a limited liability partnership. The company's turnover should not exceed INR 100 Crore in any of the previous financial years. A company shall be considered as a startup up to 10 years from the date of its incorporation. The company should demonstrate a focus on innovation or improvement of existing products, services, or processes. Additionally, it should have the potential for job creation or wealth generation. Companies formed by splitting up or restructuring an existing business are not eligible for this recognition. Eligibility Criteria for Tax Exemption under Section 56 of the Income Tax Act, 1961 After getting recognition, a startup may apply for an angel tax exemption. The eligibility criteria are as follows: The startup must be recognized by the Department for Promotion of Industry and Internal Trade (DPIIT). The aggregate amount of the startup's paid-up share capital and share premium (the additional amount paid by investors over the face value of the shares) cannot exceed INR 25 Crore after the proposed investment. However, the calculation of the paid-up capital shall not include the consideration received in respect of shares issued to a non-resident, a venture capital fund, and a venture capital company. What is the Angel Tax Exemption Declaration? Angel tax declaration is a formal statement submitted alongside your exemption application. It serves as a commitment from your startup to adhere to specific investment restrictions for a set period. The declaration outlines several asset categories where your startup cannot invest for a period of seven years following... --- - Published: 2024-04-08 - Modified: 2025-01-21 - URL: https://treelife.in/reports/shark-tank-india-the-past-present-and-future/ - Categories: Reports - Tags: shark tank india DOWNLOAD FULL PDF Report Highlights Shark Tank India, the Indian adaptation of the globally renowned business reality show, has taken the nation by storm. Since its debut in December 2021, the show has become a hot topic for entrepreneurs, investors, and viewers alike. But has it truly lived up to the hype? The show boasts a panel of cutthroat investors (Sharks) like Ashneer Grover, Namita Thapar, Peyush Bansal, Aman Gupta, and Vineeta Singh, all business tycoons (Sharks) in their own right. The high-stakes environment and candid deal negotiations (pitches) have captivated audiences, with each season witnessing a surge in venture capitalist (VC) activity and startup funding. Data suggests that over INR 100 crore was invested across the first two seasons, propelling many innovative direct-to-consumer (D2C) brands and social enterprises into the limelight. However, Shark Tank India has also faced its share of criticism. Some argue that the emotional appeals employed by contestants overshadow the business fundamentals. Others point out that securing a deal on the show doesn't guarantee long-term success. While many funded startups have witnessed a post-show funding boost, a significant number haven't been able to translate the television exposure into sustainable growth. Despite the debate, Shark Tank India undeniably democratized entrepreneurship in India. It has ignited a startup revolution, inspiring millions to chase their business dreams. Whether it's a funding platform or simply a launchpad for publicity, Shark Tank India has undoubtedly disrupted the entrepreneurial landscape in the country. --- - Published: 2024-04-08 - Modified: 2025-08-07 - URL: https://treelife.in/reports/open-network-for-digital-commerce-ondc-a-report/ - Categories: Reports - Tags: ONDC, open network for digital commerce DOWNLOAD FULL PDF What is ONDC? The Open Network for Digital Commerce (ONDC) is a pioneering initiative by the Government of India aimed at democratizing digital commerce and reducing monopolistic tendencies in the market. Launched with the vision to create a level playing field for all retailers, especially small and medium-sized enterprises (SMEs), ONDC seeks to enable buyers and sellers to be digitally visible and transact through an open network. This ambitious project represents a significant leap towards an inclusive digital economy where competition is fair, entry barriers are minimal, and consumer choice is paramount. Objectives and Benefits 1. Promoting Inclusivity and Fair Competition: One of the primary objectives of ONDC is to prevent the dominance of a few e-commerce giants by providing equal opportunities to smaller retailers. This inclusivity fosters a competitive environment where services and prices can improve, benefiting consumers. 2. Enhancing Consumer Choice: ONDC enables consumers to access a wider range of products and services from various vendors across the country. This not only increases choice but also encourages competitive pricing and quality. 3. Boosting SME Participation: By lowering entry barriers, ONDC helps SMEs and local vendors participate in the digital economy, thus enhancing their reach and scalability without significant investment in technology. 4. Streamlining Operations: The network aims to standardize protocols for cataloging, inventory management, order management, and payment facilitation, making it easier for businesses to operate online seamlessly. How It Works ONDC is not an app or a marketplace in itself but a set of open protocols that can be adopted by any digital commerce platform. It functions as an interoperable framework allowing independent platforms to connect and transact with each other, similar to how the Unified Payments Interface (UPI) transformed digital payments in India. Retailers, regardless of their size, can list their products and services on this network, and consumers can access these through any participating platform or application. Features of ONDC The Open Network for Digital Commerce (ONDC) is a transformative initiative aimed at redefining the e-commerce landscape by fostering an open and interoperable ecosystem. This ambitious project seeks to democratize digital commerce, making it more inclusive and competitive by reducing entry barriers and preventing market dominance by a few large players. Here are some of the key features that define ONDC: 1. Open Protocol Framework ONDC operates on an open protocol framework, which means it sets a standardized way for digital commerce transactions to occur across different platforms. This approach ensures that various software applications and services can interoperate seamlessly, allowing for a more fluid exchange of goods and services across the digital space. 2. Interoperability A hallmark of ONDC is its ability to facilitate interoperability among different e-commerce platforms. Just like how the Unified Payments Interface (UPI) enables cross-platform financial transactions, ONDC allows consumers to access services and products from any participating retailer, regardless of the platform they are on. This feature is central to breaking down the walled gardens created by big e-commerce entities. 3. Inclusivity ONDC is designed to level the playing field for all vendors, particularly small and medium enterprises (SMEs) and individual entrepreneurs. By providing a common platform that is accessible to everyone, it opens up opportunities for smaller players to compete on equal footing with larger corporations. 4. Consumer Choice The network significantly enhances consumer choice by aggregating offerings from various sellers across different platforms. This not only increases the variety of products and services available to consumers but also fosters competitive pricing and improves service quality. 5. Decentralization Unlike conventional e-commerce models that are centralized around specific companies or platforms, ONDC promotes a decentralized approach. This means that no single entity has control over the entire network, thereby preventing monopolistic practices and promoting a healthy competitive environment. 6. Privacy and Security ONDC is built with a strong emphasis on privacy and security. The open network ensures that consumer data is protected and that transactions are secure. This is crucial for building trust and encouraging widespread adoption of the platform. 7. Efficiency and Scalability By standardizing the way digital commerce is conducted, ONDC makes it easier for businesses to scale and reach a wider audience. The network's efficiency in connecting buyers and sellers directly can lead to reduced costs and faster transactions. 8. Innovation and Flexibility The open nature of ONDC encourages innovation by allowing developers and entrepreneurs to build upon the platform, creating new applications and services that can meet the evolving needs of consumers and businesses. 9. National and Global Reach ONDC is designed to not only cater to the vast and diverse Indian market but also to set a precedent that could be followed globally. Its scalable model can potentially be adopted by other countries looking to democratize e-commerce and stimulate their digital economies. 10. Sustainability By making the digital commerce ecosystem more competitive and inclusive, ONDC also supports sustainable economic development. It empowers local businesses, promotes regional products, and encourages responsible consumer practices. In essence, ONDC's features are aimed at creating a more accessible, fair, and efficient digital marketplace. By doing so, it holds the promise of transforming the e-commerce sector into a more vibrant, competitive, and innovative space, benefiting consumers and businesses alike. Implementation and Challenges While the initiative is ambitious and holds the potential to revolutionize e-commerce in India, its success depends on widespread adoption by retailers, platforms, and consumers alike. The government is actively working to onboard partners and create awareness about the benefits of joining the ONDC. However, challenges such as digital literacy, standardization of protocols, and ensuring robust cybersecurity measures are critical for its effective implementation. Difference between the ONDC and Traditional E-Commerce Apps FeatureONDCTraditional E-commerce AppsOwnership and ControlDecentralized network without a central controlling authority. Centralized, owned and controlled by specific companies. Access to SellersFacilitates access to any seller on the network, regardless of their platform. Limited to sellers that are registered or listed on the specific app. InteroperabilityHigh interoperability allows consumers to shop across multiple platforms through a single interface. Low interoperability, with shopping limited within... --- - Published: 2024-04-08 - Modified: 2025-07-21 - URL: https://treelife.in/legal/understanding-breach-of-contract-types-causes-and-implications/ - Categories: Legal - Tags: breach of agreement, breach of contract agreement, breach of contract law, breach of contract legal notice, contract breach, contract breach remedies, contract law breach of contract, law, legal, material breach of contract, remedies for breach of contract, violation of contract agreement Contracts are, indisputably, a foundation block in any partnership, collaboration or association between individuals or companies which provides with a clearer perspective to the duties, rights and obligations dispersed to all the parties. The significance of a legally binding document such as a contract is fetched beyond enumerating obligations on both parties, it also encircles the consequences that may arise in an instance where either of the parties lag behind or fail in fulfilling such duties. Such a non-fulfillment can be caused due to various and versatile reasons- which in legal and commercial landscape is termed as ‘breach of contract’. This article dives deep into the legal landscape surrounding breach of contract, the different types, distinctive nature of the types, causes, implications and the potential consequences. It also explores remedies available to the non-breaching party and the penalties that can be imposed by the court in case the dispute is elevated. What is Breach of Contract? A contract is breached or broken when any of the parties fails or refuses to perform its obligations or duties either partially or completely as originally agreed under the contract. Breach of contract is a legal cause of action in which a binding agreement is not honored by one or more parties by non-performance of its promise. A contract involves mutual obligations and rights between parties who have entered into such a contract. A failure, by either of the parties or both, to fulfill the terms of the contract results in a breach of contract. Some examples of a breach of contract can be: (a) A contract to perform in a classical music festival is breached if the performing artist does not come to the venue on the day of the performance. (b) A agrees to buy 100 coconuts from B on a particular date. The contract is breached if A refuses to buy the coconuts on the agreed date or B fails to deliver the promised number of coconuts. In India, the Indian Contract Act, 1872 (“the Act” hereinafter) governs disputes arising out of instances where a legally binding agreement and contract is breached, and when the terms initially agreed in the contract are not adhered to. Although the Act does not provide for an explicit definition of ‘breach of contract’, it effectively enumerates the particulars of a breach of contract through its focus on obligations and consequences of non-performance. If a party fails to fulfill their contractual obligations, and this failure causes the other party to suffer a loss, it can be considered a breach of contract under the Act. These consequences can include: Right to Claim Damages: The non-breaching party can claim compensation for any financial loss they suffer as a direct result of the non-performance. Specific Performance: In certain situations, a court order can compel the breaching party to fulfill their obligations exactly as agreed upon. Termination of Contract: Depending on the severity of the breach, the non-breaching party may have the right to terminate the contract. Sections 73 to 75 in the Act enumerate the consequences of the breach of contract such as compensation for loss or damage caused by breach of contract (section 73); compensation for breach of contract where penalty is stipulated (section 74) and instances when a party is rightfully rescinding contract and is entitled to compensation (section 75). The Act addresses breach of contract through several key provisions, following are the particulars of the provisions: Section 73: This section deals with compensation for loss or damage caused by a breach. It allows the non-breaching party to claim financial compensation for losses that naturally arise from the breach. These losses must be foreseeable and the plausible effects that can be anticipated by parties at the time the contract was formed. This section is based on the rule laid down in Hadley v. Baxendale. In this case, the court established the principle that a breaching party is only liable for damages that are reasonably foreseeable at the time of entering the contract. This section states that compensation for a breach of contract cannot be given for any remote or indirect loss or damage sustained by reason of the breach. However, compensation can be awarded for: Loss or damage which the parties knew at the time of the contract was likely to result from the breach. Loss or damage which follows according to the usual course of things from such breach. Sections 74 & 75: These sections deal with pre-determined compensation. Section 74 allows for ‘liquidated damages’ where the contract specifies a fixed amount payable in case of a breach. Section 75 covers situations where the contract is rescinded (canceled) due to a breach. Here, the non-breaching party can claim compensation alongside canceling the contract. In the case of Fateh Chand vs. Balkishan Das (1963), the court interpreted section 74, which says that "the contract contains any other stipulation by way of penalty," was interpreted by the Court. In accordance with the judicial pronouncement, the applicability of this section extends to any contract that includes a penalty. It also applies to instances where there was a delay in payment for money or property delivery due to a contract breach, as well as instances in which the right to receive payment was forfeited for previously delivered property. Types of Breach of Contract While the Act doesn't explicitly list breach types, courts consider factors like the severity of non-performance (material vs. minor breach), timing (actual vs. anticipatory breach) in order to categorize the types of breaches of contract. Breach of contract may be actual or anticipatory, material or minor. In case of any breach of contract, the affected party can claim the damage from the court by forcing the other party to perform as promised. Remedies for breach of contract include suit for damages, suit for specific performance, canceling the contract, stopping the other party from doing something, suit upon quantum meruit (which means compensation for work done and services carried on before the breach took place). Following is a... --- > The legal landscape surrounding electronic signatures has undergone a fascinating evolution. With the rise of digital technologies, the validity of eSign in India has been a topic of much debate. - Published: 2024-04-04 - Modified: 2025-07-21 - URL: https://treelife.in/legal/esign-in-india/ - Categories: Legal - Tags: Admissibility of E-sign, Admissibility of E-sign in India, E-sign, E-sign admissibility, E-sign admissibility in India, e-sign document, E-sign in India, e-sign online free, legal validity of eSign in India, legality of digital signature, legality of electronic signature, legality of esign, legality of esign in india, what is e-sign Introduction In today's digital age, the way we conduct business has fundamentally transformed. Gone are the days of paper-based workflows and physical signatures. As businesses embrace the efficiency of electronic transactions, e-signatures have emerged as a critical tool for streamlining operations and ensuring legal certainty. The legal landscape surrounding electronic signatures has undergone a fascinating evolution. With the rise of digital technologies, the validity of eSign in India has been a topic of much debate. In a contemporary perspective, electronic signatures have gained legal recognition due to protection demanded by online procedure requisites of legal transactions such as e-contracts, cross-border MOUs (memorandum of understanding), transnational deals between corporations, online dispute resolution methods etc. The conventional way of signing was hand-written and served a distinct unique representation of one’s identity. Marking a signature on a document has always been a legal requisite, without which the authenticity and legality of the document comes into question. Prior to the digital age, the validity of contracts relied heavily on physical signatures. However, the Information Technology Act (IT Act) of 2000 revolutionized the legal landscape in India by introducing a framework for electronic signatures (e-signatures). The IT Act established the legal validity of e-signatures, provided they meet specific criteria. The IT Act, along with other relevant laws like the Indian Contract Act (ICA), the Electronic Securities Act (ESA), the Information Technology (Electronic Signature Certificate Authorities) Rules (ESECAR), and the Indian Stamp Act, 1899, create a comprehensive legal framework governing the use of e-signatures in India. From the global lens, The UNCITRAL Model Law on Electronic Signatures of 2001 is the foundation stone that transmitted the hybrid concept of electronic signatures into legal systems of various nations. This article will delve into the world of e-signatures in India, exploring their legal validity, use cases, and the benefits they offer.   What is eSign? eSign, or electronic signature, is the digital equivalent of a traditional handwritten signature. It's a secure way to approve documents and transactions online, eliminating the need for printing, signing, and scanning physical paperwork. Instead, eSign utilizes electronic methods to verify your identity and bind you to the document. This can involve Typing your name, Drawing your signature or Using dedicated eSign software. Just like traffic laws differ by country, the definition and legal framework for eSignatures vary around the globe. In India, the IT Act Information Technology Act (IT Act) of 2000 established the legal foundation for e-Sign, ensuring its validity and widespread adoption. By using eSignatures, businesses can significantly streamline record management. Documents are signed electronically, stored securely in a digital format, and easily retrievable whenever needed. This eliminates the need for physical storage and simplifies the entire document lifecycle. While the core function remains the same (signifying your intent to agree), the technicalities of eSignatures can differ.   eIDAS (EU): Defines an eSignature as "data in electronic form which is attached to or logically associated with other data in electronic form and which is used by the signatory to sign. " eIDAS recognizes three types of eSignatures – simple, advanced, and qualified – each with varying levels of security and legal weight. ESIGN & UETA (US): Both define an eSignature as "an electronic sound, symbol, or process, attached with a contract or other record and executed or adopted by a person with the intent to sign the record. " This essentially means that your eSignature can take various forms, from typing your name to using a digital pen on a touchscreen or dedicated eSignature software. The key factor is that the chosen method securely links your eSignature to the document, creating an auditable record of your agreement. India has taken eSign a step further with Aadhaar-based eSign. This innovative system leverages the Aadhaar identification platform to simplify the e-Signing process for Aadhaar holders. Here's how it works: If you possess an Aadhaar card and a linked mobile number, you can digitally sign documents with ease. The e-Sign service verifies your identity through Aadhaar eKYC, ensuring a secure and reliable experience. Legal Validity of eSign in India - Laws and Compliance Remember the days of printing, signing, and physically mailing documents for every agreement? Thankfully, those days are fading with the rise of eSign. But a crucial question remains: Are eSignatures legally valid in India? The answer is Yes, eSignatures are legally valid in India! The Information Technology Act (IT Act) of 2000, established the legal framework for eSignatures, ensuring they hold the same weight as traditional handwritten signatures when used correctly. This act, along with other relevant laws like the Indian Contract Act (ICA) and the Information Technology (Electronic Signature Certificate Authorities) Rules (ESECAR), create a comprehensive legal framework for eSign in India. You can also use Digital Signature Certificates (DSCs) for enhanced security or leverage Aadhaar eSign for a simpler signing experience – both recognized under the legal framework.   Here's a breakdown of the key aspects that ensure the legal validity of eSignatures in India: Equivalence to Handwritten Signatures: The IT Act explicitly states that a contract cannot be denied enforceability solely because it was conducted electronically, provided it fulfills the essential elements of a valid contract under the ICA. In simpler terms, an eSignature has the same legal weight as a traditional handwritten signature. Digital Signature Certificates (DSCs): For enhanced security, the IT Act recognizes Digital Signature Certificates (DSCs) issued by licensed certifying authorities. These certificates act as a digital identity verification tool, adding an extra layer of trust and security to eSignatures. Aadhaar eSign: India has further simplified eSigning with the introduction of Aadhaar eSign. This innovative system leverages the Aadhaar identification platform to allow Aadhaar holders to digitally sign documents easily. The e-Sign service verifies the signer's identity through Aadhaar eKYC, ensuring a secure and reliable experience. Legal Provisions concerning E-signatures in India Section 2(1)(ta) of Information Technology Act, 2000 provides for the definition of e-signature as “Authentication of any electronic record by a subscriber by means of the electronic technique specified in the second schedule... --- > While company registration unlocks a world of possibilities for business in India, it also introduces the essential concept of compliance. In simpler terms, Compliances For a Private Limited Company refers to the company adhering to a set of established rules and regulations. - Published: 2024-04-03 - Modified: 2025-07-21 - URL: https://treelife.in/compliance/compliances-for-a-private-limited-company/ - Categories: Compliance - Tags: annual compliance checklist, compliance for plc, compliance for private limited company in india, compliances for private limited company, indian private limited company compliance, plc compliance, private limited company compliances What are the Compliances For a Private Limited Company (PLC) in India? While company registration unlocks a world of possibilities for business in India, it also introduces the essential concept of compliance. In simpler terms, Compliances For a Private Limited Company refers to the company adhering to a set of established rules and regulations. In the context of Indian businesses, this means following the guidelines outlined in the Companies Act, 2013. This act serves as the backbone for corporate governance, dictating everything from director qualifications and remuneration to the proper conduct of board and shareholder meetings. One key aspect of compliance involves adhering to the regulations set forth by the Ministry of Corporate Affairs (MCA). This applies to all private limited companies, regardless of their size or turnover. So, whether you're a startup with a modest capital base or a well-established entity, annual compliance filings like annual returns are mandatory. Managing day-to-day business activities alongside navigating complex corporate laws can feel overwhelming. This article provides a foundational understanding of compliances for private limited companies in India. What is a Private Limited Company (PLC)? A Private Limited Company (PLC) is a legal entity formed to operate a business, offering several key benefits to its founders. A defining feature is limited liability, which protects shareholders' personal assets from the company's debts. This means if the company encounters financial difficulties, creditors can only go after the company's holdings, providing a safety net for shareholders. Another key aspect is ownership structure. Unlike publicly traded companies, shares in a PLC are not freely available for purchase on the stock market. Instead, ownership is restricted to a select group, typically founders, or private investors. This allows for more control over the company's direction and decision-making processes, making PLCs suitable for entrepreneurs seeking to maintain a focused ownership structure. It's a popular option for startups, family-run businesses, and companies aiming for a more focused ownership structure.   List of Important Compliances For a Private Limited Company (PLC) in India While core compliance requirements remain constant for private limited companies (PLCs) in India, deadlines and procedures can evolve. This table summarizes key compliances along with deadlines specifically for 2025: 1) Incorporation Compliances Incorporation compliances are the legal requirements a company must follow after it's officially formed. This includes things like holding your first board meeting within 30 days, opening a company bank account, and getting any licenses or permits you need to operate. You'll also need to appoint key people, keep track of important documents, and follow labor and tax laws.   ComplianceDescriptionFormsDeadline and PenaltyDeclaration of Commencement of Business Since November 2018, companies in India with a share capital need to file a declaration with the Registrar of Companies (ROC) for the receipt of subscription money in the Bank account of the Company upon incorporation before starting operations or borrowing. Essentially, it acts as a go-ahead signal for the company to officially begin functioning. INC-20AWithin 180 days of incorporation.   Penalty of Rs. 50,000 for the company & Rs. 1000 per day for the directors for each day of default not exceeding Rs. 100,000/- Auditor AppointmentGetting your finances in order is crucial right from the start for companies in India. Appointing a statutory auditor ensures proper oversight of your company's financial health.  ADT-1 FilingWithin 30 days of incorporation.   Penalty of Rs. 25,000/- but which may extend to Rs. 500,000/- for the Company and Rs. 10,000/- but which may extend to Rs. 100,000/- for the Director or officer of the Company who is in default. Holding First Board MeetingNewly formed PLCs in India have a crucial meeting on their agenda within the first month. This initial board meeting focuses on setting up the company's financial foundation. Key items on the discussion table include opening a company bank account to deposit the share capital collected from shareholders, PLC’s incorporation certificate, seal, directors’ disclosures, etc. Additionally, the board will address issuing share certificates, -Within 30 days of incorporation.     Rs. 25,000/- on the officer of the Company whose duty was to give notice for holding such meeting Company MerchandiseAll business letters, envelopes, invoices, etc. should have: Full name of PLC, Corporate Identification Number , Registered office address, Contact details – Telephone number &; Email id-As soon as the PLC is incorporatedLabour & Other LawsObtaining registration under labour laws if applicable and other laws etc. -- 2) Director KYC & Disclosures In India, keeping director information current is crucial. Directors must go through a KYC process (Know Your Customer) to verify their identity. Additionally, directors have annual disclosure obligations. They need to declare any directorships, partnerships, or significant shareholdings in other companies, along with details of their close relatives. These measures ensure transparency and accountability within Indian companies. ComplianceDescriptionFormsDeadline and PenaltyKYC Filing for DirectorsKeeping Director information up-to-date is essential in India. When filing the KYC form (DIR-3 KYC), both email and mobile phone one-time passwords (OTPs) are required for verification. If a Director's email or phone number changes, they need to re-file the DIR-3 KYC form to update their information. For other changes in Director details, such as address, a different form (DIR-6) needs to be submitted. DIR-3 KYC / Web KYCBefore 30th September of every year (Annual)   Deactivation of Director Identification Number (DIN) Disclosure of Directors' InterestIndian company directors must disclose their financial interests annually. This includes: - Directorships in other companies, bodies corporate, Partnership firms, association of individuals, MBP-1Every First Board Meeting of the Financial Year (Annual) and whenever there is any change in the disclosures already made then at the first Board meeting held after such change   The Director shall be liable to a penalty of Rs. 100,000/- Disclosure of Non-Disqualification by DirectorsIndian company directors must file a "Director Non-Disqualification Disclosure" DIR-8At the time of appointment or reappointment  Rs. 50,000/- on the Company and every officer of the Company who is in default and in case of continuing failure, a further penalty of Rs. 500/- per day during which such failure continues, subject to a maximum of Rs. 300,000/-... --- - Published: 2024-03-26 - Modified: 2025-08-07 - URL: https://treelife.in/reports/power-play-a-regulatory-guide-for-indian-gaming-companies/ - Categories: Reports - Tags: compliance, Indian Gaming Companies, regulation for gaming, regulatory laws for gaming DOWNLOAD PDF Report Highlights Power Play: A Regulatory Guide for Indian Gaming Companies India's gaming industry is on the brink of a monumental transformation, evolving from a budding market to a global leader. With over 500 gaming studios now operational, the country is at the forefront of innovation and creativity in the gaming world. The country boasts a substantial gaming community, comprising 568 million gamers, out of which 25% are paying users. Industry analysts predict a future even brighter, forecasting the Indian gaming industry to surpass $3. 9 billion by 2025. This phenomenal growth signals a golden era for aspiring entrepreneurs and gaming enthusiasts. The Indian Gaming Industry: A Snapshot of Facts As India's gaming industry navigates through a phase of exponential growth and regulatory evolution, several key facts highlight its current status and forecast its future trajectory. India is the second-largest gaming market worldwide with a staggering 568 million gamers out of which 25% are paying users.   The segment has attracted consistent investments totaling INR 22,931 crore between FY20 and FY24 YTD from both domestic and foreign investors. The sector has grown at a CAGR of 28%, reaching INR 16,428 crore in FY23, and is expected to reach INR 33,243 crore by FY28. The Indian gaming industry is expected to surpass $8. 6 billion by 2027 (according to EY and FICCI). India has produced three gaming unicorns: Dream11, Mobile Premier League, and Games24x7. Furthermore, it directly and indirectly employs around one lakh individuals, with the prospect of expanding to 250,000 job opportunities by 2025. Diving Into the Ecosystem At the heart of this revolution are game developers, gaming platforms, esports ventures, RMG (Real Money Gaming) companies, and blockchain gaming innovators. Each segment contributes uniquely to the vibrancy and diversity of India's gaming landscape. Navigating Success in India's Gaming Industry To thrive in this booming ecosystem, understanding the legal and regulatory frameworks is crucial. The distinction between "games of skill" and "games of chance" forms the legal cornerstone. Moreover, the implementation of the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Amendment Rules 2023 marks a pivotal shift, introducing a regulatory framework tailored for online gaming companies. Innovation at the Forefront Protecting innovation is paramount in the competitive gaming industry. Intellectual Property Rights (IPR) serve as the foundation for safeguarding game developers' creativity and originality, covering everything from trademarks and copyrights to patents and designs. This protective measure ensures companies can maintain their competitive edge and continue to push the boundaries of creativity. The Road Ahead Despite facing regulatory challenges and the intricacies of GST and taxation, India's gaming industry stands on the precipice of a new dawn. The sector's ability to navigate these hurdles while harnessing its vast potential will shape its trajectory in the years to come. With the promise of increased FDI, job creation, and continued technological innovation, the future of gaming in India shines brightly. Explore the Full Report For those looking to dive deeper into the intricacies and opportunities within India's gaming industry, our comprehensive report, "Power Play: A Regulatory Guide for Indian Gaming Companies" offers an invaluable resource on investment landscape, market size and opportunity, landmark happenings, legal and regulatory framework, compliance essentials and IPR, taxation and anticipated developments. The report equips readers with the knowledge needed to navigate entrepreneurs and enthusiasts in India's vibrant gaming ecosystem. --- - Published: 2024-03-26 - Modified: 2024-08-20 - URL: https://treelife.in/news/amendment-regarding-foreign-direct-investment-fdi-in-space-sector/ - Categories: News - Tags: fdi, foreign direct investment, space, space sector India approves 100% FDI in Space Sector The Government of India (“GoI”), on March 04, 2024 has announced significant amendment in the Consolidation FDI Policy, 2020 (“FDI Policy”) pertaining to the space sector, which will be effective from the date of FEMA notification. The amendment has been brought with an objective to liberalize the space sector and promote foreign investment in the Indian space economy. As on today, the FDI policy allows 100% FDI subject to government approval in establishment and operation of satellites, subject to the sectoral guidelines of Department of Space/ISRO. Amendments under Article 5. 2. 12 Vide the press note dated March 04, 2024 issued by Department for Promotion of Industry and Internal Trade, GoI has introduced the following amendments under Article 5. 2. 12 of the FDI Policy: 1. For manufacturing and operation of satellites, the sector cap for FDI has been set at 100%, wherein upto 74% FDI can be made through automatic route and FDI beyond 74% would require government approval; 2. Satellite data products, ground segment and user segment can have 100% FDI through automatic route; 3. Launch vehicle and associated systems or sub-systems can have 100% FDI, wherein, upto 49% FDI can be made through automatic route and FDI beyond 49% would require government approval; 4. For creation of spacesports for launching and receiving spacecraft, 100% FDI can be made through automatic route; and 5. Manufacturing of components and systems/sub-systems for satellites, ground segment and user segment, can have 100% FDI through automatic route. Conclusion Further, the press note sets out definitions of each activity mentioned above which are exclusive in nature, with an intention to avoid any uncertainty going forward. The amendment is aligned with GoI’s vision to increase the space economy of India five-fold in the next 10 years, to touch $40 billion. By liberalizing the space sector, the foreign investors will find the Indian space sector to be a lucrative opportunity which would lead to immense technological growth in the sector. --- - Published: 2024-03-20 - Modified: 2025-07-21 - URL: https://treelife.in/legal/fssai-registration/ - Categories: Legal - Tags: apply for fssai license, food licence, food licence apply, food licence apply online, Food Safety and Standards Authority of India, foscos fssai, FSSAI, fssai apply online, fssai certificate, fssai food license, FSSAI License, fssai license cost, fssai license registration, FSSAI Registration, fssai registration online FSSAI Registration: Mandatory for All Food Businesses in India Getting an FSSAI registration is a crucial step for anyone starting a food business in India. This includes individuals planning to open restaurants, bakeries, hotels, cloud kitchens, or even food stalls. The requirement applies to all Food Business Operators (FBOs). This broad term encompasses any entity or person involved in the food industry, including those who manufacture, prepare, sell, transport, distribute, or store food products. FSSAI stands for the Food Safety and Standards Authority of India. This autonomous organization, established under the Ministry of Health and Family Welfare, is responsible for monitoring and regulating the entire food sector in India. The FSSAI was created under the Food Safety and Standards Act, 2006 (FSS Act). This act consolidates all regulations related to food safety in India. By ensuring food products undergo quality checks, FSSAI helps reduce food adulteration and the sale of substandard products. In addition to registering and licensing FBOs, FSSAI also lays down the rules and regulations that govern the operation of food businesses throughout India. What is FSSAI Registration? In India, the Food Safety and Standards Authority of India (FSSAI) plays a critical role in safeguarding public health by regulating the food industry. To achieve this, FSSAI mandates FSSAI Registration or Licensing for every entity (individual or company) involved in the food business lifecycle, encompassing manufacturing, processing, storage, distribution, and sale of food products. FSSAI Registration is a 14-digit registration or a license number obtained from FSSAI and printed on food packages. The 14-digit registration number provides details about the assembling state of the product and producer’s permit. Furthermore, the requirement to display the FSSAI registration number on food packaging serves as a nudge for Food Business Operators (FBOs) to prioritize food safety and quality. The Food Safety & Standards (Licensing and Registration of Food Business) Regulations, 2011 form the bedrock for FSSAI's registration and licensing procedures. These regulations establish clear guidelines regarding the eligibility criteria, application process, and documentation required for FBOs to obtain the necessary authorization. FSSAI Registration vs. FSSAI License? The type of FSSAI authorization an entity requires depends on the size and nature of its business operations. FSSAI Registration caters to small-scale food businesses with an annual turnover of up to INR 12 lakh. This includes petty retailers, hawkers, small manufacturers, and temporary stall owners. FSSAI Licenses, on the other hand, are applicable to larger businesses with higher turnovers or specific food business activities. Difference between FSSAI Registration and FSSAI License - FeatureFSSAI RegistrationFSSAI LicensePurposeBasic compliance for small food businessesMandatory for medium and large food businessesTurnover LimitUp to ₹ 12 lakh per yearAbove ₹ 12 lakh per yearType of BusinessesSmall manufacturers, retailers, petty vendors, temporary stallsFood processing & manufacturing units, large retailers, exporters, importersValidity5 years1 to 5 years (depending on license type)ProcessSimpler online applicationMore complex process with inspectionsFeeLower feesHigher feesInformation DisplayedRegistration number displayed at office premisesLicense number displayed on product packaging Food Business Operators (FBO) Who Need FSSAI Registration in India FSSAI registration is a requirement for a broad spectrum of food businesses, encompassing various sizes and activities. Here's a breakdown of the FBOs that need to register: Retailers and Shops: This includes permanent establishments like grocery stores, snack shops, bakeries, confectionery shops, and more. Street Food Vendors: Temporary or fixed stalls selling prepared or packaged food items, such as Gol Gappa stalls, chaat stalls, fruit and vegetable vendors, tea stalls, juice shops, etc. , all require registration. Hawkers selling food while moving from one location to another also fall under this category. Dairy Units: Milk chilling units, petty milkmen, and milk vendors must register with FSSAI. Food Processing Units: Vegetable oil processing units Meat processing and fish processing units All food manufacturing units, including those involved in repacking food Facilities processing proprietary or novel food items Storage and Transportation: Cold storage facilities that refrigerate or freeze food products Businesses involved in transporting food products, especially those using specialized vehicles like refrigerated vans, milk tankers, and food trucks Distribution and Marketing: Wholesalers, suppliers, distributors, and marketers of food products need to be registered. Food Service Establishments: Hotels, restaurants, and bars Canteens and cafeterias, including mid-day meal canteens Food vending agencies, caterers, and dabhas PGs providing food service, banquet halls with catering arrangements Home-based canteens and food stalls operating in fairs or religious institutions Import and Export: Businesses involved in importing or exporting food items, including food ingredients, require FSSAI registration. This extends to e-commerce food suppliers and cloud kitchens. Determining Your FSSAI License/Registration Type: The type of FSSAI license or registration an FBO needs depends on specific eligibility criteria. These criteria consider factors like the business's annual turnover, production capacity, and the nature of food products handled. The FSSAI website provides detailed information on the eligibility criteria for each type of license and registration. Types of FSSAI Registration in India The Food Safety and Standards Authority of India (FSSAI) regulates and ensures food safety across the country. To operate legally within this framework, food businesses (FBOs) need to obtain an FSSAI registration or license. The type of FSSAI registration an FBO requires depends on its size, turnover, and production capacity. Here's a breakdown of the three main categories: FSSAI Basic Registration: Eligibility: This is the most basic form of FSSAI registration and is mandatory for small businesses with an annual turnover of up to Rs. 12 lakh. Process: Registration is done online through Form A. It's a relatively simple process requiring basic details about the FBO and its operations. Suitable for: Small manufacturers, retailers, marketers, or suppliers dealing in: Homemade food products like jams, pickles, candies, etc. Small restaurants and cafes Food stalls and mobile canteens Small-scale storage units FSSAI State License: Eligibility: This license is required for medium-sized businesses with an annual turnover of more than Rs. 12 lakh but less than Rs. 20 crore. Process: Obtaining a state license involves a more detailed application process through Form B. It may require inspections of the FBO's premises and adherence to stricter hygiene and safety... --- > Compliances for Partnership Firm help strengthen a transparent and credible figure of firms in Public, as well as support in a lot of business activities. - Published: 2024-03-20 - Modified: 2025-07-21 - URL: https://treelife.in/compliance/compliances-for-partnership-firm/ - Categories: Compliance - Tags: compliances for partnership firm, partnership firm compliance, roc compliance for partnership firm, statutory compliance for partnership firm What are Compliances For Partnership Firm in India? In the context of businesses, compliances refer to the actions a company or firm must take to adhere to a set of rules and regulations established by various governing bodies. These regulations can come from the government, industry standards organizations, or even the company itself (internal policies). Partnership firm compliances are the mandatory actions a partnership firm must take to operate legally and smoothly in India. These actions ensure the firm adheres to various regulations set by the government and other authorities. Compliances for Partnership Firm help strengthen a transparent and credible figure of firms in Public, as well as support in a lot of business activities.   What are Partnership Firms in India? Partnership firms, a prevalent business structure in India, offer an attractive option for small and medium-sized businesses. They combine the ease of setup with the flexibility of shared ownership and management. Here, we'll delve into what partnership firms are, how to register one, and the essential compliances to navigate. Understanding Partnership Firms: A partnership firm is a business entity formed by an agreement between two or more individuals (partners) who come together to carry on a business and share the profits or losses. The key aspects of a partnership firm include: Minimum and Maximum Partners: A minimum of two partners is required to form a partnership firm, and the maximum number of partners cannot exceed 20 (except for banking firms). Shared Ownership and Management: Partners share ownership of the firm's assets and liabilities in accordance with the partnership deed, a legal document outlining the rights, responsibilities, profit-sharing ratio, and dispute resolution mechanisms between partners. Unlimited Liability: A crucial characteristic of partnership firms is unlimited liability. This means that partners are personally liable for the firm's debts and obligations beyond the extent of their capital contribution.   Registration Process for Partnership Firms: While registration of a partnership firm is not mandatory under the Indian Partnership Act, 1932, it offers several benefits, including: Enhanced Credibility: Registration lends legitimacy to the firm, fostering trust with potential clients and investors. Easier Access to Loans: Banks and financial institutions are more likely to provide loans to registered firms. Limited Liability for Incoming Partners: If a new partner joins a registered firm, their liability for pre-existing debts is limited to their capital contribution. Here's a simplified breakdown of the registration process: Drafting a Partnership Deed: A well-drafted partnership deed is crucial. It's advisable to consult a lawyer for this step. Registration with the Registrar of Firms (RoF): The partnership deed needs to be registered with the RoF in the state where the firm's main office is located. The process typically involves submitting the deed, along with a prescribed fee and application form. Obtaining a PAN Card: Every registered partnership firm requires a Permanent Account Number (PAN) from the Income Tax Department. List of Important Compliances For a Partnership Firm Partnership firms, a popular choice for small and medium businesses, offer a relatively simple setup process. However, ensuring smooth operations and avoiding legal roadblocks necessitates staying compliant with various regulations. This section outlines the key compliance requirements for partnership firms in India. Income Tax Compliances: PAN Card: Every partnership firm needs a Permanent Account Number (PAN) from the. Every partnership firm needs a Permanent Account Number (PAN) from the Income Tax Department. This unique identifier is crucial for tax purposes. It is used for filing tax returns, tracking financial transactions, and ensuring transparency. Income Tax Return Filing: Partnership firms must file an Income Tax Return (ITR) irrespective of their income or loss. The designated form for them is ITR-5. This ITR captures the firm's total income, expenses, deductions, and tax liabilities. Timely filing of ITRs ensures transparency and avoids penalties for late filing. Understanding Tax Implications: Partnership firms are taxed at a flat rate of 30% on their total income. However, each partner's share of profit/loss is reflected in their individual tax returns, and they are taxed according to their income tax slabs. This ensures a fair distribution of tax burden based on each partner's income level. Choosing the Right ITR Form: ITR-4: Applicable for firms with a total income up to ₹50 lakh and income recorded on a presumptive basis. Presumptive taxation offers a simplified method of calculating taxable income based on an estimated profit margin for specific business categories. ITR-5: Mandatory for firms exceeding ₹1 crore in turnover or requiring a tax audit. ITR-5 is a more comprehensive form capturing detailed income and expenditure information. Income Tax Slabs for Individual Taxpayers (Partner) in India (AY 2024-25) : Partner's IncomeTax RateSurcharge (if applicable)Total TaxUp to ₹ 3,00,000Nil-Nil₹ 3,00,001 - ₹ 6,00,0005%-5% of income exceeding ₹ 3,00,000₹ 6,00,001 - ₹ 9,00,00010%-₹ 15,000 + 10% of income exceeding ₹ 6,00,000₹ 9,00,001 - ₹ 12,00,00015%-₹ 45,000 + 15% of income exceeding ₹ 9,00,000₹ 12,00,001 - ₹ 15,00,00020%-₹ 1,35,000 + 20% of income exceeding ₹ 12,00,000Above ₹ 15,00,00030%12% of tax payable (if income exceeds ₹ 1,00,00,000)As per slab and applicable surcharge This table reflects the individual income tax slabs for partners in a partnership firm. Each partner's share of the firm's profit or loss is reflected in their individual tax returns. The partnership firm itself is taxed at a flat rate of 30% on its total income. Health and Education cess @ 4% is also levied on the total tax amount. Surcharge of 12% is levied on income exceeding ₹ 1 crore, subject to marginal relief provisions. GST Compliances: GST Registration and Return Filing: Partnership firms with an annual turnover exceeding ₹40 lakh (subject to change) must register for Goods and Services Tax (GST). GST is a destination-based tax levied on the supply of goods and services. Registered firms need to file regular GST returns: GSTR-1: This monthly return details outward supplies made by the firm. GSTR-3B: This consolidated return summarizes the firm's tax liability for a specific month. GSTR-9 (Annual Return): This annual return provides a comprehensive overview of the firm's GST transactions throughout the financial year.   Other Mandatory Compliances: TDS Return Filing: Firms acting as deductors (with a... --- - Published: 2024-03-15 - Modified: 2025-03-11 - URL: https://treelife.in/news/the-karnataka-stamp-act-1957-governor-grants-consent/ - Categories: News The Karnataka Stamp Act underwent modifications through the Karnataka Stamp (Amendment) Act 2023. On February 3, the Governor granted consent, and the revised rates were promptly published in the gazette on the same day. Despite an average 2-2. 5x increase in stamp duty rates, Karnataka continues to stand out as one of the most cost-effective jurisdictions for stamp duty in India, in contrast to Maharashtra and Delhi. Here are the noteworthy changes affecting startups: 1. Power of Attorney Duty: Formerly INR 100, now increased to INR 500. 2. Any Other Agreement under Article 5:Duty has risen from INR 200 to INR 500. --- > While they both, damages and indemnity aim to compensate for financial hardship, they differ significantly. Here we guide you to understanding damages vs indemnity. - Published: 2024-03-05 - Modified: 2025-08-07 - URL: https://treelife.in/legal/understanding-damages-vs-indemnity-explained-in-detail/ - Categories: Legal - Tags: damages vs indemnity, difference between damages and indemnity, difference between liquidated damages and indemnity, indemnity, liquidated damages vs indemnity Introduction Let's face it, contracts are broken, and sometimes, unexpected situations cause financial losses. But what recourse do you have? When it comes to recouping your losses, legal concepts like damages and indemnity come into play. While they both aim to compensate for financial hardship, they differ significantly. This blog post will be your guide to understanding damages vs indemnity. In this Article Difference between Indemnity and Damages, We'll explore into the situations where each applies, the scope of what you can recover, and the key differences that can make all the difference in your claim. So, whether you're a business owner, an entrepreneur , or simply someone who wants to be prepared, buckle up and get ready to understand the legalese of damages and indemnity! Damage, Damages & Compensation The terms ‘damage’ and ‘compensation’ are often used interchangeably for ‘damages’, it is essential to understand that the two terms hold significant differences to the concept of ‘damages’. ‘Damages’ are related to the compensation that is granted or sought for, whereas ‘damage’ pertains to the pecuniary and non-pecuniary harm or loss for which such compensation is requested or granted. ‘Damage’ can encompass both aspects, such as harm to one’s reputation, physical or mental suffering, while ‘damages’ strictly refer to monetary relief. Compensation is a comprehensive term that covers payments to address losses or harm resulting from acts or omissions, such as property acquisition by another party, legal violations, wrongful termination. In contrast, damages specifically arise from actionable legal wrongs. What are Damages? In Common Cause v Union of India, the apex court observed that damages refer to a form of compensation awarded in case of breach, loss or injury. Damages are covered under Sections 73 and 74 of the Indian Contract Act, 1872 (Act). While section 73 of the Act encompasses the actual damage incurred upon breach of contract, Section 74 provides for liquidated damages i. e. , genuine estimate of the loss incurred by the aggrieved party. What is Indemnity? According to section 124 of the Indian Contract Act, a claim for indemnity arises due to the conduct of the indemnifier or by the conduct of any other person. This is a major advantage of claiming indemnities over damages. Indemnity clauses shift the entire risk of future loss to indemnifier. Indemnity is a form of protection from any third-party losses and is established by way of an indemnity agreement between the claimant and indemnifier. Indemnity clauses are often subject to extensive debate during the commercial contract negotiations since poorly negotiated indemnity clauses can cause serious repercussions to the parties. Understanding the Differences between Damages and Indemnity DamagesIndemnityDefined under Section 73 and 74 of the Act. Damages can be liquidated or unliquidated, and refer to the losses incurred.  Indemnity is an undertaking to make good loss caused by one party to another. The act describes indemnity as “ A contract by which one party promises to save the other from loss caused to him by the conduct of the promisor, himself or by the conduct of any other person. ”In cased of monetary damages, award may be awarded for more than the actual loss occurred or even less than the actual loss occurred.  The primary objective behind indemnity is to restore the original position of the party aggrieved by the breach. The concepts of foreseeability, reasonability and remoteness bring a duty to mitigate, covering two broad principles: a) The claimant must take all reasonable steps to reduce or contain his loss; and b) The claimant must not act unreasonably so as to increase his loss. Such an obligation to mitigate may not arise in an indemnity unless specifically stated so in the indemnity clause. Damages can only be claimed when there is a breach of contract by either partyRelief may be claimed for loss caused by the action of a third party which may not necessarily result from the breach of contract. Represent a secondary obligation awarded by a court in response to a proven wrongful act.  The liable party only incurs the obligation to pay damages after a finding of wrongdoing. Creates a primary obligation, meaning the indemnifying party is directly responsible for compensating the indemnified party for losses regardless of any other obligations. Involves at least two parties: the injured party (who suffered the harm) and the liable party (who caused the harm).  Courts determine the amount of damages awarded. Typically involves two parties: the indemnifier (who promises to reimburse) and the indemnified party (who receives the reimbursement). The liable party must be found to have caused the loss through their wrongful act or breach of duty.  They are only liable for the damages directly attributable to their actions. The indemnifier may not necessarily be the direct cause of the loss.  The obligation can arise due to contractually agreed-upon scenarios, even if the indemnifier had no role in causing the loss. Limited to the actual losses suffered by the injured party due to the specific wrongful act.  Courts aim to restore the injured party to their pre-loss position, not provide excessive windfalls. Can potentially encompass all losses incurred by the indemnified party that fall within the scope of the agreement, even if the losses exceed the actual wrongdoing.  Can be express (written in a formal agreement) or implied (inferred from the circumstances and conduct of the parties).  No formal agreement is involved.  Damages are awarded through a court order based on the evidence presented during a lawsuit. Judges and juries hold greater discretion in determining the appropriate amount of damages based on the specific facts of the case and legal precedents relevant to similar situations. Limited by contractual terms and established legal principles regarding contract interpretation. Basis for claim: Damages are awarded for a breach of contract, while indemnity can be claimed for a loss arising from various situations, including a breach of contract, a third-party action, or even a potential future loss. Scope of recovery: Damages are limited to the actual loss suffered by the injured party, while indemnity can cover a wider range of losses, including consequential, remote, indirect, and third-party losses, unless specifically excluded in the indemnity clause. Duty to mitigate: The injured party has a duty to mitigate their losses when claiming damages, while there is... --- > In simpler terms, XYZ Company sets up a new company in India, with complete ownership and decision-making authority. But why go through this process? What are the benefits to setup a wholly owned subsidiary in India? - Published: 2024-03-04 - Modified: 2025-08-28 - URL: https://treelife.in/legal/how-to-setup-a-wholly-owned-subsidiary-in-india-nro-process-of-incorporation/ - Categories: Legal - Tags: foreign company subsidiary in india, formation of wholly owned subsidiary in india, indian subsidiary company, indian subsidiary company registration, setting up a subsidiary company in india, setting up a subsidiary in india, setting up a wholly owned subsidiary in india, setting up wos India, setup a wholly owned Subsidiary in India, subsidiary business in india, subsidiary india, wholly owned subsidiary in india by foreign company Setting up a wholly owned Subsidiary in India - What and Why explained Imagine a company, let's call it "XYZ Company" seeking to capitalize on the burgeoning Indian market. While direct operations might seem tempting, navigating the intricacies of a foreign market can be daunting. This is where the concept of a wholly owned subsidiary (WOS) comes into play. A WOS is essentially a separate legal entity established in India, fully owned and controlled by XYZ Company (the parent company). In simpler terms, XYZ Company sets up a new company in India, with complete ownership and decision-making authority. But why go through this process? What are the benefits to setup a wholly owned subsidiary in India? Here are some compelling reasons to consider a WOS: Market Entry and Local Presence: Setting up a WOS allows XYZ Company to establish a local legal entity, fostering trust and credibility with Indian consumers and partners. This can be crucial for navigating regulations and building brand recognition in the Indian market. Limited Liability Protection: A significant advantage of a WOS is the limited liability it offers to the parent company. XYZ Company's liability is restricted to the capital it invests in the WOS, shielding its global assets from potential risks associated with the Indian subsidiary's operations. Operational Flexibility: A WOS provides XYZ Company with operational flexibility. It can tailor its business practices and strategies to suit the specific needs and regulations of the Indian market, allowing for a more responsive and localized approach. Access to Local Incentives: Depending on the industry and location, WOS might be eligible for government incentives and subsidies offered to promote foreign investment and economic development in India. Tax Advantages: While the tax landscape is complex, WOS structures can offer certain tax benefits in specific scenarios. Consulting with a tax advisor is crucial to understand the potential tax implications of establishing a WOS. Who is considered as a Foreign Entity?   A foreign entity includes international organizations, foreign governments, and any agency or division of a foreign government, as well as any company, business association, partnership, trust, society, or any other entity or group not formed or organized to conduct business in India. If someone works for or represents a foreign entity, they are regarded as a foreign person—even an Indian citizen. Who is considered as an Indian Entity? An Indian entity is a body corporate incorporated by any current law, a limited liability partnership established under the Limited Liability Partnership Act, 2008, a partnership firm registered under the Indian Partnership Act, 1932, or a company as defined by the Companies Act, 2013. What is a Wholly Owned Subsidiary (WOS)?   A corporation whose common stock is entirely held by another company is known as a totally owned subsidiary. A business may acquire another business to form a wholly-owned subsidiary. A corporation whose common stock is 51% to 99% held by a parent company is referred to as a majority-owned subsidiary. To cut expenses and minimize risks, the parent firm may decide to purchase a majority stake in the initiative instead of buying it completely. The business that is majority owned may subsequently be referred to as an associate, affiliate, or associate company. A wholly-owned subsidiary might make it easier for the parent business to continue operating in a variety of markets, geographies, and adjacent sectors. These elements aid in the parent company's hedging against shifts in the market, trade policies, or geopolitics. There are no minority shareholders in a wholly-owned subsidiary because the parent business owns every share in it. The parent firm, which may or may not have direct influence over the management and operations of the subsidiary, grants license for the subsidiary to operate. It could become an unconsolidated subsidiary as a result. What is a NRO Account? A Non-Resident Ordinary (NRO) Account is a famous way for many Non-Resident Indians (NRIs) to manage their deposits or income earned in India such as dividends, pension, rent, etc. You can receive money from this account in international or Indian currencies. Nevertheless, as NRO Accounts are maintained in Indian currency and cannot be freely repatriated into any foreign currency, only Indian money may be withdrawn. Together with an Indian resident, you may only apply for an NRO Account on a Former or Survivor basis. You can create an NRO account with another non-resident Indian, if you'd like. Additionally, transferring funds from your existing NRE account to your NRO account is rather simple. Any foreign entity seeking to set up a wholly owned subsidiary in India, has different structures available to suit their business needs.  It's important to carefully evaluate the pros and cons of each structure before making a decision. Factors such as the nature of your business, regulatory requirements, and timelines will all play a role in determining the best structure for your company. There are other key considerations involved with each structure such as repatriation requirements, RBI filings, Valuation reports & apostilling documents. Steps For Incorporation of a Wholly Owned Subsidiary in India The Companies Act 2013 does not define a wholly owned subsidiary. Whereas a "subsidiary company" is defined as "a company in which the holding company— (i) controls the composition of the Board of Directors; or (ii) exercises or controls more than one-half of the total share capital either at its own or together with one or more of its subsidiary companies: Provided that such class or classes of holding companies as may be prescribed shall not have layers of subsidiaries beyond such numbers as may be prescribed," the Companies Act, 2013 does not define a wholly owned subsidiary. According to the Foreign Exchange Management, 2013, a foreign company may establish a company in India under the Companies Act 2013 by incorporating a wholly owned subsidiary, joint venture, or associate, or by establishing a liaison office, project office, or branch of the foreign company. Prior to Incorporation Conditions The participation of at least two directors and two shareholders is the absolute minimum needed to launch... --- - Published: 2024-03-04 - Modified: 2025-08-07 - URL: https://treelife.in/finance/understanding-the-process-of-conversions-of-loans-into-shares-complete-guide/ - Categories: Finance - Tags: conversion of loan to equity companies act 2013, Conversions of Loans into Shares, convert loan to equity, convert loan to share capital, converting a loan to equity, converting loan to equity, converting shareholder loan to equity, converting shareholder loan to equity accounting treatment, loan to equity, loan to equity value, loan to share conversion, loan to share ratio, reclassify shareholder loan to equity In the dynamic world of finance, companies constantly seek innovative ways to raise capital and manage their financial health. One such strategy, often overlooked but potentially advantageous, is the conversion of loans into shares. This process essentially transforms a lender from a creditor to a partial owner of the company, offering unique benefits for both parties. Whether aiming to alleviate cash flow pressures, reduce debt, or signal confidence to potential investors, loan-to-share conversion can be a powerful tool. What are Loans? A loan is a sort of credit arrangement wherein a certain quantity of money is extended to a third party with the expectation that the principal (or value) will be repaid at a later date. The borrower must return the principal amount plus, frequently, interest or finance charges added by the lender to the principal value. Loans can be made available as an open-ended line of credit with a predetermined maximum, or they can be made for a fixed, one-time sum. There are several varieties of loans, such as personal, business, secured, and unsecured loans. A loan is a type of debt that someone or something else has to pay back. The borrower receives an advance of funds from the lender, which is typically a government agency, financial institution, or company. The borrower accepts a certain set of terms in exchange, including the payment date, interest rate, and any additional stipulations. Collateral may occasionally be needed by the lender in order to guarantee loan security and repayment. Bonds and certificates of deposit (CDs) are other forms of loans. What are Shares? A company's shares are its ownership units. Despite their frequent interchangeability, the phrases "stocks" and "shares" have different meanings when referring to a firm. It all depends on how you talk about a firm and how much ownership you have, despite the fact that this may sound complicated. Let's take a scenario where the XYZ corporation issued stock and you bought ten shares. You own 10% of the business if each share is worth 1% of the total. Shares of the stock that the firm issued were purchased by you. You don't buy stock; instead, you buy shares of a stock, to put it another way. Shares are what you actually purchase; stock is a broader phrase used to describe the financial instruments a firm produces. Owners of corporations may decide to issue shares in order to raise funds. Next, businesses split their stock into shares, which are offered for sale to investors. These buyers are typically brokers or investment banks who then sell the shares to other buyers directly or through intermediaries like exchange-traded funds or mutual funds. In a corporation, ownership is represented by shares. The shareholders are not legally obligated to receive their money back from the firm in the event that something goes wrong because they are a representation of ownership rather than debt. What is a Rights Issue? A rights issue is a request for current shareholders to buy more shares of the business. Existing shareholders get securities referred to as rights in this kind of offering. With the rights, the shareholder can buy new shares at a future period at a price below market value. The firm is offering discounted stock to stockholders who would like to enhance their exposure to it. Shareholders may trade the rights on the market in the same manner as they would regular shares up to the day on which the new shares are available for purchase. A shareholder's rights are valuable, making up for any future erosion of the value of their existing shares for present shareholders. Dilution happens when a business distributes its net profit over a higher number of shares through a rights issue. As a result of share dilution caused by the allocated earnings, the company's earnings per share, or EPS, declines. A company may issue more shares under Section 62(1) of the Companies Act of 2013 if it intends to raise its subscribed capital by new share issuance. By submitting a letter of offer pursuant to the following terms, such shares should be initially made available to current shareholders who, as of the offer date, are holders of equity shares of the firm in proportion. What is Preferential Allotment of Shares? A sort of equity issuance known as preferential allotment occurs when a business provides shares at a discount to a certain set of investors. Usually, these investors are preferred investors, strategic partners, or current shareholders. Preferential allocation is usually done to raise funds for the business, and the lower price is meant to entice investors to get involved. Preferring allotment shares are not usually traded on a stock market, and investors may be subject to limitations on how easily they may sell their shares. Why Convert Loans to Shares? There are several reasons a company might choose to convert a loan to shares: Cash Flow Relief: This can free up cash the company would have used for loan repayments, allowing them to invest in growth. Debt Reduction: Conversion reduces the company's overall debt burden, improving its financial health. Attracting New Investors: Existing lenders with a stake in the company's success can be a good sign for potential future investors. Things to Consider Before Conversion Agreement with Lender: Not all loans can be converted. The loan agreement should explicitly mention the option to convert into shares. Share Price: At what price will the shares be issued? This needs careful consideration to be fair to both the company and the lender. Shareholder Approval: Most jurisdictions require shareholder approval for such conversions, usually through a special resolution. Conversions of Loans Into Shares (Detailed Process) *The same provision is also applicable for the conversion of debt securities. Review Loan Agreement: Carefully examine the original loan agreement to ensure conversion is allowed and understand the terms. Negotiate Conversion Terms: Discuss the conversion details with the lender, including the number of shares issued, share price, and any other relevant conditions. Board Approval: The company's board of directors... --- > That's the magic of private equity (PE) and venture capital (VC) at work. Both pump capital into companies, but with distinct tastes. - Published: 2024-03-01 - Modified: 2025-07-22 - URL: https://treelife.in/finance/private-equity-pe-vs-venture-capital-vc/ - Categories: Finance - Tags: difference between private equity and venture capital, PE vs VC, private equity, Private Equity (PE) v/s Venture Capital (VC), private equity funds, Private Equity vs Venture Capital, private placement, vc funding, venture capital, venture capital funding Introduction Ever heard of companies going public with a bang, or promising startups receiving mysterious funding? That's the magic of private equity (PE) and venture capital (VC) at work. Both pump capital into companies, but with distinct tastes. PE prefers established firms, like seasoned chefs perfecting their recipes, seeking growth through operational tweaks. Think buyouts, restructurings, and polished profits. VC, on the other hand, is the adventurous foodie, betting on bold, innovative startups with sky-high growth potential. They invest in the sizzle of new ideas, hoping for a breakout hit. So, whether you're drawn to the steady hand of a seasoned pro or the thrill of the unknown, PE and VC offer exciting investment landscapes, each with its own unique flavor. Let's dive deeper and see Core Differences between Private Equity and Venture Capital. As the title suggests Private Equity vs Venture Capital is an understanding which re-defines investment scenario for companies, organizations or startups. What is Private Equity (PE)? Private equity (PE) refers to a form of financing where funds and investors directly invest in private companies, or engage in buyouts of public companies, resulting in the delisting of public equity. This investment method is typically utilized by PE firms that pool money from high-net-worth individuals, pension funds, and institutional investors to acquire equity ownership in companies with high growth potential. Unlike public stocks, private equity investments are not traded on public exchanges and therefore offer less liquidity. The main goal of private equity is to generate strong returns by improving the operational efficiencies, growing the strategic value, and eventually selling the companies for a profit, typically over a period of four to seven years. Understanding how private equity works is crucial for anyone involved in the financial sector or interested in alternative investment strategies. PE firms leverage their expertise and resources to enhance the performance of their portfolio companies through strategic guidance, management improvements, and optimal capital structuring. This active management approach differentiates private equity from other investment forms like public equity and venture capital. As global markets evolve, private equity continues to play a significant role in shaping industries and driving innovation by empowering companies with the capital and strategic insight they need to succeed. This sector attracts substantial attention from investors seeking to diversify their portfolios and achieve above-market returns. What is Venture Capital (VC)? Venture Capital (VC) is a pivotal form of financing that focuses on investing in early-stage, high-potential startups and small businesses that are poised for exponential growth and innovation. Unlike traditional bank loans, venture capital investments provide the necessary funding without requiring immediate repayment, making it a vital resource for entrepreneurs who lack the assets for collateral or who are operating at a net loss. Venture capitalists are typically wealthy investors, investment banks, and other financial institutions that offer not only capital but also strategic advice, industry connections, and operational guidance. This financial infusion is crucial for startups needing to scale operations, develop products, and expand their market reach rapidly. The role of venture capital is indispensable in the tech industry and other sectors driven by innovation and rapid technological advancements. By taking an equity stake in promising companies, venture capitalists share the risks and rewards of their investments. The objective is to drive these companies towards substantial growth and a profitable exit, usually through an IPO or a sale to a larger corporation. This investment approach benefits the entire economy by supporting the commercialization of innovation, creating jobs, and promoting healthy competition in various industries. As such, venture capital is not just a funding mechanism but a cornerstone of entrepreneurial ecosystems, catalyzing significant advancements and economic growth. Stages of Funding Journey: When Do PE and VC Enter? Funding StageInvestorsPre seed & Seed Self, family and friends Micro & Early VC’s Series A & Series B Accelerators Angel Investors VC’s Series C & beyond and Mezzanine PE Firms Hedge funds Banks IPO Anchor Investors Retail and Institutional Investors The world of startup funding can be intricate, with different types of investors coming in at specific stages. Understanding when PE and VC enter the journey is crucial for entrepreneurs seeking the right kind of support at the right time. Pre-Seed & Seed Stage: At this early stage, founders rely heavily on personal savings, friends & family, and angel investors. PE and VC rarely participate due to the high risk and uncertain potential. Series A and B: This is where PE and VC start to show interest. Series A companies have validated concepts and initial traction, making them attractive for VCs seeking high-growth potential. PE might enter Series B, but typically focuses on established businesses with proven revenue and profitability. Series C and Beyond: As the startup matures and scales, PE becomes more relevant. Series C and later rounds attract PE firms seeking larger investment opportunities with lower risk and a clearer path to exit (acquisition or IPO). VC might still participate, but with a smaller stake, focusing on companies with exceptional growth potential. Mezzanine and IPO: Mezzanine financing bridges the gap between debt and equity, often used for acquisitions or pre-IPO growth. PE firms are well-suited for this stage, providing flexible capital without full control. After a successful IPO, PE firms typically exit their investments, while VC might remain involved if the company's growth story continues. In short, PE and VC enter at different stages based on risk tolerance and investment goals. Generally, VC’s take on higher risk for potentially high returns in early stage startups whereas PE focuses on more mature companies with lower risk and established track records. Both type of investors play crucial roles in different stages of a startup journey. Core differences between Private Equity and Venture Capital Private equity and venture capital, though similar, cater to different stages. Private equity targets established, profitable companies, aiming to optimize operations and drive growth. They often take controlling stakes. Venture capital, on the other hand, fuels high-risk, high-reward startups with innovative ideas. They invest smaller amounts, seeking explosive growth potential. Here... --- > we have provided a concise summary of the necessary valuation report requirements based on the instrument being used and the relevant regulations. Let us dive in to learn Simplifying Startup Investment. - Published: 2024-03-01 - Modified: 2025-07-22 - URL: https://treelife.in/finance/simplifying-startup-investment-understand-valuation-norms-requirements/ - Categories: Finance - Tags: investing in startup, startup investments Introduction  Primary / fresh investment in a startup requires the startup and investor to comply with valuation norms under various regulations like company law, income tax and FEMA from different professionals such as CA, merchant banker and registered valuer. This can get very confusing and therefore to help simplify it, we have provided a concise summary of the necessary valuation report requirements based on the instrument being used and the relevant regulations. Let us dive in to learn Simplifying Startup Investment.   Type of Instrument Under Companies Act, 2013  Under Income Tax Act, 1961  Under FEMA regulations  Equity Shares  Registered valuer Report  Valuation Report  From Merchant Banker (MB) – calculated using DCF method From chartered accountant (CA) – calculated using BV method (Rule 11UA) Valuation report from CA or MB or cost accountant – as per internationally accepted pricing methodology Preference Shares /CCPS/ CCDs/CNs Valuation report from MB -calculated using DCF or BV or any other method. Notes: We have assumed that the instruments will be allotted under private placement. The above table is based on provisions of section 62(1)(c) of companies Act, 2013, Section 56(2)(x), and Section 56(2) (viib) of the income tax Act, 1961 read with relevant rules and Rule 21 of the foreign exchange management (non-debt instruments) rules, 2019.   Conclusion: It can be intimidating to navigate the complex world of startup funding appraisal. Both founders and investors may set out on this road with more clarity and confidence if they are aware of the important legislation, use the accompanying table as a reference, and consult an expert. It is important to maintain open communication, openness, and meticulous evaluation of all pertinent aspects in order to arrive at a just and long-lasting value that is advantageous to all stakeholders.   Three key regulations govern startup valuations: Companies Act, 2013: Ensures fair allotment of shares by mandating valuation reports under specific circumstances. Income Tax Act, 1961: Determines tax implications based on the fair market value of issued instruments. FEMA regulations: Regulate foreign investment and ensure accurate valuation for capital inflow/outflow.   Navigating the Table: The provided table offers a concise overview of report requirements based on the instrument used for investment: Equity Shares: Under Companies Act: A registered valuer's report is mandatory, typically using the Discounted Cash Flow (DCF) method provided by a Merchant Banker (MB). Under Income Tax Act: A valuation report is required, but the method is flexible. Choose either a MB's DCF report or a Chartered Accountant's (CA) report using the Book Value (BV) method under Rule 11UA. Under FEMA: No specific mandate, but consider using internationally accepted pricing methodologies for transparency. Preference Shares/CCPS/CCDs/CNs: Under Companies Act: A valuation report is mandatory, with flexibility in choosing the method. Options include DCF, BV, or other methods provided by an MB. Under Income Tax Act: A valuation report is required, again with flexibility in methodology. Consider reports from CAs, MBs, or cost accountants, ensuring adherence to internationally accepted practices. Under FEMA: No specific mandate, but consider internationally accepted methodologies for compliance. While the table provides a structured approach, remember that valuation is an art, not an exact science. Consider these additional factors: Startup stage and potential: Early-stage ventures might rely more on qualitative factors like growth potential, while established startups might have more concrete financial data for DCF models. Investor expectations and negotiation: Both founders and investors should have clear expectations and engage in open communication to reach a mutually agreeable valuation. Transparency and documentation: Maintain detailed records of the valuation process, including chosen methodologies and assumptions, for future reference and compliance purposes. --- > An LLP can also be established by one person and a defunct business. Now let us understand Important Amendments to the LLP. - Published: 2024-03-01 - Modified: 2025-08-07 - URL: https://treelife.in/legal/llp-limited-liability-partnership-understanding-llp-and-amendments-to-the-llp-rules-2009/ - Categories: Legal - Tags: Amendments to the Limited Liability Partnership, limited liability partnership, limited liability partnership agreement, llc partnership, llp act 2009 amendment, llp agreement, llp business, llp formation, llp rules 2009 What is a Limited Liability Partnership (LLP)? A limited liability partnership (LLP) is a kind of general partnership in which each partner's personal responsibility for the firm's obligations is strictly restricted. In accordance with the state, partners may be held accountable for contractual debts but not for the tortious damages of other partners. Larger partnerships and professionals in particular frequently employ limited liability companies (LLPs); in fact, several jurisdictions restrict the use of LLPs to professionals. An LLP, like ordinary partnerships, must consist of two or more partners; however, the structure of the amount of control and profits that each partner keeps is flexible. With the exception of choices involving the modification of the partnership agreement, which call for the consent of all partners, almost all decisions in an LLP can be delegated to specific partners. Limited liability is permitted under LLPs, unlike limited partnerships, even in cases where partners continue to have managerial control over the company. The court may, however, pierce the veil of limited liability to reclaim funds for creditors in cases where it determines that the partners attempted to undermine creditors, for example, through improper distributions. However, the specific actions that would prompt such treatment need to be examined on a case-by-case basis in accordance with applicable state laws. In contrast, consider limited liability companies (LLCs) and limited partnerships. The members (partners) of a limited liability partnership are solely accountable for the money they contribute plus any personal guarantees; the partnership is a distinct legal entity. It is mandatory for partners to furnish the firm with a registered location and preserve a membership registry. The maximum number of partners is unrestricted; nevertheless, upon incorporation, there must be a minimum of two members, who may be either people or limited businesses. An LLP can also be established by one person and a defunct business. Now let us understand Important Amendments to the LLP. Amendment to LLP Rules: Increased Transparency and Scrutiny On October 27, 2023, the Ministry of Corporate Affairs (MCA) of the Indian government notified the Limited Liability Partnership (Third Amendment) Rules, 2023. These amendments introduce significant changes aimed at increasing transparency and accountability within Limited Liability Partnerships (LLPs). These changes require LLPs to maintain a record of their partners and disclose information about individuals with a significant financial stake in the partnership. Who is Affected? These amendments apply to all Limited Liability Partnerships, both existing and newly incorporated, effective from October 27, 2023. Impact: These changes are expected to enhance transparency and accountability within LLPs by: Providing a clear record of ownership: The register of partners and disclosure of beneficial interest allows for a clearer picture of who ultimately controls and benefits from the LLP. Combating potential misuse: Increased transparency can help prevent the misuse of LLPs for illegal activities, such as money laundering or tax evasion. Improving investor confidence: Greater transparency can boost investor confidence in LLPs by ensuring a clearer understanding of ownership and risk profiles. List of Important Amendments to the Limited Liability Partnership Rules, 2009 Maintaining a Register of Partners in Form 4A (similar to the concept of a Register of Members in a Company). Every LLP is now required by Rule 22A of the LLP Rules to keep a register of its partners in Form 4A (annexed to the modified LLP Rules); this record should be maintained at the LLP's registered office. Existing LLPs must comply with this obligation within 30 (thirty) days following the start of the modified LLP Rules, even though the LLP Rules now mandate that any new LLP keep such a register from the date of its creation. The following information about each partner must be included in the register of partners: (i) PAN or CIN; (ii) name, address, and email address;; (iii) Unique Identification Number (if any); (iv) father's, mother's, or spouse's name; (v) occupation, status, nationality, and the name and address of their nominee; (vi) date of partnership formation; (vii) date of cessation; (viii) type and amount of contribution with monetary value thereof; (ix) any other interest (if any). Any modification to the amount of the contribution, the name and contact information of the LLP's partners, or the termination of a partnership interest must be recorded in the register within seven (seven) days.  Declaration regarding Beneficial Interest in the Contribution of LLPs (similar to the applicability of Companies under Section 89 of the Companies Act, 2013).   Within 30 (thirty) days of the date on which their name was entered in the aforementioned register of partners, each registered partner of the LLP that does not have a beneficial interest (fully or partially) in any contribution is required to file a declaration with the LLP in Form 4B (annexed to the amended LLP Rules), stating the name and details of the person who actually holds any beneficial interest in such contributions. In addition, any modifications to the beneficial interest must be disclosed on Form 4B within 30 (thirty) days of the modification date. In addition, within 30 (thirty) days of acquiring their beneficial interest in the LLP's contribution, anyone who has a benefit interest in the LLP's contribution but is not listed in the LLP's partner registry must file a declaration in Form 4C, which is annexed to the amended LLP Rules, with the LLP, outlining their specifics and the nature of their interest. In addition, any modification to the beneficial interest must be recorded in Form 4C within 30 (thirty) days of the new information being available The LLP must enter the aforementioned declarations (if applicable) in the register of partners and submit a Form 4D report to the Registrar of Companies ("ROC") within thirty (30) days after receiving the declarations, together with any necessary costs.  Declaration regarding Significant Beneficial Owners (“SBOs”) in LLPs (similar to the applicability of Companies under the Companies (Significant Beneficial Owners) Rules, 2018).   According to Rule 22B(4) of the amended LLP Rules, every LLP must designate a designated partner who will cooperate and provide information to the ROC (or any other... --- > In the gaming industry ipr safeguard everything we cherish, from our beloved characters to the groundbreaking technologies that fuel immersive adventures. Let us learn about types of intellectual property rights in gaming industry. - Published: 2024-02-29 - Modified: 2025-08-07 - URL: https://treelife.in/legal/types-of-intellectual-property-in-gaming/ - Categories: Legal - Tags: design a game, intellectual property gaming, intellectual property in gaming, intellectual property rights in gaming, ipr gaming, patent a board game, patent a card game, patent a game, patent a game idea, patent a video game, trade mark video games, trademark a game, types of intellectual property rights in gaming Introduction In the ever-evolving world of gaming, innovation and imagination often take the centre stage. Intellectual Property Rights are a crucial foundation in the gaming industry as they safeguard everything we cherish, from our beloved characters to the groundbreaking technologies that fuel immersive adventures. Let us learn about types of intellectual property rights in gaming industry. Types of Intellectual Properties in Gaming Industry 1) Trademark Safeguarding brand elements like names, logos, slogans, taglines, sound marks, cartoon images etc. that differentiate one vendor’s products or services from another’s. Trademarks registration is optional but advisable, and once granted will be valid for 10 years, renewable every decade.  A recognizable phrase, word, symbol, or emblem that designates a particular product and legally sets it apart from all other items of its sort is referred to as a trademark. A trademark acknowledges the firm’s ownership of the brand and uniquely identifies a product as being owned by that company. Trademarks may or may not be registered and are often regarded as a type of intellectual property.  Any term, phrase, symbol, design, or combination of these that uniquely distinguishes your products or services can be used as a trademark. It’s how consumers identify you in the market and set you apart from your rivals.  Both service marks and trademarks may be referred to by the same term. A service mark is used for services, whereas a trademark is used for commodities. Key IP Names, word-marks, Logos, symbols, Tag-lines, Cartoon/ caricature image, Short sound marks Example XBOX Logo 2) Copyright Copyright is an inherent right for original works, like literary, artistic, dramatic, musical, cinematographic, architectural works and software codes. Creator owns the copyright 60 years from creation before the work becomes public.  The legal word “copyright,” often known as “author’s right,” refers to the ownership rights that authors and artists have over their creative works. Books, music, paintings, sculptures, films, computer programmes, databases, ads, maps, and technical drawings are among the works that fall under the purview of copyright protection. For a specific amount of time, copyright law grants the producers of creative content the only authority to use and replicate their creations. The copyrighted material enters public domain when the copyright expires. Key IP Software code, Cartoon caricature, Storyline, Music and sound effects, Conceptual art and design, Maps and buildings, Choreography Gaming rules and manual Example 3) Patent Protection for an original invention, typically granted for 20 years, and covers utility, plant/industrial, or design patents.  An innovation is entitled to a patent, which is an exclusive privilege. Put another way, a patent is the exclusive right to a good or service that, in most cases, offers a novel approach to a problem or a fresh technical solution. Technical details of the invention must be made public in a patent application in order to get one. On mutually agreeable terms, the patent owner may provide permission or a license to third parties to exploit the innovation. The patent owner may potentially transfer ownership of the innovation to a third party by selling them the right to use it.  An innovation becomes public domain—that is, anybody can use it for commercial purposes without violating the patent—when a patent expires, ending its protection. In return for a thorough disclosure of the innovation, a patent grants the creator the exclusive right to use the patented design, technique, or invention for a certain amount of time. They represent a type of intangible right. Usually, government organizations examine and authorize patent applications. Key IP Gaming console, joystick or other hardware device, and Drastically unique or different technology User interfaces 4) Design Protection for the aesthetic appearance of products/articles, including shape, configuration, pattern, ornament, or composition of lines/colours.  Intellectual property in design is the result of human creativity. This covers names and pictures that may be used in business, as well as designs, emblems, innovations, and creative and literary works. The legal protection of intellectual property is provided by copyright, patents, and trademarks. These enable individuals to profit monetarily or gain notoriety for the goods they produce. The system fosters an atmosphere where creativity and innovation may flourish by striking the right balance between the interests of inventors and the larger public good. For creative workers, intellectual property is a crucial subject.  In legal terms, an article’s decorative or artistic elements are referred to as its industrial design. Two-dimensional elements like lines or patterns may be present, or there may be three-dimensional elements like the contour of an object. A registered or patent-holding owner of an industrial design has the legal authority to prevent other parties from manufacturing, importing, or selling products that imitate their design. A wide range of handicrafts and industrial products are included in industrial designs. They consist of textiles, jewellery, electronics, home items, and containers. These designs may also apply to logos, visual symbols, and graphical user interfaces. To be protected by industrial design laws, the majority of countries mandate that all industrial designs be registered. Some nations’ laws grant unregistered industrial designs—a term used to describe designs that are not registered—limited protection. Certain industrial designs, like works of art, could also be protected by copyright laws. One of the key elements that draws customers to a product and convinces them to choose it over another is its design.  An unique, novel, and unobtrusive decorative design for a manufactured item is protected by a design patent. Just the look is protected by the patent; the structural or functional aspects are not. For instance, the outside style of an athletic sneaker or bicycle helmet may be protected. There will be no intermediate maintenance costs, and the design patent will remain enforceable for 14 years after it was first awarded. When it comes to intellectual and copyright property, designers face several challenges. It is more difficult for artists to maintain ownership control when a single idea is presented in a variety of forms and media. Key IP Graphic characters, Gaming cover and Graphic interface 5) Trade Secret Trade secrets are... --- > As we approach March 2024, it’s crucial to ensure that you complete all of your financial tasks before the deadline to avoid any fines or penalties. Explore important financial timelines - Published: 2024-02-28 - Modified: 2025-08-07 - URL: https://treelife.in/finance/important-financial-timelines-before-31st-march-2024/ - Categories: Finance - Tags: financial deadline, financial timeline As we approach the financial year end, it’s crucial to ensure that you complete all of your financial tasks before the deadline to avoid any fines or penalties.     Here’s a list of essential tasks which cover financial timelines that must be completed by March 31, 2024:   Applicable for Individuals Tax Saving Investments: This is applicable to individuals opting for the old tax regime under income tax. March 31, 2024, is the cutoff date for making all your tax-saving investments such as LIC premium, Public Provident Fund, ELSS, National Pension Scheme, Donations, etc. for claiming Donations under section 80C, 80D, 80G, 80GGB, etc. , for F. Y. 2023-24. Investment Declarations: March 2024, is the final month for submitting the Investments & Expenses proofs to the employer. Failure to do so will result in the deduction of higher TDS from Salary. Employers usually keep a deadline of February 15 or March 15 for submissions of investment declarations to consider while processing the payroll for the month of March.   Applicable for Companies Filing of PTRC Returns for the State of Maharashtra: The Annual PTRC returns for the state of Maharashtra for the period March 2023 to February 2024 should be filed on or before March 31, 2024, to avoid a penalty. Provision of Expenses in the Books: Ensure that all your expenses related to FY 2023-24 are provided in the books before March 31, 2024 and relevant TDS payments on those expenses are done as per the applicable due dates.   Applicable for Individuals, Firms and Companies Payment of Advance Tax: The last date for payment of fourth installment of advance tax (if applicable) for FY 2023-24 is March 15, 2024. For Professionals and Business paying taxes on presumptive income under section 44ADA and 44AD of the Income Tax Act respectively, the due date for payment of advance tax for FY 2023-24 is March 15, 2024. Updated Return (ITR-U): The Finance Act of 2022 introduced a new provision of “Updated Return,” which gives an opportunity to the assessee to rectify their mistakes or omissions, if they missed out on declaring some income. This updated return can be filed within two years from the end of the relevant assessment year. Therefore, March 31, 2024, is the last date to file the updated return in ITR-U for FY 2020-21 (AY 2021-22). --- > Discussing the burden of employer in company's perspective where we explain the legal implications a company can face on behalf of its employee, and summarizing the legal concepts underlying the same. - Published: 2024-02-28 - Modified: 2025-07-21 - URL: https://treelife.in/legal/burden-of-the-employer-a-look-at-company-liabilities-for-employee/ - Categories: Legal - Tags: burden of employer, employee, employee employer relationship, employer Introduction In the bustling corporate landscape of India, companies thrive on the dedication and expertise of their employees. However, with great power comes great responsibility, and the actions, or sometimes, even the lack thereof, of an employee can have significant legal ramifications for the company itself. This post aims at explaining the legal implications a company can face on behalf of its employees, and summarizing the legal concepts underlying the same. Vicarious Liability: Carrying the Weight of Another’s Wrongdoing The concept of vicarious liability, or imputed liability, forms the bedrock of understanding a company’s accountability for employee conduct. Stemming from the Latin phrase “Respondeat Superior” which translates to “let the master answer” this principle holds an employer liable for the torts (civil wrongs) committed by their employees while acting within the scope of their employment. The basis of holding a company vicariously liable for the actions or inactions of its employees is that employers are in a position to limit and/or curtail such actions or inactions. However, it often becomes practically difficult to determine situations where an employee acted within the scope of their employment. Scope of Employment: Defining the Line between Work and Personal Determining whether an employee's actions fall within the scope of employment is crucial in establishing vicarious liability of the employer. Generally, acts undertaken: During work hours, At the place of work, While performing duties assigned by the employer/company, or While furthering the employer/company’s interest, are considered to be within the scope of an employee’s employment. However, exceptions exist for the following: Frolic and Detour: Acts of an employee that are motivated by personal agendas, and completely deviating from the duties and responsibilities of the employee, as determined by the company, fall outside the scope of his/her employment. Intentional Torts: Malicious and intended acts of an employee that exceed the boundaries of reasonable conduct expected from them are deemed outside the scope of their employment, Beyond Civil Wrongs: The Shadow of Criminal Liability In certain situations, a company can also face criminal liability for the actions of its employees. The Indian Penal Code, 1860, outlines specific offenses where a company can be held accountable for offenses committed by employees. These include situations where: The offense was committed by the employee for the company's direct or indirect benefit. The offense was committed by the employee with the knowledge or consent of the company's management. The offense committed by the employee was facilitated by a lack of proper due diligence or oversight by the company. Proactive Measures: Shielding the Company from the Storm While the law holds companies accountable for employee conduct, proactive measures can mitigate the risk of legal and financial repercussions. These include: Robust Employee Training: Regularly training employees on company policies, ethical conduct, and legal compliance can minimize the chances of misconduct. Clear Codes of Conduct: Establishing and disseminating clear codes of conduct outlining acceptable and unacceptable behavior provides a framework for employee actions. Effective Supervision: Implementing proper supervision and monitoring systems can help identify and address potential issues before they escalate. Adequate Insurance Coverage: Investing in comprehensive liability insurance can provide financial protection against legal claims arising from employee actions. Navigating the Legal Labyrinth: Seeking Expert Guidance The legal landscape surrounding company liability for employee actions can be complex and nuanced. It is crucial for companies to seek the guidance of experienced legal counsel to deal with such scenarios as well as while framing its internal policies to minimize the risk of attracting such liability. Indian courts have, from time to time, set out certain guardrails and principles to address the issue of employers’ liabilities for their employees, which form the basis of the concept of vicarious liability in India. Landmark Judgments State of Rajasthan v. Mst. Vidhyawati & Anr. (1962): The Hon’ble Supreme Court held that the State of Rajasthan was vicariously liable for the tortious act of its employee who carried out such act during the course of his employment, despite the State not directly authorizing or condoning the act so carried out by the employee. It was also held that the liability of the State in such matters would be the same as any other employer, and that the State would not enjoy any immunity in matters of vicarious liability. State Bank of India v. Shyama Devi (1978): The respondent gave some cash and a cheque to her husband’s friend, who was an employee of the appellant bank, for depositing the same in her account. No receipt or voucher was obtained indicating the said deposit. The employee, instead of making the deposits in the respondent’s account, got the cheque cashed and misappropriated the amounts. To cover up his act, the employee made false entries in the respondent’s passbook. The Hon’ble Supreme Court held that the employee had acted outside the scope of his employment and without the directions, orders or knowledge of the bank. Hence, the appellant bank was not held liable for the fraud committed by its employee in this matter. State of Maharashtra & Ors. v. Kanchanmala Vijaysingh Shirke & Ors. (1995): In this matter, Vijaysingh died in an accident when a jeep, which belonged to the State, dashed against his scooter. The 3rd appellant was the driver of the jeep but at the time of the accident, the 4th respondent, who was then a clerk in a separate department of the State Government, was driving the jeep. The State contended that since the act was not authorized by it, the State could be held vicariously liable. The Bombay High Court affirmed this stance and penalized only the 4th respondent. The Hon’ble Supreme Court, while overruling the High Court’s decision, held that the accident took place when the act authorised by the State was being performed in a mode which may not be proper but nonetheless it was directly connected with ‘the course of employment' and it was not an independent act for a purpose or business which had no nexus or connection with the business of the State... --- > An officer-in-default is a person associated with a company who is held liable for any penalty or punishment in case of default committed by the company under the Companies Act, 2013. - Published: 2024-02-25 - Modified: 2025-08-07 - URL: https://treelife.in/legal/decoding-officer-in-default-under-the-companies-act-2013/ - Categories: Legal DOWNLOAD FULL PDF An officer-in-default is a person associated with a company who is held liable for any penalty or punishment in case of default committed by the company under the Companies Act, 2013. Who is qualified as an officer in default? Section 2(60) of the Companies Act 2013 makes provision for identifying specific persons who may be held liable in case of a default by the company: --- > Every restaurant has to comply with some taxation regulations and also file its returns on a regular interval as required under the specific laws. In this article we provide a detailed insight on Tax and Returns for a Restaurant in India. - Published: 2024-02-20 - Modified: 2025-08-07 - URL: https://treelife.in/legal/tax-and-returns-for-a-restaurant/ - Categories: Legal - Tags: food tax in india, government tax on restaurant, gst on restaurant, income tax for restaurants, income tax on restaurant business, itr restaurant, restaurant gst rate, tax and returns for a restaurant, tax in restaurants in india, tax on restaurant, tax on restaurant food, tax refund restaurant, what taxes do restaurants pay Introduction Every restaurant has to comply with some taxation regulations and also file its returns on a regular interval as required under the specific laws in India. Among others, the Income Tax Act, 1961 (“Act”) and the Goods and Service Tax, 2017 (“GST Act”) are the main governing regulations for taxation of restaurant business income. In this article we provide a detailed insight on Tax and Returns for a Restaurant in India. Taxation in India is divided into two parts – A. Direct Tax and B. Indirect Tax. Direct Tax is the tax that is levied and paid directly by the restaurant while, Indirect taxes are those taxes that are levied on goods or services. They differ from direct taxes because they are not levied on a person who pays them directly to the government, they are instead levied on products and are collected by an intermediary, the person selling the product. These taxes are levied by adding them to the price of the service or product which tends to push the cost of the product up.   A. Understanding Direct Tax  Income Tax  Income from restaurants is governed by ‘Profits and Gains of Business or Profession Chapter’ as provided under the Act. Section 2(13) of the Act has defined the term ‘Business’ as including any trade, commerce or manufacture or any adventure or concern in the nature of trade, commerce or manufacture. Section 2(36) states that ‘Profession’ includes vocation’ without defining what the profession means. Generally, the profession involves labour skills, education and special domain knowledge. All the businesses, including the food industry, must have a PAN and TAN in the name of the business or in the name of the owner (in case of a Sole-Proprietorship) in whose name the transactions are to be carried out. PAN and TAN are two ten-digit different alphanumeric numbers provided by the IT Department. Every person who deducts or collects tax at the source has to get a TAN. In case the business is set up in the form of a company or a LLP, there are different rates of tax applicable. In case of an individual the income from PGBP (defined hereinafter) shall form a part of the income of the assessee. Principles of Computation of business income 1. Business must be carried by the assessee himself or through his agent. 2. Business must be carried on during the previous year. 3. Business profits of the previous year must be taxable. 4. Business profits should be understood in its true commercial sense. 5. Business profits should be real and not fictional. Most Relevant Income Tax Provisions Section 28 of the Act states that –The following income shall be chargeable to income-tax under the head “Profits and gains of business or profession” (“PGBP”) — 1) the profits and gains of any business or profession which was carried on by the assessee at any time during the previous year. Along with specific provisions as detailed in Section 28(ii) to 28(vii) of the Act. Section 41 “Profits chargeable to tax” of the Act deals with a situation where:1) A loss, expenditure or trading liability has been incurred in the course of business or profession;2) Allowance or deduction has been made in respect of such loss, expenditure or trading liability in the course of assessment; and3) A benefit is subsequently obtained in respect of such loss, expenditure or trading liability by way of remission or cessation thereof. In such a situation, the value of the benefit accruing to the assessee is deemed to be profits and gains of business or profession. Section 176(3A) states that –Where any business is discontinued in any year, any sum received after the discontinuance shall be deemed to be the income of the recipient and charged to tax accordingly in the year of receipt, if such sum would have been included in the total income of the person who carried on the business had such sum been received before such discontinuance Any other incomes received during the course of business such as income from house property or rental income, bank interest, etc. Presumptive taxation –Section 44AD of the Act states that in the case of an eligible assessee engaged in an eligible business, a sum equal to eight per cent of the total turnover or gross receipts of the assessee in the previous year on account of such business or, as the case may be, a sum higher than the aforesaid sum claimed to have been earned by the eligible assessee, shall be deemed to be the profits and gains of such business chargeable to tax under the head PGBP. However, eight percent shall be replaced with ―six per cent in respect of the amount of total turnover or gross receipts which is received by an account payee cheque or an account payee bank draft or use of electronic clearing system through a bank account during the previous year. Here eligible business shall mean -(i) any business except the business of plying, hiring or leasing goods carriages referred to in section 44AE; and (ii) whose total turnover or gross receipts in the previous year does not exceed an amount of 2 crore rupees. Deductions under Section 30 to 37 of the Act –Deductions available from the income under the sections pertaining to rent, repairs, depreciation, additional depreciation (if applicable), deduction under section 32AC is available if actual cost of new plant and machinery acquired and installed by a manufacturing company during the previous year exceeds Rs. 25/100 Crores, as the case may be (in case the business is engaged in manufacturing), Non-corporate taxpayers can amortise certain preliminary expenses (up to maximum of 5% of cost of the project) (Subject to certain conditions and nature of expenditures), insurance premium paid, bonus or commission paid to employees, interest on borrowed capital, employer’s contribution to provident fund and gratuity fund, bad debts written off, securities transaction and commodities transaction tax paid etc. and other such deduction as may be applicable. Disallowances –There are... --- > The financial industry is expected to see a major impact from emerging fields like Fintech and TechFin. Thus we decide to dive deep in understanding fintech vs techfin. - Published: 2024-02-20 - Modified: 2025-07-22 - URL: https://treelife.in/fintech/fintech-vs-techfin-understanding-the-difference/ - Categories: Fintech - Tags: financial technology, fintech, fintech in india, fintech vs techfin, techfin, understanding fintech As modern finance continues to be influenced by advancements in technology, two terms have emerged to delineate the evolving intersection of technology and financial services: “FinTech” and “TechFin”. While these terms may sound similar, they represent distinct paradigms that are reshaping the way financial services are delivered and consumed, particularly in markets like India: “FinTech”, characterized by innovative startups leveraging technology to disrupt traditional financial services, has gained momentum as a driver of financial inclusion and efficiency. On the other hand, “TechFin” refers to established technology companies integrating financial services into their existing platforms, leveraging vast user bases and data analytics to offer a wide array of financial products.   This article delves into the nuances of FinTech and TechFin, exploring their origins, key players, and implications for the Indian financial ecosystem. By understanding the difference between these two approaches, stakeholders can better navigate the evolving landscape of digital finance and harness its transformative potential for the benefit of India's diverse population. What is FinTech? Fintech, short for financial technology, refers to the convergence of finance and technology, revolutionizing traditional financial services through innovative, technology driven solutions. Fintech thrives at the intersection of two broad domains: finance (including sectors such as banking, payments, non-banking financial companies, security broking, wealth management, insurance, digital lending and regulatory technology) and technology (including providers in sectors such as hardware, software, cloud, platform, blockchain, Artificial Intelligence and Machine Learning, cybersecurity, and data analytics and big data) -  On the finance side, Fintech transforms sectors like banking, payments, digital lending, insurance and wealth management, enhancing efficiency, accessibility and user experience. On the technology side, advancements like cloud services, blockchain, AI/ML and data analytics power financial innovations, creating smarter, faster and more secure financial services.   By integrating finance and technology, Fintech is revolutionizing how financial services are delivered, making them more efficient, secure and accessible.   Segments of Fintech Fintechs generally operate in the following sectors: (i) Accounting & Finance; (ii) Business Lending & Finance; (iii) Asset Management; (iv) Core Banking & Infrastructure; (v) Capital Markets; (vi) Financial Services & Automation; (vii) Mobile Wallets & Remittances; (viii) Credit Score & Analytics; (ix) Payments Processing & Networks; (x) General Lending & Marketplaces; (xi) Real Estate & Mortgage; (xii) Payroll & Benefits; (xiii) Personal Finance; (xiv) Retail Investing & Secondary Markets; and (xv) Regulatory & Compliance. India boasts participants in following segments of Fintech:  BankingTech - aids unbanked/underbanked services that aim to help underprivileged or low-income people who are neglected or underserved by conventional banks or financial services firms (eg: Jupiter Money, RazorpayX, Fi Money); PayTech - suite of financial technologies that enable seamless, secure and real-time payment solutions (eg: PhonePe, Paytm, Razorpay, BharatPe); LendingTech - technology-driven platforms and solutions that streamline and enhance the process of borrowing and lending money. Enables faster loan approvals, broader financial access and data-driven risk assessment that provides an efficient alternative to traditional lending methods (eg: Slice, ZestMoney, KredX); InsureTech - innovative technology to enhance and streamline traditional insurance industry by way of digital platforms for policy comparison, purchase, claims processing, microinsurance and AI-driven risk assessments. Aims to increase accessibility, affordability and efficiency of insurance by leveraging data analytics, AI and digital platforms (eg: Acko, PolicyBazaar, Coverfox, Turtlemint); WealthTech - technology is used to deliver investment management, financial planning and wealth advisory services. Democratizes access to sophisticated financial products and services, enabling wealth and investment management and future planning for users (eg: Zerodha, Groww, Scripbox, AngelOne); RegTech - shorthand for regulatory technology, providing a set of tools to help businesses manage regulatory compliance and risk management (eg: Digio, IDfy, HyperVerge, Electronic Payments and Services). Crypto & Blockchain - digital tokens (such as non-fungible tokens, or NFTs), digital cash, and cryptocurrency (such as Bitcoin, Ethereum, etc. ) frequently make use of distributed ledger technology (DLT) called blockchain, which keeps records on a network of computers without the need for a central ledger. Smart contracts, which use code to automatically carry out agreements between parties like buyers and sellers, are another feature of blockchain technology. Importance of Fintech Fintech plays a pivotal role in shaping the modern financial landscape, with its significance stemming from several key factors: Financial Inclusion: FinTech has democratized access to financial services, breaking down traditional barriers and reaching underserved populations. By leveraging innovative technologies like mobile banking and digital wallets, FinTech has made financial services more accessible to people around the world, empowering them with greater control over their finances. Efficiency and Cost Savings: FinTech solutions streamline processes, automate tasks, and reduce overhead costs for financial institutions. Whether it's through algorithmic trading, robo-advisors, or blockchain technology, FinTech enhances operational efficiency, driving down costs and improving the bottom line. Enhanced Customer Experience: FinTech companies prioritize user experience, offering intuitive interfaces, personalized recommendations, and real-time access to financial information. By leveraging data analytics and artificial intelligence, FinTech enhances customer engagement, satisfaction, and loyalty, fostering long-term relationships in an increasingly competitive market. Innovation and Disruption: FinTech thrives on innovation, constantly pushing the boundaries of traditional finance and challenging incumbents to adapt. From peer-to-peer lending and crowdfunding to cryptocurrencies and decentralized finance (DeFi), FinTech disrupts entrenched industries, catalyzing innovation and fostering a culture of experimentation. Financial Literacy and Education: FinTech platforms provide educational resources, tools, and insights to help individuals make informed financial decisions. By offering financial literacy courses, budgeting apps, and investment tutorials, FinTech promotes financial literacy and empowers consumers to take control of their financial futures. Financial Freedom: Peer-to-peer lending platforms connect borrowers with lenders directly, potentially offering lower interest rates and more accessible loans. Investing Made Easy: Robo-advisors, powered by technology, can create personalized investment plans based on your risk tolerance, making investing more approachable. Democratization of Finance: Fintech tools and services are often cheaper and easier to use than traditional options, allowing more people to participate in financial activities. What is TechFin? The term “Techfin” refers to technology companies operating in the financial sector to provide advanced or innovative technological solutions primarily designed to support the financial industry with cutting-edge... --- - Published: 2024-02-20 - Modified: 2024-08-21 - URL: https://treelife.in/news/deciphering-the-supereme-courts-verdict-on-most-favoured-nation-mfn-clause/ - Categories: News - Tags: MFN, Most Favoured Nation, Supreme Court Based on an article published in Economic Times (ET Article Link - https://lnkd. in/dVUdVza8), MNCs might be facing a retro tax demand of INR 11,000 Cr following a Supreme Court ruling on the interpretation of the MFN clause included in various Indian tax treaties. Supreme Court Judgement - https://lnkd. in/dX2kk8wT So, what is the MFN clause, and how does the Supreme Court ruling impact existing arrangements entered into between group companies of MNCs?   The MFN clause allows for a reduction in the TDS rates on dividends, interest, royalties, or fees for technical services (FTS), as applicable. Also, it can limit the scope of royalty/FTS (for example, make available) in the treaty entered with the First Country. These adjustments only come into play if, at a later date, such concessions are extended by India to another OECD member (Third Country). Example 1986 DTAA notified between India and Canada (First Country) which contained the MFN provision. 1988 DTAA entered between India and Sweden (OECD member) which contained more favourable benefits than what was given to Canada. 1992 CBDT amended the DTAA with Canada (First Country) under section 90 to extend beneficial provisions present in the India-Sweden DTAA (Third Country). What was happening?   The bilateral treaties between India and the Netherlands, France, and Switzerland contained the MFN clause. Entities based in the Netherlands, France, and Switzerland automatically claimed the beneficial provisions present in subsequent tax treaties signed by India with Third Countries, based on the MFN clause in their respective DTAAs with India. Certain Third Counties were not an OECD member at the time of signing the DTAA with India and became OECD members later. Example DTAA entered between India and Slovenia contained lower tax rate of 5% on Dividend. India-Slovenia DTAA came into force on Feb 17, 2005. Slovenia became an OECD member on July 21, 2010. Entities from the First Country with whom India had entered into DTAA before Slovenia (Third Country) claimed beneficial provisions present in the India-Slovenia DTAA under the MFN clause automatically without CBDT notification. Supreme Court Ruling -  Issues raised Whether there is any right to invoke the MFN clause when the Third Country with which India has entered into a DTAA was not an OECD member at the time of entering into such DTAA? Whether the MFN clause is to be given effect to automatically or if it is to only come into effect after a notification is Issued. Held Notification under Section 90(1) is necessary and a mandatory condition for a court, authority, or tribunal to give effect to a DTAA, or any protocol changing its terms or conditions, which has the effect of altering the existing provisions of law. Third Country should be a member of OECD at the time of entering into DTAA with India, for the earlier treaty beneficiary (First Country) to claim parity. MFN clause present in a tax treaty does not automatically lead to the benefit present in DTAA entered with a Third Country being extended automatically to the First Country. The terms of the earlier DTAA entered with the First Country are required to be amended through a separate notification under Section 90. Treelife comments: Going forward, entities from First Country should claim beneficial provisions present in DTAA entered between India and the Third Country under the MFN clause if: 1. Third Country is OECD member at the time of entering the DTAA with India 2. CBDT has issued a notification extended the benefits present in DTAA entered with a Third Country to the DTAA entered with the First Country. --- > Here are a few common due diligence mistakes we have observed after working with startups for multiple business types - Published: 2024-02-15 - Modified: 2025-07-22 - URL: https://treelife.in/compliance/common-due-diligence-mistakes-made-by-startups-in-india/ - Categories: Compliance - Tags: due diligence for startups, due diligence india, due diligence mistakes, due diligence mistakes by startups, indian startup due diligence, startup accounting and compliance, startup due diligence report Why due diligence is conducted for startups in India? Investment in a startup business could be risky and thus, venture capitalists and angel investors appoint startup consultants having the relevant expertise in the area to conduct startup due diligence before making such an investment. A potential investor in startup companies should gain a holistic understanding of the startup business they are investing in and performing a startup due diligence furthers the cause. Startup Due Diligence is most often performed by potential startup investors before making the decision of capital entry into a startup business. During this process, the financial, commercial, legal, tax and compliance conditions of the startup are thoroughly analyzed based on historical data in order to objectively assess the operational situation of the company in the near future. This allows the startup investors to estimate the potential risks, SWOT directly or indirectly affecting the value of the target company. Due diligence immediately precedes the negotiation stage, after which the startup due diligence report prepared by the startup consultants is reviewed by the investors and the shareholder’s subscription agreement (SSA) is signed if everything goes smoothly. Most common due diligence mistakes in 2025 Here are a few common mistakes we have observed after working on startup due diligence for multiple startup business: A. Legal Due Diligence Mistakes: Legal due diligence is an essential aspect of the entire due diligence process, especially in the context of procurement. It looks for and assesses any legal risks related to the target company or sector that is being purchased. Contract compliance, litigation risk, intellectual property rights, and many more subjects are covered by legal due diligence. Legal due diligence focuses on a number of things, one of which is government rule and regulatory compliance. This kind of due diligence comprises reviewing all essential documents to ensure that the target firm has complied with all applicable national and international regulations in its operations. The purchasing company may be subject to significant liabilities if they don't comply. The following factors are involved in Legal due diligence - Inconsistent terms in agreements - Plainly, if a contract term means one thing when it is considered on its own and means something very different when it is considered in the light of a printed term in a set of standard conditions, that is likely to shed considerable light on that issue. When two clauses conflict and one of them is a conventional term of one party and the other is the result of bespoke drafting, the bespoke drafting will usually take precedence. If a contract calls for something to be produced in line with a prescribed design and to satisfy specified standards, the parties must share the risk if the prescribed design falls short of the prescribed standards.   Agreements Inadequacy - Employee stock options are a common topic on investor due diligence questionnaires that founders get. Investors should be wary if you claim to have given your key staff options and have represented this in the cap table, but there are no stock option agreements or plans in place. It is quite probable that investors will request that the founders address this issue as quickly as possible. The solution to avoid the above scenario is to maintain current option valuation. External parties perform this appraisal for any noteworthy occasions, such as the opening of new investment rounds. Initially, your staff members might be curious about the true worth of their options-based shares at any given moment. Secondly, upon employing staff in the nation where your business is registered , they will be required to notify local tax authorities of any appreciation in the value of their shares. The importance of having an updated firm value increases with your organization's worldwide reach and workforce diversity. Stamp duty not paid on agreements - Like income tax and sales tax that the government collects, stamp duty is a tax that needs to be paid in full and on schedule. Penalties are incurred for payment delays. An instrument or document that has paid stamp duty is regarded as legitimate and lawful, and as such, it has evidential value and may be used as proof in court. The court will not accept instruments or papers that are not properly stamped as evidence. A penalty of 2% per month will be applied to the outstanding stamp duty balance if it is not paid on time. Equity promises without documentation - Written documentation in the form of a signed binding pledge card or other written correspondence would typically provide sufficient evidence of a promise. Three primary forms of equity are granted to employees by startups: The right to purchase or sell a specific number of founders' shares at a fixed price is known as a stock option. Between the vesting date—which occurs after an employee has earned stock options—and the expiration date, the employee may exercise this right. This is the most typical kind of equity that entrepreneurs decide to provide their staff members. The right to purchase or sell a specific number of business shares at a fixed price is known as a stock warrant. Although warrants often have longer expiry dates than stock options, they can also only be exercised between the vesting and expiration periods. The ownership of a certain number of shares is known as a stock grant. No vesting is present. The main problem that occurs in startups are that they promise equity without doing proper documentation. Inadequate IPR protection - During the frantic process of developing new products, it is not uncommon for entrepreneurs to forget to sign the appropriate contracts with all of the consultants and contractors they have recruited. Investors will always ask about the agreements for the transfer of intellectual property of all the product's components—codebase, designs, texts, etc. during the due diligence process. It's suspicious if these agreements weren't in place. Investor ownership would be at danger in the event that any former workers or contractors choose to sue the business. B. Financial... --- - Published: 2024-02-14 - Modified: 2025-08-07 - URL: https://treelife.in/legal/exit-rights-a-founders-perspective-detailed/ - Categories: Legal - Tags: exit of investors, exit rights investor, investor exit, investor leaving company Introduction Exit provisions determine how, when and at what price investors can sell their stake in a company and procure an exit from the Company, thereby, being the most crucial exit rights that an investor seeks in an investment transaction. Important aspects of an Exit provision -  Exit period: This determines the maximum period within which the Company and the Founders are required to provide returns to the Investors on their investment. Typically Investors agree upon an exit period of about 5-7 years.   Exit Price: Investors usually do not incorporate an exit price in the documentation at an early stage as it is difficult to determine the growth trajectory of a company so early on, hence, exit is to be procured at the fair market value at the time of such exit  Exit Mechanisms: The investment documentation sets out the manner in which an exit can be provided such as IPO, third party sale, etc. Various Exit Mechanisms IPO: An investor can procure an exit by ensuring their shares are sold in an initial public offer, in case the Company decides to be listed on a stock exchange. Strategic Sale and Third Party Sale: In case the Company has an offer from a strategic buyer to buy substantial amount of shares/assets of the Company, the Investor can procure an exit by selling their shares in such a strategic out, whereas, a third party sale is a simple secondary transfer between the investor and a proposed buyer.   Buyback: In the event the Company/Founders are unable to provide an exit to the Investors within the exit period, the Investors may require the Company to repurchase the shares held by them. Put Option: Considering the legal barriers in executing a buyback, investors seldom insist on having a Put Option on the Founders, i. e. , at the option of the Investors, the Founders are required to purchase the shares held by the Investors.   Sale in a new fundraise: In case the Company raises a new round of funding, they could offer the investors exit by way of facilitating a secondary transfer of their shares to the new Investors. Liquidation Preference: The Company may provide an exit to the investors at the time of a liquidity event ,i. e. , an event including but not limited to merger, acquisition, corporate restructure, change of control of a company, liquidation, etc. by providing them at least 1x of their investment amount or such amount from the proceeds of a liquidation event, proportionate to their shareholding in the Company. Tag Along Right: This is right enables the investors to tag alongside the Founders in case the Founders find a third party buyer for their shares. Drag Along Right: In the event the Company is unable to provide an exit to the Investors, the investors have a right to invoke a right to drag all the shareholders of the Company in a drag sale (sale of substantially all shares of the Company) facilitated by such investors.   Founders’ Perspective on Exit Let us look at certain exit provisions from a Founders’ perspective and what kind of safeguards do founders need to build in the exit rights: Exit RightFounder specific provisions Exit Period Founders can be about providing an exit period of not less than 5 years.  Exit PriceFounders of especially early stage companies should not agree on a delta on the investment amount, and instead provide the exit price equivalent to the fair market value at the time of such exit. IPOIt is important to ensure that while Investors would be able to sell their shares in an IPO, the Founders should also have the right to do so in order to realise the value of their shares.  Put OptionA Put Option ensures a direct obligation on the Founders to purchase the shares held by the Investors from their own funds and hence, it is not recommended to sign up to such provisions. Sale in a new fundraise While this right is not a major redflag for the founders, it may act as an impediment to raise funds in the Company. In case such rights are exercised, a substantial portion of the investment will be provided to such existing investor leading to shortage of funds to the Company. Liquidation PreferenceFounders should be wary of the mechanism of liquidation preference clause. Some investors require more than 1x of their investment amount along with a participating liquidation preference, meaning, once they are provided with their investment amount, they will have a right to participate in distribution of funds to the other investors as well on a pro-rata basis. This is to the detriment of the other investors and especially founders, as, they are at the lower end of the liquidation preference recipients and leaves very little funds for distribution amongst the Founders. Tag Along Right Founders to ensure that in case they provide a tag along right to the Investors, they must provide only a proportionate tag along right, i. e. , in the event the Founders transfer 10% of their shareholding in the Company, they facilitate only a 10% exit of such investor’s shareholding. Having a complete tag on Founder’s shares leaves very little opportunity for the Founders to procure liquidity on their shares. Drag Along Right Founders should ensure that while Investors have a right to drag all the shareholders (including the Founders), the Founders should get an exit on terms which are pari passu with the terms provided to such dragging investors for their shares. Conclusion In conclusion, ensuring safeguards for the Founders/Company in the exit clauses of shareholders' agreements is not merely a legal formality, but crucial for the interests and vision of the Company. These provisions ensure that founders retain a degree of benefit from the company's growth, even as they navigate the complex waters of investment and potential corporate events such as mergers/acquisition. This careful consideration of exit strategies reflects a mature approach to entrepreneurship, recognizing the importance of legal foresight in the unpredictable journey of... --- > A financial model is simply a tool to forecast a business financial performance into the future. Explore all about Financial Modeling for Startup in India - Published: 2024-02-07 - Modified: 2025-07-21 - URL: https://treelife.in/finance/financial-model-for-startups/ - Categories: Finance - Tags: best startup financial models, business financial model, financial analysis for startups, financial model of a company, financial model of a startup, financial modeling for startups, financial modelling for startups, growth models for startups, how to create a financial model for a startup, startup finance model, startup financial model example What is Financial Modeling for Startups? The process of projecting and predicting revenue, customers, workers, costs, etc. into the future in order to comprehend and evaluate the profitability and feasibility of the firm is known as financial modeling for startups. Since the firm is still in its early stages, this modeling will assist in creating the budget and business plan that they will be able to show to possible investors. Additionally, financial modeling helps startups monitor their performance against the financial plan by identifying areas of underperformance. This allows them to make the necessary adjustments to their strategy to ensure long-term sustainability and success. Finally, financial modeling helps startups set realistic goals for revenue growth and profitability. Therefore, entrepreneurs may ensure a bright and secure future for their organisation by developing a robust financial strategy. It considers revenue estimates, costs, and historical performance. A financial model aids in the informed decision-making of corporate stakeholders. Financial models are used by bankers, credit analysts, accountants, valuation advisers, and research analysts to assess a company's financial viability. A financial model is simply a tool that’s built-in Excel to forecast a business’ financial performance into the future. The forecast is typically based on the company’s historical performance, assumptions about the future, and requires preparing an income statement, balance sheet, and cash flow statement. Financial modeling is the process of estimating the financial performance of a company or business by taking into account all relevant factors, including growth and risk assumptions, and interpreting their impact. It enables the user to acquire a concise knowledge of the current financial position of the company and its projected growth, and a clear understanding of the financial forecasts.   Advantages of building a financial model for startups There are multiple advantages given by financial modeling for startups which are as follows: Planning and Forecasting of FinancesMaking precise financial estimates and projections is the goal of financial modeling for startups. It aids in both comprehending possible financial results and helping to create reasonable goals for the company. It enables startup owners to prepare for various contingencies and make well-informed choices depending on anticipated financial success. Investing and Communicating with InvestorsIt's true that startups frequently need to raise money in order to expand. A thorough understanding of the company's development potential, financial stability, and predicted profits is offered by a well-built financial model. It primarily serves to increase the startup's credibility while pitching to possible investors. This indicates a deep comprehension of the monetary components of the nature of business. Planning for Resources and Capital AllocationThe best possible use of financial resources is made possible via financial modeling. Startups can find areas of high profitability, cost inefficiencies, and cash flow bottlenecks by examining the financial predictions. This facilitates their ability to deploy resources in a strategic manner, make well-informed investment decisions, and efficiently manage cash flow. Evaluation and Reduction of RisksStartups may use financial modeling to undertake sensitivity analysis and evaluate how different risks and uncertainties affect the financial success of their company. Through the process of recognising possible risks and their associated financial repercussions, entrepreneurs may create backup plans and lessen the likelihood of unfavourable outcomes. Evaluation and Outcome PlanFinancial modelling is essential for figuring out a startup's valuation when it comes to potential exit strategies like acquisitions or initial public offerings (IPOs). Startups can assess their worth and get better terms during investment rounds or exit talks by projecting their future financial performance. Monitoring and Accountability of PerformanceIn order to assess the real financial performance of the business, a financial model acts as a benchmark. By regularly updating the model with real financial data, business owners are able to track the company's development, spot deviations from the plan, and move quickly to address them. It makes proactive decision-making easier and improves responsibility. Making Strategic DecisionsFor startups, financial modeling offers an organized framework for assessing strategic choices. This enables business owners to evaluate the financial effects of different choices, including the introduction of new products, market expansions, price adjustments, infrastructure improvements, and technological investments. Making educated judgments that support the startup's financial goals is another benefit. Sample Financial Model for Startups To ease the effort, Treelife is sharing a sample format of the financial model, which assists the founders/others to work out the outcome at one go. We believe that a financial model example should be clear, self-explanatory, and very pragmatic in its approach. Download the Financial Model Worksheet by Treelife here. Why should you use a Financial Model? The output of a financial model is used for decision making and performing financial analysis, whether inside or outside of the company. Inside a company, executives will use financial models to make decisions about:   Types of Financial Model Startups can use a variety of financial modeling techniques, some of which are listed below, to assess various elements of their business: Model for Forecasting RevenueThe main goal of this model is to project future startup income streams. To predict sales statistics over a certain time period, it considers variables including growth rates, pricing strategy, market size, and client acquisition. Models for revenue forecasting assist startups in assessing their future revenue and making plans appropriately. Expense ModelAn expenditure model aids in the estimation and monitoring of operational costs for a startup. Together with variable costs like marketing expenditures and cost of goods supplied, it mostly consists of fixed costs like utilities, payroll, rent, and so forth. Expense models assist startups in determining their cost structure, prospects for cost savings, and efficient cash flow management. Model of Cash FlowBecause it evaluates the availability and timing of capital inflows as well as withdrawals, the cash flow model is crucial for startups. A cash flow model follows every transaction that occurs in the business's cash flow. This covers elements like financial commitments, outlays, earnings, and other funding sources. It helps new businesses to prepare ahead for any financial constraints, manage their cash flow, and making informed decisions about funding requirements Valuation ModelThe value of a... --- - Published: 2024-02-02 - Modified: 2024-09-04 - URL: https://treelife.in/news/interim-budget-2024-highlights/ - Categories: News - Tags: budget, budget 2024, budget 2024 highlights, budget 2024 india, budget 2024 summary DOWNLOAD FULL PDF Report Highlights Here are some highlights of the Indian Interim Budget 2024: Focus on Infrastructure Development: The government has allocated significant funds for building highways, railways, airports, and other critical infrastructure projects to achieve the vision of 'Viksit Bharat' (Developed India) by 2047 https://innovateindia. mygov. in/viksitbharat2047/. This push for infrastructure spending is expected to create jobs and boost overall economic growth. Boost to Social Welfare Schemes: The budget aims to uplift people out of poverty by increasing spending on social welfare programs like education, healthcare, and poverty alleviation. This focus on social welfare should benefit a large portion of the Indian population. Investment in Research and Innovation: The government announced a corpus of ₹1 lakh crore to provide long-term financing for research and development in sunrise sectors. This initiative is expected to propel India's technological advancements and self-reliance (Atmanirbharta) https://pib. gov. in/PressReleaseIframePage. aspx? PRID=1845882. Measures for Sustainable Development: The budget promotes sustainability through initiatives like rooftop solarization. A target has been set to enable one crore households to generate their own solar power and potentially even sell surplus electricity back to the grid. This scheme is likely to increase clean energy adoption and reduce dependence on fossil fuels. Support for MSMEs and Farmers: The budget proposes measures to support small businesses (MSMEs) and farmers. This may include tax breaks for MSMEs and continued financial assistance to farmers under schemes like PM-KISAN. These initiatives are expected to give a leg up to these crucial sectors of the Indian economy. --- - Published: 2023-11-21 - Modified: 2025-07-03 - URL: https://treelife.in/legal/demystifying-posh-a-world-of-taboos-and-uncertainty/ - Categories: Legal - Tags: POSH, POSH policy In the corporate environment today, you may often come across the term “POSH”. Whether the company you’re working at is talking about it, or the HR is circulating a document called “POSH Policy”, or you hear about a POSH Committee, or learn about someone initiating action under the POSH Act. But do you know what POSH is? What does it stand for? Who can claim under POSH and when? What are your rights and how does it impact you? What can you do in a POSH-related situation? If the answer is no, here’s a quick read giving you the basics of POSH.   Sexual harassment in workplaces is a global issue, including in India. However, as India was a very patriarchal country, women oriented laws were few. Sexual Harassment against women was also majorly neglected in our country until about a decade ago when Supreme Court and the Government of India finally took some measures and regularised it by passing a legislation called: “Sexual Harasment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013”, better known as “POSH” Act. Physical contact or advances Making sexually coloured remarks Demand or request for sexual favours Eve-teasing and any other unwelcome physical, verbal or non-verbal conduct of a sexual nature Showing Pornography Staring, leering, obscene gestures, making kissing sounds, licking lips Stalking, blocking, cornering Implied or explicit preferential treatment or threat about jobs Making work discussions sound sexual and using innuendos Physical assault and molestation So what is not sexual harassment? While sexual harassment can encompass a wide range of behaviours, there are certain actions and interactions that, in isolation, may not be considered sexual harassment. Here are some examples of such actions: Compliments: Giving compliments or making polite comments about someone's appearance or attire, as long as they are respectful and not objectifying. Single, Non-Offensive Jokes: Telling a single, non-offensive joke that has a sexual theme may not necessarily be sexual harassment, especially if it's not directed at someone in a demeaning or offensive way. Non-Sexual Touching: Non-sexual physical contact, like a friendly hug or handshake. Whether something constitutes sexual harassment often depends on the context, intent, and impact it has on the victim. Where can an incident occur? Any department, organization, undertaking, establishment, enterprise institution, office or branch unit of the Company. Any place visited by the employee during the course of employment, including the following: Cafeteria Meeting room Staircase Premises Car Park Elevator Cabins Cab Online or over the phone What is a POSH Policy? Every employer with female employees is required to adopt and enforce a POSH Policy elaborating on its scope, acts considered as sexual harassment covered, applicability, complaint and redressal mechanism,details and contact information of POSH committee members. Today, a lot of organisations internationally are embracing a gender neutral and “all inclusive” policy, to protect every individual employee from sexual harassment regardless of their gender or orientation or identity. What’s a POSH Internal Committee? It’s a committee appointed by employers with more than 10 employees including female employees, comprised of 4 members, with atleast 50% women, one being an external independent member, to whom any victim can complain about any incident of sexual harassment. The Committee’s responsibility is to acknowledge the complaint filed, investigate and prepare a report with details of the incident, and to recommend a suitable course of action to the employer. What to do if you are a victim but your organisation does not have a POSH Internal committee? If your organisation is not required to appoint a committee under the law, or has failed to appoint, you can always file a complaint with the Local Committee, appointed for each District by the respective State Government. What to do if you have a complaint? Complaints can be filed with IC within 3 months of the incident or the last incident in a series. IC can extend this period up to 3 months for any valid reasons. If a complainant is physically incapacitated, a complaint can be lodged with their prior written consent by a relative, friend, co-worker, an officer of the NCW or SCW, or any individual with knowledge of the incident. If a complainant is mentally incapacitated, a complaint can be made with their prior written consent by a relative, friend, special educator, qualified psychiatrist, psychologist, guardian, authority responsible for their care, or any person knowledgeable about the incident. If a complainant has passed away, a complaint can be filed with the prior written consent of the deceased employee's legal heir or any designated person. If the complaint is made to an employee (not a member of the IC), the employee shall promptly report it to the IC. What actions can the Internal Committee recommend and/or employer take against the offender / accused? Censure or reprimand Written warning Withholding promotion and/or increments Suspension Termination Deduction of compensation payable to the victim Community service or counseling Or any other action that the management and/or the board of directors of the Company may deem fit. What to do if you are a witness or a colleague? As observers or witnesses: Intervene If Safe Document What Was Seen Support the Victim Report the Harassment As colleagues: Create a Supportive Environment Encourage Reporting Cooperate with Investigations Respect Privacy Maintain confidentiality What not to do? Do NOT ignore it – reporting is essential Do NOT accept inappropriate or uncomfortable behaviour Do NOT retaliate or mock the victim - Instead be supportive, instead of socially ostracizing or demeaning or intimidating the victim The confidentiality of all aspects related to the complaint has to be strictly maintained. Do not disclose this information to the public or media in any way. The internal committee possesses the authority to initiate actions against the accused when found guilty and against the complainant in the event that false claims are proven. Any party not satisfied by the recommendations of IC, can appeal to the appellate authority within 90 (ninety) days of the recommendations being communicated. Conclusion It is every employer’s duty to provide... --- - Published: 2023-11-21 - Modified: 2025-01-28 - URL: https://treelife.in/finance/the-rise-fall-of-indian-ipo/ - Categories: Finance - Tags: indian startups, IPO Critical Factors in Initial Public Offering (IPO) Outcomes: Lessons from Past IPOs Navigating the complexities of an IPO is a pivotal moment for companies, with the potential for significant growth and capital increase. Companies aiming to transition from private to public spheres have encountered a variety of challenges, yet there have also been remarkable stories of triumph. In this article, we deep dive into the successes and challenges of previous public listings.   IPO Key factor What went wrong? Learnings Zomato Valuation When Zomato, India’s first unicorn to venture public, made its debut on the National Stock Exchange, its shares surged, opening at a staggering 52. 63% premium. This catapulted the company's market capitalisation beyond the INR 1 lakh crore mark. After a promising debut on the National Stock Exchange, Zomato's shares took a significant hit, falling to a low of Rs 46 in July nearly 40 per cent down from its issue price of Rs 76. Such a decline moved closer to expert evaluations that pegged the company's genuine share value at around Rs 41. Realistic valuations of companies planning to launch an IPOs are of paramount importance for both investors and the companies aiming to go public. Overvaluations might result in unrealistic expectations and potential future corrections, which could dent investor confidence. On the other hand, a firm grounded in its intrinsic value will likely offer more stability and transparency to its shareholders. OYO Good governance and Transparency The case of OYO, a prominent hospitality company in India, serves as an example of the challenges that can arise when governance and transparency are perceived to be inadequate. OYO's journey towards an IPO has been fraught with scrutiny, primarily due to concerns regarding its governance practices and the clarity of its business operations. Questions have been raised about the sustainability of its growth, the clarity of its revenue model, and the management’s decision-making processes. Legal disputes and questions about its asset-light business model have further compounded these concerns, leading to a delay in its IPO plans. Good governance and transparency are paramount in the complex process of launching an IPO, as they instill confidence among potential investors and ensure a fair and smooth transition to the public market. Good governance involves the establishment of robust internal controls, adherence to ethical standards, and accountability to all stakeholders, while transparency requires clear and honest communication about the company’s financial health, business model, and potential risks. For companies looking to go public, the lesson from OYO’s experience is clear – prioritize good governance and transparency, not just as a means to facilitate a successful IPO, but as a fundamental business practice. This commitment to ethical practices and clear communication is crucial for building trust with investors and laying the groundwork for long-term success in the public domain. IPO Key factor What went right? Learnings Avenue Supermarket Right timing The IPO of Avenue Supermarts Ltd, which operates the DMart chain of supermarkets in India, serves as an illustrative example. The company went public in March 2017, a period that was characterized by a strong bull market in India. The IPO was priced at INR 299 per share, and due to the positive market conditions and strong fundamentals of the company, it received an overwhelming response from investors. On its debut on the stock exchanges, the stock listed at INR 604, a 102% premium over its issue price. Investors who had participated in the IPO were rewarded with substantial gains, showcasing the importance of choosing the right time to invest in an IPO. Companies aspiring to go public should aim to initiate their IPO during a bullish market, where stock prices are climbing, and investor optimism is palpable. Moreover, a stable or rising interest rate environment is preferable for launching an IPO. During such periods, the financial markets are generally considered to be in a healthy state, inspiring confidence among investors. From the company's perspective, strategically timing the IPO to align with favorable market conditions can significantly enhance the success of the public offering. It not only helps in maximizing the capital raised but also contributes to establishing a strong investor base and a positive market perception, which are vital for the company’s long-term growth and stability in the public domain.   Conclusion: Embarking on an IPO journey necessitates a careful balance of several critical elements to ensure success and sustainability in the public domain. Companies must prioritize realistic valuations, uphold the principles of good governance, effectively communicate their value proposition, and choose the right market conditions to launch their public offering. The examples of Zomato, Paytm, and others in the Indian context underscore the varying outcomes that can result from this complex process, demonstrating that while the rewards of a successful IPO can be substantial, the road to achieving it is fraught with challenges. Ultimately, for companies aiming to make a successful transition to the public markets, a combination of transparency, accountability, ethical decision-making, and strategic timing emerges as the indispensable formula for success. --- > We worked with the company right from incorporation through till the acquisition in various engagements of legal, finance, compliance and advisory. We closely reviewed the founders exit, the acquisition and liaised for regulatory of their international expansion. - Published: 2023-11-08 - Modified: 2025-03-05 - URL: https://treelife.in/case-studies/edtech-company-incorporation-to-acquisition-stage/ - Categories: Case Studies Client: EdTech company and Founder Our Engagement: We worked with the company right from incorporation through till the acquisition in various engagements of legal, finance, compliance and advisory. We closely reviewed the founders exit, the acquisition and liaised for regulatory of their international expansion.  Actions carried out: Setting up the entire initial finance and legal framework and executing it. Represented the company in their due diligence and legal functions while raising their investment rounds. Liaise with global consulting firms and legal firms to explore setting up the international business. Represent interest of founder and company along with other firms consulting on a transaction Impact: Considering our robust initial setup of the processes, it was easier to migrate the legal and financial processes inhouse at scale. Our deep understanding of the business since the inception made us a key PoC for stakeholders to validate their ideas from a regulatory perspective. High vote of confidence in key business decisions of the company. --- - Published: 2023-10-28 - Modified: 2025-08-07 - URL: https://treelife.in/legal/do-you-think-its-time-to-take-your-startup-global/ - Categories: Legal - Tags: how to go global, Indian startup ecosystem, indian startups, startup expansion, startups, startups going global, startups gone global Expanding your startup into foreign markets presents a global business expansion opportunity that can be daunting yet rewarding. It’s important to keep an informed eye on regulations, compliance, and technical aspects of the countries you want to venture into. The reasons for international business expansion are many. However, before extending your global footprint, startups must address the following key compliance considerations to be global business ready: International Investment Regulation Compliance Establishing lawful compliance with investment regulations and rules is a key factor in setting up a business internationally. Private capital investment structuring is vital for raising funds through Alternative Investment Funds (AIFs). Startups should also consider bilateral and multilateral agreements that promote foreign investment and provide substantial protection to investors. The growth of international business is driven by these agreements and policy announcements that encourage businesses to invest in foreign markets, such as the Indian government’s recent directive allowing Indian startups to offer public listings in foreign markets. CapOne Research Case Study CapOne Research is a thriving fintech startup that launched in 2016 and uses blockchain and AI to design payment systems. The company’s founder initially planned to incorporate the business in the US but faced roadblocks with visa compliance and structuring expenses. Instead, CapOne took advantage of Estonia’s Startup Programme, gaining access to EU-based venture capital markets and angel investors. The ease of business and personnel availability were key factors in the company’s growth. CapOne’s experience is a valuable lesson in understanding the opportunities and challenges of international business. Data Protection and Policy Data protection and policy regulations vary between countries. It’s essential to adhere to strict data privacy guidelines and ensure proper security measures are in place. Incorporating the latest advancements in technology, such as blockchain and AI, to design payment systems provides exceptional opportunities for global business expansion. As companies handle and process personal data, it is crucial to ensure strict compliance with processing guidelines under EU-GDPR privacy regulations, which are now considered a global standard for privacy protection. To comply with these regulations, business entities that handle personal data must follow specific consent, disclosure, and collection mechanisms. Moreover, these regulations may restrict the transfer of data outside the region from where it was collected. Data privacy law and compliance are at the forefront of not just the technology industry but also the service and sales industry to ensure the free, fair, and safe processing of sensitive consumer data. Indian startups such as Paytm have taken positive steps to match global giants like Google and Facebook in ensuring data welfare and protection. Paytm and Privacy Case Study Paytm recognizes that in an era where data is ‘the new gold,’ regulatory authorities must create a strong consumer data protection framework that respects the privacy concerns of citizens. Paytm deems all financial data (KYC, Aadhar, and other identification-related biodata) as ‘Critical Personal Data’ and takes measures to store and process the same within India alone. Likewise, startups wanting to expand to foreign jurisdictions can expect to deal with regulations that enforce cooperation and compliance in matters of private data. Paytm has expanded to Canada and Japan and is compliant with related data privacy regulations – Canada’s Personal Information Protection and Electronic Documents Act (PIPEDA) and Japan’s Act for Protection of Personal Information (APPI). To summarize, the basic tenets that an enterprise must follow to ensure data protection include accountability, consent, limitation of use, disclosure, and retention, and data security systems. Human Resources & Labour Law Compliance Startups expanding into new markets must comply with local labour laws regarding employment contracts, minimum wage, and working hours. Companies must also be mindful of cultural differences in regards to communication and working styles. The advantages of expanding a business internationally are vast, but understanding the challenges and opportunities of international business is critical to success. Each jurisdiction has specifics and standards on HR and Labour law that need to be incorporated into employee contracts and other agreements on personnel and conduct. Anti-Corruption policies and Insider Trading Disclosure mechanisms need to be in place to regulate fair and lawful business conduct. Startups that enter new countries often take advantage of ‘floating employee’ arrangements that constitute a network of consultants and independent contractors. Intellectual Property Intellectual property protection laws, such as patents, trademarks, and copyrights, differ between countries. Startups must protect their intellectual property by adhering to proper regulations to prevent infringement. Avoiding problems in international business is possible by investing in the right legal expertise and understanding the comprehensive international expansion strategy. It is important to refile for intellectual property, such as trademarks, copyrights or patents, in a new territory to ensure global recognition. The business may either apply for the same individually in each country or go for a comprehensive filling such as that offered by the EU Intellectual Property regime that holds valid for all European Union countries. Trademark incorporation and registration in North America, as done by giants such as Flipkart and Myntra, is a route preferred not only to ease tax burdens in India but also to increase valuation and reputation in business. Case Study A very well-known startup in India recently started expanding in the UK and posted vacancy ads on LinkedIn. The public, at large, including some prospective recruiters mistook this Indian startup for a UK-based startup that had a similar sounding name. This came into the eyes of the UK-based startup and rounds of to and fro legal notices were ensued on the Indian startup. This delayed the Indian startup’s expansion plans and also cost a substantial legal fee on top of settlement offers for coexisting in the UK market. Tax Obligations Startups must also be aware of tax laws and obligations when operating in a foreign market. These can vary significantly depending on the nature of business and location. Engaging with authorities at different levels including legal and taxation experts will help startups establish a scalable international business expansion. Tax structuring and management may help minimize tax obligations. Ensure that taxes deducted at the source... --- - Published: 2023-10-20 - Modified: 2025-01-28 - URL: https://treelife.in/finance/tykes-csops-bridging-startups-with-investors-or-crossing-regulatory-boundaries/ - Categories: Finance - Tags: csops, tyke What is Tyke? Founded in 2021, Tyke claims to be a private investment gateway that enables private capital transactions in a seamless manner. With a ticket size as low as INR 5,000, Tyke enables individuals to become angel investors and invest in startups. This opens up the angel investing market to a large community of investors, which was earlier restricted to a small circle of HNIs. This also allows startups to raise capital from a larger pool of investors. For the above services, as per their website, Tyke charges a standard listing fee from the startup and a success fee on the total amount raised via a successful campaign. Further, it also charges a 2% convenience fee on the subscription amount. It does not charge anything from the investors. In a short span of two years, Tyke has impressively mobilized over INR 100 crore via 200+ campaigns. The rising public fascination with platforms like Shark Tank further fuels this enthusiasm towards the startup ecosystem. Startups can launch various campaigns on Tykeinvest, ranging from CCD and CCPS to CSOP, NCD, and Invoice Discounting campaigns. While CCDs and CCPS offer investors a seat at the startup's cap table, Tyke accentuates that their Community Stock Option Plan (CSOP) doesn't influence the company's cap table. They describe CSOP as a contractual agreement executed between a subscriber (investor) and the startup which entitles the subscriber to community benefits and the potential to be granted Stock Appreciation Rights. Recent MCA order in the case of SustVest which raised funds on Tyke Gurugram-based 'Solargridx Ventures Private Limited' (“the Company”), in its bid to attract investments, used the CSOP campaign on the Tyke platform under the brand name ‘SustVest’. It managed to raise around ~INR 52 lakhs from more than 500 investors through this campaign. The Company issued 6,186 CSOPs to 565 subscribers. The Company issued the CSOPs for a subscription fee of INR 1,000 inclusive of applicable taxes and GST. Invoices were issued to the subscribers for such fee. The Company treated the revenue received from CSOPs of INR 52. 42 lakhs under the head of “other income” and paid 18% GST on the same as was filled in the GSTR3B return for the month of March 2022. However, the MCA issued an order against the Company on September 22, 2023, imposing a total penalty of INR 10 lakhs on the Company and the 3 directors for breach of section 42 of the Companies Act, 2013 (“CA 2013”). The MCA has also asked the Company to refund the total money received of ~INR 52 lakhs along with interest of ~INR 7 lakhs to the investors. The crux here was: Do CSOPs issued by the Company classify as “securities”? If so, this would necessitate the Company's compliance with section 42 of the CA 2013, which pertains to the 'Issue of shares on a Private Placement basis'. Key Matters of Contention 1. Whether CSOPs can be regarded as a “security”  The first and key matter of contention is whether the CSOPs issued should be classified as “securities” or not. If yes, the MCA has alleged that the Company has not complied with the provisions of section 42 of the CA 2013 dealing with 'Issue of shares on a Private Placement basis'. Section 42 of the CA 2013 is reproduced in Annexure 1. Before discussing the arguments on this matter by both parties, it is imperative to understand the term “security”. The term “security” is defined in section 2(81) of the CA 2013 where it directs us to section 2(h) of the Securities Contracts (Regulation) Act, 1956. Reading these two laws in conjunction, broadly, "securities" includes derivatives which, in turn, includes: (A) a security derived from a debt instrument, share, loan, whether secured or unsecured, risk instrument or contract for differences or any other form of security (B) a contract which derives its value from the prices, or index of prices, of underlying securities An extract of the relevant sections from the CA 2013, and the Securities Contracts (Regulation) Act, 1956 are reproduced in Annexure 1. Company’s contention  The Company submitted that CSOPs are merely an agreement by the company to engage its Subscribers / Evangelists through a closed community with a view to grow the customer base and business. The company aims to leverage the network effect created through this community to achieve its objectives, including increased sales, improved brand identity, better adaptation to new trends, and reliable user feedback. The Company partnered with Tyke, a technology-based community platform, to conduct an online pitching session to introduce itself to Tyke members and educate them about its achievements and growth prospects. After the pitching session, the Company created a closed group for subscribers to access the community benefits and perform the role of evangelizers on behalf of the Company. Thus, according to the Company, it can be seen that it has neither released any public advertisements nor utilized any media, marketing or distribution channels or agents to inform the public at large about such an issue of securities. Further, the amounts received from the subscribers are in the nature of 'membership fees’ and invoices have been raised by the Company. Such amounts are shown under the head "other income“ and offered to tax as such. Further, GST has also been paid on such income. The Company submitted that CSOP does not derive its value from any underlying variable like share price/ stock index. To qualify as “rights or interest in securities” there has to be an underlying security that is absent in the present facts. MCA’s contention  The MCA pointed out that the CSOP holders were ostensibly promised that they would be rewarded based on future valuation of the Company. Further, the financial statements unequivocally declare that CSOP holders would be able to unlock value based on future valuation. The CSOP agreement submitted by the Company had the following key clauses: •The payout amount to the CSOP holders means settlement paid by the Company by way of cash, by way... --- - Published: 2023-10-11 - Modified: 2025-01-28 - URL: https://treelife.in/finance/revised-valuation-rules-for-angel-tax/ - Categories: Finance The Central Board of Direct Taxes (CBDT) notified amendments to Rule 11UA of the Income-tax Rules, 1962 applicable for computing angel tax on September 25, 2023 pursuant to the draft rules introduced earlier and feedback received from stakeholders and general public. In addition to the proposed changes, the CBDT has introduced rules for valuation for Compulsorily Convertible Preference Shares (CCPS). Timeline May 19, 2023 – CBDT proposes changes to Angel tax rules and notify list of excluded non-resident entities May 24, 2023 – The Central Government notifies entities to whom Angel tax provisions will not apply September 25, 2023 – The CBDT notifies amendments to Rule 11UA New Valuation methods In addition to the existing valuation methods the CBDT has introduced the below options: •Price offered to Venture Capital (VC): A VC undertaking can consider the investment valuation received for the issuance of unquoted equity shares from either a VC fund, a VC company, or a specified fund (Cat I / II AIF) as a valuation benchmark for determining FMV of equity shares issued as long as it does not exceed the aggregate investment so received. Consideration from other investor should be received within a period of 90 days before or after the date of issue of shares which are the subject matter of valuation •Price offered to notified entities: The valuation of investment received by a company from notified entities can also be considered subject to conditions mentioned above •International pricing methods: For investment by non-residents, they have an additional option to determine FMV by a Merchant Banker as per any of the below 5 methods: (i) Comparable Company Multiple Method (ii) Probability Weighted Expected Return Method (iii) Option Pricing Method (iv) Milestone Analysis Method (v) Replacement Cost Method Applicability of valuation methods MethodReport issued byInvestment received from ResidentInvestment received from Non-residentEquity sharesCCPSNAV²Not specifiedYesYesDCF²Merchant Banker³YesYesPrice offered to venture capital-YesYesInternational pricing methods²Merchant Banker³--Price offered to notified entities-YesYes 1 CCPS can also be valued as per valuation of equity shares determined in line with the above methods as applicable 2 Safe Harbour available i. e. 10% upside variation is allowed 3 Date of merchant banker report not older than 90 days from date of issue of shares can be considered as valuation date Do reach out to us at support@treelife. in if you need further help in understanding this or obtaining valuation reports --- - Published: 2023-09-27 - Modified: 2025-07-21 - URL: https://treelife.in/finance/settlements-beyond-courtroom-walls-tax-impact/ - Categories: Finance The following article offers an understanding of the funds received and disbursed by involved parties in a settlement outside the courtroom. It also outlines how such funds are handled according to the Income Tax Act and GST Act. 1. Treatment as per Income tax in the hands of a recipient 2. Treatment as per Income tax in the hands of the settling party 3. Understanding GST applicability on the same 4. Case laws 5. Conclusion Treatment as per Income tax in the hands of a recipient In the realm of taxation concerning out-of-court settlements, a pivotal aspect to consider is the categorization of receipts into revenue and capital under the Income Tax Act, 1961 (“IT Act”). This distinction helps identify whether the settlement amount is taxable or not. Revenue receipts Arise from the regular and routine business operations of an entity and are generally recurring in nature. In out of court settlement, compensation for loss of trading stock or loss of profits can be considered as Revenue receipts. Generally, revenue receipts are taxable unless specifically exempted. Examples – amounts received for sale of goods, interest on loans, rental income. Capital Receipts Do not arise from the normal business operations and usually one-time receipts and are not recurrent. In out of court settlement, compensation for damages leading to the diminution of the asset’s value or for the termination of a business can be considered as Capital Receipts. Generally not taxable, unless it’s mentioned otherwise under the IT Act Examples – Receipts include sale proceeds from selling an asset, money received from a share issue. Distinguishing between compensatory and punitive nature is crucial for determining if compensation payments can be treated as allowable expenses. The following points outline this differentiation clearly. Compensatory Expense Paid damages or losses in business operations are compensatory expenses. Paid to end a lawsuit for alleged damages or harm caused or payments to businesses for losses incurred due to contract breaches are compensatory expenses. Examples include Payment for breach of contract or business losses. Penal Expense Paof toward fines or penalties levied for legal or regulatory violations are penal expenses. In out of court settlement context, amounts paid to end a lawsuit for regulatory violations or payments for statutory non-compliances are penal in nature. Common examples include fines for legal infringements or regulatory non-compliances Untangling GST Applicability in Out-of-Court Settlements The taxable event in GST is supply of goods or services or both. Hence its important to understand the meaning and scope of “Supply” under GST which clearly defined in the following 6 parameter 1. Supply of goods or services. Supply of anything other than goods or services does not attract GST 2. Supply should be made for a consideration 3. Supply should be made in the course or furtherance of business 4. Supply should be made by a taxable person 5. Supply should be a taxable supply  6. Supply should be made within the taxable territory Compensation paid in out of court settlements does not qualify as a ‘supply’ under the GST regime. Therefore, it is not liable to GST. However, it’s vital to analyze the nature and purpose of the compensation to ascertain the exact GST implications. Taxability of compensation paid under GST depends on whether the compensation is for breach of contract – be considered as consideration for supply of a service and would be taxable under GST for any other reason – it would not be taxable under GST as they cannot be treated as any sort of service and they lack the element of mutual consideration For damages / liquidated damages – may be considered as supply of goods or services considering such receipt fall within the ambit of ‘agreeing to obligation to refrain from an act, or to tolerate an act or a situation, or to do an act’. Case Laws Under Income Tax: Commissioner of Income Tax v. D. P.  Sandu Bros. , Supreme Court Compensation received due to the termination of a dealership agreement is a capital receipt and hence not taxable. Kettlewell Bullen & Co. Ltd. v. Commissioner of Income Tax, Supreme Court Compensation received in lieu of a trading asset is a revenue receipt. But if for the loss of a profit-making structure, it’s a capital receipt. Commissioner of Income Tax v.  Panbari Tea Co. Ltd. , Supreme Court Compensation received for the loss of a source of income is considered a capital receipt and is not taxable. Under GST: Bai Mamubai Trust, VithaldasLaxmidas Bhatia, Smt.  InduVithaldas Bhatia vs. Suchitra, Bombay High Court GST is not payable on damages/compensation paid for a legal injury as payment lacking the element of mutuality of consideration. Conclusion •Classification of receipts, whether revenue or capital, especially in the context of out-of-court settlements, might require a detailed analysis of the nature and purpose of the receipt. •Decisions from judiciary and expert advice can aid in providing clarity. •In practice, nature of receipt shall be determined by extensive scrutiny of pleadings in suit and / or recitals contained in the settlement agreement and careful drafting will be quintessential. --- - Published: 2023-09-27 - Modified: 2025-07-22 - URL: https://treelife.in/taxation/how-to-create-esop-pool/ - Categories: Taxation Often founders are confused about creating an ESOP pool on the cap table when investors require them to create one before making the investment. An ESOP pool is a set of shares earmarked for the company's employees - which will be issued to them under ESOP Scheme. Creation of ESOP pool leads to dilution of founder and investor shareholding at the time of creation of the pool. The shares forming part of the pool are not issued yet. They are just notionally carved out shares which are represented on the fully diluted cap table of the company. Sample cap table on a fully diluted basis : ShareholderPre-ESOPOn creation of ESOP pool# of shares% shareholdingFounder 15,00050%Founder 25,00050%ESOP Pool*--Total10,000100% These are just notional shares and not issued to any employee benefit trust* We have also created a sample cap table with an ESOP pool for your ready reference: Click to know more https://bit. ly/3pYF4zH Practical Insights Founders typically create an ESOP pool of 10-15%. As the company grows and raises rounds of funding, the ESOP pool dilutes to approx. 3-4% Mature investors usually ask founders to create an ESOP pool before making investment so that their stake does not dilute during later stages of funding Creation of an ESOP pool only requires passing of a simple board resolution. --- - Published: 2023-09-12 - Modified: 2025-07-22 - URL: https://treelife.in/legal/gaming-law-judgement-summaries/ - Categories: Legal - Tags: gaming, gaming law, high court, judgement, legal 1. Play Games24x7 Private Limited v. Reserve Bank of India & Anr. Factual Matrix Play Games24x7 Private Limited (“Petitioner”) is engaged in the business of designing and developing software related to games of skill (“Business”), and offers the games ‘Ultimate Teen Patti’ and ‘Call it Right’ (“Impugned Games”). However, these Impugned Games do not involve any real-money winnings or cash prizes as rewards. During the period 2006-2012, the Petitioner received several foreign remittances, for which the necessary reporting with the Reserve Bank of India (“RBI”) under the Foreign Exchange Management Act, 1999 and the rules made thereunder (“FEMA”) was pending from the Petitioner’s end. In 2012, the RBI, directed the Petitioner to file an application such that all the FEMA contraventions could be compounded together (“Compounding Application”). In early 2013, the foreign exchange department of the RBI returned directed the Petitioner to approach the then Department of Industrial Policy and Promotion (now the Department from Promotion of Industry and Internal Trade (“DPIIT”)), to seek a clarification whether the Petitioner was eligible to legally receive FDI (“DPIIT Clarification”), which the Petitioner had applied for, but to no avail. Thereafter, in March 2020, the Petitioner filed yet another Compounding Application with the RBI, which the RBI returned to Petitioner, citing that the DPIIT Clarification was still not obtained by the Petitioner. Despite multiple communications with the RBI, there was no tangible outcome with regards to the DPIIT Clarification. In light of the same, in May 2021, the Petitioner filed the present petition against the RBI before the Hon’ble Bombay High Court alleging that the Compounding Application was being unreasonably delayed by the RBI. Contentions and the question in point Party ContentionsPetitionerThe Impugned Games were casual/ social games which did not involve any real-money winnings or cash prizes as rewards. The Petitioner earned revenue through the Impugned Games only through in-app purchases by players and through in-game advertisements. Since the Impugned Games, although ‘games of skill’, did not have any real-money winnings or rewards, they could not be construed as ‘gambling’ under gaming laws in India. RBIIt was not concerned with the assessment of the Petitioner’s nature of Business and that it just required for its records, the DPIIT to state that the Petitioner’s Business was not illegal in nature. If the DPIIT Clarification would identify the Petitioner’s Business as permissible, the Compounding Application would be processed by the RBI. DPIITThe Impugned Games, being ‘games of chance’ under Indian laws, fell under the purview of ‘gambling’, which is a prohibited sector under the FDI Policy 2020 (“FDI Policy”). Question in point before the Hon’ble Bombay High CourtWhether the Petitioner’s Business would constitute ‘gambling’ (which is a prohibited sector under the FDI Policy) and thus, disqualify the Petitioner from being entitled to FDI. Judgement and Key Takeaways JUDGEMENT The Hon’ble Bombay High Court primarily placed reliance on the Hon’ble Supreme Court of India’s decisions in RMD Chamarbaugwala v. Union of India (AIR 1957 SC 628) and Dr. K. R. Laxmanan v. State of Tamil Nadu & Anr.  in order to determine the legality of the Petitioner’s Business and whether the same constitutes ‘gambling’. The Hon’ble Bombay High Court held that in order to be construed as ‘gambling’, the game shall: (i) predominantly be a ‘game of chance; and (ii) be played for a reward. Since there was no real-money reward involved, the Impugned Games could not be brought under the purview of ‘gambling’. The Hon’ble Bombay High Court also directed the RBI consider the Petitioner’s Compounding Application in an expedited manner. KEY TAKEAWAYS FDI in entities offering games with no real-money rewards is legal and shall not be prohibited under the FDI Policy. For an online game to be considered ‘gambling’, it shall: (i) predominantly be a ‘game of chance’; and (ii) be played for a real-money reward. 2. Gameskraft Technologies Private Limited v. Directorate General of Goods Services Tax Intelligence & Ors. Factual Matrix Gameskraft Technologies Private Limited (“Petitioner”) is a company engaged in developing skill-based online games such as ‘Rummyculture’. In November 2021, the GST authorities (“Respondents”) having conducted search and seizure operations at the Petitioner’s premises, alleged that the Petitioner had suppressed taxable amounts and passed certain orders (“Attachment Orders”) attaching the Petitioner’s bank accounts (“Attached Accounts”), to which the Petitioner filed several objections in the Hon’ble High Court of Karnataka, but to no avail. In December 2021, the Petitioner challenged the Respondent’s orders attaching the Attached Accounts pursuant to which, the Hon’ble High Court of Karnataka issued an order, allowing the Petitioner to operate the Attached Accounts for limited purposes. In August 2022, the Hon’ble High Court of Karnataka directed that no further action be initiated against the Petitioner by the Respondents. However, soon thereafter, in September 2022, the Respondents issued an intimation notice to the Petitioner under the applicable GST provisions, demanding that the Petitioner deposit a sum of approximately INR 21,000 crores along with applicable interest and penalty (“Intimation Notice”). Thereafter, in March 2020, the Petitioner filed yet another Compounding Application with the RBI, which the RBI returned to Petitioner, citing that the DPIIT Clarification was still not obtained by the Petitioner. Despite multiple communications with the RBI, there was no tangible outcome with regards to the DPIIT Clarification. In light of the same, in May 2021, the Petitioner filed the present petition against the RBI before the Hon’ble Bombay High Court alleging that the Compounding Application was being unreasonably delayed by the RBI. Contentions and the question in point PartyContentionsPetitioner– The Petitioner merely hosts the ‘rummy’ game and the discretion to play a game and the stake for which it is to be played lies entirely with the players. The Petitioner merely charges 10% of the players’ winnings as ‘platform fees’. – The Respondents’ contentions under the Impugned Notice were completely false, perverse, malicious and deserved to be disregarded on the following grounds: the game ‘rummy’ is a ‘game of skill’ as per well-established judgements of the Hon’ble Supreme Court of India and thus, the Petitioner cannot be said to have... --- - Published: 2023-09-12 - Modified: 2025-02-07 - URL: https://treelife.in/news/reverse-flipping-for-startups-a-new-shift-towards-india/ - Categories: News - Tags: expertadvice, flipping, legal, reverse flip First Published on 12th September, 2023 In today’s globalized era, the world feels more interconnected than ever. Many companies are expanding internationally, setting up offices worldwide, and seeking new markets for their products. Some startups, including some unicorns, have relocated their holding company outside India in a process known as “flipping” to capitalize on global opportunities. Understanding the Flipping Phenomenon Flipping, in the Indian startup realm, refers to the practice where startups, originally based in India, restructure their corporate structure to relocate their holding company and intellectual property (IP) to foreign jurisdictions, usually the United States or Singapore despite having a majority of their market, personnel and founders in India. The primary reasons for startups to externalize their corporate structure inter-alia are access to deeper pools of venture capital, favorable tax framework, market penetration and brand positioning as an international entity, which can be beneficial in terms of attracting global talent and customers. However, recent times have seen an emergence of an interesting counter-trend: ‘Reverse Flipping’ or ‘De-externalization’. However, recent times have witnessed an intriguing counter-trend: ‘Reverse Flipping’ or ‘De-externalization’ i. e. Indian startups are opting to reverse flip back into India due to its favorable economic policies, burgeoning domestic market, and growing investor confidence in the country’s startup ecosystem. The Emergence of Reverse Flipping Reverse flipping, as the name suggests, is the antithesis of the flipping trend. Here, startups that once relocated their holding companies outside India are now considering a strategic move back to their home ground, India. As mentioned above, one of the primary reasons for reverse flipping back to India is the fact that the Indian startup ecosystem has matured significantly in recent years. There is now a large pool of untapped domestic retail investors who want to invest in emerging companies they believe have the potential to grow. Additionally, the Indian government is taking steps to make it easier for startups to go public, which could make it more attractive for startups to reverse flip. Take, for example, PhonePe. Originally an Indian entity, it flipped its structure to Singapore but has now moved its base back to India. In doing so, the founders have gone on record to say that the investors had to pay almost INR 8,000 crore of taxes to the Indian Government. It also stands to lose the chance to offset its accumulated losses of almost INR 7,000 crore against future profits due to this restructuring. Also, all employees had to be migrated to a new India-level ESOP plan which stipulates a minimum 1 year cliff thereby resetting the vesting status to zero with a 1 year cliff. PhonePe is not alone. Several startups like Razorpay and Groww are also evaluating this shift, acknowledging the promise that the Indian market holds. How to Reverse Flip? Structuring a reverse flip is not easy and startups considering this reverse journey have to navigate a maze of regulations. Some popular methods include share swaps, mergers, etc and could also require approval from NCLT. Startups need to be aware of the potential tax and exchange control implications that come with such a restructuring exercise. When a startup’s valuation has increased significantly since its initial flip, there can be significant tax consequences upon reverse flipping. The process can be perceived as a ‘transfer of assets’, leading to capital gains tax implications in India and possibly even in foreign jurisdictions. This can also technically lead to a change in beneficial ownership, thereby risking the accumulated losses for setoff against future profits. Startups also need to navigate the exchange control regulations when repatriating funds or assets to India, ensuring all compliances are met. While the above provides a birds-eye view, it’s imperative for startups to consult experts for a tailor-made approach, aligning with their unique business needs and ensuring compliance with the tax and regulatory framework. What is the Government saying? Indian Economic Survey 2022-23 acknowledged the concept of reverse flipping and has listed possible measures that can accelerate the reverse flipping process for startups including simplifying the process for granting tax holidays to start-ups, simplification of taxation of ESOPs, simplifying multiple layers of tax and uncertainty due to tax litigation, simplifying procedures for capital flows, etc. The International Financial Services Centres Authority i. e. IFSCA has also constituted an expert committee to formulate a roadmap to ‘Onshore the Indian innovation to GIFT IFSC’. IFSCA plans to make GIFT City, India’s first IFSC, the preferred location for startups to reverse flip into. This expert committee submitted its report1 on 25 August 2023 with recommended measures to be undertaken by various stakeholders such as ministries and regulatory bodies in implementing the idea of onshoring the Indian innovation to GIFT IFSC. In Conclusion The trend of reverse flipping underscores the belief in India’s potential as a global startup hub. While challenges exist, the long-term benefits of tapping into the domestic market, coupled with the strengthening startup ecosystem, are compelling many to look homeward. It will be intriguing to witness how this trend evolves and shapes the future. Looking for expert contract advice? Call us at +91 99301 56000 today. --- - Published: 2023-09-07 - Modified: 2025-08-07 - URL: https://treelife.in/legal/liquidation-preference-in-venture-capital-deals/ - Categories: Legal - Tags: liquidation, startups, VC, venture capital What is Liquidation Preference? A Liquidation Preference provision sets out the level of priority that an investors’ shares receive for the purpose of recovering their initial investment (or a multiple thereof) upon trigger of a liquidation event. A liquidation event typically includes winding up, sale of substantial assets of a company, change of control, merger, acquisition, reorganization and other corporate transactions, among others. How Liquidation Preference Helps an Investor? 1Recovery of InitialA liquidation preference allows the investors to recover at least their initial investment in a company. 2Multiple on the Initial InvestmentA liquidation preference provision also allows the investors to earn a multiple on their initial investment, i. e. , instead of 1x, investors may seek 2x or more, if so agreed. 3Distribution in order of seniorityA liquidation preference clause allows the distribution of the proceeds to be in an order of priority on the basis of the series of securities held by the investors. . Types and Mechanics of Liquidation Preference Types of Liquidation Preference Type of LPParticularsNon-participating Liquidation Preference1xAllows the investors to recover only their initial investment in the company. 1x or pro-rata, whichever is higher* (single dip)Allows the investors to recover their initial investment or entitles them to the proceeds from the liquidation event, basis their pro-rata shareholding in the company (on an as-if converted basis), whichever is higher. Participating Liquidation Preference1x (double-dip)Allows the investor to recover their initial investment (or a multiple thereof) in addition to a right to participate in the remaining proceeds basis their pro-rata shareholding in the company. *Note:The multiple on the liquidation preference may be more than 1x and the amount of distribution of the liquidation preference shall be determined basis such a multiple. Let us understand the mechanism of different types of liquidation preference through the below illustration: Investment AmountINR 10crPercentage shareholding in the Company10% . Scenario 1: Non-participating liquidation preference 1x or pro rata, whichever is higher Total Liquidation proceeds*Investors’ liquidation entitlement (2x)Investors’ liquidation entitlement (pro-rata)Actual entitlementINR 20crINR 10crINR 2crINR 10cr. INR 200crINR 10crINR 20crINR 20cr. *Note: The total liquidation proceeds are the total proceeds from a liquidation event which are subject to distribution between the shareholders. 2x or pro rata, whichever is higher Total Liquidation proceeds*Investors’ liquidation entitlement (2x)Investors’ liquidation entitlement (pro-rata)Actual entitlementINR 20crINR 20crINR 2crINR 20cr. INR 400crINR 20crINR 40crINR 40cr. . This form of liquidation preference is most desirable as, while it allows the investors to recover their initial investment, it also enables them to take advantage of the upside in case the larger proceeds are accumulated from a liquidation event. It is however, not recommend signing up for a multiple on the investment amount. Scenario 2: 1x (participating liquidation preference) Total Liquidation proceeds*Investors’ liquidation entitlement (1x)Investors’ liquidation entitlement (pro-rata)Actual EntitlementINR 20crINR 10crINR 2crINR 12crINR 500crINR 10crINR 50crINR 60cr. . While this may seem like a desirable form of liquidation preference, in the event the structure of a liquidation is not pari passu, i. e. , in case the liquidation clause provides for a seniority, this may lead to disadvantage to the holders of equity shares (in most cases, the founders). Conclusion In conclusion, while liquidation preference is a crucial right for the investors, it is important for the founders to be mindful about the construct of this provision. Early stage founders are recommended to consider the 1x non-participating liquidation preference, preferably provided in Scenario 1. Excessive or stringent liquidation preferences can deter future investment rounds and put the founders at risk of reduced share in the liquidation proceeds. --- - Published: 2023-08-21 - Modified: 2025-02-10 - URL: https://treelife.in/compliance/compliance-with-the-indian-digital-personal-data-protection-act-2023/ - Categories: Compliance - Tags: B2B SaaS, compliance, data privacy, data protection, digital personal data protection, indian startups, legal, SaaS, startups For: B2B SaaS businesses The Digital Personal Data Protection Act, 2023 (“Act”) is intended to safeguard and protect digital personal data, and (inter alia) govern the manner in which it can be collected, stored, processed, transferred, and erased. The Act imposes requirements on data fiduciaries/collectors and data processors, as well as certain duties on the data subject/individual with respect to personal data. “Personal Data” under the Act includes any digital or digitized data about an individual (including any data which can be used to identify an individual). This excludes any non-digital data, or any data which cannot be used to identify an individual in any manner (including in concert with any other data). This document is intended to provide a summary of the obligations of B2B-based SaaS business, which arise from the Act. An Overview The key obligations of businesses towards complying with the Act include: Identify the extent of Personal Data collection, storage and processing which your business undertakes, and how much is necessary. Prepare notices for procuring consents from individuals whose Personal Data you collect, store, and process (including those individuals whose Personal Data has already been collected and/or is being stored or processed), specifying: Type/s of Personal Data you will use; The specific purpose/s you will use it for; The manner in which they can withdraw consent or raise grievances; and The manner in which they can make a complaint to the Data Protection Board of India. Maintain a record of consents procured and provide the following rights: Right to request for (i) summary of their Personal Data being used; and (ii) identities of parties to whom their Personal Data has been transferred; Right to correct, update and/or delete Personal Data (unless required to be retained for compliance with law); Right to redressal for grievances and complaints; Right to nominate another individual to exercise their rights (in the event of death or incapacity) Action Items While B2B SaaS platforms have limited Personal Data collection, Personal Data can still be collected and processed in case of user accounts for individuals/employees/representatives of enterprise customers. Businesses can take the following actions towards compliance with the Act: Data audit: Carry out an internal data audit, including identifying Personal Data collection, storage and processing requirements; Limit Personal Data usage: Erase or anonymize Personal Data to the extent feasible to reduce the compliance and associated risks, or limit the Personal Data points which are collected; Update your product to enable privacy rights: Businesses should therefore make available on the SaaS tool / platform functionalities to: Issue notices for procuring consent for Personal Data collection, storage and processing prior to any such collection, storage or processing. These notices can be worded in simple and clear terms so as to enable individuals to know their rights, and should include language which clearly states that consent is provided for collection, storage, and processing (including processing by third-parties); specify the purpose/s for the type or types of processing. For example – in case the processing will be done for purposes A, B and C, consent will have to procured specific for each of A, B and C; mention that consent can be withdrawn Request modification, correction, updating, or erasure of Personal Data. Other than any Personal Data which is necessary for providing the services (for example, corporate email IDs), all Personal Data should be subject to modification or erasure pursuant to withdrawal of consent. Appoint person/s who can handle complaints, grievances, or requests from individuals. This can be an individual assigned specifically for this task or a team responsible for ensuring speedy response. Implement technical measures to protect against and mitigate data breaches and their consequences. The Act requires fiduciaries/collectors to “take reasonable security safeguards to prevent personal data breach”, which can include cloud monitoring, penetration testing, ISO certification, etc. , depending on the sensitivity and extent of Personal Data. --- - Published: 2023-08-21 - Modified: 2025-07-21 - URL: https://treelife.in/news/phonepe-reverse-flip-to-india-unraveling-the-strategic-shift-and-its-impact/ - Categories: News - Tags: flip, India markets, indian startups, jurisdiction, legal, markets, reverse flip, startups First Published on 21st August, 2023 The Reverse Flip What is Reverse Flip? “Reverse flip” or “re-domiciliation” refers to a corporate restructuring process in which a company changes its country of domicile or legal registration from one jurisdiction to another. Background PhonePe was incorporated in 2015 in India In April 2016, PhonePe was acquired by Flipkart. As part of the acquisition, PhonePe flipped its structure to Singapore In 2018, PhonePe became a part of Walmart after it acquired Flipkart In October 2022, PhonePe announced that it has moved its domicile to India (reverse flip) for following key reasons: PhonePe wants to focus on India markets for the next couple of decades. PhonePe is a digital payments company that operates primarily in India. By redomiciling to India, PhonePe can be more responsive to the needs of its customers and partners. The Indian government has been tightening regulations for digital payments companies in recent years. By redomiciling to India, PhonePe can be more easily compliant with these regulations. To be better positioned for an IPO. PhonePe is expected to go public in the next few years What Happened? Steps undertaken PhonePe moved all businesses and subsidiaries of PhonePe Singapore to PhonePe India directly PhonePe created a new ESOP plan at India level and migrated all group employees to this new plan IndusOS, owned by PhonePe, also shifted operations from Singapore to PhonePe India Key Consequences of Reverse Flip to India Lapse of accumulated losses of USD 900 million PhonePe stands to lose the chance to offset its USD 900 million (~INR 7,380 crore) of accumulated losses against future profits as shifting the domicile from Singapore to India is viewed as a restricting event under Section 79 of the Income Tax Act, 1961 As per the provisions of Section 79, a company is not allowed to carry forward the losses if the change in beneficial ownership of shareholding of more than 50% occurred at the end of year in which losses were incurred Reset of ESOPs to zero vesting with 1 year cliff All employees of PhonePe were migrated to the new India level ESOP plan which stipulates a minimum 1 year cliff. Thus, the employees vesting status was reset to zero with a 1 year cliff Tax payout by investors of almost INR 8,000 cr PhonePe investors, led by Walmart, sold their stake in the Singapore entity and invested in PhonePe India This means that there was a capital gains tax event in India for the the investors leading to a tax-pay-out of almost INR 8,000 cr Other Startups looking at Reverse Flip Razorpay is in process to move its parent entity from the US to India Groww is planning to move its domicile from the US to India Pepperfry has reverse flipped their structure to India via amalgamation Source: https://economictimes. indiatimes. com/tech/technology/phonepe-shifts-headquarters-from-singapore-to-india/articleshow/94621544. cms https://www. bqprime. com/business/after-phonepe-razorpay-kicks-off-reverse-flipping-process https://youtu. be/MFjh0rp_dbM? si=J1MsXQ4vSlfwc6cZ https://en. wikipedia. org/wiki/PhonePe#:~:text=10%20External%20links-,History,the%20CEO%20of%20the%20company https://inc42. com/features/unicorn-desh-wapsi-reverse-flipping-is-the-new-startup-sensation --- - Published: 2023-08-05 - Modified: 2025-01-21 - URL: https://treelife.in/legal/the-draft-national-deep-tech-startup-policy/ - Categories: Legal The Office of Principal Scientific Advisor to the Government of India published the Draft National Deep Tech Startup Policy (NDTSP) for public recommendations. According to Startup India’s database, as of May 2023, more than 10,000 startups in India can be classified within the deep tech space and it is imperative to address the complex problems in the ecosystem. Deep tech Definition Deep tech refers to technologies which are based on pioneering scientific breakthroughs, which help providing solutions to complex problems. Deep tech conceptually includes the segment of Artificial Intelligence, Big data and analytics, Robotics, Internet of Things, Blockchain, etc. , however, it is seldom difficult to make that identification. The NDTSP recognizes that in order to understand the issues in the ecosystem, it is important to focus on identifying what qualifies as ‘deep tech’. While doing so may be challenging, the NDTSP aims to establish a framework of a working group that would be responsible in identifying the techno-commercially viable startups, which would further enable the creation of a definitive criterion for determining whether a startup can be qualified as ‘deep tech’. Objective of the NDTSP The NDTSP seeks to address the needs, complex challenges and strengthen the deep tech startup ecosystem by complimenting the current Start-up India policies and initiatives. The NDTSP aims to thematically prioritize the areas that require intervention and propose policy level changes in order to create a conducive ecosystem for the deep tech startups in the following manner: Nurturing Research, Development & Innovation The NDTSP aims to bolster research, development and innovation by incentivizing researchers, facilitate seamless dissemination of knowledge and set up platforms for protection and commercialization of IP. The primary priority of the policy is to increase gross expenditure on research and development by encouraging public and private investment through patient capital. Strengthening Intellectual Property Regime The NDTSP recognizes that the deep tech ecosystem lacks specialized support in obtaining patents required for such cutting-edge technology. In order to streamline the process of obtaining IP registrations, the NDTSP focuses on building framework for obtaining and managing the IP specifically in the deep tech space, capacity building for patent landscaping, monetary incentive for developing technologies with the government and other amendments in the current IPR Policy, 2016. Facilitating Access to Funding The NDTSP aims to enhance the already existing policies and programs of the government in order to tailor them for the requirements of the deep tech space by various initiatives such as setting up a centralized window to capture the lifecycle of government grant payments, assessment of the current CSR laws in order to facilitate CSR funding into the deep tech sector, building a dedicated deep tech guidance fund with longer tenure to match the gestation period of the deep tech startups, to mobilise the government, private and foreign funding in the ecosystem, reducing the compliance burden and onerous taxation in order to curb the relocation of startups to other countries with better taxation regimes, among others. Enabling Infrastructure Access and Resource Sharing The NDTSP recognizes the high cost required for the primary R&D in the frontier technology space and hence, it endeavours to provide access to shared infrastructure to deep tech startups at nominal fees. The NDTSP also aims to build other resource sharing mechanisms for dissemination of data to such startups, as well as dissemination of data expertise. Creating Conducive Regulations, Standards and Certifications The NDTSP encourages establishment of mechanisms such as regulatory sandboxes that would help startups, end-users, industry, and regulatory experts to test the technology in a controlled environment while gathering evidence on functionality and potential risks of the technology. The NDTSP also focuses on providing subsidies and exemption in certification and accreditation costs for deep tech startups. This enables experimentation of frontier technology to comply with existing regulatory frameworks. Attracting Human Resource & Initiate Capacity Building The NDTSP places great impetus on capacity building vis-à-vis encourages establishment of knowledge dissemination mechanisms in different segments of frontier technology, creation of accessibility to the educational resources and building inclusive framework for encouraging involvement of women and people from tier II and tier III cities in augmenting the deep tech ecosystem. Promoting Procurement & Adoption The NDTSP advocates for public procurement as a market for deep tech startups and aims to enhance the current programs and initiatives by implementing targeted interventions. The NDTSP urges the government to take a higher risk on such deep tech startups and enable public procurement to be the first market for such startups. Enhancing Policy & Program Interlinkages While many policies to encourage the deep tech segment are already established, the NDTSP encourages enhancing the policies and creating interlinkages in already existing initiatives in order to create a larger impact. Sustenance of Deep Tech Startups Lastly, considering the gestation period of deep tech startups, the policy aims to set mechanisms and provide a roadmap to the startups engaged in building frontier technology to ensure sustainable growth by implementation of funding sensitization programs, facilitation of meaningful partnerships, among many other initiatives. While the initiative of formulating a policy for the deep tech ecosystem is meritorious, it would be interesting to witness how the policy shapes up. Considering the nascent stage of the deep tech ecosystem in India and the multitudes of benefits that the deep tech actually offers, it is pertinent to encourage experimentation and high-risk investments in this ecosystem. The Draft National Deep Tech Startup Policy is open for public recommendation until September 15, 2023. --- > WhatsApp has become a ubiquitous messaging platform, with millions of users worldwide relying on it for personal and professional communication. - Published: 2023-07-21 - Modified: 2025-08-07 - URL: https://treelife.in/legal/validity-of-whatsapp-documents-as-court-service-a-changing-landscape/ - Categories: Legal - Tags: court, court service, legal, legal documents, whatsapp Introduction WhatsApp has become a ubiquitous messaging platform, with millions of users worldwide relying on it for personal and professional communication. With the legal system having already embraced technology and digital transformation to streamline their processes and enhance accessibility and electronic filing systems, digital signatures, and online platforms for case management, it has now also started accepting WhatsApp as a tool to enhance client communication and flow of information. Courts in India have also started accepting service of documents sent through WhatsApp to be valid service in certain situations. Here is an analysis of accepting WhatsApp as a valid platform for service: Proof of Delivery One of the primary requirements for accepting WhatsApp documents as valid court service is the ability to prove delivery. Traditionally, a clear paper trail was created through registered mail or in-person delivery to demonstrate that the documents were received by the intended recipient. With WhatsApp, the challenge lies in establishing irrefutable evidence of delivery. Acknowledgment and Read Receipts WhatsApp offers features like read receipts and acknowledgment indicators, which can serve as evidence of delivery and receipt of documents. When a recipient opens and reads a message, the sender can receive a read receipt, providing a timestamp as proof of delivery. Additionally, if the recipient acknowledges receiving the message or responds to it, it further strengthens the case for the validity of WhatsApp documents as court service. Authentication and Integrity Courts place a high value on document authenticity and integrity. When considering WhatsApp documents as valid court service, it becomes crucial to establish the authenticity of the sender and the integrity of the document. Verification mechanisms, such as digital signatures or encryption, can help ensure that the documents have not been tampered with and that they originate from the identified sender. Confidentiality of documents and service is another concern faced by courts, however, WhatsApp claims to incorporate end-to-end encryption. Legal Framework and Precedents Courts in India have explicitly started recognizing WhatsApp as a valid platform of communication and service of documents related to court proceedings. However, burden of proof of service lies entirely on the party claiming service to have been completed through WhatsApp. Cost-Effective Solution Adopting WhatsApp as a communication tool can be a cost-effective solution for legal service providers and helps reduce wastage of paper. Instances where courts have accepted service done via WhatsApp to be valid The Delhi High Court set a precedent in 2017 in Tata Sons Limited & Ors Vs John Does, by allowing service of summons through WhatsApp after the Defendants evaded service though regular modes. Thereafter, in SBI Cards and Payments Services Pvt Ltd Versus Rohidas Jadhav, the Bombay High Court accepted the service of notice in an execution application after finding that the PDF file containing the notice had not only been served but the attachment had also been opened by the opposite party. Justice G. S. Patel observed that “For the purposes of service of Notice under Order XXI Rule 22, I will accept this. I do so because the icon indicators clearly show that not only was the message and its attachment delivered to the Respondent’s number but that both were opened. Justice G. S. Patel at Bombay High Court in Kross Television India Pvt Ltd & Anr Vs. Vikhyat Chitra Production & Ors. has also held that the purpose of service is to put the other party to notice. Where an alternative mode (email and WhatsApp) is used and service is shown to be effected and acknowledged, it cannot be suggested that there was ‘no notice’. The Rohini Civil Court at Delhi in a case has also accepted the blue double-tick sign in a WhatsApp message as valid proof that the message’s recipients had seen a case-related notice. Conclusion As the Supreme Court is yet to lay down a precedent or ruling accepting Whatsapp as valid medium of service. The acceptance of WhatsApp documents as valid court service is a complex issue that requires careful consideration of factors such as proof of delivery, acknowledgment, authentication, and adherence to legal frameworks. As the Indian courts continue to navigate the digital landscape and embrace technology, it is essential for legal professionals, lawmakers, and technology providers to work together to establish clear guidelines and standards that safeguard the integrity of court proceedings while embracing the efficiencies offered by modern communication platforms like WhatsApp. The courts incorporating WhatsApp as part of the legal service workflow demonstrates the industry’s commitment to adapting to the evolving needs of clients in an increasingly digital world. --- - Published: 2023-06-27 - Modified: 2025-08-07 - URL: https://treelife.in/legal/merge-ahead-fast-track-your-way-to-competitive-advantage/ - Categories: Legal Meaning A fast-track merger is a streamlined process for combining two or more companies. It is typically designed to expedite the merger process, reduce administrative burdens, and facilitate efficient integration of the merging entities. It involves simplifying certain procedural steps and regulatory approvals, allowing the merger to be completed quickly. Eligibility Criteria A scheme of merger or amalgamation under section 233 of the Companies Act, 2013 may be entered into between any of the following classes of companies, namely:- A holding company and its wholly-owned subsidiary company or such other class or classes of companies; Two or more start-up companies; or One or more start-up companies with one or more small companies*. *Small Company means a company whose paid up capital is maximum Rs 4 crore and turnover is maximum Rs 40 crore Highlights of Recent Amendment The Ministry of Corporate Affairs (“MCA”) made amendments to Rule 25 of the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016, on 15th May, 2023 which states that the Central Government (CG) now has a specific timeframe to approve merger and amalgamation schemes, addressing the previous absence of a defined time frame for approval from the Registrar of Companies (“ROC”) or Official Liquidator (“OL”). The purpose of these amendments is to streamline and expedite the merger and amalgamation process specifically for start-up companies and small companies under section 233 of the Companies Act, 2013. Step Plan for a Fast-track Merger Step 1: Authorization under Articles & Memorandum of Association Step 2: Draft a scheme of merger ("Scheme") Step 3: Convene a Board Meeting approving the Scheme Step 4: Declaration of solvency with the ROC Step 5: Convening meetings of Shareholders & Creditors Step 6: Filing a copy of Scheme with Regional Director ("RD"), ROC, OL for inviting objections Step 7: No Objections from the authorities Step 8: If found within public interest RD may approve the scheme Step 9: File form INC 28 with ROC within 30 days of approval from RD Amendments are as follows Note: The Scheme in each of the aforementioned situations shall be approved or deemed to be approved only if the same is in the public interest or in the interest of the creditors IFTHENNo objection/ suggestion received by the CG from ROC/OL within 30 days of the receipt of copy of scheme. CG shall confirm and approve the scheme within 15 days after the expiry of 30 days. No confirmation from CG within 60 days from the receipt of the scheme. The scheme shall be deemed to be approved. On receipt of objections/ suggestions from ROC/ OL where such objection/ suggestion are not sustainable. CG shall approve the scheme and issue confirmation order within 30 days after the expiry of 30 days. If no confirmation order is issued within the aforementioned period, it shall be deemed that it has no objection to the scheme and a confirmation order shall be issued accordingly. On receipt of objections/ suggestions from ROC/ OL where CG is of opinion that the scheme is not in the public interest or in the interest of creditors. CG shall file an application with the tribunal within 60 days of receipt of the scheme, requesting the tribunal to consider the scheme in the regular manner. If CG does not file the application within the aforesaid period, it shall be deemed that it has no objection to the scheme and a confirmation order shall be issued accordingly. --- - Published: 2023-06-13 - Modified: 2025-07-16 - URL: https://treelife.in/legal/incorporation-of-an-indian-company/ - Categories: Legal Pre-requisites for incorporation Proposed Name•Name to be available and unique. Should contain the nature of business •Minimum 2 names to be proposedShare Capital•Authorized and paid-up share capital to be determined •Sample capital structure: -10,000 equity shares of INR 10 per share -Total paid-up capital of INR 100,000 -Total authorized capital of INR 1,000,000Directors•Minimum 2 directors required •Minimum 1 director to mandatorily be Indian residentShareholders•Minimum 2 shareholders requiredRegistered Office Address•Commercial property/office location required as registered address •Services of co-working office spaces can also be availed for virtual office address Incorporation process Step 1 – Obtain DSC of directors & shareholders Approx TAT: 2 Days Key documents/information required to be filed: Aadhar/PAN card, contact no. & email address and photo of individual Step 2 – File for name application Approx TAT: 3 Days Form: Spice+ Part-A Key documents/information required to be filed: a. 2 proposed names of company b. NIC code along with 2-3 sentences about proposed business of company Step 3 – File incorporation documents Approx TAT: 1 Days Form: Spice+ Part-B Key documents/information required to be filed: A. Shareholder and director details + KYC proofs KYC documents of foreign director and shareholder need to be apostilled and notarized in home country B. Company details – Share capital (authorized and paid up), registered office address, email address and contact no. Note: TAT is subject to MCA website On approval of spice forms, company incorporation is complete Certificate of incorporation, PAN, and TAN are issued to the company Company can open bank account Post – incorporation process STEP 1 – Post incorporation filings A. FORM ADT 1 Approx TAT: 2 Days Key documents and information required to be filed: – Auditor details – Name of auditor/auditor’s firm along with partner’s name, PAN, Membership no. , registered address, email address, written consent & certificate stating he/she is not disqualified for appointment – Company’s board resolution appointing such auditor B. FORM INC 20A Approx TAT: 2 Days Key documents/information required to be file: Bank statement of company showing inward receipt of subscription money from subscribers Company can issue share certificates to its shareholders STEP 2 – RBI filing in case of foreign investor Form: FC-GPR Approx TAT: 2 Days* (*2 days from receipt of FIRC and KYC from AD bank) Key documents/information required to be filed: FIRC and KYC for the fund transfer in foreign exchange entity master registration and business user registration to be obtained on FIRMS portal Obtain initial registrations: Shops & establishment registration Profession tax registration GST registration Udyog Aadhar/MSME registration Startup India registration Angel tax exemption For further details on licenses and registrations, refer to the document attached here. --- - Published: 2023-06-12 - Modified: 2025-01-21 - URL: https://treelife.in/legal/case-summary-lgbtq-marriage-rights-in-india/ - Categories: Legal Supriyo @ Supriya Chaktraborty & Anr. v. Union of India For a presentation view, click here! Factual Matrix • The nature of the subject matter of the case at hand has been weighed and adjudicated upon around the world across various jurisdictions. In order to observe the case at hand more objectively and illuminate the grounds and discussions which have been placed before the Honourable Supreme Court thus far, we have laid out a summary of the facts of the case: • The Petitioners identify themselves as gay men and are Indian citizens. Both petitioners, presently aged about 32 and 35 years respectively, have been in a committed relationship for almost a decade. • On 17. 08. 2021, the Petitioners held a ceremony in the presence of their families, friends and colleagues. • However, despite a decade long committed relationship, the Petitioners are unmarried in the eyes of law as the legal regime around recognition and solemnization of marriages excludes marriage between a same-sex couple. • Despite the ceremony, the Petitioners realized that they are legally incapable of exercising the rights of married individuals and strangers in the eyes of the law, such as securing health insurance which would include their partner, nominating each other for life insurance, mutual funds, PPF, pension scheme, or any other financial instruments. Legally, they do not have the right to inheritance, property, to take medical or end-of-life decisions pertaining to each other. • In light of the same, the Petitioners filed their PIL before the Hon’ble Supreme Court seeking recognition and solemnization of same-sex marriage. Questions In Point The Hon’ble Supreme Court is hearing the matter based involving the following issues: • Recognition of Same-Sex Marriage: Whether same-sex marriage or non-heterosexual marriage can be recognized and solemnized under the Special Marriage Act, 1954? • Constitutionality of the Special Marriage Act: Whether the Special Marriage Act, 1954 can be declared to be unconstitutional and violative of Articles 14, 15, 19 and 21 of the Constitution of India to the extent that it does not provide for solemnization of marriage between a same sex couple? Recognition of same-sex marriage PetitionersUoI• Broad interpretation to be made of the word “spouse” under Special Marriage Act, 1954 (“SMA”) and its meaning should not be confined merely to and be read as “a man and a woman”. Additionally, Section 4, SMA, which refers to a marriage in gender-neutral terms, between ‘any two persons’. However, it was clarified that merely amending the SMA isn’t enough and that a constitutional declaration of marriage, akin to that of the heterogeneous group, is needed. • It is important to remove the 30-day notice period under Section 5 of the SMA on the grounds that it invites unwarranted interference and such notice period violates an individual’s privacy along with their personal and decisional autonomy. • Advocate Abhishek Manu Singhvi, Counsel to the Petitioner stated that “But on the canvas there are two crucial words here. ‘Marriage’ and ‘persons’. ‘Same sex’ is a slight misnomer. The correct word is ‘person’, not ‘same sex’. ”* • It was contended that the State could not deny marriage equality on grounds of “impracticality” as the discriminatory laws were created by it • Excluding the LGBTQIA+ community from their right to marry sends a message that it is legitimate to differentiate between the commitments of heterosexual and non-heterosexual couples, by indicating that the latter’s marriages are not as significant as “real” marriages. • The Supreme Court could not hear this case as it fell under the powers of Parliament. The Respondent’s Counsel argued that there are certain issues which are better left to the discretion of the Parliament. There is no discrimination, no breach of privacy, right of choosing one’s sexual orientation. • It was argued that argued that 160 laws would be impacted in the process of bringing marriage equality. • It was argued that the subject of marriage is in the concurrent list and the possibility of one state agreeing to it and another against it cannot be ruled out. In this scenario, the maintainability of the petition would come into question. • Counsel to the Respondent stated that “Societal acceptance of any relationship in the society is never dependent either on legislation or on judgments. It comes only from within. Let us accept it whether we like to accept it or not. ” • It was argued that the legislative intent of the legislature throughout has been a relationship between a biological male and a biological female including Special Marriage Act. • It was argued that the concept of biological man means a biological man and the question of notion does not arise. Recognition of same-sex marriage Constitutionality of the Special Marriage Act PetitionersUoI• The Counsel argued that “The right to marry non-heterosexual unions is implicit in Articles 14, 15, 16, 19 and 21 of the Indian Constitution, especially after the Supreme Court rulings in “Navtej Singh Johar vs. Union of India” and “KS Puttaswamy and Anr. vs. Union of India”. • It was contended that the State could not deny marriage equality on grounds of “impracticality” as the discriminatory laws were created by it. • It is a civil union, as permitted in some countries, is not a solution to what same-sex couples are asking for.  civil unions are not an equal alternative and do not address constitutional anomalies presented by excluding non-heterosexual couples from the institution of marriage • Excluding the LGBTQIA+ community from their right to marry sends a message that it is legitimate to differentiate between the commitments of heterosexual and non-heterosexual couples, by indicating that the latter’s marriages are not as significant as “real” marriages. • Adv. Mukul Rohatgi argued that “Gender identity is one of the most fundamental aspects of life and refers to a person’s intrinsic sense of being male, female or transgender or transsexual. ” • Inalienable right to privacy must be granted in sanctity of a natural right to privacy in the Constitution as a fundamental right and the soulmate of dignity. Therefore, privacy,... --- - Published: 2023-06-12 - Modified: 2025-02-05 - URL: https://treelife.in/legal/diversity-inclusion-policy-in-india/ - Categories: Legal Introduction The Constitution of India explicitly prohibits discrimination based on sex, race, religion, or on any other ground, but it has taken some time for this protection to be extended to LGBTQ+ individuals. The landmark judgment in NALSA v. Union of India case in 2014 marked a progressive interpretation by the Supreme Court, which recognized that discrimination based on sexual orientation and gender identity falls within the ambit of “discrimination on the grounds of sex. ” The court emphasized that such discrimination violates the fundamental right to equality enshrined in the Constitution. In a subsequent case, Navtej Singh Johar v. Union of India, the Supreme Court took one step forward by acknowledging that the freedom to choose one’s sexual orientation and express one’s gender identity, including through dress, speech, and mannerisms, is at the core of an individual’s identity. Although there is an absence of standalone anti-discrimination legislations in India, certain laws such as the Rights of Persons with Disabilities Act, 2016, the Equal Remuneration Act, 1976 (along with the Code on Wages, 2019), the Human Immunodeficiency Virus and Acquired Immune Deficiency Syndrome (Prevention and Control) Act, 2017, and the Transgender Persons (Protection of Rights) Act, 2019, do contain provisions addressing discrimination against individuals falling under the ambit of the aforementioned laws. A major drawback of the Equal Remuneration Act, 1976 is that while it encourages pay parity at workplaces, however its scope is restricted to merely two genders, i. e. , men and women thereby alienating an individual with a different sexual orientation from obtaining the benefits under this legislation. This piece highlights the various workplace policies in India and the need to make them more inclusive for the disabled persons and those belonging to LGBTQ+ communities. Equal Opportunity Policy under Rights of Persons with Disabilities Act, 2016 The Rights of Persons with Disabilities Act (“Act”) requires all establishments to have an equal opportunity policy (EOP) specifically for individuals with disabilities. This policy must be made publicly available, preferably on the establishment’s website or in conspicuous locations within the premises. The EOP should outline the facilities and services that will be provided to enable individuals with disabilities to fulfill their responsibilities effectively in the establishment. Furthermore, if the organization employs 20 or more individuals, the EOP must include the following details: A comprehensive list of positions within the establishment that are deemed suitable for individuals with disabilities; The procedure for selecting individuals with disabilities for different positions, as well as providing post-recruitment and pre-promotion training, prioritizing them in transfers and job assignments, granting special leave, allocating residential accommodation if available, and offering other necessary facilities. Provisions for assistive devices, ensuring barrier-free accessibility, and implementing other necessary measures to accommodate individuals with disabilities. Information about the designated liaison officer. It is mandatory for every establishment with 20 or more employees to appoint a liaison officer responsible for overseeing the recruitment of individuals with disabilities and ensuring the provision of necessary facilities and amenities. A copy of the EOP must be registered with the relevant authority (whether a Chief Commissioner or State Commissioner, as the case may be) specified by the law. Can POSH Policy be Gender Neutral? The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (“POSH Act”) is an Indian legislation designed to address workplace sexual harassment and ensure a safe working environment for women. Although the law primarily aims to protect women due to the widespread gender-based discrimination they face, it does not exclude or expressly/impliedly prohibit inclusion of men or individuals of other gender identities from receiving protection. It is important to recognize and address the experiences of all individuals who may encounter sexual harassment, regardless of their gender identity. It is important to note that in the POSH Act, there is no bar on gender for the respondent, i. e. , although the victim can only be a woman, but there is no specific gender mentioned for the respondent. Therefore, the term “respondent” encompasses all genders. During the legislative process, the idea of enacting a gender-neutral law was discussed. However, this discussion primarily centered around men’s rights groups advocating for equal treatment and was framed as a debate between men and women. In response to this, the Parliamentary Standing Committee in 2011 proposed that the law should remain specific to one gender, citing the historical disadvantages, discrimination, abuse, and harassment faced by women. The committee based its recommendation on the belief that women are particularly vulnerable to workplace harassment, which hinders their ability to work. The primary objective of maintaining a gender-specific law was to increase female participation in the workforce and establish a robust mechanism to safeguard women’s employment rights. In Anamika v Union of India, the Delhi High Court ruled that transgender individuals can utilize the protection under provisions related to sexual harassment, (which are commonly resorted to in cases of harassment by men against women), to file complaints. It is pertinent to note that in this case, although the aggrieved person was a transgender, however she identified herself as a woman and possessed a legally sanctioned identity document as evidence. Provisions under Transgender Persons (Protection of Rights) Act, 2019 In 2014, the Supreme Court of India made a significant ruling in the case of National Legal Services Authority v. Union of India. This ruling played a crucial role in establishing the rights of transgender individuals in India. The court recognized the category of “transgender” as the “third gender” and introduced various measures to prevent discrimination against transgender individuals and protect their rights. The judgment also suggested that reservations should be made for transgender individuals in employment and educational institutions. Additionally, it affirmed the right of transgender individuals to identify their gender based on their self-perception, without the requirement of undergoing a sex reassignment surgery. The Transgender Persons Act requires all establishments, including private employers, to adhere to certain regulations: Prohibition of discrimination: Ensure a safe working environment and prevent any form of discrimination against transgender individuals in all aspects of employment, such as recruitment, promotions, infrastructure... --- > IPL Business Model. Disney Star – India TV rights Viacom 18 (Jio) – India Digital rights, non-exclusive rights and overseas digital and TV rights - Published: 2023-05-29 - Modified: 2025-03-05 - URL: https://treelife.in/reports/inside-indian-premier-league/ - Categories: Reports DOWNLOAD FULL PDF         --- - Published: 2023-05-27 - Modified: 2025-01-21 - URL: https://treelife.in/technology/what-is-blockchain-technology/ - Categories: Emerging Technology With the increasing awareness and hype surrounding Cryptocurrency, NFTs, and other Digital Currencies, understanding the concept of Blockchain Technology has become crucial. Blockchain technology is a distributed digital ledger that records data, documents, and transactions securely and transparently. Key Features of Blockchain Technology: Decentralized: Blockchain allows for a decentralized network composed of multiple nodes or participants. This ensures the network is secure and minimizes the risk of malicious interference while providing financial sovereignty and democratic control to participants. Peer-to-Peer (P2P): Blockchain technology leverages the power of P2P networks to provide a shared and reliable ledger of transactions. All nodes carry out the same tasks equitably without the presence of a central administrator. Transparency: Blockchain makes transaction history more transparent, as all nodes on the network share a copy of the document, enabling all users to see updated records. Security: Blockchain is superior to any other recording system, as it ensures all documents of transactions are updated or altered by consensus by the nodes in the network. This decentralized storage of information ensures that no individual holds the right to update records. Efficiency: Blockchain streamlines transactional processes through traditional paperwork, minimizes the risk of error, eliminates the involvement of third-party beneficiaries, and makes transactions efficient and faster. How Blockchain Technology Works: Blockchain technology is the concept of digitally storing data in the most transparent, secure, and efficient way. The data is recorded on blocks and chained together cryptographically to create an unalterable digital ledger. Each participant on the Blockchain network has access to the entire database and its history, ensuring transparency, security, and efficiency. Let us now try to understand the working of the Blockchain technology from the flowchart below: Types of Blockchains: Public Blockchain: Also known as Permissionless Blockchains, Public blockchains are open networks that allow anyone to participate in the network. The data on a public blockchain is secure as it is not possible to modify the data or interfere with the same once it is validated on the blockchain. Private Blockchain: Private blockchains, also known as authorized blockchains, are managed by the network administrator and only a single organization has authority over the network. Potential Use Cases: Cryptocurrency: The most well-known use of Blockchain Technology is for cryptocurrency exchanges. When people exchange or spend cryptocurrency, the transactions are recorded on a blockchain, with each block representing a separate transaction that is validated by the participants in the network. Financial Exchanges: Blockchains can also be used for traditional exchanges to allow for faster and less expensive transactions. Decentralized exchanges provide better management and security because investors do not have to deposit their assets with a central authority. Banking: Blockchain may be used to process transactions in fiat currency such as dollars and euros to make such transfers secure, quick, and more economical, especially for processing cross-border transactions. Insurance: Using smart contracts on the blockchain can increase the transparency of customers and insurers. Recording all claims on the blockchain would prevent duplicate claims for the same event and speed up the process for applicants to receive payments. Lending: Smart contracts built on the blockchain allow for secure lending, triggering the payment of services, margin calls, full repayment of loans, the release of collateral, etc. on the happening of certain events. Real Estate: By recording real estate transactions using blockchain technology, a safer and more accessible way to identify and transfer real estate can be provided, speeding up transactions, reducing paperwork, and saving costs. Healthcare: Blockchain can be used to protect medical records, health records, and other related electronic records, ensuring that medical professionals have accurate and up-to-date information about their patients and improve treatment. Drawbacks of Blockchain Technology: Power Consumption: The power consumption in the blockchain is high due to mining activities, maintaining a real-time ledger, and communicating with other nodes. Scalability: The size of the block equals the data it stores, which poses serious difficulties for practical use, as each participant node needs to verify and approve a transaction. Storage: Blockchain databases are stored indefinitely on all network nodes, causing storage space issues. Privacy and Security: The public blockchain is not entirely secure as anyone on the network can legally access data, leading to privacy concerns. Regulations: Regulatory regimes in the financial arena are a challenge for blockchain implementation, as blockchain applications need to establish a process to identify the culprit in the event of a scam. In conclusion, Blockchain Technology is a powerful tool with numerous potential use cases and benefits, especially in the rapidly growing field of Cryptocurrency, NFTs, and digital currencies. However, there are also drawbacks to be considered, such as power consumption, scalability, storage, privacy and security, and regulatory challenges. Despite these challenges, the potential benefits of blockchain technology make it an important development to watch as it continues to evolve and adapt to new regulatory regimes. As the world becomes more technologically advanced, it is essential to stay informed about the latest developments in blockchain technology, as it has the potential to revolutionize how we store and exchange data in the future. FAQs about Blockchain Technology What are the main benefits of using blockchain technology? Blockchain technology offers several benefits, including decentralization, transparency, security, and efficiency. By providing a decentralized network, blockchain ensures that the network is secure and minimizes the risk of malicious interference while giving participants control and financial sovereignty. Additionally, blockchain offers transparency by making transaction history more visible to all participants, and it provides security by ensuring that documents of transactions are updated or altered by consensus by the nodes in the network. How is blockchain technology different from traditional database technology? Blockchain technology differs from traditional database technology in several ways. First, blockchain is a distributed ledger that is shared among participants in a decentralized network, while traditional databases are often centralized, controlled by a single party or authority. Additionally, blockchain is more secure due to its decentralized nature, while traditional databases are more vulnerable to malicious interference. Lastly, while traditional databases require specific permissions to access and modify data, blockchain enables participants to access records while maintaining security and transparency. How does blockchain technology and cryptocurrencies... --- - Published: 2023-05-08 - Modified: 2025-07-22 - URL: https://treelife.in/legal/ecb-for-start-ups/ - Categories: Legal Overview What are ECB? External Commercial Borrowings (“ECB”) are commercial loans raised by eligible resident entities from recognized non- resident entities and should conform to parameters such as minimum maturity, permitted and non permitted end-uses, maximum all-in-cost ceiling, etc. Transactions on account of ECBs are governed by the provisions of Foreign Exchange Management Act, 1999 and the Master Direction – External Commercial Borrowings, Trade Credits and Structured Obligations (2018-19) issued by the RBI and as amended from time to time (“ECB Master Directions”) External Commercial Borrowings (“ECB”) are commercial loans raised by eligible resident entities from recognized non- resident entities and should conform to parameters such as minimum maturity, permitted and non permitted end-uses, maximum all-in-cost ceiling, etc. Transactions on account of ECBs are governed by the provisions of Foreign Exchange Management Act, 1999 and the Master Direction – External Commercial Borrowings, Trade Credits and Structured Obligations (2018-19) issued by the RBI and as amended from time to time (“ECB Master Directions”) RBI permitted Startups to raise ECB with the introduction of new guidelines vide its circular dated 16th January, 2019. Pursuant to the said guidelines, AD Category-I Banks are permitted to allow recognized Startups to raise ECB under the automatic route as per the prescribed framework Recognized Lenders •Lender/Investor, who is a resident of a Financial Action Task Force compliant country •The recognized lenders do not include the following: Indian banks’ foreign branches or their Indian subsidiaries; and Overseas entity in which Indian entity has made overseas direct investment Key Considerations TermBrief descriptionMAMP*MAMP for ECB will be 3 years. FormsThe borrowing can be in form of loans or non-convertible, optionally convertible or partially convertible preference sharesCurrencyThe borrowing should be denominated in any freely convertible currency or in Indian Rupees (INR) or a combination thereofAmountThe borrowing per Startup will be limited to USD 3 million or equivalent per financial year (either in INR or any convertible foreign currency or a combination of both)All-in-costAs may be mutually agreed between the lender and borrowerEnd-usesFor any expenditure in connection with the business of the borrowerChoice of SecurityAt the discretion of the borrower. Security can be in the nature of: -movable assets; -Immovable assets; -intangible assets (including patents, intellectual property rights); -financial securities and shall comply with foreign direct investment or foreign portfolio investment/ or any other norms applicable to foreign lenders -Issuance of corporate and personal guarantee. Guarantee is only allowed if such parties qualify as lender under ECB for start-upsConversion RateIn case of borrowing in INR, the foreign currency – INR conversion will be at the market rate as on the date of agreement Notes : * MAMP: Minimum Average Maturity Period * All-in-cost: It includes rate of interest, other fees, expenses, charges, guarantee fees, Export Credit Agency charges, whether paid in foreign currency or INR but will not include commitment fees and withholding tax payable in INR. Other Provisions TermBrief descriptionParking of ECB ProceedsECB Proceeds can be parked abroad as well as domestically •If ECB Proceeds parked/repatriated to India, ECB borrowers are allowed to park ECB proceeds for a maximum period of 12 months cumulativelyReporting arrangementsSubmission of Form ECB and obtaining loan registration number (LRN) •Any change in terms and conditions of ECB should be reported to DSIM through revised form ECB •Monthly reporting through form ECB 2Conversion of ECB into Equity• Conversion is allowed subject to the conditions such as (without limitation): – activity should be covered under automatic route for FDI or government approval is received where required -conversion must not contravene eligibility or applicable sectoral cap on foreign equity holding -compliance with applicable pricing guidelines • The exchange rate prevailing on the date of the agreement between the parties concerned for such conversion or any lesser rate can be applied with a mutual agreement with the ECB lender •Equity ratio of 7:1 not applicableNon applicability of Equity-liability ratioThe requirement of equity liability ratio of 7:1 as prescribed under the ECB Master Directions is not applicable for start-ups Other provisions summarised in short Process Flow ECB FOR START-UPSNotes :LRN: Any drawdown in respect of an ECB should happen only after obtaining the LRN from the RBI. To obtain the LRN, borrowers are required to submit duly certified Form ECB, which also contains terms and conditions of the ECB, in duplicate to the bankMonthly Reporting of Actual Transactions: Form ECB 2 Return through the AD Bank on monthly basis. --- - Published: 2023-05-08 - Modified: 2025-02-10 - URL: https://treelife.in/legal/the-co-founders-questionnaire/ - Categories: Legal SAMPLE RESPONSES I. GENERAL  ParticularsResponsesRemarks / ExamplesName of the Business--Registered office address (to be skipped if the Business is yet to be set up)--Brief Description of the Business-Note: This can be a 2-3 line description of the industry/sector where the Company currently operates and any differentiating factors. Face Value of Equity Shares--Chairman of the Board-- II. FOUNDERS ParticularsResponsesRemarks / ExamplesName and Address of the FoundersFounder 1: -Founder 2: -PAN/ Tax Registration Number of the FoundersFounder 1: -Founder 2: -Founders who are a party to a pre-existing Shareholders Agreement (if any)-Monetary Contribution of each Founder (if any)Founder 1: -Founder 2: -Shareholding Pattern of the Founders before the execution of the Co-Founders’ Agreement (to be skipped if the Business is yet to be set up)Founder 1: -Founder 2: -Shareholding Pattern of the Founders as on the execution of the Co-Founders’ AgreementFounder 1: -Founder 2: -Maximum amount of financial assistance that can be provided by the Business to each of the Founders during the course of Business- III. DECISION MAKING AND DISPUTE RESOLUTION ParticularsResponsesRemarks / ExamplesFounder whose opinion will hold more weight in case of any conflict with respect to the Business-Note: This can be an internal ‘veto’ right granted to one or more Founders, and is extremely customizable to the relationships between the Founders and their responsibilities. For example, one Founder may hold the deciding vote in general or have the final say on specific parts of the business such as design, costs, funding, or hires. How will the day-to-day and major decisions of the Business be taken? -Note: Similar to the ‘veto’ mentioned above, this is customizable to match the working relationship between Founders. While one Founder may control day-to-day operations, another may be the decision-maker for the long-term direction. Alternatively, a voting mechanism can be set up for multiple Founders. How will a sale of the Business be decided? -Example: To be decided by the Board/mutual agreement of the Founders. In case the parties have executed a SHA, this will ideally also be covered under reserved matters to be taken upon consent from the investor. Dispute resolution in case one of the Founders is not performing his duties in accordance with the Co-Founders’ Agreement-Example: To be decided by the Board/such Founder may be terminated upon a simple majority of the other Founders. While this is difficult to account for at an early stage, it's important to set checks and balances to avoid any disconnect in goals, ideals, and responsibilities. IV. EXIT OPTIONS ParticularsResponsesRemarks / ExamplesProcedure to be followed by the Founders in case of resignation-Example: Prior written notice of 60 (sixty) days is to be provided to the Company. The Founder may not, in lieu of notice, pay the company his salary for the notice period, and may not also avail leave. Can any of the Founder's employment with the Business be terminated in the following situations? If yes, what will be the procedure followed by the Business to terminate such Founder's employment? -Example: (a) For Cause (fraud, negligence, misconduct, crime of moral turpitude, material breach): Yes - the board may terminate the Founder's employment with immediate effect by simple majority. (b) Without Cause (restructuring, cost cutting, underperformance): Yes - the board shall provide the Founder with an opportunity to present his case and may terminate his employment with 60 days' notice or relieve him from duties or pay his salary. Procedure to be followed by the Business in case any permanent disability is suffered by any Founder-Example: Agreement shall be terminated immediately in case the Founder is unable to perform his duties for a continuous period of 3 (three) months. Would the Founder be obliged to leave his position as a Director on the Board in the following situations? -Example: (a) Termination of the Founder's employment by the Business: Yes (b) Resignation by the Founder: YesTime period for which the exiting Founders shall be contractually obliged to not work with or as a competitor to the Business-Example: 1 year. This restriction, while falling into a grey area in terms of enforceability, is important to ensure that the Company's confidential and proprietary information doesn't become available to a competitor (whether directly or indirectly). Considering the goodwill carried by Founders, it is likely that courts will uphold such clauses. V. TRANSFER OF SHARES ParticularsResponsesRemarks / ExamplesHow will the Founder shares be dealt with in the following situations: (Please provide the details if any buyback options shall be given to the Business or remaining Founders)-Example: (a) Termination of the Founder's employment by the Business: - For Cause: The company shall be entitled to purchase the unvested and vested shares at their face value or such other lower price as may be permissible under applicable law / as determined by the Board / in case of existing SHA, to be dealt with as described in the transaction document. - Without Cause: The company shall be entitled to purchase unvested shares at their face value or such other lower price as may be permissible under applicable law, and the vested shares at the fair market value / as determined by the Board / in case of existing SHA, to be dealt with as described in the transaction document. (b) Resignation by the Founder: The company shall be entitled to purchase unvested shares at their face value or such other lower price as may be permissible under applicable law, and the vested shares at the fair market value / as determined by the Board / in case of existing SHA, to be dealt with as described in the transaction document. How will the market value of Shares be determined in case a Founder wants to sell his Shares? -Example: Fair market value / last valued round. VI. DISSOLUTION OR SALE OF THE BUSINESS ParticularsResponsesRemarks / ExamplesWhat will happen to the Intellectual Property of the Business in case of the following:-Example: (a) Dissolution of the Business: If any compensation is received from the intellectual property owned by the company, the proceeds will be divided among the... --- - Published: 2023-05-03 - Modified: 2025-07-22 - URL: https://treelife.in/legal/issues-faced-while-seeking-start-up-india-registration/ - Categories: Legal The Startup India initiative was announced by Hon’ble Prime Minister of India on 15th August, 2015. The Department for Promotion of Industry and Internal Trade (DPIIT), previously known as the Department of Industrial Policy and Promotion (DIPP), is the nodal agency for dealing with matters related to startups in India. To obtain the benefits of “startups” under the Startup India initiative, as outlined above, recognition from DPIIT is necessary. DPIIT is the monitoring authority for registering all Startups under the scheme. One of the key issues that an entity, being a startup, faces is not having adequate knowledge about what qualifies as a “Startup” under the Department for Promotion of Industry and Internal Trade (“DPIIT”). Due to lack of unawareness, many entities fail to avail the benefits applicable and attracted to them under the Startup India Action Plan prescribed vide notification No. G. S. R. 34 (E) dated January 16, 2019 issued by the Ministry of Commerce and Industry. Under the DPIIT Scheme, an entity shall be considered as a startup: ● Upto a period of ten years from the date of incorporation/ registration, if it is incorporated as a private limited company (as defined in the Companies Act, 2013) or registered as a partnership firm (registered under section 59 of the Partnership Act, 1932) or a limited liability partnership (under the Limited Liability Partnership Act, 2008) in India. ● Turnover of the entity for any of the financial years since incorporation/ registration has not exceeded INR 100 crore ● Entity is working towards innovation, development or improvement of products or processes or services, or if it is a scalable business model with a high potential of “employment generation” or “wealth creation”. Provided that an entity formed by splitting up or reconstruction of an existing business shall not be considered a ‘Startup’ The other major concern is lack of information about the registration process, the documents required for making registrations, collating the information and documents and uploading the same on the portal. The company will need the Charter documents of the Company i. e. MOA and AOA, Certificate of Incorporation, Pitch deck of the Company, Link of the company website(optional), Intellectual Property Registration Certificates (if applicable), Proof of any funding received by the company (MCA records, capital structure of the company, bank statements etc), Aadhar card of the authorized signatory making application on behalf of the Company, Director details (DIN, PAN, Address, contact details), Company details (CIN, Address, authorized signatory details for the Company). In order to help ease the process, here are a few things one needs to bear in mind while initiating the registration process. Preliminary process for registration: ● The Company needs to make a profile on the Startup India Portal. The registered email id will then receive an OTP and once that is confirmed the profile can be operated using the login credentials entered for registration. ● The User will have to complete the profile by adding the company specific details i. e. name of the company, CIN, the industry that the company operates, area of operation, stage of development the startup is currently at (ideation, validation early traction, scaling) etc ● The User will have to provide company specific responses to the questions basis which, at the discretion of the DPIIT, the application will be accepted/rejected or asked for clarification in case of any deficiency. Questions on the portal: a.  Details of the innovation product/service or improvement in any existing product/service the Startup aims to create/provide b. What is the problem that the startup aims to solve c. How does your startup propose to solve this problem d. What is the uniqueness of the solution provided by the startup. e. How does startup generate revenue. Etc. The authorized signatory signing and making application on behalf of the Company needs to be authorized by the other director/s of the Company and the same needs to be authenticated by signing a Letter of Authorisation (in the format provided on the startup India portal). Once the application is submitted, the department will, at its discretion, approve the application of the Company. --- - Published: 2023-04-27 - Modified: 2025-02-10 - URL: https://treelife.in/legal/importance-applicability-of-labour-laws-for-startups/ - Categories: Legal Currently in India there are 29 labour laws which needs to be followed by all the entities. To make it more streamlined and hassle free the Ministry of Labour is under the process of consolidating all the labour laws under 4 new labour law codes (“Labour Codes”) •Code on Wages •Occupational Safety, Health and Working Conditions Code •Social Security Code •Industrial Relations Code These Labour Codes are yet to be notified. In India, the labour laws can be divided into compliance under central laws and the specific state laws. We have compiled a list of central laws and examples of specific state laws herein. Sr. NoLabour LawsApplicabilityRegistration/ ImplementationPenalty for non-compliance with the applicable laws1Employee’s State Insurance Act, (ESI Act 1948)a) Working with the aid of power- 10 or more employees b) Without the aid of power- 20 or more employeesSection 2-A of the Act read with Regulation 10-B, registration within 15 days from the date of its applicability to themImprisonment for a period extending up to 2 years and a fine of up to INR 5,000. 2Prevention of Sexual Harassment of Women at Workplace (Prevention Prohibition and Redressal Act, 2013) (“POSH Act”)Applicable to all organizations, however the formation of an internal committee is applicable when there are 10 or more employeesThe company has to elect an internal committee and pass a board resolution for adopting the internal committee as per the provisions of POSH ActA fine of INR 50,0003Maternity Benefit Act, 1961Any organization with 10 or more employeesNo registration required. However, an organization needs to maintain a muster roll. An organization is required to provide for first and second-time mothers, a leave of 6 months, or 26 weeks, off, which is a paid leave wherein her employer needs to pay her in full. Imprisonment which may extend to 3 months, or with fine which may extend to INR 500, or with both. 4Payment of Gratuity Act, 1972Any organization with 10 or more employeesForm A to be filed within 30 days of registrationpunishable with imprisonment for a term which may extend to six months, or with fine which may extend to ten thousand rupees or with both5Rights of Persons with Disabilities Act, 2016Any organization with 20 or more employeesa) Form E for registration under Rule 27(3). b) Organization needs to appoint a grievance officer as a complianceImprisonment up to 6 months and/ or a fine of INR 10,000, or both6Equal Remuneration Act, 1976No minimum applicabilityForm D- Register to be maintained by the employerPenalty levied may be up to INR 10,0007Payment of Bonus Act, 1965Any organization with 20 or more employeesIn case of new establishments, for the first 5 years, bonus is payable only if the business is profitable. Imprisonment for six months or may impose a fine of INR. 1000 or both8The Employees’ Provident Funds and Miscellaneous Provisions Act, 1952Any organization with 20 or more employeesForm 5 to be filled by employers for enrolling new employees for this schemeFor delay in payment of PF- a)For 0 — 2 months delay – @ 5 % p. a. b)For 2 — 4 months delay – @10 % p. a. c)For 4 — 6 months delay – @ 15 % p. a. d)For delay above 6 months – @ 25 % p. a. (subject to a maximum of 100%) List of Central Labour Laws applicable to Start-ups State Specific Labour Laws applicable to Start-ups Types Of Applicable Legislations For Specific States: •State-specific shops and establishment acts •State-specific labour welfare acts •State-specific professional tax acts STATE OF MAHARASHTRA AND KARNATAKA COVERED HEREIN State Specific Labour Laws applicable to Start-ups A. For Maharashtra Sr. NoLabour LawsApplicabilityRegistration/ ImplementationPenalty for non-compliance with the applicable laws1Maharashtra Shops and Establishment Act, 1948Applicable to all organizations. Any organization with 10 or more employees needs to register. Form A to be filed for registrationFine which shall be not less than INR 1,000 but which may extend to INR 3,000 along with the prescribed registration or renewal Fee2Maharashtra Labour Welfare Fund Act, 1953Any organization with 05 or more employeesForm A to be filed for registrationA fine of INR 500 and/or imprisonment up to 3 months3The Maharashtra State Tax on Profession, Trades, Callings and Employments Act, 1975Applicable to all organizations/ establishmentsForm I-I and I-II to be filled for enrollmentEmployer will be liable to pay a simple interest @ 1. 25% of the tax payable for each month for which the tax remains unpaid. Maharashtra Labour Laws applicable to Start-ups B. For Karnataka Sr. NoLabour LawsApplicabilityRegistration/ ImplementationPenalty for non-compliance with the applicable laws1Karnataka Shops and Commercial Establishments Act, 1961Applicable to all.  Organizations with 10 or more employees have to registerRegistration of establishment in Form Bpunishable with fine up to INR 1,000 and in case of a continuing contravention, a further fine of up to INR 2,000 for every day during which such contravention continues2The Karnataka Tax on Professions, Trades, Callings And Employment Act, 1976Applicable to all person working in KarnatakaRegistration of establishment under Sec 5Penalty not exceeding fifty per cent of the amount of tax due. This penalty shall be in addition to the interest payable under sub-section (2) or (3) of section 11. Karnataka Labour Laws applicable to Start-ups --- - Published: 2023-04-11 - Modified: 2025-02-10 - URL: https://treelife.in/legal/regulating-online-gaming/ - Categories: Legal 1. Key Takeaways The Ministry of Electronics and Information Technology (“MeiTY”), vide notification dated April 6, 2023 released the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Amendment Rules, 2023 (“Amended Rules”), whereby the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Amendment Rules, 2021 were amended in order to provide for certain regulations with respect to online gaming industry.  View complete Amended Rules • The following new terms have been defined: a) online game (Rule 2(1)(qa)) b) online gaming intermediary(Rule 2(1)(qb)) c) online gaming self-regulatory body(Rule 2(1)(qc)) d) online real money game (Rule 2(1)(qd)) e) permissible online game (Rule 2(1)(qe)) f) permissible online real money game (Rule 2(1)(qf)) • Online self-regulatory body (SRO) shall verify an online real money game as a permissible online real money game. Main criteria would be to satisfy that (Rule 4A (3)): (a) the online game doesn’t involve wagering on any outcome (b) the users are at least 18 years of age • Obligations on online gaming intermediaries to ensure compliance under IT act and also to not show, distribute or host any data that can cause harm to the users. • Obligations on permissible online real money game providers: (a) displaying a visible mark verification by such online self-regulatory body on such games (b) informing users about withdrawal or refund of deposit policies (c) the manner in which the determination of distribution of winnings, fees and other charges is done 2. New Concepts Introduced Online games (Rule 2(1)(qa)) – A game that is offered on the Internet and is accessible by a user through a computer resource or an intermediary. Online real money game (Rule 2(1)(qb)) – Online games where users make deposits in cash or kind with the expectation of earning winnings on that deposit. Examples of online real money games shall be: Dream 11, My Premier League and My11Circle. Permissible online real money game (Rule 2(1)(qc)) – Online real money game verified by an online gaming self-regulatory body. Permissible online games (Rule 2(1)(qd)) – (a) Permissible online real money game; or (b) any other online game that is not an online real money game. Online self governing Body (Rule 2(1)(qe)) – MeitY may designate as many online gaming self-regulatory bodies as it may consider necessary for the purposes of verifying an online real money game as a permissible online real money game. Online gaming intermediary (Rule 2(1)(qf)) – Any intermediary that enables the users of its computer resource to access one or more online games. 3. Changes in the Gaming Ecosystem Business of the gaming entityLaw before the AmendmentEffect of the amendmentOnline Gaming IntermediariesNot regulated earlier. Will be covered under the IT Act, 2000 and shall have a plethora of obligations. List of obligations found in further slidesOnline Fantasy SportsOnline fantasy sports, though not heavily regulated, is permitted all over India except few states namely • Assam, Sikkim, Nagaland, Andhra Pradesh, Odisha, Telangana and Tamil Nadu. Online games covered here shall be taken up for consideration by the online self-regulatory body to be classified as a permissible online real money game, provided that the same (Rule 4A (3)): (a) does not involve wagering on any outcome (b) the user is at least 18 years of age. eSportsNot regulated. However, recognised as a part of multi-sports events in India and recognised by the Ministry of Youth Affairs and Sports. With respect to eSports, the online self-regulatory body shall ensure that its rules and regulations, privacy policy or user agreement inform the users not to host, display, upload, modify, publish, transmit, store, update or share any information that is in relation to an online game which causes harm (Rule 4 and Rule 5 (11)). Online Casino Games including Poker• Sikkim allows casino games, such as Casino and Blackjack • Nagaland and West Bengal allow Poker • Gujarat bans Poker. Online games covered here shall be taken up for consideration by the online self-regulatory body to be classified as a permissible online real money game, provided that the same (Rule 4A (3)) : (a) is permitted by the applicable state enactment within a particular state’s territory (b) does not involve wagering on any outcome (c) the user is at least 18 years of age. Changes in the gaming ecosystem 4. Obligations of Online Gaming Intermediary Reasonable security practices and procedures as prescribed in the Information Technology (SPDI) Rules, 2011 (Rule 3(1)(i)). To retain information for a period of 180 days from cancellation or withdrawal of his registration in case information is collected from user for registration (Rule 3(1)(g)). To not deploy / install / modify technical configuration of computer resource or become party to any act that may change operations such computer resource thereby, circumventing any law (Rule 3(1)(g)). To publish the rules and regulations, privacy policy and user agreement on its website or mobile based application (Rule 3(1)(a)) : a) To inform its users of its rules and regulations, privacy policy or user agreement (or any changes) at least once in a year (Rule 3(1)(f)) (Online real money game intermediary shall inform its users of such changes as soon as possible, not later than 24 hours after such change is effected)* (b) To not display, upload, publish or share any information that (Rule 3 (1) (b) of Amended Rules)– • related to online games that causes a user harm • is not verified as a permissible online game • is in the nature of advertisement of an online game that is not permissible • violates any law (c) To include provisions to inform the user not to host, display, upload or share any information that belongs to another person, is defamatory, obscene, pornographic, pedophiliac, invasive of another‘s privacy, including bodily privacy, racially or ethnically objectionable, relating or encouraging money laundering or gambling, is harmful to child, infringes any patent, trademark, copyright or other proprietary rights, violates any law for the time being in force; any deceiving or misleading information, impersonates another person; threatens the unity, integrity, defense, security or sovereignty of India, contains software virus or any other computer code (Rule 3(1)(b)). 5. Online Self... --- - Published: 2023-04-11 - Modified: 2025-01-28 - URL: https://treelife.in/finance/budget-2023-applicability-of-angel-tax-for-foreign-investors-from-april-1-2023/ - Categories: Finance - Tags: angeltax If you are a foreign investor investing in Indian companies or a startup raising money from foreign investors post April 1, 2023, angel tax is now applicable. We have summarized the implications for you below Upto March 31, 2023: Non-resident investors (typically offshore PE/VC funds) generally made primary investment in Indian startups at a price which was above the FMV as per the valuation report without there being any income tax implications. The reason was that it allowed investor to have room to exercise their anti dilution liquidation preference rights by revising the conversion ratio incase of a down round*. From April 1, 2023 onwards: While the FEMA pricing rules as discussed above continue as it is, section 56(2)(viib) of the Income-tax Act, 1961 now provides that the Indian company will be liable to pay tax if it issues shares to a non-resident at a price above its FMV (as determined by a merchant banker). Thus, Indian company will have to issue shares to non-resident investors exactly at FMV. Further, implementation of such investor protection clauses may not be as straightforward and the non-resident investors will need to look at alternate options such as rights issue or bonus issue or buyback, etc *As per FEMA rules, price at the time of conversion should not be lower than the FMV at the time of issuance --- - Published: 2023-03-24 - Modified: 2025-07-22 - URL: https://treelife.in/finance/startup-valuations/ - Categories: Finance Startups face the challenge of determining their value since they often lack revenue figures or hard facts. Thus, estimation is required, and startup valuation methods frameworks have been invented to help startups accurately gauge their valuation. Startup founders aim for high valuation while investors want the value low enough to see big returns on their investment. This article will discuss the factors that determine startup valuation, negative and positive. Additionally, it will cover startup valuation methods such as the Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA), Discounted Cash Flow (DCF) Method, Venture Capital Method amongst others FACTORS THAT DETERMINE STARTUP VALUATION Positive Factors Traction – One of the biggest factors of proving a valuation is to show that your company has customers. If you have 100,000 customers you have a good shot at raising $1 million. Reputation – If a startup owner has a track record of coming up with good ideas or running successful businesses, or the product, procedure or service already has a good reputation a startup is more likely to get a higher valuation, even if there isn’t traction. Prototype – Any prototype that a business may have that displays the product/service will help. Revenues – More important to business to business startups rather than consumer startups but revenue streams like charging users will make a company easier to value. Supply and Demand – If there are more business owners seeking money than investors willing to invest, this could affect your business valuation. This also includes a business owner’s desperation to secure an investment, and an investors willingness to pay a premium. Distribution Channel – Where a startup sells its product is important, if you get a good distribution channel the value of a startup will be more likely to be higher. Industry Trends – If a particular industry is booming or popular (like mobile gaming) investors are more likely to pay a premium, meaning your startup will be worth more if it falls in the right industry. Negative Factors Poor Industry or Market – If a startup is in an industry that has recently shown poor performance, or may be dying off. Low Margins – Some startups will be in industries, or sell products that have low-margins, making an investment less desirable. Competition – Some industry sectors have a lot of competition, or other business that have cornered the market. A startup that might be competing in a cluttered market is likely to put off investors. Management Not Up To Scratch – If the management team of a startup has no track record or reputation, or key positions are missing. Product – If the product doesn’t work, or has no traction and doesn’t seem to be popular or if there isn’t a product-market fit. Desperation – If the business owner is seeking investment because they are close to running out of cash. 2. STARTUP VALUATION METHODS Early-stage startups usually have little to no revenue or profits; therefore, valuing them can be challenging. Angel investors and venture capital firms use multiple formulas to find the pre-money value of a business. With mature businesses that receive steady revenue and earnings and make profits, it is easier to value the company using a multiple of their earnings before interest, taxes, depreciation, and amortization (EBITDA). Concept of EBITDA EBITDA is best shown with the following formula – EBITDA = Net Profit + Interest +Taxes + Depreciation + Amortization For example, if a company earns INR 10,00,000 in revenue and production costs are INR 4,00,000 with INR 2,00,000 in operating expenses and depreciation and amortization expense of INR 100,000 that leaves an operating profit of INR 300,000. The interest expense is INR 50,000 leading to earnings before taxes of INR 250,000. With a 20 percent tax-rate the net income becomes INR 200,000. For calculating EBITDA, add tax and interest to the net profit of INR 200,000 to get the operating income of INR 300,000 and also add on the depreciation and amortization expense of INR 100,000 giving you a Earning Before Interest Tax Depreciation and Amortisation of INR 400,000. Venture Capital Method The Venture Capital Method employs a forecasted terminal value for the startup and an expected return from the investor to determine pre-money and post-money valuations. The formula used is: Pre-Money Valuation = Post Money Valuation — Invested Capital With the Post-Money Valuation being the terminal value divided between the expected return. Let’s say an investor values your startup at a terminal value of $1,000,000 and he wants a 20X return on his $10,000 investment. In this case, your Post-Money valuation would be $50,000. And, according to the Venture Capital Method, the Pre-Money Valuation would be: Pre-Money = $50,000 — $10,000 = $40,000 This is another popular method utilized by a lot of venture capital firms. To calculate the value of the firm, you will need to derive the terminal value or the value at which you will be selling the business and the Return On Investment. Plugging in these values to the formulas will help you arrive at the solution. The formulas for the same are as follows: Berkus Method The Berkus Method, created by American venture capitalist and angel investor Dave Berkus is a straightforward method that values startups based on detailed assessment of five key aspects called as success factors : Basic Value, Technology, Execution, Strategic Relationships and Production and Consequent Sales A detailed assessment is carried out to evaluate how much monetary value is assigned to each aspect. The startup value is the sum of all those monetary values. This method usually allocates $500,000 per success factor so theoretically the maximum pre-money valuation is $2,500,000. Nevertheless, depending on the degree in which each element is developed the investor could reduce the value of the item to say $400,000 or $250,000, to determine the final value. Though the Berkus Method is seen as an important method utilized by many startups, it fails to take into consideration a lot of other aspects of startup life. However, for a startup that is in the early stage of its life or in development... --- - Published: 2023-03-23 - Modified: 2025-08-28 - URL: https://treelife.in/legal/branch-offices-in-india/ - Categories: Legal What is a Branch Office (“BO”)? A BO is a suitable business model for foreign companies looking to establish a temporary presence in India. The BO serves as an extension of the head office business and carries on the same business and activity as that of its parent company. The foreign company can have any revenue from the Indian BO only from the activity allowed by the Reserve Bank of India (“RBI”). It has to meet all its expenses of Indian office through remittances from the head office or through the revenue generated from the Indian operation permitted by the RBI. BO is suitable for a foreign company to test and understand the Indian market with a very strict control by the RBI, as it does allow the companies to do business but just to do the activity which are mentioned in the application of BO. The Master Direction on Establishment of Branch Office (BO)/ Liaison Office (LO)/ Project Office (PO) or any other place of business in India by foreign entities shall be relevant for setting up of the BO. Permitted Activities Companies incorporated outside India and engaged in manufacturing or trading activities are allowed to set up BO in India and undertake the following activities in India; i. Export/import of goods. ii. Rendering professional or consultancy services (other than practice of legal profession in any matter). iii. Carrying out research work in which the parent company is engaged. iv. Promoting technical or financial collaborations between Indian companies and parent or any overseas group company. v. Representing the parent company in India and acting as buying/ selling agent in India. vi. Rendering services in information technology and development of software in India. vii. Rendering technical support to the products supplied by parent/group companies. viii. Representing a foreign airline/shipping company. General Criteria Applications from foreign companies (a body corporate incorporated outside India, including a firm or other association of individuals) for establishing BO in India shall be considered by the AD Category-I (“AD”) bank as per the guidelines given by RBI. An application from a person resident outside India for opening of a BO in India shall require prior approval of Reserve Bank of India and shall be forwarded by the AD Category-I bank to the General Manager, Reserve Bank of India, Central Office Cell, Foreign Exchange Department, 6, Sansad Marg, New Delhi – 110 001 who shall process the applications in consultation with the Government of India, in the following cases: a. The applicant is a citizen of or is registered/incorporated in Pakistan; b. The applicant is a citizen of or is registered/incorporated in Bangladesh, Sri Lanka, Afghanistan, Iran, China, Hong Kong or Macau and the application is for opening a BO in Jammu and Kashmir, North East region and Andaman and Nicobar Islands; c. The principal business of the applicant falls in the four sectors namely Defence, Telecom, Private Security and Information and Broadcasting. However, prior approval of RBI shall not be required in cases where Government approval or license/permission by the concerned Ministry/Regulator has already been granted. d. The applicant is a Non-Government Organisation (NGO), Non-Profit Organisation, Body/ Agency/ Department of a foreign government. However, if such entity is engaged, partly or wholly, in any of the activities covered under Foreign Contribution (Regulation) Act, 2010 (FCRA), they shall obtain a certificate of registration under the said Act and shall not seek permission under FEMA 22. The non-resident entity applying for a BO in India should have a financially sound track record of a profit making track record during the immediately preceding five financial years in the home country and net worth of not less than USD 100,000 or its equivalent. Net Worth . An applicant that is not financially sound and is a subsidiary of another company may submit a Letter of Comfort (“LOC”) from its parent/ group company, subject to the condition that the parent/ group company satisfies the prescribed criteria for net worth and profit. Procedure for setting up a BO i. The application for establishing BO in India may be submitted by the non-resident entity in Form FNC to a designated AD Category – I bank (i. e. an AD Category – I bank identified by the applicant with whom they intend to pursue banking relations) along with the prescribed documents mentioned in the Form and the LOC, wherever applicable. The AD Category-I bank shall after exercising due diligence in respect of the applicant’s background, and satisfying itself as regards adherence to the eligibility criteria for establishing BO, antecedents of the promoter, nature and location of activity of the applicant, sources of funds, etc. , and compliance with the extant KYC norms grant approval to the foreign entity for establishing BO in India. ii. However, before issuing the approval letter to the applicant, the AD Category-I bank shall forward a copy of the Form FNC along with the details of the approval proposed to be granted by it to the General Manager, Reserve Bank of India, CO Cell, New Delhi, for allotment of Unique Identification Number (UIN) to each BO. After receipt of the UIN from RBI, the AD Category-I bank shall issue the approval letter to the non-resident entity for establishing BO in India. iii. An applicant that has received a permission for setting up of a BO shall inform the designated AD Category I bank as to the date on which the BO has been set up. The AD Category I bank in turn shall inform RBI accordingly. The approval granted by the AD Category I bank should include a proviso to the effect that in case the BO for which approval has been granted is not opened within six months from the date of the approval letter, the approval shall lapse. iv. All applications for establishing a BO in India by foreign banks and insurance companies will be directly received and examined by the Department of Banking Regulation (DBR), Reserve Bank of India, Central Office and the Insurance Regulatory and Development Authority (IRDA), v. There is a... --- - Published: 2023-03-23 - Modified: 2025-08-07 - URL: https://treelife.in/legal/a-founders-guide-to-understanding-liquidation-preference/ - Categories: Legal Liquidation is the process of closing a business and distributing its assets among stakeholders, creditors, and rightful claimants. In the event of a corporate liquidation, preferred shareholders recover their investments first, prior to all other shareholders, in the process known as Liquidation Preference. Liquidation preference is a form of protection for investors as it guarantees them a certain minimum payment, regardless of the company’s valuation at exit. Investors can choose between non-participating and participating liquidation preference. Non-participating liquidation preference allows investors to receive predetermined returns without any share in the surplus. In contrast, participating liquidation preference allows investors to receive predetermined returns as well as a share of the surplus proceeds based on their shareholding. Standard Seniority Liquidation Preference is followed by most early-stage companies, where liquidation preferences are honored in reverse order from the latest investment round to the earliest. Pari-Passu Seniority gives all preferred investors equal seniority status, meaning that all investors would share in at least some part of the proceeds. Tiered Seniority is a hybrid between standard and pari-passu seniority, with investors grouped into distinct seniority levels. Investors ask for liquidation preference to protect themselves, particularly if a company fails to meet expectations and sells or liquidates at a lower valuation than anticipated. Liquidation preferences are expressed as a multiple of the initial investment and are most commonly set at 1X. In the event of liquidation, investors receive the full amount of their investment before any other equity holders or their share in the liquidation proceeds on a pro-rata basis, whichever is more. Understanding liquidation preference is important for founders to negotiate well with potential investors. --- - Published: 2023-03-23 - Modified: 2025-08-07 - URL: https://treelife.in/finance/convertible-notes-under-companies-act-2013/ - Categories: Finance - Tags: convertible notes, Convertible Notes under Companies Act The regulatory landscape for startups in India is a constantly evolving space due to the dynamic and volatile nature of the country’s startup ecosystem. Cost-effective and innovative fundraising opportunities are a necessity for startups to succeed. The Indian government, being aware of the above fact, regularly updates regulatory norms in accordance with the economic conditions and market dynamics. One of the fairly recent introductions by the government is the concept of ‘convertible notes’. Convertible notes act as an instrument that evidences receipt of money initially as a debt, which is repayable at the option of the holder, or which can be convertible into equity shares of the startup company. Convertible notes are a hybrid of equity and debt instruments. Convertible notes are primarily targeted towards startups as valuing companies during the initial phase of operations is often difficult. Since there’s no actual valuation for the startup’s shares, convertible notes become an attractive investment option for investors. Under the Companies Act, 2013, a ‘convertible note’ was introduced as an exempted deposit (with respect to startup companies) under Rule 2(1)(c)(xvii) of Companies (Acceptance of Deposit) Rules, 2014. To issue convertible notes, the startup company must be recognized as a "Startup" by the Department for Promotion of Industry and Internal Trade. Further, the investment amount per investor should not be less than Rs. 25 lakh in a single tranche, otherwise the same shall be considered to be a deposit under the relevant provisions of the Companies Act, 2013 and shall attract the necessary compliances relating to ‘deposits’. As convertible notes are debt instruments, startup companies can issue the same under the provisions of Section 62(3) of the Companies Act, 2013, with the shareholders’ approval at a general meeting, and by notifying the Registrar of Companies by filing eForm MGT-14 within 30 days of having held the said general meeting. Convertible notes offer extensive flexibility compared to other instruments like compulsorily convertible preference shares, compulsorily convertible debentures, or equity shares. They involve minimal regulatory reporting while issuing and valuation hassles, thus promising substantial traction in the Indian ecosystem. FAQs about Convertible Notes under Companies Act, 2013 1. What exactly are convertible notes? Convertible notes are a financial instrument that acts as a hybrid of debt and equity. They allow startups to raise money by issuing a promise to: (a) either repay the debt; or (b) convert it into equity shares in the company at a later stage. 2. Are there any pre-conditions to issue convertible notes in India? Yes, there are two pre-conditions for issuing convertible notes in India: (a) the company issuing the convertible note must be recognized as a “Startup” by the DPIIT; and (b) the investment amount per investor should not be less than Rs. 25 lakh in a single tranche. 3. How can startups comply with regulations while issuing convertible notes in India? Startups must obtain shareholders’ approval by way of a special resolution at a general meeting and shall notify the Registrar of Companies of the same by filing eForm MGT-14 within 30 days of having held the meeting. 4. How is a convertible note different from a traditional loan? Unlike most traditional loans, convertible notes are convertible into equity shares of the startup company upon the occurrence of specified events. The investor also gets a right to receive equity shares of the startup company at a future date in lieu of repayment. 5. What advantages do convertible notes offer startups? Convertible notes are an attractive investment option because of their hybrid structure. They allow flexible fundraising, and bypass the initial valuation hassles that startups usually face, thus making them a promising investment option. --- - Published: 2023-03-23 - Modified: 2025-07-22 - URL: https://treelife.in/finance/investment-thumb-rules-for-beginners/ - Categories: Finance In life people want shortcuts, that’s the reason rules of thumb find someplace in one life. There are rules of thumb for everything. In games, always start with a good serve; for boiling eggs there is a six-minute boiling rule. Why should investing be an exception? In investing, there are certain rules that help us gauge how fast our money will grow or how fast it will lose its value. There are rules to make investment making easier. Such as asset allocation in mutual funds, how much to save for retirement and for emergencies etc. In this blog, we will learn about the most popular thumb rules in the world of investing. Rules to understand how fast your money can grow – Rule of 72 –  We all want the money we invest to double and are always on the lookout for the ways it can be done in the shortest amount of time. Well, calculating the number of years in which your money doubles is very easy with the Rule of 72. According to this rule, if you divide 72 by the expected rate of return, you can get a fairly accurate estimate of the number of years your money can take to double. For example, let’s suppose you have invested Rs 1 lakh in a product that provides you a rate of return of 6 percent. Now, if you divide the number 72 with 6, you arrive at 12. That means, your Rs 1 lakh will become Rs 2 lakh in 12 years. You can also use the Rule of 72 to calculate the interest rate required for the investment to double in a set time frame. For example, if you want your investment to double within 6 years, Doubling Time = 72/Rate of Return Rate of Return = 72/Doubling Time = 72/6 =12% p. a. Rule of 114 – For determining the number of years it will take for your investment to triple itself, use the Rule of 114. According to this rule, if you divide the expected rate of return from 114, you can get an estimate of the number of years your money can take to triple. The answer is the number of years in which your investment will triple. So, if you invest Rs 1 lakh in a product that gives you an interest rate of 6 percent, then as per the Rule of 114, it will become Rs 3 lakh in 19 years. Rule of 144 –  Rule of 144 helps you ascertain in how many years your money will quadruple if you know the rate of return. By dividing the expected rate of return with 144, the remainder shall be the number of years required to quadruple the money invested. Quadrupling Time = 144/Rate of Return If you invest Rs. 1,00,000 with an expected rate of return of 10% per annum, then Quadrupling Time = 144/10 =14. 4 years Hence, you can expect your investment to triple in 14. 4 years. It is important to remember that this rule is applicable in the case of investments that offer compound interest. Rules to understand how fast your money value can diminish – Rule of 70 – Even if you don’t spend a single penny from the wealth you own today, the value in 10 or 20 years shall be way less than it is today. The reason being inflation. This rule helps you understand the value of money in 10 or 20 years keeping inflation in mind. To calculate this, divide 70 by the current inflation rate. The remainder is the number of years in which your wealth will be worth half of what it is today. For example – you have Rs 50 lakh, and the current inflation rate is 5%. In 14 years, your Rs 50 lakh will be worth Rs 25 lakh, according to the Rule of 70. This is especially useful for retirement planning, as it affects the way you set up your monthly withdrawals. However, do keep in mind that the inflation rate keeps varying. Some other rules to keep in mind while investing – Rule of 10,5,3 – When we invest money or even consider investing money, we usually look for the rate of return on our investments. The 10,5,3 rule will assist you in determining your investment’s average rate of return. Though mutual funds offer no guarantees, according to this law, long-term equity investments should yield 10% returns, whereas debt instruments should yield 5%. And the average rate of return on savings bank accounts is around 3%. 100 minus age Rule – The 100 minus age rule is a great way to determine one’s asset allocation. That is, how much you should allocate in equities and how much in debt. For this, subtract your age from 100, and the number that you arrive at is the percentage at which you should invest in equities. The rest should be invested in debt. For example, if you are 25 years old and you want to invest Rs 10,000 every month. Here if you use the 100 minus age rule, the percentage of your equity allocation would be 100 – 25 = 75 percent. Then Rs 7,500 should go to equities and Rs 2,500 in debt. Similarly, if you are 35 years old and want to invest Rs 10,000, then according to the 100 minus age rule the equity allocation would be 100 – 35 = 65 percent. That means, Rs 6,500 should go in equities and Rs 3,500 in debt. Finally, to know if you are wealthy, follow this rule – The Net Worth Rule –  Thomas J. Stanley and William D. Danko in “The Millionaire Next Door: The Surprising Secrets of America’s Wealthy” postulate that an average individual has a net worth equal to the product of their age and one-tenth of their pre-tax annual income. This should be the least net worth you should aim for. Remember that net worth includes not just your cash, investments... --- - Published: 2023-03-22 - Modified: 2025-07-22 - URL: https://treelife.in/legal/basic-understanding-of-saas-and-saas-agreements/ - Categories: Legal - Tags: introduction to saas, SaaS, saas agreement india, SaaS Agreements, SAAS and SAAS Agreements, SaaS Business Model, SaaS company, saas contracts, SAAS Products, saas services examples, types of saas contracts, understanding of SAAS, understanding saas, what are saas agreements SAAS Products: An Introduction Software as a Service or SaaS is a cloud-based software delivery model that licenses applications on a subscription basis through the internet. It’s one of the three main types of cloud computing, along with platform as a service (PaaS) and infrastructure as a service (IaaS). Unlike traditional software, SaaS products do not require upfront purchases or underlying infrastructure maintenance. A software as a service agreement, or SaaS agreement, specifies the parameters of a software delivery framework. Under this kind of arrangement, users will access software and data via the internet from a central location. A software as a service (SaaS) agreement may have extensive service components, or it may only provide end customers with access to items that are already available for traditional licensing. With the SaaS approach, data is uploaded into a system and then saved on the cloud, negating the need for extra hardware or software. In today’s technology industry, SaaS products have become widely prominent. Its features, including cost-effectiveness, greater flexibility, low risk, an increasing mobile workforce, and customers, have led to its widespread adoption across industries such as hospitality, education, healthcare, and wellness. The demand for SaaS products has led to a massive rise in startups dealing in SaaS products. How is SAAS different from a License Agreement? A licensing arrangement is not the same as a SaaS deal. A business would normally provide the actual software for usage via a licensing arrangement, usually in exchange for a one-time or ongoing charge. Hardware and software must be installed physically. Contrarily, with a SaaS deal, clients receive cloud-based access to software and other technologies without exchanging any tangible commodities. End customers will get online access to the relevant items through a SaaS arrangement. Consequently, rather than authorizing product usage as a service, which would allow the licensee to install and execute the software on their own servers, the form of a SaaS agreement concentrates on allowing the use of a product, i. e. , offering access to software housed remotely. Components of a SAAS Contract  SaaS agreements serve a purpose when a business decides to license software rather than purchase it. In contrast to the conventional method, which sold software as a whole to an organization and installed it on servers on their premises, SaaS suppliers grant access to software and other technologies through public, private, or hybrid clouds. Although the nature, structure, and requirements of SaaS contracts are generally similar, the particular services, service level agreements, and obligations might differ depending on the technology or service being provided. Difference between a SaaS company and a Software company The main difference between a SaaS company and a software company is that a SaaS product is hosted on a cloud server, while the software is sold in a pre-packaged form. This technology eliminates the need for an end-user license to activate the software and any infrastructure to host the software. Instead, the SaaS company hosts its membership in the form of a subscription. The customer only needs to log into their account and get complete access. Any software company that leases its software through a central, cloud-based system is said to be a SaaS company. The basic distinguishing factor between a mainstream software company and a SaaS based company is the method of delivery.   SaaS Business Model and its Benefits The SaaS business model is basically a delivery model and is not just about selling software but also being a full-fledged service provider. This involves not just selling the product but also customer retention for the foreseeable future. SaaS companies can follow a Business to Business (B2B) approach or a Business to Customer (B2C) approach. In the B2B approach, the SaaS company sells its products and services to other companies, helping businesses operate more efficiently and effectively with highly automated technology. The B2C model focuses on individual customers, providing them ease of access to the software and products online, taking into account the exact user requirements. The SaaS business model offers several benefits, including cost-effectiveness, recurring revenue, and ease of maintenance. It also allows companies to optimize their sales, marketing, and customer care services to enhance performance and generate more revenue. For startups and small businesses, the SaaS business model is a cost-effective solution that eliminates the need for prompt customer support and various operating systems and devices. Instead, the product should only support different web browsers.   SAAS Terms and Conditions  A Terms and Conditions document for your SaaS application will help you better manage it while also reducing the reasons why users may file lawsuits against you. It is a legally significant document that every SaaS application should own. Having a Software as a Service (SaaS) Terms and Conditions agreement is crucial, regardless of how long your business has been in operation or if you're a startup offering your first product. Legal conflicts may have been averted by those who do not have a Terms and Conditions agreement or who do not include the necessary terms. In addition to all the provisions found in regular Terms and Conditions agreements, SaaS terms and conditions agreements may contain additional sections or clauses specific to SaaS agreements. For instance, the majority of terms and conditions agreements include a section on acceptable behaviour on the website or app, copyright laws regarding content usage, and guidelines for suspending or cancelling a user's account. Information about a SaaS's licence agreement, reseller agreement, and subscription agreement may also be included in the Terms and Conditions document. A Service Level Agreement (SLA), which outlines the service level a customer may anticipate, the metrics used to assess it, and the potential remedies in the event that the firm falls short of these expectations, may also be included in some. Negotiating a SAAS Contract  The topic of SaaS negotiation is seldom explored due to the fact that SaaS providers do not publicly promote their willingness to negotiate SaaS contracts. Instead, they utilise sales techniques to convince SaaS consumers that they're receiving a fantastic... --- - Published: 2023-03-20 - Modified: 2025-01-21 - URL: https://treelife.in/reports/the-tyke-case/ - Categories: Reports Regulators position - primary breach of S 42 (Issue of Shares on Private Placement basis) of CA, 2013 Extract of S 42(7) of the CA, 2013: “(7) No company issuing securities under this section shall release any public advertisements or utilize any media, marketing or distribution channels or agents to inform the public at large about such an issue. ” “S 42 of the Act clearly provides that the private placement shall be made to a select group of persons who have been identified by the Board. The number of such persons cannot exceed 200 (prescribed in the rules). The Explanation I. to S 42(3) makes it very clear that the process of "private placement" covers:• the offer or• invitation to subscribe or• issue of securities to a select group of persons by a company (other than by way of public offer) through private placement offer-cum-application, which satisfies the conditions specified in the section. ”In summary - the concept of the term ‘private placement’ stands for the fact that the company is identifying a certain set of parties to whom it wants to offer its securities rather than making any kind of public offer which generally happens in the case of listed companies. Private is construed as 200 people. TYKE + Company’s position “Tyke provides value added services in the form of facilitation of connecting like-minded people. Community with start-ups. Tyke also provides the verification of KYC, identification of KYC of people who have shown interest to invest in the company. ” “The Companies have only availed the value added services (VAS) which is provided by the Tyke platform. ” In summary - Tyke calls itself like a ‘community of like minded people and startups’ where the startup is leveraging on the community to raise investments and TYKE acts as a facilitator for the investment once the proposed investor and startup agree. Our thoughts! In the era of Shark Tank, every individual aspires to be a ‘shark’ and wants to participate in the startup ecosystem and ride the wave. TYKE serves as a great platform to provide access to both startups and retail investors for raising money and to invest money in startups respectively. In the USA, for example, this is considered as a high risk asset class and hence there are restrictions on the annual investment amount for regular investors other than ‘accredited investor’. Keeping this in mind, in the current scenario, despite all the explanations given by Tyke and the Company, the regulator primarily points out to the intent of the law where private placement (fundraise) cannot be published in open markets to solicit any investments through communities, etc --- - Published: 2023-03-20 - Modified: 2025-07-22 - URL: https://treelife.in/compliance/whether-to-set-up-a-private-limited-company-or-llp/ - Categories: Compliance Incorporating a business involves several important decisions, including the choice of a business vehicle. Two popular vehicles are Limited Liability Partnerships (LLPs) and Private Limited Companies. This article aims to help founders choose between these two vehicles by providing a comparison chart that outlines the characteristics of each. Although the article doesn’t provide a definitive answer as to which vehicle is best, it aims to present various perspectives that should be considered. When should founders choose between LLPs and Companies? As soon as their business idea is validated. The comparison chart outlines various factors, including Applicable Law, Charter Documents, Number of Partners/Members, Liability of Partners/Members, Legal Entity, Key Managerial Personnel, Board and Shareholders Meetings, Preparation of Minute Book, Maintenance of Statutory Registers, Conversion, Directorship/Partnership, Audit, Withdrawal of Capital, Management, Taxability of Dividend, Employee Stock Options Plans, Funding, and Listing. Investors are usually more willing to invest in a business vehicle set up as a Company. Shares are of two types; equity and preference. Equity shareholding provided to investors gives them a percentage share in the equity of the Company. The more the share, the more control investors as equity shareholders will have. Private companies can list their shares on the stock exchange and convert into a public limited company, subject to provisions of the Companies Act and SEBI Regulations. Whether to set up a Private Limited Company or LLP? Incorporating a business involves several important decisions, including the choice of a business vehicle. Two popular vehicles are Limited Liability Partnerships (LLPs) and Private Limited Companies. This article aims to help founders choose between these two vehicles by providing a comparison chart that outlines the characteristics of each. Although the article doesn’t provide a definitive answer as to which vehicle is best, it aims to present various perspectives that should be considered. When should founders choose between LLPs and Companies? As soon as their business idea is validated. Comparison Chart: LLP vs. Company The following table briefly compares the characteristics of the two business vehicles and helps you make a decision based on what factors are most crucial for your business: CriteriaLLPCompanyApplicable LawLimited Liability Partnership Act, 2008 (“LLP Act”)Companies Act, 2013 (the “Act”)Charter DocumentsLLP agreementMemorandum and Articles of Association and certificate of incorporation. Number of Partners/MembersMinimum – 2 Maximum – No limitMinimum – 2 Maximum – 200Liability of Partners / MemberLimited – indicating partners will not be personally liable for any debts of the LLPLimited – indicating members will not be personally liable for any debts of the companyLegal EntityYes, can sue or be sued in the name of LLPYes, can sue or be sued in the name of the CompanyNeed to Appoint a key managerial person/Company SecretaryNoNo, unless applicableBoard MeetingsDepends on the procedure prescribed in the LLP agreementMandatory, at least four (4) in every yearShareholders MeetingNot applicableMandatoryPreparation of Minute BookDepends on the procedure prescribed in the LLP AgreementMandatoryMaintenance of Statutory RegistersLLP is not required to maintain any Registers, Records and Minutes unless specifically mandated by LLP Agreement. The partners are at liberty to decide the requirements. A Company is required to maintain various Registers, Records and to Minutes of Board Meetings and General Meetings from time to time irrespective of doing business. ConversionCan be converted into a CompanyCan be converted into LLP or any other class of Companies subject to certain restrictions as per the Act. Directorship / PartnershipForeign national can be a partner in the LLP subject to FEMA RegulationsForeign national can be a Director in the Company. AuditLLP is required to get their accounts audited only if their annual turnover exceeds INR 40 Lakhs or capital contribution exceeds INR 25 LakhAll Companies are required to get their accounts audited annually. Withdrawal of capitalPartners can withdraw capital subject to LLP agreement. It is also possible for a partner to reduce contribution liability after giving notice to creditors. Once paid up, capital cannot be withdrawn by shareholders without the approval of the court. Companies can buy back the shares subject to provisions of the Companies Act or transfer shares to others. ManagementLLP is managed by partners as per LLP agreement. Partners can delegate management power to a management team or single partnerManagement of Company is vested with Board of Directors elected by shareholdersTaxability of Dividend in the hands of partner / shareholder Profit distributed by an LLP is completely exempted in the hands of a partner. Dividend from a Company up to INR 10 Lakhs is exempted in the hands of a shareholder. Dividend in excess of ₹10 Lakhs shall be taxable at 10% in the case of a resident individual/Firm. Employee Stock Options Plans for attracting Employees Not ApplicableCompanies can issue Employee Stock Options Plans. FundingLLP cannot raise equity funding, as there is no concept of shareholding in an LLP. Investors would have to be provided an interest in the LLP, often through becoming partners in the LLP Agreement. Private companies are preferred for external funding since shares can be issued against funds received (explained in detail below)ListingAn LLP cannot ‘go’ public, in the sense that it cannot be listed on a stock exchange, which many investors view as a mode to exit from their interest in the entity. Private companies can list their shares on the stock exchange and convert into a public limited company subject to provisions of Companies Act & SEBI Regulations Comparison Chart: LLP vs. Company Funding preference:  Investors are usually more willing to invest in a business vehicle set up as a Company, since through certain arrangements (between the investors, founders and companies) the investors are able to gain the right to ‘control’ their investment. Investors are provided shares in the Company for their investment. To protect their investment, Indian laws allow freedom to the Company to structure share issue and allotment to investors in a manner that is mutually beneficial to both. The investors gain important rights such as the right to vote on certain business decisions, appoint their nominee directors on the board of the Company, gain access to sensitive financials and financial information of the... --- - Published: 2023-03-20 - Modified: 2025-02-10 - URL: https://treelife.in/startups/all-you-need-to-know-about-the-e-commerce-industry-in-india/ - Categories: Startups E-commerce has revolutionized the way businesses operate, not just in India but around the world. It is a business model that enables firms to conduct business over an electronic network, typically the internet. E-commerce operates in all four major market segments: B2B, B2C, C2C, and C2B. The ease and convenience of conducting commercial transactions over the internet have led to the rapid popularity and acceptance of e-commerce worldwide. Here are some frequently asked questions about e-commerce in India: What are the benefits of starting an e-commerce business in India? - The government of India has been promoting e-commerce initiatives such as Startup India, Digital India, allocating funds for the BharatNet Project, and promoting a cashless economy. Registering an e-commerce business in India is a fairly open space, with no entry barriers imposed on domestic and foreign direct investment. What are the steps to start an e-commerce business in India? - The most basic step is to create a business plan designed according to market research, financial budget, and profit margin. Next, register the business for tax compliance and establish a payment gateway on the website. It is also mandatory to register with the Shops and Establishment Act, 1948 and the Employees State Insurance Act, 1948, if applicable. Finally, registration for domain name, Microsoft software licenses, and other software licenses is also needed. What are the benefits of MSME registration for e-commerce businesses? - MSME registration comes with its own set of benefits and is required for any e-commerce business falling within the limits of maximum investment for service providers to be INR 100 crore to appropriately register under MSME. What are the legal compliances needed for setting up an e-commerce business in India? - Legal compliances include registration for tax compliance, payment gateway establishment, registration for licenses such as the Shops and Establishment Act, 1948, Employees State Insurance Act, 1948, and registering the business for domain name and software licenses. FAQs about Setting up E-commerce Business in India What is FDI in e-commerce? FDI (Foreign Direct Investment) in e-commerce refers to the investment made by a foreign company in an Indian e-commerce business. The government has formulated certain guidelines and regulations that govern FDI in India's e-commerce industry. Is FDI allowed in inventory-based e-commerce models? No, FDI is not permitted in the inventory-based model of e-commerce. What are the conditions that e-commerce entities need to fulfill? E-commerce entities must follow specific conditions, such as not directly or indirectly influencing the sale price of goods or services and not exercising ownership or control over the inventory beyond a particular limit. Who is responsible for post-sales services and customer satisfaction in e-commerce? The responsibility for post-sales services and customer satisfaction lies with the seller, as mentioned in the FDI guidelines. Can entities with equity participation or control over inventory sell their products on the marketplace run by the marketplace entity? No, entities with equity participation or control over inventory cannot sell their products on the platform run by the marketplace entity. What consumer protection measures are emphasised in the e-commerce policy? Genuine reviews and ratings, anti-counterfeiting and privacy measures, and e-courts for grievance redressal are some of the consumer protection measures highlighted in the draft e-commerce policy. What is the emphasis on Made-In-India in e-commerce? The Indian government intends to promote the Made-In-India initiative by allowing foreign MNCs to invest in Indian e-commerce companies that hold inventory, with a condition that 100% of the products in the inventory must be Made In India. Are foreign companies allowed to operate e-commerce businesses in India? Foreign companies are allowed to operate e-commerce businesses in India, subject to compliance with Indian laws and regulations. --- - Published: 2023-03-20 - Modified: 2025-06-13 - URL: https://treelife.in/compliance/special-purpose-acquisition-companies-spacs/ - Categories: Compliance What’s the connection between NBA legend Shaquille O Neal, tennis star Serena Williams, former Facebook executive and Silicon Valley investor Chamath Palihapitiya, and Indian media veteran Uday Shankar?  SPACs! What are SPACs and how do they work?   SPAC or Special Purpose Acquisition Company is a company without commercial operations listed on a stock exchange by an experienced management team or an individual with an investment pedigree (known as the Sponsor) with the sole purpose of acquiring or buying out a private company, thus making it public without going through traditional IPO. At times, SPACs are also referred to as blank check companies. The private company being targeted is not known at the start, although the Sponsors could indicate the geography/sector they are interested in investing. For the purpose of this acquisition, the SPAC needs money which is raised through the process of IPO. The IPO’s success solely depends on the faith that the investors have in the Sponsors, since the company has no business / financial performance to speak of. SPACs seek underwriters and institutional investors before offering shares to the public. During IPO, investors are allotted units which comprise of shares along with fractional warrants (SPAC warrants are options given to the warrant holder to buy the shares of the company at a predetermined price on a future date, subject to certain terms and conditions relating to the exercising) that offer them an upside and act as a deal sweetener. The capital raised through the IPO is placed in an interest-bearing trust account until the target company is identified. A SPAC has about two years to discover this target and complete a reverse merger. If the SPAC fails to find a suitable target and complete the process, it gets delisted, liquidated and the entire money kept in the escrow account (along with interest less any taxes/bank fees) is refunded to all the investors. If the target is identified within 2 years, then post the approval of the proposed acquisition by SPAC investors, the SPAC and the target combine to form a publicly traded operating company, leading to an automatic listing of the acquired private company. Note – If the SPAC investor is not comfortable with a planned purchase, he/she has the option to sell the shares and exit, but can keep the warrants. These warrants give you an additional upside if the SPAC is successful and goes better than expected. The deal value of the acquisition could be four to five times higher than funds raised by the SPAC. The difference is met through fresh investments, mainly in the form of Private Investment in Public Equity (PIPE) deals. At the time of a public listing, large private equity and hedge funds can directly invest in and acquire shares of a company at share price or at a discount without going through the stock markets. The funds get access to non-public information on the potential target company from the SPAC after signing a NDA and get the option to invest at the time of the merger. SPACs – why prefer them over traditional IPOs? SPACs are considered a safe bet during choppy markets and the global outbreak of COVID-19 has played a major role in its popularity. Traditional IPOs are seen to be expensive and far more time consuming in terms of registrations, disclosures and processes. SPACs involve lesser parties, lesser negotiations and are perceived to offer a faster and flexible route for venture capital funds and private equity majors to take their private companies public. A regular IPO involves a list of procedures prior to actual listing – doing roadshows, convincing a wide variety of investors regarding future business prospects, deriving optimum valuation for the business etc. All these activities take time and are fraught with uncertainties. This is where SPAC has an advantage. With SPAC already listed, half the work is done. Also, the negotiation works faster since only one party has to be convinced. SPACs work even better for startups – since most successful SPACs are run by experienced business investors, young companies can benefit from that investment expertise and not have to worry too much about swinging investment amounts or shifting negotiations. Broader market sentiment matters less since the SPAC investors commit to the purchase, sometimes allowing companies to remain truer to their original mission statement or purpose than if they were purchased by a larger board of investors. Off late a majority of the SPACs have sponsored startups and companies that are pushing the boundaries of tech and are innovative. Being an investor in a SPAC gives funds and individuals the opportunity to potentially become an investor in such cutting-edge companies What’s in it for the Sponsors and Investors? For the sponsor, though they are not entitled to any remuneration during the process of raising funds and acquiring the target company, the substantial Founder shares and warrants are incredibly valuable. It is not every day that you get to own 20% of a company for $25,000. For investors, SPACs make for a safe bet because their funds are parked in an interest bearing trust account until the merger. In many cases, the investors in a SPAC sell their shares before the merger or at the time of the merger and are able to make good profits SPACs – Picking up steam It is the sheer volume of dry powder sitting with investors – $2. 5 trillion globally – that’s making SPACs quite popular. Also, SPACs offer a simplified path to taking a company public and to access the public markets for both investors and private companies. Over the last 10 years, SPAC has been gradually gaining traction in the US markets. In 2020, SPAC was used as a listing option for every alternate transaction, i. e. 50 per cent of the transactions were done through SPACs. As much as $83 billion was raised. In India, SPAC structure deals are not entirely new. For instance, in 2015, Silver Eagle Acquisition, a SPAC acquired a 30 percent stake in... --- > Discover how New Umbrella Entities (NUE) are shaping India's digital payments. Learn the key differences from NPCI, benefits, eligibility, and latest RBI updates. - Published: 2023-03-20 - Modified: 2025-03-06 - URL: https://treelife.in/fintech/unraveling-the-concept-of-nue/ - Categories: Fintech Over the recent years, cashless payments have become one of the preferred modes of retail transaction in India – particularly in urban markets. Unified Payments Interface (UPI) has allowed users to link their mobile phone numbers to their bank accounts since 2016. That’s made transferring and receiving money via apps as easy as sending a text message, at a minimal cost. With several payment apps to choose from and a quick and simple interface, the popularity of UPI has soared. However, as the traffic builds, it’s getting riskier to depend on just one system. During the pandemic, with people spending more time at home and relying on the internet for shopping and entertainment, there’s been a rising incidence of internet fraud and cyber-crimes. To address the “risk concentration” of only one platform and offer consumers more options, the Reserve Bank of India in 2020 invited private companies to bid for a license to set up new platforms or pan-India umbrella entities to boost the retail payment in the country. These entities are otherwise known as New Umbrella Entities or NUEs. What is an NUE & Why is RBI Introducing It? At present, only the National Payments Council of India (NPCI), an umbrella organisation set up by the Reserve Bank of India (RBI) and the Indian Banks’ Association and incorporated as a not-for-profit entity, supports various payment systems, including RuPay, UPI and National Automated Clearing House, which manage inter-bank transfers. Players in the payments space have indicated the various pitfalls of NPCI being the only entity managing all of the retail payments systems in India. The concerns regarding the systemic risk arising from concentrating operations of a significant portion of retail payments in one entity had been on the radar of the RBI for quite some time now and coupled with the pressure to open up the sector for competition from private players, the RBI has now put in place a regulatory framework that allows private players to establish and operate retail payments systems that enables fund-transfer and merchant payment systems. The RBI’s move is aimed at developing a network parallel to NPCI, which can maintain interoperability with services such as UPI yet foster innovation and inclusion in the payments space offering more retail payment solutions to customers along with expanding the competitive landscape in this area. How is NUE Different from NPCI? NUEs will be for-profit (could also be registered as a Section 8 company under the Companies Act, 2013 as may be decided by it) and will be allowed to charge fees for transactions, unlike NPCI. They will be able to earn interest from the float that customers maintain in their online shopping accounts. According to RBI Guidelines, the NUE licence would give companies the opportunity to set up, manage and operate ATMs, White Label PoS, Aadhaar-based payments and remittance services, develop new payment methods, standards and technologies and monitor related issues in the country and internationally. RBI will authorize these NUEs under section 4 of the Payment and Settlement Systems Act, 2007. Eligibility & Who Can Apply for NUE? All entities owned and controlled by resident Indian citizens (as defined under FEMA rules) with at least three years of experience in the payment ecosystem as a Payment System Operator (PSO), Payment Service Provider (PSP) or Technology Service Provider (TSP) can apply for NUE. Promoter: Any entity holding more than 25% of the paid-up capital of the NUE shall be deemed to be a promoter. A promoter will hold at least 25% and up to 40% in the operator and must be an Indian resident. In case of Foreign Direct Investment (FDI) / Foreign Portfolio Investor (FPI): The applicant entity should – Comply with the FDI policy and guidelines of the Indian government Comply with capital requirements as per FEMA rules / regulations Comply with corporate governance norms issued by RBI Obtain RBI’s approval for the appointment of board members. RBI’s fit and proper criteria for applicant entity and promoter – Should have a track record of financial integrity, good reputation & character and honesty. Such a person should not be convicted by a court for any economic offence or any offence under RBI laws; should not be declared insolvent and not discharged; should not be financially unsound or of an unsound mind. Capital & Governance Requirements for NUE At the time of application: The entity, applying for NUE, should have a minimum paid-up capital of INR 500 crore. The promoter should be able to demonstrate a capital contribution of at least 10% i. e. INR 50 crore at the time of application (to be further increased to at least 25% at the time of commencement of business) A single promoter or group cannot hold more than 40% investment in the capital of the NUE. Foreign companies can own a maximum 25% and are therefore teaming up with local players. Subsequently A minimum net worth of INR 300 crore should be maintained at all times. The promoter/promoter group shareholding can be diluted to a minimum of 25% after 5 years of commencement of the business. Latest Updates on NUE Licensing by RBI (2024) The Reserve Bank retains the right to approve the appointment of Directors as also to nominate a member on the Board of the New umbrella entity. The Application Process Once an entity applies for the license of NUE, a scrutiny of applications will be undertaken by an External Advisory Committee (EAC). The EAC will submit its recommendations to the RBI. Board for Regulation and Supervision of Payment and Settlement Systems (BPSS) will be the final authority on issuing authorization for setting up the NUE. This whole process should tentatively be completed within a period of six months. Who had applied for NUE license and Recent Developments? Six groups have applied for the NUE licence, for which the deadline was March 31, 2021: A consortium consisting of Amazon, Visa Inc. , Indian private lenders ICICI Bank Ltd and Axis Bank, and two financial-services startups, Pine Labs and BillDesk Another group is... --- - Published: 2023-03-20 - Modified: 2025-02-07 - URL: https://treelife.in/taxation/tax-efficiency-strategies-for-businesses-how-to-save-money-on-taxes-and-maximize-earnings/ - Categories: Taxation Saving tax money is a crucial aspect of running a profitable business. However, not all entrepreneurs are familiar with the tax provisions and available tax-saving strategies. By introducing tax efficiencies in their financial planning, startups and other businesses can save money and resources that can be used for growth. Here are some tax efficiency strategies for businesses, including startups, to reduce their overall tax liability and maximize earnings: 1. Proper Book Keeping Keeping accurate financial records is paramount to managing business expenses properly. Many business expenses are tax-deductible, so keeping detailed financial statements and receipts will help you to claim all eligible tax deductions and credits. 2. Registration Under Start-Up India Initiative Start-ups that are registered under the Start-Up India program are eligible for various tax benefits such as tax holidays, angel tax exemption, and more. By taking advantage of this initiative, startups can save money on taxes and allocate those resources to other areas of their business. 3. Donations and Charity Donations made to registered charities and funds are tax-deductible. Giving back to the community not only earns goodwill but can also attract tax benefits. So, consider donating to a registered charity or fund to help your community while also saving money on taxes. 4. Plan Your Investments Consider investing in tax saving schemes or SIPs. These investment accounts offer tax benefits that can help you save money and also prepare for your retirement. 5. Correct Deduction of Taxes at Source Non-deduction of taxes could lead to the disallowance of the entire expense or part thereof for tax purposes. Hence, ensure you’re deducting taxes, where applicable, and at the correct rates in force to avoid any tax disallowance or tax penalty. 6. Depreciation Manufacturing companies can avail of additional tax benefits by claiming depreciation on the purchase of new plants & machinery. Make sure to keep accurate records of all capital expenditures to claim these deductions. By adopting these tax efficiency strategies, businesses, including startups, can save a considerable amount of money on taxes each year, which can be used to reinvest and grow their business. With proper financial planning, businesses can avoid unnecessary expenses and maximize their earnings potential. FAQs Q: What is the importance of proper bookkeeping for tax efficiency in businesses? A: Proper bookkeeping is crucial for tax efficiency as it allows businesses to keep accurate financial records, enabling them to claim all eligible tax deductions and credits. This helps reduce their overall tax liability and maximize earnings. Q: How can startups benefit from registering under the Start-Up India initiative? A: Start-ups registered under the Start-Up India program are eligible for various tax benefits, including tax holidays and angel tax exemption. By taking advantage of these incentives, startups can save money on taxes and allocate those resources to other areas of their business. Q: Can donations and charity contribute to tax savings for businesses? A: Yes, donations made to registered charities and funds are tax-deductible. By donating to a registered charity or fund, businesses can both support their community and save money on taxes. Q: How can planning investments help in tax savings for businesses? A: Planning investments in tax-saving schemes or Systematic Investment Plans (SIPs) can provide businesses with tax benefits. These schemes not only help save money on taxes but also assist in preparing for retirement. Q: Why is correct deduction of taxes at source important for businesses? A: Correctly deducting taxes at source is crucial to avoid disallowance of expenses or tax penalties. Non-deduction of taxes could lead to the disallowance of the entire expense or part thereof for tax purposes. Q: How can manufacturing companies benefit from claiming depreciation on new plants and machinery? A: Manufacturing companies can avail additional tax benefits by claiming depreciation on the purchase of new plants and machinery. Keeping accurate records of capital expenditures is essential to claim these deductions. --- - Published: 2023-03-20 - Modified: 2025-03-04 - URL: https://treelife.in/taxation/know-your-taxes-basics/ - Categories: Taxation TAX A tax is a compulsory fee or financial charge levied by the government on the income, profits, occupation, property, transaction, etc. of the taxpayer. It is everyone’s contribution to the fund for making common public expenditures. Basically, taxes are a source of revenue to run the country for economic growth and development. Some also consider it as a transfer of wealth/ contribution from the rich to the poor betterment via the government. TAXPAYER Everyone who earns or gets an income in India is subject to income tax. But taxes are collected from those whose income is more than the basic exemption limits prescribed by the government. A taxpayer may be an individual, a partnership firm, a company, the government itself, and any other legal entity. He may or may not be a citizen of India and he may or may not be a resident of India. TAX COLLECTOR The Ministry of Finance heads the Department of Revenue, which functions under the direction and control of the Revenue Secretary. He exercises control through two statutory bodies – the Central Board of Direct Taxes (“CBDT”) and the Central Board of Indirect Taxes and Customs (“CBIC”). There are many taxes levied by the state governments and local bodies also. TYPES OF TAX There are two groups of tax systems – progressive and regressive. Progressive is the one where the tax rate increases with the taxpayer’s income. While regressive is the one where the tax rate decreases with an increase in income. The former is beneficial for rich people. India follows the progressive tax system. Direct Taxes Direct taxes are collected from the person directly. Parliament passes the finance bill every year to give effect to any amendments proposed in the income tax law and to specify the rates of income tax for the purpose of self-assessment tax, advance tax, and tax deducted at source. Eg income tax, equalization levy, etc. Indirect Taxes Indirect taxes are the taxes that are imposed on goods and services. They are collected by the source that sells the product/ services thereby increasing the cost of the product/ services. eg. goods and services tax, excise and customs duty, securities transaction tax, commodities transaction tax, entertainment tax, etc. Other Types Stamp duty, registration fees, property tax, toll tax. DIRECT TAX: Taxable Income As per the income tax act, the “total income” of the year of a person is charged to income tax. Certain deductions are allowed to be deducted from the total income, eg. investments to provident fund, the premium for life insurance and medical insurance, interest income from the savings bank, principle/ interest paid for a home loan and the education loan, etc. (all these are subject to provisions of the income tax laws). “Total income” includes the income earned or received or accrued or arose in India or outside India depending on the residential status of the person and other provisions of the law to bring the taxability. The income tax act has not exhaustively defined the term income but extensively covered many types and sources of income. Direct tax is divided into 5 main categories of income – salary income, income from house property, income from business/profession, capital gains, and income from other sources. Exempt Income Certain incomes are treated as exempt, which will not be included in the calculation of total income, eg. agriculture income, house rent allowance, the share of profit derived from partnership firm, gratuity, pension, the amount received under life insurance policy, etc. (all these are subject to provisions of the income tax laws). It is worth noting that exempt income has to be disclosed separately in the return though not under the income statement. Don’t get confused between deductions and exempt income – deduction reduces total taxable income while exempt income is excluded from total taxable income. RETURN OF INCOME To ensure each person that there is a financial record of all the incomes, expenditures, losses, gains, losses, and taxes for each year, a return has to be filed by all those coming under the threshold limits. The return has to be filed annually for the period ranging between April to March i. e. Financial year. Type of personWhen to file*Due Date*Form*CompanyAlways31st OctoberITR 6FirmAlwaysNon audit – 31 July Audit : Audit report – 30 September Return – 31 OctITR 4 – having presumptive income ITR 5 – othersLLPAlwaysNon audit – 31 July Audit : Audit report – 30 September Return – 31 OctITR 5IndividualIf the total income exceeds the basic exemption limitsNon audit – 31 July Audit : Audit report – 30 September Return – 31 OctITR 1 – not having business income and total income should be up to 50 Lakhs ITR 2 – not having business income ITR 3 – having business income TR 4 – having presumptive incomeHUFIf the total income exceeds the basic exemption limitsNon audit – 31 July Audit : Audit report – 30 September Return – 31 OctITR 2 – not having business income ITR 3 – having business income ITR 4 – having presumptive income *unless amended/ otherwise notified by CBDT Please note that the above table has been prepared based on generic detail and may subject to the addition/ deletion of any forms as prescribed by CBDT. TAX AUDIT Concept Audit refers to the official inspection of an organization’s accounts and production of reports. Tax audit is an examination or review of accounts of business or profession carried out by taxpayers from an income tax point of view. Audit is applicable to any person who: Carries on business & sales, having turnover or gross receipts exceeds INR 1 Cr for the financial year. Subsequently, the limit has been increased to 5 Cr and recently in budget’21 to 10 Cr subject to certain conditions. Simply put – If your turnover exceeds 1 Cr/ 10 Cr as the case may be, have a look at the applicability. Carries on profession, having gross receipts exceeds INR 50 Lakhs for the financial year. Taxpayer carrying on business or... --- - Published: 2023-03-17 - Modified: 2025-08-25 - URL: https://treelife.in/legal/impact-of-pmla-amendments-on-virtual-digital-asset-transactions/ - Categories: Legal Notification Coverage The Ministry of Finance has notified an amendment in Prevention of Money-Laundering Act, 2002 (“Act”) by way of Notification No. S. O. 1072(E) dated 07. 03. 2023 (“Notification”). The Act has been amended to include cryptocurrency or virtual digital assets (“VDA”) transactions within its scope. This means that certain transactions are now subject to the provisions of the Act. The amendment shall be applicable to the following entities: (a) exchange between virtual digital assets and fiat currencies; (b) exchange between one or more forms of virtual digital assets; (c) transfer of virtual digital assets; (d) safekeeping or administration of virtual digital assets or instruments enabling control over virtual digital assets; and (e) participation in and provision of financial services related to an issuer’s offer and sale of a virtual digital asset. If a company falls under the above mentioned categories they are considered to be Virtual Assets Service Providers (“VASPs”) and are required to follow various reporting requirements. Reporting Requirements Verifying Identity: Under section 11A of the Act, every reporting entity shall verify the identity of its clients and the beneficial owner, by: authentication under section 2(c) of the Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Act, 2016, if the reporting entity is a banking company; offline verification under the Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Act, 2016; use of passport issued under section 4 of the Passports Act, 1967; and use of any other officially valid document or modes of identification as may be notified by the Central Government on this behalf. Records Maintenance: Under section 12 of the Act, Every reporting entity shall: maintain a record of all transactions as to enable it to reconstruct individual transactions (for 5 years from the date of the transaction); furnish to the Director, information relating to such transactions, whether attempted or executed, the nature and value of which may be prescribed; and (iii) maintain record of documents evidencing identity of its clients and beneficial owners as well as account files and business correspondence relating to its clients (for 5 years after the business relationship between a client and the reporting entity has ended). Every information maintained, furnished or verified, shall be kept confidential. Conclusion It can be therefore concluded that, the activities of any company who is just a marketplace or an aggregator of VDAs would not fall within the purview of this amendment. However, if a company engages in activities related to the buying and selling of VDAs, such as processing transactions, offering VDAs for sale, making purchase offers, or providing financial services related to them, it will be considered a reporting entity. In our view, advisory services or other non-financial services which do not include any actual facilitation of payments/ sale would not be covered under the ambit of the amendment. However, if a reporting entity engages in such activities, it must comply with the above mentioned requirements. --- - Published: 2023-03-13 - Modified: 2025-08-07 - URL: https://treelife.in/legal/de-coding-the-co-founders-agreement/ - Categories: Legal Starting a business involves risks, and it is important to take precautionary steps to safeguard your investment. One of these steps includes drafting a Co-Founders Agreement, especially if your startup is co-founded by more than one person. This agreement lays down the terms and conditions between co-founders and helps navigate their day-to-day operations, resolve any disputes that may arise, and clarify profit-sharing and intellectual property rights. Here are some key clauses that should be part of your Co-Founders Agreement to ensure smooth operation of your business: Capital Contribution: Clearly state the contribution that each co-founder will make to the company, the percentage of total capital held by each of them, and the form and manner of the contribution. Roles and Responsibilities: Describe each co-founder’s roles and responsibilities in the company and assign specific decision-making responsibilities. Transfer of Shares: Clearly state any restrictions on the transferability of shares held by the founders, including lock-in of shares, vesting of shares, and right of first refusal. Non-Compete: Incorporate a non-compete clause to protect the business and the interests of other founders. The clause should clearly state that founders are not eligible to engage in activities that conflict with the objectives of the business while they are part of the company and for a certain number of years post-exit. Confidentiality: Incorporate a confidentiality clause to protect the business’s know-how, client information, pricing, and future strategies, among other things. Intellectual Property: Ensure that all intellectual property developed during the course of the business is owned by the business and not by any individual co-founder. Exit Process: Clearly state the manner to be adopted and the exit mechanism in case any co-founder is removed from the company or wants to exit voluntarily. Dispute Resolution: Provide a clear mechanism for the resolution of deadlocks or conflicts that may arise between the co-founders, such as arbitration. Compensation: Determine the compensation to be paid to each co-founder and state the profit-sharing mechanism. Voting Matters and Governance: Address any voting matters and governance issues to ensure smoother decision-making in the long run. Incorporating these clauses into your Co-Founders Agreement can help build a long-lasting and successful relationship between co-founders and lead to the ultimate success of your business. --- - Published: 2023-03-13 - Modified: 2025-08-07 - URL: https://treelife.in/legal/understanding-ipr-relating-to-work-products/ - Categories: Legal - Tags: Employment Agreement, Intellectual Property, Intellectual Property Assignment Agreement, Intellectual Property Rights, IPR in Employment How to Understand Intellectual Property Rights in Employment? Intellectual Property is any creative work or invention of the mind and it belongs to the person who created it unless it is stated otherwise in a predetermined contract. In the case of employment, the employer may own or have assigned rights over the intellectual property that an employee creates during the employment period, if his signed employment contract says so. But, the employee still has original rights over the work they created and can claim them later after leaving the company which may lead to confusion and potential dispute. Therefore, it is essential to include terms related to the ownership of intellectual property in employment contracts, independent contractor agreements, or consultant and designer agreements. What falls under Intellectual Property Rights? Intellectual property includes inventions, designs, literary and artistic works, trademarks (symbols, and images) used in commerce. There are nine categories of intellectual property such as copyrights, trademarks, patents, designs, geographical indications, trade secrets, and more. Some key attributes of IPRs are that they are intangible assets, creations of the mind, and entail negative rights which means the owner can exclude others from using their property. Under the employment scene, the most common IPRs are industrial designs, copyrights, trademarks, inventions and patents, trade secrets, and more. Protection of intellectual property is crucial, as employees have access to the business's internal and pre-existing codes, models, and systems. Employees can leak or steal data and share it with competitors. Therefore, it is essential to protect IPRs from being stolen or leaked from the company. Ownership of IPR in Employment As per common practice and industry standards, the employer owns the intellectual property an employee creates during their employment, since the employer invests in the employee in terms of salary and providing infrastructure and basic resources which enables the employee to create such work product and IP. However, no blanket rights are granted to employers, and there are some factors to consider while resolving any dispute related to the ownership of intellectual property rights in employment. Ordinarily, the employment agreement signed by the employee at the time of agreeing to work with the employer will detail out the IP rights and which party will retain ownership in the work product consisting of such IP and for how long. Including clauses about confidentiality in employment contracts or commercial relationships between the parties can also help to protect intellectual property. If there is no pre-existing agreement defining terms of ownership of IPR between employee and the employer, the employee can assign his rights in the IP by executing an assignment deed at a subsequent stage in favour of the employer, based on mutual understanding. By including clear clauses in employment contracts or other written agreements, employers can define title to seek protect their IPRs and prevent any legal disputes regarding ownership. Understanding Intellectual Property Rights in Employment: Key Factors and Agreements In India, the ownership of Intellectual Property (IP) rights can vary under different IP laws. Copyright law states that the creator or author is the first owner of copyright, and patents law says that the inventor is the first owner. The Designs Act, 2000, mandates a procedure for the assignment of designs similar to patent assignments. Trademarks are the property of the registered proprietor. However, there is no current domestic legislation protecting trade secrets or confidential information. Hence, disputes may arise between employers and employees regarding ownership rights, which can be resolved by including clear terms in employment contracts for how employee-developed IP will be dealt with. Key Factors to Decide Ownership in IPR Statutory Provisions – The ownership rights of IP will be decided according to clear legal provisions specified in law. Contract of Service – The employer must pay salary to the employee for work done under a contract of service, and the employer can claim the ownership of IP if provided in the employment contract. Agreement for IP Ownership – An intellectual property assignment agreement between the employer and employee specifies the ownership of IP in different situations. This agreement solves the ownership issue with respect to the IP created during the employment, especially if terms of ownership are not contemplated in the employment agreement itself. Nature of Work – If there is no statutory provision, the nature of work that the employee is engaged in can decide the ownership of the IP created during the employment. If any IP is created by the employee in connection with work profile and part of his day-to-day functions, then it belongs to the employer unless there is a contrary contractual understanding. Agreements to Execute Between Employer and Employee to Avoid Disputes Employment Agreement It is recommended to execute a detailed and exhaustive employment agreement at the time of hiring an employee that mentions the ownership of IP generated during the course of employment. Confidentiality and Intellectual Property Assignment clauses, and governing law clauses can be included. Intellectual Property Assignment Agreement If the employer wants to acquire the IP created by an employee that does not fall under the employee's nature of work and IP that doesn’t get owned by the employer automatically, an IP Assignment Agreement can be executed subsequently with proper terms and conditions. Conclusion Employers need to protect their IP, but they cannot always be the deemed owner of IP created by an employee during the employment. With proper contracts between the employer and the employee, the risks associated with the ownership of IP can be mitigated. To avoid disputes, terms and conditions of ownership of IP created during the employment must be executed on paper, and a lawyer can help dilute the prospective risk of tussles for ownership rights. --- - Published: 2023-03-13 - Modified: 2025-08-07 - URL: https://treelife.in/legal/why-do-angel-investors-and-vc-funds-ask-for-preference-shares-in-a-funding-round/ - Categories: Legal - Tags: angel investors, funding, Preference shares, VC funds In this blog, we will discuss the reasons why investors ask companies to issue preference shares during their funding rounds. We'll also cover what preference shares are, their features, and their types. Section 43 of the Companies Act, 2013 states that (ii) “preference share capital‘‘, with reference to any company limited by shares, means that part of the issued share capital of the company which carries or would carry a preferential right with respect to— (a) payment of dividend, either as a fixed amount or an amount calculated at a fixed rate, which may either be free of or subject to income-tax; and (b) repayment, in the case of a winding up or repayment of capital, of the amount of the share capital paid-up or deemed to have been paid-up, whether or not, there is a preferential right to the payment of any fixed premium or premium on any fixed scale, specified in the memorandum or articles of the company; (iii) capital shall be deemed to be preference capital, notwithstanding that it is entitled to either or both of the following rights, namely: — (a) that in respect of dividends, in addition to the preferential rights to the amounts specified above, it has a right to participate, whether fully or to a limited extent, with capital not entitled to the preferential right aforesaid; (b) that in respect of capital, in addition to the preferential right to the repayment, on a winding up, of the amounts specified above, it has a right to participate, whether fully or to a limited extent, with capital not entitled to that preferential right in any surplus which may remain after the entire capital has been repaid. ” From the above definition, we can understand that Preference Shares are those shares that are given priority over other equity shares. Preference Shares are held by preference shareholders who get the right to receive the first payouts in case the company decides to pay its investors any dividends. Another way to understand preference shares is those shares whose shareholders have the right to claim dividends during the lifetime of a company. The same shareholders also can claim repayment of capital in case the company is wound up or liquidated. These shares combine the characteristics of debt and equity both. Preference shares are given priority over other equity shares and are held by preference shareholders who receive the first payouts in case the company pays its investors any dividends. These shares also provide a preferential right to claim dividends during the lifetime of a company and the repayment of capital if the company is liquidated. The features of preference shares: Dividend payouts: Preference shares allow holders to receive dividend payouts when other stockholders may not receive any dividends or receive them later. The payouts can be fixed or floating based on the interest rate benchmark. Preference in assets: When the company is liquidated or wound up, preference shares get priority over non-preferential shareholders when claiming the company's assets. Voting rights: Preference shares generally do not carry voting rights, but preference shareholders may be allowed to vote in specific events that directly affect their rights as holders of preference shares. Convertibility: Preference Shares can be converted into ordinary equity shares. They are typically converted into a predetermined number of non-preference shares after certain trigger events. Types of preference shares: Convertible preference shares: Convertible Preference Shares allow shareholders to convert their Preference Shares into equity shares at a fixed rate after a specified period. Non-convertible preference shares: These shares cannot be converted into equity shares and only receive fixed dividend payouts. Redeemable preference shares: Redeemable Preference Shares can be repurchased or redeemed by the company at a fixed rate and date. Irredeemable preference shares: Irredeemable Preference Shares cannot be redeemed during the company's lifetime. Participating preference shares: These shares allow shareholders to demand a part in the surplus profit of the company at the event of liquidation after the dividends have been paid to other shareholders. Non-participating preference shares: These shares only offer fixed dividends and do not provide shareholders with the additional option of earning dividends from the surplus profits earned by the company. The prime reason investors ask for Preference Shares is the security it offers them, especially when investing in early-stage startups. Preference Shares provide a participating liquidation preference that grants the investor a right to receive its funds in a liquidation event, with the balance of the proceeds being shared ratably amongst the holders of the equity shares and Preference Shares. In a non-participating liquidation preference, the preference holder will receive its predetermined returns, but will not receive any portion of the remaining proceeds. FACTS:  Startup- ABC Private Limited Investor-XYZ Ventures, Investment amount: USD 5 million for 20 percent of the equity in the Startup with a predetermined liquidation preference of 1x of the Investment Amount. (this typically ranges from 1x to 1. 5x depending on the deal size) Liquidation Event Proceeds = USD 100 million As per Non-participating Liquidation Preference, XYZ Ventures will have the option to take the greater of USD 5 million or 20 percent of USD 100 million. Here, XYZ Ventures will opt for the latter and take away USD 20 million; As per the Participating Liquidation Preference, XYZ Ventures will have the right to take USD 5 million first and then partake 20% in the remaining USD 95 million as well. This totals the aggregate amount of return to XYZ Ventures to USD 24 million (USD 5 million + 20% of USD 95 million). In practice, an event of liquidation is not limited to "winding up", under the Companies Act, 2013. It usually includes any merger or consolidation of the company in which its shareholders do not retain a majority of the voting power in the surviving entity, the sale of all or substantially all of the company's assets, and any other transaction constituting a change of control or even an initial public offer. If the company has to be wound up,... --- - Published: 2023-03-10 - Modified: 2025-08-07 - URL: https://treelife.in/legal/5-things-to-keep-in-mind-while-filing-for-trademark/ - Categories: Legal - Tags: legal assistance, trademark, trademark registration As the famous quote by Shakespeare goes, "What's in a name? " Well, in today's world, a lot! With businesses fighting for exclusivity and originality in their names, it has become crucial to protect your brand through Trademark registration. A Trademark, according to Section 2 of the Trade Marks Act, 1999, is a mark that distinguishes the goods and services of one company from another. It can be anything from a symbol to a label or a logo. Trademark registration provides legal rights to the owner to use the name, logo, symbol, etc. , as the identity of their business. It also helps customers associate your brand name with your product/service, creating a strong consumer base. For instance, Cadbury is a multinational company known for its milk chocolates. Still, due to its unique and widely used name, people interchangeably use Cadbury to refer to a basic milk chocolate.   In India, the Ministry of Commerce & Industry, Controller General of Patents, Designs, and Trade Marks, and Indian Government regulate Trademark Registration. Before initiating the registration process, it is essential to keep the following crucial aspects in mind: What can be trademarked? Understand what can be trademarked and what cannot. You can trademark a wordmark, device mark or logo, unique sound mark associated with your brand, or a new color/shade of color. Which are the types of Trademarks? Goods marks and Service marks are the two broad categories for trademarks. There are also Product marks, which are marks on products or goods, and Service marks to register services. The applicant needs to choose the appropriate class from the notified classification to register a Trademark according to the nature of its products/service provided. Choose a mark that is protective Choose a unique and easily identifiable mark that protects your brand from infringement. Ensure that your mark is not too common or generic or directly descriptive of your product/service, leading to issues arising due to its similarity with common words or other brand names or logos. Check for similar marks and the availability of the chosen mark in the specific class Running a preliminary search in the database to check for any similar trademarks in the same class is crucial to avoid rejection of the Trademark application. The cost involved The cost of filing a Trademark application varies based on the type of entity applying for the mark. It is advisable to renew the registration before the lapse of ten years; otherwise, the mark will be considered abandoned and can be applied for by someone else. Trademark registration is an efficient tool to gain a competitive edge over other businesses of similar nature. Apart from providing a unique identity, filing for your Trademark comes with a package of advantages that can be beneficial for the business in the long run. These include a greater brand image, product differentiation, identity, and most importantly, legal protection against infringement. If you need any legal assistance in Trademark Registration, Treelife Consulting is a one-stop solution for you. Contact us for more information. --- - Published: 2023-03-07 - Modified: 2025-08-07 - URL: https://treelife.in/finance/elementary-concepts-of-equity-dilution/ - Categories: Finance In the start-up ecosystem, equity distribution is a crucial aspect of wealth creation and value generation. With such importance on the valuation aspect, stakeholders are continuously looking for varied structures to define equity distribution of the company. As such, founders must strike a balance between controlling costs and distributing equity. Although equity distribution has no fixed principles, industry practices offer some broad structures that founders can follow. This post answers frequently asked questions about equity dilution, which is one of the most critical aspects of a start-up. What is dilution of equity? Equity dilution means the reduction of a shareholder’s percentage of ownership in the company as new shareholders are added. Consider a company as a piece of land where two shareholders or founders share the land. Then you bring on board an advisor and an ESOP pool is also created. ,the founders will have to share the same land with them, reducing the founders’ percentage of ownership. When new investors come in, they will have to share the same land too. The same principle applies to a company, as new shareholders come in, the founders’ share in the company gets reduced. The reduction of your space/ percentage of shareholding as a shareholder is termed as dilution of equity. What is primary sale vs. secondary sale? This question often comes across that founders are skeptical about giving away their shares when anyone wants a piece of the company. To address this issue, it’s important to understand two primary concepts – primary and secondary sale. Primary Sale – Primary sale happens when an investor invests money in a company and seeks new shares to be allotted from the company. In primary investment, everyone gets diluted in proportion to their shareholding unless special conditions are mentioned. Secondary Sale – Secondary sale, on the other hand, occurs when the investor is looking to buy already existing shares of the founder or any other existing shareholders by paying money directly to them. There is no dilution or change in the share of other parties, except the buyer and seller. How does it work? Every company has 100% shares, and the number of shares can be increased based on the ratio to post-investment. For example, if two founders (founder A and B) hold 5,250 shares each with a 50% controlling interest in the company, and an investor comes in with an investment of $1 million considering the pre-money valuation of $3 million, the number of shares will increase based on the ratio to post-investment. In this case, 25% (1Mn/4Mn). The post-investment round will dilute the holding of the founders, reducing their controlling interest from the original hold. How much to dilute? The amount of dilution depends on the stage of the business and other factors. Too much dilution can be a concern for future incoming investors, while too little is concerning to investors as they should have skin in the game. The ultimate goal is to grow the business, so even if the dilution numbers are skewed from the expected dilution, the growth of the business is the primary concern. Pre-money vs. post-money Valuation Pre-money valuation is the value of the company before it receives the investment amount, while Post-money valuation is the value of the company after it receives the investment amount. Investors offer equity based on pre-money valuation, but the percentage sought is based on the post-money valuation. Post Money Valuation = Pre Money Valuation + Investment Amount In conclusion, understanding equity dilution and the cap table is a pertinent metric of fundraising and talking to investors. We often see founders neglect it due to a lack of clarity of these concepts. A grasp on these concepts enables the founder to have better control of the shareholding. --- - Published: 2023-03-02 - Modified: 2025-08-07 - URL: https://treelife.in/finance/term-sheet-basics/ - Categories: Finance - Tags: non binding term sheet, term sheet clauses, term sheet for investment, term sheet format, term sheet startup, term sheet template, term sheet venture capital, what is term sheet A Term Sheet is a non-binding document outlining the basic terms and conditions under which an investment will be made. It is essentially a brief understanding between the founders and the potential investor(s). The document summarizes the key points of the commercial agreement set by both parties, before actually executing the definitive agreement(s) and initiating the time-consuming due diligence.   The primary purpose of executing a term sheet is for both parties to concur on the important terms by means of negotiations. Typically, the negotiations for term sheet(s) are not long and the number of iterations between the parties is limited. While term sheets vary for different companies, investors, and even between rounds, there are a few essential terms that should be kept in mind in any fundraising round as they are crucial and most importantly, negotiable.   What is a term sheet? How to draft a term sheet for investment? What are the key clauses in a term sheet? What is a non-binding term sheet? What is the format of a term sheet for venture capital? Here is a comprehensive guide to understanding term sheets for startup with a term sheet template that covers all the essential clauses. A term sheet is a document that outlines the terms and conditions of an investment deal, including the rights and obligations of the parties involved. It serves as a blueprint for the investment transaction and helps both parties to negotiate and finalize the details of the investment. The format of a term sheet for venture capital investment usually includes the following sections: Company details, including name, address, and incorporation date Investment details, including the amount, type of security, and valuation (if applicable) Management and board control, including the appointment of directors Liquidation preference, outlining how the proceeds of a sale or liquidation will be distributed Anti-dilution provisions, which protect the investor's ownership percentage from being diluted Employee Stock Option pool, which is a percentage of the company's equity reserved for employee stock options Pre-emptive rights, which allow the investors to maintain their ownership percentage by subscribing to new shares issued by the company A non-binding term sheet signifies that the terms are subject to further negotiation and are not legally binding. This allows the parties to negotiate without the fear of being contractually bound. While drafting a term sheet, it is essential to seek legal counsel’s assistance to ensure compliance with applicable laws and regulations. Here is a term sheet template that covers all the essential clauses necessary for a successful investment negotiation: Investor: _____________________ Investor Address: _____________________ Amount of Investment: ______________ Type of Security: __________________ Valuation: ______________________ Management and Board Control: ________________________ Liquidation Preference: _______________________________ Anti-Dilution Provisions: ______________________________ Option Pool: _______________________________________ Pre-emptive rights: __________________________________ This term sheet is non-binding and subject to further negotiation. Any investment will be subject to completion of legal due diligence and the execution of the definitive investment documents. This template serves as a starting point for drafting a term sheet. Ensure that all the terms and clauses are carefully negotiated and drafted to meet the specific needs of the company and the investor. Exit rights Achieving a successful exit from a company is the primary goal for most of the financial investors. While there are many routes via which an investor intends to obtain an exit, such as through an IPO, third-party sale or buy-back of their shares, there are other contractual mechanisms available such as a drag-along right and tag-along right which also aid in achieving the desired exit. A 'drag along' clause allows the investors to 'drag' the other shareholders into a joint sale of their shareholding too. Usually, if the investor is a minority shareholder it may become difficult to find a buyer for such shares, hence the investors usually demand a drag-along right to make the sale attractive for any buyer by offering a significant chunk of shareholding of the company. A tag-along provision is a clause that allows the investors to 'tag-along with the promoters or group of shareholders if they find a buyer of their shares on the same terms and conditions. The term sheet is an important document and may create issues for the parties involved if it does not correctly reflect what has been agreed on or fails to deal with key terms which may lead to ambiguity and uncertainty over the exact nature of the relationship between the parties. FAQs Q: What is the difference between a term sheet and an agreement? A: A term sheet is a non-binding preliminary document that outlines the basic terms and conditions of a proposed investment or transaction, while an agreement is a legally binding document that formalizes the terms of the transaction. Q: Who prepares the term sheet? A: Generally, the lead investor or the investor’s legal counsel prepares the term sheet. Q: What is the purpose of a term sheet? A: The purpose of a term sheet is to set out the key terms and conditions of a proposed investment or transaction so that both parties can negotiate and finalize the details of the investment. Q: What happens after a term sheet is signed? A: After a term sheet is signed, the parties will move towards preparing legal documentation such as an investment agreement or a shareholder’s agreement. Q: Is the term sheet legally binding in India? A: The term sheet is usually non-binding and is intended to serve as a framework for further negotiations. However, some clauses of the term sheet such as confidentiality and exclusivity clauses may be legally binding. Q: What is the term sheet process? A: The term sheet process involves negotiation and finalization of the key terms and conditions of an investment or transaction, followed by the preparation of legal documentation. Q: Who signs a term sheet? A: Generally, the lead investor, the other investors and the company sign the term sheet. Q: Do term sheets have signatures? A: Yes, term sheets are signed by the parties involved to indicate their agreement to... --- - Published: 2023-02-23 - Modified: 2025-08-07 - URL: https://treelife.in/legal/understanding-tag-and-drag-along-rights-in-a-shareholders-agreement/ - Categories: Legal - Tags: Drag Along Right, SHA, Shareholder, shareholders agreement, Tag Along Rights, Tag and Drag, Tag and Drag Along Rights In the dynamic realm of corporate governance and shareholder relations, navigating the intricacies of shareholder agreements (hereinafter, “SHA”) is paramount for ensuring clarity, fairness, and accountability. Among the myriad provisions that populate these agreements, tag and drag rights stand out as crucial mechanisms that dictate the dynamics of ownership transfer and decision-making within a company. Tag and drag rights, often included in the SHAs of closely held companies and startups, serve as powerful tools for safeguarding shareholder (including investor) interests, facilitating liquidity events, and preserving harmony among stakeholders. Delving into the nuances of tag and drag rights unveils a complex yet essential aspect of corporate governance, offering insights into their mechanisms, implications, and strategic significance for both majority and minority shareholders.   What are Tag and Drag Along Rights in SHA? At its core, tag (or tag-along) rights and drag (or drag-along) rights are contractual provisions designed to address the potential scenarios where shareholders seek to sell their ownership stakes in a company. These rights play a pivotal role in determining how ownership transfers occur and the extent to which shareholders can protect their interests in such transactions. In essence, the article focuses on comprehending tag and drag rights in an SHA that goes beyond mere contractual clauses; it embodies a deeper understanding of the intricate interplay between shareholder rights, corporate governance, and transactional dynamics.   Importance of Tag and Drag Rights in a Shareholder’s Agreement An SHA is a legally binding document that outlines the rights, obligations, and protections of shareholders in a company. It is typically entered into when an investor comes on board and will include all the shareholders, often in conjunction with the transaction documents, the company's articles of association and other governing documents. SHAs are particularly common in closely-held companies, startups, and private companies where the relationship between shareholders is critical and the ownership structure is more fluid. Tag and drag rights are often critically negotiated when drafting the SHA; here's why they are crucial: Protection of Minority Shareholders: Tag-along rights empower minority shareholders by allowing them to join in a sale of the company initiated by majority shareholders. This ensures that minority shareholders have the opportunity to participate in the sale on the same terms and conditions as the selling majority shareholders. Without tag-along rights, minority shareholders could risk being left behind in transactions that significantly impact the company's ownership and control structures or value. Facilitating Majority Control: Drag-along rights provide a mechanism for majority shareholders to compel minority shareholders to sell their shares alongside theirs in a sale of the company. This provision is particularly advantageous for majority shareholders seeking to streamline the sale process, overcome potential obstacles posed by dissenting minority shareholders, and maximize the attractiveness of the company to potential buyers. Drag-along rights help ensure that majority shareholders can effectively exercise their control over the company's ownership. Clarity on Transfer of Ownership: By including tag and drag rights in an SHA, the parties establish clear rules and procedures for ownership transfers. This clarity helps minimize disputes and uncertainties among shareholders, providing a framework for orderly and efficient transactions. Shareholders can enter into agreements with confidence, knowing that their rights and obligations are clearly defined and protected. Facilitating Liquidity Events: Tag and drag rights are particularly important in the context of liquidity events such as mergers, acquisitions, or sales of the company. These provisions ensure that all shareholders, regardless of their ownership percentage, have the opportunity to participate in and benefit from such transactions. By facilitating liquidity events, tag and drag rights can enhance the attractiveness of the company to potential investors and buyers, ultimately contributing to its growth and success. Drag-Along Rights What are drag-along rights? A drag-along right allows a majority shareholder (i. e. , usually a shareholder holding more than 50% of shares in a company that has voting rights attached) of a company to force the remaining minority shareholders (ie usually a shareholder holding less than 50% of shares in a company that has voting rights attached) to accept an offer from a third party to purchase the whole company.   The majority shareholder who is 'dragging' the other shareholders must offer the minority shareholders the same price, terms and conditions that the majority shareholder has been offered. For example, a majority shareholder who holds 75% of the shares in the company who agrees to sell their shares in a share sale to a potential buyer, must offer the same price for the shares to the minority shareholders if they want to 'drag them along'. A drag-along clause will allow the majority shareholder to 'drag' the remaining minority shareholders with them and require them to sell their shares to the potential buyer at the same price, in order to allow the buyer to purchase the entire company. Why are drag-along rights used? The aim of drag-along rights is to provide liquidity, flexibility and an easy exit route for a majority shareholder. The majority shareholder’s percentage of shares is variable depending on the company's ownership mix and the negotiating strength of the shareholders but is normally between 51% - 75%. As many buyers of a target company will want 100% control over the business and rarely agree to allow a minority shareholder to retain a minority share, it would be difficult for a majority shareholder to accept an offer if the minority shareholders are uncooperative and block the sale of a company.   Although drag-along rights are heavily favoured towards investors/majority shareholders by preventing them from being 'locked in' to the company, these types of clauses also ensure that minority shareholders are treated the same as the majority shareholder.   How are drag-along rights triggered? The conditions triggering a drag-along right are usually contained in the SHA and can range from sales transactions such as mergers and acquisitions, or a change of control in the company, to events of default such as the company/founders failing to provide the investors with an exit. Drag rights are powerful tools available to... --- - Published: 2023-02-23 - Modified: 2025-08-07 - URL: https://treelife.in/finance/fundamentals-of-corporate-finance/ - Categories: Finance Corporate finance is a crucial component of any business’s success, as it encompasses the management of a company’s capital structure and funding activities to enhance its value. Corporate finance is closely linked to business decisions that have a financial and monetary impact, serving as a bridge between the capital market and the corporation. In addition to capital investments, corporate finance is involved with cash flow management, accounting, financial statement preparation, and taxation. The ultimate goal of corporate finance is to optimise a company’s value through resource planning and implementation while balancing risk and profitability. In this article, we will explore the various types of corporate finance and the three pillars that serve as the foundation for this field. Types of corporate finance Corporate finance involves numerous techniques to raise capital for a company, which are classified into short-term and long-term financing options. Short-term corporate finance provides services to a firm for a limited time, usually lasting a few months to a year. This type of financing includes financial lease, trade credit, and accrual accounts. Long-term corporate finance refers to financial support that is stretched out over a year or more, with minimal interest rates that can be repaid through monthly interest payments. Examples of long-term corporate finance include debentures, bank loans, and flotation. Three pillars of corporate finance To understand the fundamentals of corporate finance, it is necessary to understand the three pillars that serve as its foundation. 1. Investments and Capital Budgeting: This pillar involves planning where to position a company’s long-term capital assets to earn the maximum risk-adjusted returns. This includes determining whether or not to pursue an investment opportunity through rigorous financial analysis. Capital budgeting helps financial decision-makers make educated decisions for projects that involve significant capital expenditures and are expected to last a year or more. Projects of this type may include : Investing in new equipment, technology and buildings Upgrading and maintaining current technology and equipment completing existing building renovation projects Increasing their workforce Creating new goods Developing new markets 2. Capital Financing: This pillar involves deciding how to finance the capital investments using the company’s stock, debt, or a combination of the two. The value of the ideal blend for the capital structure is kept in mind while making consistent selections. After determining the best financing mix, the principles assist in putting it in place for the long or short term. 3. Dividend and Return of Capital: This pillar involves determining whether to keep a company’s surplus earnings for future investments and operational needs or to distribute them to shareholders in the form of dividends or share buybacks. The decision must be made with the highest value of the company in mind. Private and public businesses handle dividend choices differently. FAQ 1.  Why is corporate finance important for business?   Corporate finance is important as it helps businesses optimize financial resources, make informed decisions, and maximize shareholder value. 2.  How does financial planning and analysis impact corporate finance?   Financial planning and analysis help companies assess their financial health, make informed decisions, and achieve their financial objectives. 3. What is the role of risk management in corporate finance?   Risk management identifies and mitigates potential financial risks, protecting a company’s assets and ensuring stability. 4. How does corporate finance help maximize shareholder value?   Corporate finance strategies optimize financial decisions and resource allocation to generate higher returns for shareholders. CONCLUSION Corporate financing is critical in any organization, as it helps to maximise wealth distribution and return production. The three pillars mentioned above form the core of corporate finance. By understanding these pillars and the various types of corporate finance, businesses can make informed decisions to optimize their value through resource planning and implementation while balancing risk and profitability. --- - Published: 2023-02-21 - Modified: 2025-08-07 - URL: https://treelife.in/legal/5-important-things-to-keep-in-mind-while-taking-strategic-investment/ - Categories: Legal Strategic investments are made by parties who are not looking for an immediate financial return but instead want to influence the company so they can reap future benefits. These investors are typically called “strategic investors. ” They can be individuals, families, venture capitalists, or other companies which can derive strategic value. What they have in common is that they’re not after a quick buck; they’re interested in the company’s long-term success and are willing to invest time and resources to help it grow. This investment model requires a well-thought-out strategy and a solid legal understanding by both parties. That said, here are five elementary things founders and investors must be mindful of during strategic investments. 1. Founder Veto Rights As a founder, it’s crucial to retain the right to veto any significant decisions regarding the startup. This should include decisions such as major hiring and firing, altering the company’s vision, and changes in the corporate structure. As hinted earlier, these investors only chip in for a say in the startup and not total control. This is where founder veto rights come into play. These policies allow the founder(s) to maintain ultimate control of the startup while still enjoying investments from the investor. Having such policies in place before signing any agreement protects the founders’ vision for the company. 2. Any Business Arrangements Apart From Investments by the Investor Apart from financial assistance, the investor and the startup can agree to other business arrangements. For example, many investors may offer more than just money to startups by bringing new expertise and connections. But what does this mean for founders? Founders must first determine if these arrangements can benefit the startup or potentially damage it. A clause that clearly defines the agreement and the investor’s role (and capacity) can help startups avoid problems. 3. Tag-Along Rights in Case the Investor is Exiting ‘Tag-along rights’ refer to a contractual agreement between the investor and the startup, which states that if the major investor decides to exit the investment, the other shareholders can leave alongside the investor on similar terms. This prevents them from being obliged to stay on in a company that may not be profitable anymore. Founders and investors need to negotiate this before entering a deal, as it protects the latter against any unwanted outcomes. 4. Additional Investment Requirement Protocols It takes time and multiple funding rounds to get a startup on its feet. Thus, in addition to the initial investment, founders and investors should discuss any additional investments that the startup may require going forward. This prepares both parties as it sets out each party’s obligation regarding further investment in the company upfront. Doing this eliminates any miscommunication or surprises later on and gives existing investors a say in ongoing growth decisions. It also ensures that the existing investors have some say over any future dilution of their equity due to additional investments. This step is crucial to keep everyone on the same page and maintain lasting investor relationships. 5. If Buy-Out Conditions Need to Be Discussed Strategic investors must factor in buy-out conditions when investing in a startup. This means discussing with the investor what happens if the startup is acquired by another company. Founders also need to outline when and how to execute such a transaction. Most importantly, they must determine who will manage such a transaction and agree on specific triggers to meet before this process kicks off. Further, these details must remain confidential and not be disclosed outside of the transaction. Preferably, seeking legal assistance to ensure that all details are legally binding while remaining fair for both parties is advisable. These steps will ensure a smooth transition if a buy-out happens during the investment journey. Wrapping Up Taking strategic investment can be a boon for startups and VCs, but keeping a few things in mind is important. Founders should focus on veto rights and consider any other business arrangement an investor offers in addition to the investment itself. They also need to lay down the terms and conditions for future additional investment needs. In the same vein, investors need their ‘tag-long rights’ to protect their bottom line if things go south and clear buy-out conditions if the startup lists for sale. In a nutshell, strategic investments built on these five pillars will favor both parties and lead to long-lasting relationships. --- - Published: 2023-02-20 - Modified: 2025-08-07 - URL: https://treelife.in/legal/digital-lending-guidelines-issued-by-the-reserve-bank-of-india/ - Categories: Legal On September 02, 2022, the Reserve Bank of India (RBI) issued guidelines on digital lending to protect the interests of borrowers and to bring transparency and accountability in the digital lending space. Further, on February 13, 2023, The Reserve Bank of India (RBI) published a set of frequently asked questions (FAQs) on digital lending, which provides guidelines and clarifications on various aspects of digital lending in India. The FAQs cover topics such as the regulatory framework for digital lending platforms, the rights and obligations of borrowers and lenders, data privacy and security, fair practices code, and grievance redressal mechanisms. Some of the key points covered in the FAQs include that the REs may carry out a portion of the lending process physically. Further, it has been stated that only if a lending transaction qualifies under the definition of ‘Digital Lending’, will a service provider facilitating such lending be designated as LSP. It specifies that insurance charges shall be included in the computation of APR only for the insurance which is linked/integrated with loan products as these charges are intrinsic to the nature of such digital loans. It clarifies that while Payment Aggregators (PA) that do not handle funds flowing from the lender to the borrower are not subject to the Guidelines on Digital Lending, any PA that acts as a Loan Service Provider (LSP) must comply with the Digital Lending Guidelines. In cases of delinquent loans, recovery agents can collect cash from borrowers, and these transactions are exempted from the requirement of direct repayment of the loan in the RE’s bank account. It provides clarity on the fact that confirms that repayment can be allowed from a corporate employer who deducts the EMI amount from the borrower’s salary, but it must be ensured that the repayment is directly from the bank account of the employer to the RE. It notes that exemptions from direct disbursal to the bank account of the borrower can be extended to co-lending arrangements between REs for non-PSL loans subject to the condition that no third party other than the REs in a co-lending transaction should have direct or indirect control over the flow of funds at any point of time. The Guidelines on Digital Lending apply to all transactions meeting the definition of ‘Digital Lending’ and to digital loans offered over any digital platform that meets the definition of ‘Digital Lending Apps/ Platforms’ (DLAs). The penal interest/charges levied should be based on the outstanding amount of the loan, and the amount under default should act as the ceiling on which the penal charges can be levied. Any cheque bounce or mandate failure charges, which are levied on a per instance basis, need not be annualized but must be disclosed separately in the KFS under ‘Details about Contingent Charges. ’ The FAQs also emphasize the importance of transparency and disclosure of terms and conditions, interest rates, and charges, and the need to obtain explicit consent from borrowers before sharing their data with third parties. Additionally, the FAQs guide responsible lending practices, such as assessing the borrower’s creditworthiness and ensuring that the loan amount and repayment terms are reasonable and aligned with the borrower’s income and expenses. --- - Published: 2023-02-08 - Modified: 2025-07-21 - URL: https://treelife.in/startups/thrasio-business-model-and-the-indian-startup-ecosystem/ - Categories: Startups Introduction Thrasio, a US-based unicorn, has created a lot of buzz in the startup ecosystem because of its unique operations of buying and scaling up select online brands. Thrasio follows an acquisition-entrepreneurship template, by surfing Amazon’s third-party ecosystem. The company focuses on acquiring Amazon sellers’ businesses and scaling them up, earning $100 million in profit last year. In the startup ecosystem Thrasio’s success is now known as the Thrasio Model. What is the Thrasio Business Model? Thrasio’s business model revolves around the fast acquisition of different online businesses from Amazon sellers. The company follows a multi-brand and multi-product strategy, which is consumer-brand-focused. After acquiring the businesses, Thrasio overhauls them by customizing their product portfolio, changing the branding, and developing a long-term revenue growth strategy. Thrasio has over 50 experts working on improving the brand and turning it into a profit-doubling machine. In the words of Thrasio itself “We don’t optimize, we mastermind ”. Informed by billions of rows of data sourced from hundreds of APIs every day, Thrasio’s teams make the best possible decisions to maximize sales of every product they own and purchase Even though Thrasio runs the ecommerce business full-time, the previous owner still benefits long-term as they continue to get a percentage of future revenues. Thrasio’s acquisition platform is a win-win for every party involved, as there is a continuous revenue stream for both Thrasio and the previous business owner. Success of Thrasio Thrasio was founded by entrepreneurs Carlos Cashman and Josh Silberstein in mid-2018 and have built a business that has been profitable since inception and growing multifold. Thrasio is a digital consumer goods company that acquires other third-party private label Amazon FBA (fulfilment by Amazon) businesses. The company operates by way of acquiring these businesses after which it optimizes the operations of these businesses. This is done in an attempt to expand their reach through the market, develop the product, as well as the supply chain management. This in turn leads to the expansion of the sales, improvement in financial growth and ultimately scales up the business under the umbrella of the acquiring company. Thrasio’s success reflects in its most recent earnings. The company reported $300 million in revenues and obtained $260 million in public funding, giving it a $1 billion valuation, earning the company unicorn status. Startup Ecosystem in India Based on the Thrasio Model’s proven success, many startups in India have adopted this concept for their success and attracted investor interest. These startups have a similar pitch to that of Thrasio, making fast-growing online brand acquisitions and building their portfolio. These startups have their own strategy, offering unparalleled market expertise, a founder-friendly relationship, or guaranteeing media coverage. Funding has been the main activity in this sector in India, with over $300 million invested in Indian startups. Thrasio is becoming the fastest-growing e-commerce acquisition company worldwide, with its current portfolio comprising 60 Amazon business acquisitions, 6,000 products, and a spot in Amazon’s top 25 sellers’ list. The company has already paid out over $100 million to sellers. The Thrasio Model’s success has been emulated across many startups in India, with each one having a unique strategy for acquisitions and portfolio building. Thrasio Model: Pros and Cons for Small Businesses Pros i. Big cash payouts – these startups pay the businesses money based on the valuation done which usually is much more than they make in a year through their sales in the e-commerce space. ii. Speedy Exit – for those founders who wish to get an easy, hassle free exit from their businesses, this seems the best bet. The entire process is smooth and quicker as compared to the traditional exit mechanisms and completed within 4-6 weeks. iii. Legacy and Goodwill – the most important thing any founder could be worried about is the brand image and the goodwill attached. The Thrasio Model focuses on scaling up the acquired businesses and also smoothening the supply chain. With this being the main objective of these startups, the interest of the founders in terms of brand image is protected. Cons i. Losing long-term profitability – the most important reason for these startups to acquire smaller businesses is the potential they see in the business. They will make the business reach new heights with their expertise but the founders also lose out on the long term profitability attached to the businesses growth. ii. Losing your ownership – eventually when the startups functioning with this model purchase controlling stakes in the business, the founders lose their controlling rights in all future operations. The fact that most of these startups work collaboratively with the founders to scale up the business, the founders in that case have negligible say in the operations of the business and are bound by the decisions taken by these startups. Viability of Thrasio Business Model in Indian Startup Ecosystem When it comes to implementing the Thrasio Model in India, it’s important to understand that the success of the model depends on numbers. The USA’s large number of brands, even the smallest of which can generate millions of dollars in revenue, makes the Thrasio Model perfect. India, on the other hand, has a smaller online market and many consumers prefer traditional retail markets, which may limit the success of startups using the model in India. Maintaining the balance between online and offline businesses is critical for success. Startups need to consider acquiring offline-led brands as well to enter the large offline market. Investors should also weigh the risks of entering into deals at extremely high valuations, as it may not be commensurate with the company’s growth. Investors are contemplating a valuation fight and warning startups of the sameas all startups may approach the same top sellers and have more leverage to command prices. They will then be in the position to command the price as they wish and that’s where the problems begin. The future of these startups based on the Thrasio Model will be determined by what price they buy the brands at, and how they buy them – using... --- - Published: 2023-02-03 - Modified: 2024-08-21 - URL: https://treelife.in/news/union-budget-2023-overview-startups-founders-investors/ - Categories: News First Published on 3rd February 2023 KEY MACRO ECONOMIC INDICATORS GDP growth estimated at 7% This year nearly 6. 5 crore Income tax returns were filed Average processing period of Income Tax Returns reduced from 93 days in financial year 13-14 to 16 days now. Fiscal deficit is estimated to be 5. 9% of GDP Per Capita income has increased to INR 1. 97 lakh p. a. Digital payments widened around 76% in transactions and 91% in value over the last year. BUDGET SNAPSHOT FOR STARTUP STAKEHOLDERS KEY HIGHLIGHTS FOR STARTUP ECOSYSTEM Maximum surcharge rate capped to 25% under new tax regime thereby reducing the maximum tax rate from 42. 74% to 39% Rollover benefit under section 54 and 54F for reinvestment of capital gains in new residential properties capped at INR 10 crore Change in shareholding of eligible start-ups not to impact carry forward of losses as long as such loss is incurred during the period of 10 years (previously 7 years) beginning from the year of incorporation Angel tax provisions extended to infusion of share premium in excess of FMV by non-residents (earlier applicable only to infusion by resident shareholders) – Exemption from angel tax to startups still continues Payments to MSMEs beyond mandated 15 / 45 days (as per MSMED Act) is proposed to be allowed as deduction only on payment basis. Deduction allowed on accrual basis only if payment made within aforementioned mandated time Rebate provided to individuals earning upto INR 7 lakhs in an FY – no tax required to be paid by such individuals STARTUPS Threshold for small businesses to avail the presumptive tax scheme is increased to INR 3 crore from INR 2 crore TDS introduced on net winnings from online games at the time of withdrawal or at the end of the financial year without any threshold. Threshold of INR 10,000 for TDS on winnings lottery, crossword puzzles games, etc clarified to apply to aggregate winnings during a financial year (and not per transaction) Date of incorporation for startups eligible to apply for tax holiday extended to 01 April 2024 (earlier 01 April 2023) Clarification provided that the cost of acquisition / cost of improvement of intangible asset / rights for which no consideration was paid for acquisition will be NIL for the purpose of computation of capital gains Provisions of section 28(iv) and section 194R regarding taxability and TDS on benefit or perquisite received in the course of business extended to benefit or perquisite provided in cash Basic customs duty rate reduced to 13% from 21% on goods (other than textiles and agriculture) Custom duty exemption on machinery for manufacture of lithium-ion cells used in batteries of EVs extended to 31 March 2024 FOUNDERS AND TEAM Threshold for professionals to avail the presumptive tax scheme is increased to INR 75 lakhs from INR 50 lakhs Gift of a sum over INR 50,000 by a resident individual to a ‘resident but not ordinarily resident’ individual now taxable in the hands of the recipient Standard deduction of INR 50,000 to salaried individuals, and deduction from family pension up to INR 15,000 now allowed under the new tax regime as well Tax exemption limit increased to INR 25 lakhs from INR 3 lakhs on income from salary under ‘leave encashment’ for non government employees. Anomaly of double deduction of interest on borrowed capital for property (as deduction from income from house property and added to cost of acquisition / improvement for computing capital gains on sale) now removed Income from Insurance policies issued after 01 April 2023 (other than ULIP) having premium above INR 5 lakh in a year now taxable (except where income is received on death of insured person) ANGEL INVESTORS TCS on foreign remittances under LRS and overseas tour packages increased to 20% without any threshold (earlier 5% with a threshold of INR 7 lakhs) There are no specific tax announcements pertaining to VCs except amendments in sec 56 (2)(vii)(b) for offshore funds mentioned above --- - Published: 2023-02-03 - Modified: 2024-09-04 - URL: https://treelife.in/news/the-union-budget-2023-macro-economic-highlights/ - Categories: News First Published on 3rd February, 2023 Vision for Budget 2023 Amrit Kaal – an empowered and inclusive economy Our nation will enter a 25-year period wherein India will go from India@75 to India@100.  Amrit Kaal marks the blueprint to steer the Indian economy for the upcoming years.  The vision for the Amrit Kaal includes technology-driven and knowledge-based economy with strong public finances, and a robust financial sector. The economic agenda for achieving this vision focuses on three things: Facilitating ample opportunities for citizens, especially the youth, to fulfil their aspirations; Providing strong impetus to growth and job creation; Strengthening macro-economic stability The Budget in Amrit Kaal presented by Hon’ble Finance Minister Smt. Nirmala Sitharaman adopts 7 priorities as ‘Saptarishi’   The Union Budget 2023: Macro Economic Highlights Green Growth The Government has proposed to implement many programs for green fuel, green energy, green farming, green mobility, green buildings, and green equipment, and policies for efficient use of energy across various economic sectors. These green growth efforts help in reducing carbon intensity of the economy and provides for largescale green job opportunities. The following key programs have been proposed apart from many other initiatives PM PRANAM – To incentivize States/ UTs to promote usage of alternative fertilizers MISHTI – To ensure Mangrove plantation along the coastline Amrit Dharohar – To implement optimal usage of wetlands GOBARdhan Scheme – To establish 500 “Waste to Wealth” plants to promote circular economy Flow of Money in Budget 2023 The Union Budget 2023: Macro Economic Highlights Economic Growth Indicators Per Capita income has increased to ` 1. 97 lakh pa GDP growth is estimated at 7%, highest amongst largest economies The fiscal deficit is estimated to be 5. 9% of GDP. The government intending to bring the fiscal deficit below 4. 5% of GDP by 2025-26. Capital Investment outlay increased to INR 10 Lakh Crores. Increase of 33% which is ~ 3. 3% of GDP. Effective capex to be INR 13. 7 Lakh crores. ~ 4. 5% of GDP This year around 6. 5 crore Income tax returns were filed and nearly 45% of returns were processed within 24 hours. The average processing period reduced from 93 days in financial year 13-14 to 16 days now. Digital payments has widened by 76% in transactions and 91% in value over the last year. Savings Scheme Proposals A new scheme for Women called Mahila Samman Savings Certificate, will be available for 2 year up to March 2025.  This will offer deposit upto INR 2 lakh at fixed interest rate of 7. 5%. The deposit limit for Senior Citizen Savings Scheme (SCSS) is proposed to enhanced from 15 lakh to 30 lakh subject to the prescribed conditions. The maximum deposit limit for Monthly Income Account Scheme will be enhanced from 4. 5 lakh to 9 lakh for single account and from 9 lakh to 15 lakh for joint account. Reduction in the TDS rate from 30% to 20% on EPF taxable withdrawal in non-PAN cases. KYC process will be streamlined and PAN card will be adopted as a single identifier. Health, Education & Transport initiatives 157 New Nursing colleges to be started National Digital Library to be for children and adolescents 38,800 teachers to be recruited for the 740 Ekalvya Model Residential schools serving for tribal students To empower the youth and help the ‘Amrit Peedhi’, the government have formulated the National Education Policy, focused on skilling, adopted economic policies that facilitate job creation at scale, and have supported business opportunities. 50 additional airports, heliports, water aerodromes and advance landing grounds will be revived for improving regional air connectivity. Highest ever capital outlay of INR 2. 4 lakh crores for railways Other key announcements A system of ‘Unified Filing Process’ will be set-up by the government to share the information or filed return in simplified forms on a common portal, across the agencies. An integrated IT portal will be established for investors to reclaim unclaimed shares and unpaid dividends from the Investor Education and Protection Fund Authority. A one stop solution for reconciliation and updating of identity and address of individuals maintained by various government agencies, regulators and regulated entities will be established using DigiLocker service and Aadhaar as foundational identity. A Central Processing Centre will be setup for faster response to companies through centralized handling of various forms filed with field offices under the Companies Act. At present, India is the largest producer and second largest exporter of Millets. Efforts are made to make India a global hub for Millets. --- - Published: 2023-01-28 - Modified: 2025-07-22 - URL: https://treelife.in/legal/do-you-need-an-agreement-with-your-shareholders/ - Categories: Legal - Tags: shareholder agreement, shareholder agreement template, shareholders agreement, shareholders agreement for private limited company, shareholders agreement format, shareholders' agreement clauses, types of shareholder agreements Business partnerships can be a great endeavor, but when partnerships go bad, things become messy. In such situations, it may be best to part ways, and having a comprehensive Shareholders’ Agreement (SHA) could be your insurance cover. In this article, we will discuss why and how to implement an SHA. Good Partnerships Gone Bad Partnerships that fail can lead to loss of hard work and loss to your ventures. A comprehensive SHA can help protect your interests in such situations. Do You Need a Shareholders’ Agreement? An SHA is your best fallback option in case your business partnership goes south. Here’s what you need to know about it. The equity battle between Arunabh Kumar and Prashant Raj is a reminder of the importance of having a clear and comprehensive SHA in the startup ecosystem. With a partnership, the chances of survival are higher than with sole proprietorships. However, it also has a high failure rate of over 50%. A crystal clear SHA is the main governing agreement of your relationship with your co-founders, the investor and other shareholders, if any. Shareholders’ Agreement Clauses Clauses typically included in an SHA are: Management of the Company, Rights and obligations of the Shareholders, Confidentiality and Non-compete clauses, and Exit rights of shareholders. Shareholders Agreement Format and Draft An SHA format and draft may vary depending on the company structure and you may hire a legal professional to draft one for you. Term Sheet for Shareholders Agreement It is common to draft a Term Sheet before an SHA to set out the key terms before finalizing the SHA. A Term Sheet can provide an outline of what you want to achieve in an SHA. Implementing an SHA A well-documented SHA gives a clear view of how the company will function, ensures lesser hassle if there is a fallout, and most importantly, protects the business from going down. FAQs about SHA Q: What is a shareholders’ agreement? A: A shareholders’ agreement is a legal document that outlines the rights and obligations of shareholders in a company. It provides guidance for shareholder decisions, outlines dispute resolution procedures, and defines shareholder responsibilities towards the company. Q: How do you write a shareholders’ agreement? A: To write a shareholders’ agreement, you should consult with a legal professional who can tailor the document to your specific needs and make sure it meets all legal requirements. Q: Is a shareholders’ agreement legally binding? A: Yes, a shareholder agreement is legally binding and can be enforced by law. Q: Who needs a shareholders’ agreement? A: Any company with multiple shareholders should have a shareholders agreement to clearly define each shareholder’s rights and responsibilities. Q: Who signs the shareholders’ agreement? A: All shareholders in a company should sign the shareholder agreement to show that they understand and agree to the terms outlined therein. Q: Is a shareholders’ agreement mandatory in India? A: A shareholders’ agreement is not mandatory in India. However, it is highly recommended for all companies with multiple shareholders to execute one. Q: What is the benefit of a shareholders’ agreement? A: The benefits of a shareholders’ agreement include clearly defining each shareholder’s role and responsibilities, protecting the company from disputes and disagreements, and outlining dispute resolution procedures. Q: What is the scope of a shareholder agreement? A: The scope of a shareholder agreement is to define the rights and responsibilities of shareholders, outline procedures for decision-making and dispute resolution, and protect the company from disagreements between shareholders. Q: Can I write my own shareholders’ agreement? A: While it is possible to write your own shareholders’ agreement, it is highly recommended to consult with a legal professional to ensure that all necessary clauses are included and that the document meets all legal requirements. Q: What should be included in a shareholders’ agreement? A: A shareholders’ agreement should include clauses on decision-making, share transfer restrictions, dispute resolution, management and operation of the company, and responsibilities and rights of shareholders. Q: What happens if there is no shareholders’ agreement? A: If there is no shareholders’ agreement, disputes between shareholders may lead to legal battles that could harm the company and its reputation. Having a shareholders’ agreement in place can help prevent such conflicts from arising and protect the company from financial loss. --- - Published: 2023-01-23 - Modified: 2024-08-20 - URL: https://treelife.in/news/endorsement-know-hows-for-celebrities-influencers-virtual-influencers-on-social-media-platforms/ - Categories: News First Published on 23rd January, 2023 The Department of Consumer Affairs, Ministry of Consumer Affairs, Food and Public Distribution (vide press release dated January 20, 2023) has released guidelines for celebrities, influencers and virtual influencers specifically with respect to social media platforms. The said guidelines are called ‘Endorsement Know-hows! For Celebrities, Influencers & Virtual Influencers on Social Media platforms These guidelines talks about the disclosure of certain information by such celebs and influencers while they are advertising/ promoting certain products on social media platforms. 1) Let’s break down some key words and it’s meaning Celebrities: Famous personalities, including but not limited to the entertainment or sports industry have the power to affect the decisions or opinions of their audience. Influencers: Creators who advertise products and services with a strong influence on the purchasing decisions or opinions of their audience. Virtual Influencers: Fictional computer-generated ‘people’ or avatars who have realistic characteristics, features, and personalities of humans, and behave in a similar manner as influencers. Material connection: Includes but is not limited to benefits and incentives, such as: Monetary or other compensation; Free products with or without any conditions attached, including those received unsolicited, discounts, gifts; Contest and sweepstakes entries;Trips or hotel stays;Media barters;Coverage and awards; or Any family, personal or employment relationship. 2) Who should be disclosing information? Individuals/ groups who have access to an audience and the power to affect their audiences’ purchasing decisions or opinions about a product, service, brand or experience, because of the influencer’s / celebrity’s authority, knowledge, position, or relationship with their audience. 3) When should such information be disclosed? A material connection between an advertiser and celebrity/ influencer may affect the weight or credibility of the representation made by the celebrity/ influencer. 4) How to disclose information? Information should be hard to miss – in a manner that it is clear, prominent and extremely hard to miss; disclosures should not be mixed with a group of hashtags/ links. In case of endorsement in a picture – disclosure should be superimposed over the images in such a manner so that the person viewing them can see them clearly. In case of endorsement in a video – disclosures shall be placed in the video and not only in the description; such disclosures shall be in both the audio as well as the video format. In case of endorsement in a live stream – disclosures shall be displayed prominently throughout the entire stream. Use of simple and clear language Terms which are allowed: ‘advertisement’ or ‘ad’; ‘sponsored’; ‘paid promotion’ or ‘paid’. Disclosures shall be in the same language as the endorsements. Separate disclosures shall be made apart from platform disclosure tools. 5) Due Diligence Celebrities/influencers are always advised to review and satisfy themselves that the advertiser is in a position to substantiate the claims made in the advertisement. It is strongly recommended that the endorser of a product or service should have actually used or experienced the product or service before endorsing it. 6) Consequences of non-compliance Such celebs/ influencers shall be made liable under the Consumer Protection Act, 2019 for non-compliance or non-disclosure (in case of false or misleading advertisements, penalty may extend up to INR 50 Lakhs). --- - Published: 2023-01-18 - Modified: 2025-08-07 - URL: https://treelife.in/finance/how-to-know-if-revenue-based-financing-is-right-for-your-startup/ - Categories: Finance In 2021, the global revenue-based financing market size was valued at $901. 41 million. This market is expected to grow at a compound annual growth rate of 61. 8% from 2020 to 2027. By 2027, it is estimated to touch $42,349. 44 million in value. Revenue-based finance, which is also referred to as royalty-based financing, is an alternative fundraising model to the equity-based venture capital investment or angel investing model. Instead of offering equity, founders offer investors a percentage of the company’s gross revenues or an opportunity to earn royalties on sales in exchange for funds. In this blog, we explore the pros and cons of revenue-based finances and how it compares to debt-based and equity-based models. Revenue-Based Financing: The Basics  To qualify for revenue-based financing, companies need to be generating a certain amount of revenue. Hence, this model is not accessible to pre-revenue early-stage startups. Companies do not need to give away any equity from their company. Investors offer funds in exchange for a pre-determined percentage (usually between 4 to 10%) of the revenues earned by the company. Typically, there is no set maturity since a company’s revenues can vary from quarter to quarter. However, there may be a flexible time frame, which can range from four months to five years. The monthly payout to investors is dependent upon the revenue generated. Hence, if revenues dip, the company is not stuck with an unaffordable monthly payment. In revenue-based financing, there is always the potential to raise more funds once the initial contract reaches maturity. Revenue-Based vs. Debt-Financing vs. Equity-Based Funding  Startups require funding at various stages and may need to access it via diverse models based on their applicability. Sometimes, startup founders may need to opt for a hybrid model, which can have various components. For instance, a founder may go for a mix of debt and revenue-based funding. Hence, it is important to understand the basics of two other popular funding models work: 1. Debt-Financing In this model, an investor will extend a credit line to the company. The interest and payment tenure will be pre-fixed, akin to a business loan. It comes with certain advantages over a traditional business loan, such as quicker access and a principal amount of higher ticket size. However, founders will need to offer some form of personal guarantee. For instance, they may use personal assets, such as a house, as collateral. They will need to pay a fixed amount every month. Defaults on payment can come with financial penalties. 2. Equity-Based Funding In this model, founders offer an equity stake in the company in exchange for a large chunk of funding. This is a popular model, especially for those startups that require an investment of a higher ticket size and have not started generating any revenue as yet. Venture capitalists tend to bet on the startup idea and hence, demand some ownership and higher returns in exchange for the risk they are undertaking. The Growing Relevance of Revenue-Based Financing  The startup world is seeing a spurt in the adoption of revenue-based financing. There are several reasons for this trend. One of the key advantages of revenue-based funding is that the risk is lower for founders as compared to equity-based funding, where the stakes are much higher, and investors expect returns to the tune of 10X to 20X. Hence, revenue-based financing is relatively cheaper. Another key advantage is that the ownership of the business, autonomy, and decision-making stay with the founders. On the other hand, once venture capital investors come into the equation, founders must be ready for higher scrutiny on the running of the business. In the case of revenue-based financing, investors are satisfied as long as they receive their share of the revenues. They do not occupy board seats or bring in fresh financial demands. In Conclusion The revenue-based finance model is applicable to companies that have demonstrated steady growth but require capital for further expansion. The founders may not wish to part with equity or take a loan. But generating considerable revenue puts them in a position to access this option. Having said that, making the right funding choice is a critical decision for startups, one that must be taken after weighing the pros and cons of all options. Fundraising contracts play a significant role in the ownership, sustainability, and profitability of the business. Hence, it is advisable for startups to partner with a legal and financial firm like Treelife, which comes with the expertise to help them make informed decisions.   --- - Published: 2023-01-11 - Modified: 2025-02-07 - URL: https://treelife.in/finance/all-you-need-to-know-about-setting-up-an-e-commerce-business-in-india/ - Categories: Finance In the previous article we had learnt about what the e-commerce ecosystem is and how it functions in India, the Government of India initiatives taken to promote the same and the Foreign Direct Investment (“FDI”) norms for investment in the e-commerce ecosystem in India. In this article we shall be learning about the laws and regulations applicable, compliances required for an e-commerce startup and the related impact on the economy. Laws and regulations applicable i.  Information Technology Act, 2000 (“IT Act”) – The e-commerce is similar to the traditional marketplaces with the only difference of non-availability of flesh and blood to sell things. Through e-commerce also, the sellers have to generate bills, pay taxes, file returns, prepare ledgers, and maintain records which are done online. The IT Act is the primary legislation that governs and regulates the services provided by e-commerce platforms in India. The IT Act governs online conduct and related aspects of e-commerce and recognizes electronically concluded contracts and digital signatures which are essential for facilitating paper less trading. The Act aims at regulating the use of the Internet by providing punishments for publication of obscene information or hacking or destroying or altering the data from devices. Indian Contracts Act, 1872 – Governs the conditions for validity of contracts formed through electronic means; communication and acceptance of proposals; additionally, revocation, and contract formation between consumers, sellers, and intermediaries. Further, the terms of service, privacy policy, and return policies of any online platform must be legally binding agreements. The seller and buyer on an e-commerce platform enter into an electronic contract while the seller provides the good or services to the buyer. For this purpose, it is important to read the Indian Contract Act with the Information Technology Act, 2000. Transaction security is one of the most important aspects of e-commerce. It is absolutely essential for any e-commerce business to ensure reliability and security of transactions being conducted over the internet. The most reliable means is through cryptography. The most popular and useful method of encryption is public-key cryptography; that is, encryption and decryption techniques involve the use of two kinds of keys, public keys and private keys both of which are mathematically linked. One key is used for encryption and the other corresponding key is used for decryption. The IT Act regulates encryption in India. Digital Signatures – These are electronically attached signatures that can be annexed to e-contracts by the parties and shall be treated equivalent to physical signatures. Section 3 of the IT Act establishes that a signature could be sent using public-key cryptography. In order to link the identity of the sender with the signature, it is necessary to attach a digital certificate which is issued by a certifying authority that confirms the identity of the sender. ii.  Payment and Settlements Systems Act, 2007 A ‘payment system’ indicates a system that enables payment to be effected between a buyer and a seller. An e-commerce business has to qualify as a payment system and comply with the relevant rules of RBI relating to online payments. Further, it is mandatory for every intermediary that is receiving payments through electronic modes to have a Nodal Account in operation for settling the payments of the merchants on its online e-commerce platform. iii.  Sale of Goods Act, 1930 The Sale of Goods Act, 1930 covers what the sales and shipping policy of the e-commerce business must contain. Additionally, such as the warranties, conditions, and the refund and return conditions. iv.  Consumer Protection Act, 2019 read along with Consumer Protection (E-Commerce) Rules, 2020 In order to protect the interest of the consumers, the central government has enacted the Consumer Protection Act, 2019. Section 94 of the Consumer Protection Act, 2019 provides that for the purposes of preventing unfair trade practices in e-commerce, direct selling and also to protect the interest and rights of consumers, the Central Government may take such measures as required. For the same purpose the Consumer Protection (E-Commerce) Rules, 2020 have been enacted to provide the details of the compliances required by every e-commerce business. Compliance requirements for E-commerce business in India i.  Indian Contracts Act, 1872 read with Information Technology Act, 2000 – Terms of Service, Privacy Policy and return policies of any e-commerce platform are to be laid out such that they are legally binding agreements. ii.  Information Technology Act, 2000 and rules thereunder – Compliances under Information Technology (Reasonable Security Practices and Procedures and Sensitive Personal Data Or Information) Rules, 2011 for the policy of privacy and the disclosure of information. Under section 79 of the IT Act certain safe-harbors are available to e-commerce entities functioning as ‘Intermediaries’. Regulations are also applicable to ‘Intermediaries’ relating to the content displayed on the platform, especially pertaining to defamation and obscenity. The Information Technology (Intermediary Guidelines) Rules 2011 lays down stringent liability for e-commerce businesses in India. A digital due diligence is advisable before commencing any e-commerce business. If the end consumers happen to be a European Union resident, General Data Protection Regulations (GDPR) compliance becomes mandatory. iii.  Intellectual Property Issues – the e-commerce business must secure all trademarks in accordance with the Trademarks Act and copyrights intended to be used by it, one must also be mindful to not infringe the trademarks and copyrights of other businesses as well. In the age of such wide use of the internet, e-commerce entities should be aware of various intellectual property infringements that may happen online such as cybersquatting, identity theft, copyright infringement, caching, derivative works, domain name protection, etc. iv.  As per the Reserve Bank of India (“RBI”) notification DPSS. CO. PD. No. 1102 /02. 14. 08/ 2009-10 dated 24 November 2009, it is mandatory for an intermediary which is receiving payments through electronic modes to have a Nodal Account in operation for settling the payments of the merchants on its online e-commerce platform. Further depending on the arrangements for payments for the transactions on the platform, the entity must comply with the relevant rules relating to online payments... --- - Published: 2023-01-09 - Modified: 2025-01-28 - URL: https://treelife.in/finance/digital-rupee-a-brief-introduction/ - Categories: Finance What is a digital rupee? The Reserve Bank of India has launched the pilot of its Central Bank Digital Currency (CBDC), which is being categorized as legal tender in a digital form, by the central bank. Popularly recognized as the digital rupee, it is exchangeable at par with existing currencies and will be considered acceptable for payments and a safe store of value. The Reserve Bank announced the launch of the first pilot for retail digital Rupee (symbolized as “e₹-R”) on December 01, 2022. The pilot is set to cover locations which have been notified by the RBI and are mentioned hereinbelow. The pilot will be available for a closed user group (CUG) comprising participating customers and merchants. The e₹-R shall be in the form of a digital token that represents legal tender. The denominations of this digital token are being touted to be the same as that of the paper currency. Banks shall be responsible for the distribution of the digital currency. Users will be able to transact with e₹-R through a digital wallet offered by the participating banks and stored on mobile phones / devices. The users will be able to transact on a Person to Person (P2P) basis as well as Person to Merchant (P2M) basis too. The Merchants will be having QR codes at the Merchant locations to enable them to accept the e₹-R. The e₹-R would offer features of physical cash like trust, safety and settlement finality. However, as is the case with cash, the digital currency will not earn any interest and may not be subject to conversion to other forms of money, like deposits with banks. Why is digital currency important for India? It is safe to state that the most important reason behind launching the digital currency by the RBI is to provide the country with a catalyst to remain in the virtual currency race. The potential that India and its huge populace carries is no secret and with a digital currency the transactions may just end up simplified and multiplied, which shall further and eventually result in the creation of more capital, thus giving a massive push to our economy. Being called the first digital currency of the nation and aimed at creating an additional option to use money and it isn’t very different from the currently-issued banknotes; only that the digital rupee is expected to be transacted digitally and thus facilitate ease of use. How will you benefit from this? There are various expected benefits of the digital currency which has been rolled out. Few of the benefits can be listed as: · With the introduction of blockchain technology in the mainstream, the digital rupee is set to increase efficiency and transparency. · The use of digital rupee is also set to enable real-time transaction tracking which will further simplify the process of ledger maintenance. · The payment system is expected to be active 24X7 and for all days over the year. The same shall be available for wholesale and retail customers alike. · It shall enable the Indian buyers and customers to make online payment of digital currency without the requirement of a middleman. · It is expected to reduce the intermediaries, and resultantly, the average transaction cost. · Users will not be required to mandatorily open a bank account to transact in digital money, hence increasing the scope of online payments. · The benefits of simplified and quick cross border transactions is a major benefit of digital currencies. As the e₹-R is being backed by the RBI, there will not be any threats of volatility Conclusion The e₹-R is the RBI’s accepted version of cryptocurrencies, which the central bank has dismissed repeatedly and called a serious challenge to the stability of the financial system of the country. It is aimed at creating an additional option to use money which is not very different from the currently issued banknotes, except for the ease of use. It’s only fair to form more opinions and follow the growth of our very own digital currency once the pilot project rolled by the RBI comes to its conclusion. --- - Published: 2022-12-29 - Modified: 2025-01-21 - URL: https://treelife.in/legal/why-companies-must-pay-heed-to-the-id-act-during-layoffs/ - Categories: Legal As of December 2022, 52 Indian firms, including startups, have laid off over 18,000 employees. The unicorns on this list include prominent startups like BYJU’S, Unacademy, MPL, Chargebee, Cars24, LEAD, Ola, OYO, Meesho, Innovaccer, Udaan, and Vedantu. Further, this list includes 15 EdTech startups, which collectively saw 7,868 employee layoffs. Amidst the news of layoffs, Labour and Employment Minister Bhupender Yadav stated that retrenchment and layoffs will not be deemed legal if they are carried out outside the provisions of the Industrial Disputes Act of 1947. What is the Industrial Disputes (ID) Act? The Industrial Disputes Act, constituted on March 11, 1947, is legislation that governs industrial dispute resolution in India. The Act aims to prevent illegal lockouts and strikes and offer relief to employees who are illegally laid off without following due process. It provides guidelines for various processes, such as conciliation, arbitration, and adjudication, with the aim of promoting mutually beneficial relations between employers and employees. Relevance of the ID Act to Layoffs Here’s a snapshot of the provisions of the Act: In the context of the ID act, a layoff is defined as a condition where the company has no option but to deny its employees further work opportunities due to circumstances that make it unable to continue operations. Some examples include a shortage of raw materials, a breakdown of machinery, or a natural calamity. Firms employing more than 100 persons are required to seek the nod of the appropriate government before conducting mass layoffs. However, if there is no response from the government for over 60 days, the permission will be deemed to have been granted. According to Yadav, the jurisdictional authority for mass layoffs in sectors such as EdTech, social media, information technology (IT), and related sectors resides with state governments. The ID Act has certain provisions under which layoffs are deemed legal. For instance, a worker is entitled to compensation equivalent to 50 percent of the total basic wages and dearness allowance for the layoff period, provided they have been in service for over a year. The ID Act also has provisions for the reemployment need of professionals. If a company aims to rehire people in the future, it must prioritize the rehiring of retrenched employees first. What Companies Must Keep in Mind Companies need to keep in mind the various laws that govern incidents such as retrenchment and mass layoffs. Besides having an in-depth understanding from a legal standpoint, they must also plan such pivotal events strategically. The aim is to reduce the negative impact on employees while also keeping the business’ sustainability and profitability in mind. Completely circumventing the law can result in a loss of reputation, reduce employee branding, and lead to financial losses in the event of employee lawsuits. What Employees Must Keep in Mind It is important for employees to understand the terms and conditions of their employment contract. They must go through it in great detail. If they feel they are being treated unfairly without adequate financial compensation, they can seek legal support or appeal to the consumer court to seek a fair outcome. In Conclusion In 2022, tech-enabled businesses have seen the most number of layoffs. Of these, EdTech leads with over 8000 layoffs across content, HR, sales, and tech teams. Around five EdTech companies have shut shop altogether. The social media industry has also seen a large number of layoffs, with Twitter and Meta leading the way. As tech-enabled businesses continue to face new challenges, layoffs will continue to be a part of the cycle. Companies should seek timely interventions to navigate the legal and financial hurdles of these times. By partnering with legal finance specialists such as Treelife early on, companies can build resilience and emerge stronger.   References: https://inc42. com/features/indian-startup-layoffs-tracker https://labour. gov. in/sites/default/files/THEINDUSTRIALDISPUTES_ACT1947_0. pdf https://www. business-standard. com/article/economy-policy/layoffs-deemed-illegal-if-not-carried-as-per-industrial-disputes-act-yadav-122120800970_1. html --- - Published: 2022-12-19 - Modified: 2025-08-07 - URL: https://treelife.in/finance/dividend-payouts-and-significant-dates/ - Categories: Finance Introduction Dividends are typically paid for a fiscal year when the final accounting are completed and the amount of distributable earnings is known. Dividends for a firm’s fiscal year (referred to as a “final dividend”) are due only if declared by the company at its annual general meeting on the suggestion of the Board of Directors. Dividends are sometimes paid by the Board of Directors between two annual general meetings without being declared at an annual general meeting (this is known as an ‘interim dividend’). Section 2(35) of the Companies Act of 2013 defines the term “dividend. ” Any interim dividend is included in the definition of “Dividend. ” It is a broad definition, not a complete one. According to the commonly recognised definition, a “dividend” is a company’s profit that is not retained in the firm and is dispersed to shareholders in proportion to the amount paid-up on the shares owned by them. Dividend Payout Ratio The dividend payout ratio is the ratio of the total amount of dividends paid out to shareholders to the company’s net income. It is the percentage of earnings distributed to shareholders in the form of dividends. The sum not given to shareholders is kept by the firm and used to pay down debt or reinvest in core activities. It is sometimes referred to simply as the payout ratio. The dividend payout ratio can be calculated as the yearly dividend per share divided by the earnings per share (EPS), or equivalently, the dividends divided by net income. The dividend payout ratio is a crucial financial indicator used to assess the long-term viability of a company’s dividend distribution programme. It is the amount of dividends given to shareholders in relation to a company’s total net income. Key Dividend Dates Date of declaration This is the day on which the company’s board of directors declares its intention to pay a cash dividend. A corporation may make a payment one quarter but not the next. Even though a corporation has a history of paying dividends, there is no guarantee that they will be paid until the day of declaration. When a firm declares dividends, it incurs a debt on its books. The declaration specifies the amount of the dividend to be paid as well as the record and payment dates. Date of Record (& ex-dividend rate) The corporation determines which shareholders are entitled to the dividend based on the date of record. Unless the shares are held in street names, a corporation keeps a record of all its shareholders. The term “street-name” refers to the fact that you hold your shares through a brokerage account. In some circumstances, the corporation pays the broker, who then sends the cash dividend into your account. The ex-dividend date is two days before the record date. Investors who possess the stock prior to the ex-dividend date are entitled to the dividend, however investors who purchase the shares on or after the ex-dividend date are not. As a result, the stock’s value falls on the ex-dividend date since it trades without the right to the dividend, and the business’s value falls because the dividend no longer belongs to the firm. Date of payment It is the day on which you will get your cash dividend. If you own your shares through a brokerage account (also known as a street-name account), the firm pays the broker, who puts the cash dividend into your account. Conclusion Some businesses provide dividend-paying stocks, which pay out a percentage of profits in cash to owners on a quarterly basis. If you decide to purchase a dividend-paying stock, keep the aforementioned three dates in mind to guarantee that you receive the cash you are entitled to. --- > You’re working on a lovely website for your company when the developer requests your Terms & Conditions (“T&C”) and Privacy Policy (“PP”) page. - Published: 2022-12-07 - Modified: 2025-03-05 - URL: https://treelife.in/legal/do-i-need-terms-conditions-and-privacy-policy-for-my-business/ - Categories: Legal Introduction You’re working on a lovely website for your company when the developer requests your Terms & Conditions (“T&C”) and Privacy Policy (“PP”) page. You’ve spent hours honing the messaging on your landing page, your bio, and other material. You haven’t even considered an uninteresting project like this. Isn’t that legal jargon at the bottom of websites? Is it even read by anyone? Do you really need a T&C and PP page for your website if you’re a small business? That’s an excellent question. The quick answer is no, technically, but you should. Read this article to know more about why your business should have a T & C and PP page. If you collect or use any personal information from your clients, you must have a PP in place. For instance, email addresses, first and last names, and so on. The goal of this knowledge is to enlighten clients about your collection and use of personal information about them. A T&C understanding presents terms, conditions, prerequisites, and provisions associated with the use of your website or mobile/workplace application, for example, copyright security, account termination in cases of maltreatment, and so on. Important Elements In T&C: Governing law: what nation and/or state law governs your company? Users’ rights and responsibilities: the rules that govern how your website is used. Confidentiality: a provision stating that information gathered via the relationship via the website is not to be divulged to any third parties unless expressly authorized. Security: what types of security do you use on your website? Copyright notice: All text pertaining to the whole content of the website is protected by copyright and other relevant intellectual property rights. Refund policy: the company’s refund policy, if any. Termination: a set of criteria specifying the terms of the agreement’s termination by both parties. And a lot more In PP: Data Collection: Describe how data is gathered and processed. Security: How is personal information safeguarded? Personal Information: the sorts of personal information collected and processed by your website. Cookies: an explanation of cookies and how they are used by your website Data Protection Rights: the rights of data subjects Contact information for your firm, as well as the Data Processing Officer and Data Controller, if relevant. as well as others Why are they needed? Terms and Conditions In contrast with PP, the T&C are not legally required under law. However, it is highly recommended to have one so that the business can anticipate misuses of their website or mobile application, as well as to limit your own danger as the proprietor of the internet business. Without this type of agreement in place, and without it being properly permitted, there is no way for the business to legally limit or restrict how someone may or cannot use their site or app. Copyright infringement issues might arise if clients use the business’ content without their permission or if there is abuse. It is recommended that any online business (even if it is just a simple website or a basic, mobile application) that allows or requires a client to enroll for a record have this agreement set up and present it to clients. Privacy Policy The Information Technology Act was amended in 2009 to provide basic privacy and data protection protections. In India, the privacy legislation currently compels companies and websites to use caution while collecting and handling sensitive personal data or information. A civil provision is now available that specifies damages for a business that fails to use “reasonable security methods and procedures” while managing “sensitive personal data or information,” resulting in unlawful loss or benefit to any individual. Hence it is legally mandated to have a PP for businesses whether small or large. Small firms stand to suffer the most as a result of improper data practices. The business can manage data in accordance with local laws and internal procedures, but if a customer views it as mistreatment, the business may face liability or, at the very least, a costly and time-consuming legal battle to contest the allegation. A Privacy Policy defines the business’ principles for managing information and separates forbidden behaviors from permissible ones. Also, if a consumer authorizes the operations of the business by agreeing/consenting to your Privacy Policy, they are less likely to sue the business. Conclusion Irrespective of the size of your business, having T&C and PP helps increase transparency and the trust your customers have in you. It also helps save the business from future liability that might arise due to the use of the website, the contents of the website, the data collected and how the data is utilized. --- - Published: 2022-11-21 - Modified: 2025-07-22 - URL: https://treelife.in/legal/celebrity-endorsement-agreement/ - Categories: Legal WHAT IS A CELEBRITY ENDORSEMENT AGREEMENT? A celebrity endorsement agreement is a legally binding agreement between a company owning a brand or a product under a brand name and a celebrity or influencer who acts as a brand ambassador, in which such company engages the brand ambassador to provide his services as an influencer of the consumers to promote the company’s product and services on various platforms and media depending on the targeted consumer base of the company. The brand ambassadors and the company have to work together to actively promote the brand before its potential customers or audience and such agreements formalize and define the relationship between the company’s brand and the brand ambassador engaged by such company. Celebrity endorsement agreements are used by the companies to appoint the brand ambassador to legalize their relationship in connection with the promotion of the brand’s products and services. Such agreements can be labelled interchangeably as brand ambassador agreements, celebrity endorsement agreement, endorsement agreement, etc. IMPORTANCE OF MARKETING AND CELEBRITY ENDORSEMENT AGREEMENTS In order to grow, flourish and keep up with the ever updating market conditions, marketing plays an important role for every brand existing in the market. An ever growing focus on brand development, awareness, and authority by deploying various marketing tactics has become one growing concern for any and every brand planning on having a celebrated product in the market. To survive competition from all corners, influencers and brand ambassadors are being hired by such brands for a particular period until their marketing targets are achieved. Celebrities and notable personalities have lately become an integral part and parcel of the brands they endorse. Certainly, they are the face of the brand they endorse and the consumers relate to the celebrity endorser and the product as a package in many scenarios. Such developments have led to the origination of the term brand ambassador, who is a person who markets the product to the consumers and is the face of the product and/or the brand. In the persisting marketing conditions and scenarios, the celebrity endorsement agreement is a pertinent agreement to be executed in between the Company/person owning the brand and the celebrity brand ambassador. If the cut-throat competition around every popular product category if considered, the brands which are doing well in the market and have been on the receiving end of consumer appreciation and subsequent high profits are often noted to engage a notable celebrity to endorse their brand so as to capture a larger market share using the visibility of the celebrity, while paying a fair amount of consideration to the celebrity for his services. Hence, as the brands are ready to spend humongous amount of money and resources on marketing and celebrity endorsements forms a imperative part of every modern day marketing strategy, it becomes very pertinent for all parties involved in an endorsement arrangement to execute a celebrity endorsement agreement to capture the rights and obligations of all such parties involved. It is very important to have an executed agreement which serves as a legal record and a valid proof of agreements in between the parties in the event of any possible disputes or differences that may arise in future relating to the agreement and protect the legal rights and interests of both the contracting parties and for this very reason it becomes absolutely necessary for the parties to execute a celebrity endorsement agreement. Like any other agreement, it helps in reassuring the parties that their contractual relationship will be carried out as agreed by them. Apart from being enforceable in a court of law it also adds to building the credibility and legitimacy of both parties. PROVISIONS TO BE CAPTURED IN A CELEBRITY ENDORSEMENT AGREEMENT A celebrity endorsement agreement includes the rights and obligations required by the company to be fulfilled by the brand ambassador in a certain period stipulated in the agreement. Typically, the celebrity endorsement contact may include: Exhaustive details of the company and the brand ambassador entering into the agreement. Details of rights and limitations pertaining to the services or duties exchanged in connection with sales and promotion to be provided by the brand ambassador to the company. Detailed guidelines and timelines that are to be adhered to by the brand ambassadors while performing their contractual duties. Actions that brand ambassadors should restrain themselves from performing during the time period that they are representing the brand (restrictions). Such restrictions may include endorsement of competing products, engaging in illegal activities, non-disparagement, performing any acts which may prove to be detrimental to the reputation of the company. Compensation and/or commission details of the agreement (Consideration), which is to be provided by the company to the brand ambassadors in return of their services. Exhaustively capture the details of the particular products or services of the company which brand ambassador has to endorse while providing his services. The obligation of the company or brand to perform in assisting brand ambassador performing his part of the agreement. Standard terms and conditions like mode of payment, details and number of promotional events or activities to perform, confidentiality and intellectual property terms (if any), etc. Legal responsibilities and disclosures of parties to ensure proper compliance required by law. Other miscellaneous but pertinent terms and conditions are required to be fulfilled by the parties in the form of requisite clauses such as: Dispute resolution mechanism between the parties; Provision for protection of intellectual property rights; Provision for protection of unauthorised disclosure of confidential information; Provision relating to indemnity to be provided by parties in the event a loss is suffered by either party due to an action/inaction of the other party; Term and termination agreements between the parties; and The representations and warranties provided by each party to the other party. The above points can also be used as checkboxes while drafting the brand ambassadorship agreement. IMPORTANCE OF PROFESSIONAL DRAFTING OF CELEBRITY ENDORSEMENT AGREEMENT There are a plethora of templates available for such agreements on the internet, but they are not... --- - Published: 2022-11-08 - Modified: 2025-04-17 - URL: https://treelife.in/case-studies/saas-company-angel-funding-round/ - Categories: Case Studies Client: SaaS based customer engagement and retention Our Engagement: Legal Advisory-Created a single point window for all legal issues in the organization Actions carried out: Worked closely with the sales team to negotiate and execute SaaS Customer Contracts for India/ US/ EU/ EMEA and South East Asia Implemented GDPR documentation protocol Advised on marketing and IPR infringement issues by competitors Created Legal SOPs and playbooks for various departments Robust employment documentation-policies, employments agreements, NDAs Impact: Successfully executed >100 SaaS Enterprise Contracts globally Reduced liability burden on the organization in terms of commercial exposure through customer contracts Curtailed data breaches by utilizing stringent enforceable legal measures --- - Published: 2022-11-04 - Modified: 2025-02-05 - URL: https://treelife.in/legal/new-amendment-a-step-towards-making-social-media-intermediaries-more-accountable/ - Categories: Legal On October 28, 2022, the Ministry of Electronics and IT (“MeitY”) notified amendments to the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021 (“IT Rules”), categorically sending a warning to the social media intermediaries (“SMI”). This move comes five months after MeitY, in the month of June, proposed a draft of the aforementioned amendments and invited comments from the stakeholders, which garnered considerable reactions and discussions surrounding the regulation of social media in India. The amendments to the IT Rules provide a boost to MeitY’s objective to make internet a safe place for its users while imposing accountability on SMI. The amendments aim at inter alia improving the efficacy of the grievance redressal mechanism provided for in the IT Rules by providing for the establishment of appellate bodies, and proposing certain changes in the grievance redressal mechanism. Furthermore, there was a need felt to ensure better compliance by SMI of the IT Rules. In this light, we have highlighted in brief, the key amendments to the IT Rules below: Introduction of Grievance Appellate Committee Prior to the present amendment, the IT Rules prescribed appointment of grievance officers (“GCs”) by all SMI, to dispose of the complaints made by the users expeditiously and the only recourse available to users / stakeholders against the order of the grievance order was to contest the same before the High Courts or Supreme Court. To remedy the concerns of social media platform users, the amendments have envisaged establishment of one or more Grievance Appellate Committee(s) (“GAC”), each composed of a three-person panel appointment by the government. The GAC would comprise a chairperson and 2 whole time members, of which one would be a government official and the others would be autonomous representatives. Aggrieved users of social media platforms, would have the opportunity to, within 30 days, appeal against orders of the GCs to the GAC and the GAC shall make endeavours to resolve such appeals within 30 days from the date of receipt of such appeal. Furthermore, the GAC has been commissioned to adopt an online mode for the process of resolution of disputes, from the stage of filing an application, till decision thereof. While establishment of GACs is a remarkable step towards strengthening the grievance redressal framework in the SMI world, the amendments fall short in conferring express powers to the GAC, in the enforcement of its decisions. Obligations of SMIs Previously, SMI were responsible to intimate its users of their rules, regulations, privacy policy and user agreement and the categories of content which they are prohibited from sharing or uploading on platforms. The amendments require SMI to make available these rules, regulations, privacy policy and user agreement in all regional languages. In addition, SMI now have the additional obligation to ensure that their users abide by the rules of the platform. This has considerably increased the responsibility of SMIs to supervise and regulate content on their websites and has attracted mixed reactions from both, the social media platforms and its users. Furthermore, according to the amendment, SMI must now address any complaint regarding removal of content from a platform, within 72 hours. --- - Published: 2022-10-12 - Modified: 2025-01-28 - URL: https://treelife.in/finance/what-are-the-benefits-of-flipping/ - Categories: Finance Global Market Access: Flipping core business operations outside India provides a wider audience to the startup. This enables the startup to reach out to a global audience as compared to just India. This access is enabled because of the reasons below which act as a catalyst for such access and expansion. Ease of Operations to manage foreign currency transactions: Multi-currency payment gateway management is easier in jurisdictions like Singapore and the USA. This facilitates faster reconciliation, easier payment mechanisms enable the business to grow faster and swifter. Access to global incubator/s, investors, etc: Flipping opens up new funding opportunities for startups. Exposure and access to global incubators, VCs, and accelerators who may be restricted from funding companies abroad. The new company enables startups to pitch and seek funding from such specialized funding players. Flexibility of financing options and structuring: Countries like Singapore/USA have easier and more flexible regulatory frameworks for the functioning of businesses. For eg in terms of granting of ESOPs, faster IP registration mechanisms, and robust judicial procedures. This offers ease of business and malleability in business operations that startups require. Additionally, options like revenue-based financing and line of credit schemes for startups are easily available. This empowers the entrepreneurs to avail of better financing options than diluting equity all the time. Lower tax rates in certain countries: Multiple countries have lower tax rates which turn out to be lucrative for startups. A lower corporate tax rate helps startups to manage cash flows and plan better for resources. --- - Published: 2022-08-25 - Modified: 2025-08-07 - URL: https://treelife.in/finance/new-amendment-regarding-maintenance-of-accounts-and-books-in-electronic-mode/ - Categories: Finance 25th August 2022 Ministry of Corporate Affairs (MCA) vide a notification dated 5th August 2022 has amended Rule 3 of Companies (Accounts) Rules, 2014, relevant for companies maintaining their accounts and other books and papers in electronic mode. The summary of the amendment is provided as under: 1. Accounts and other books and papers shall remain accessible in India at all times: Prior to this change, Companies were required to ensure that the accounts and other books and papers are accessible in India so that they can be made available to stakeholders as and when required, however, post this amendment, it shall be maintained at all times. Accordingly, the loss of accessibility even for a brief amount of time will be categorized as a non-compliance and no company can decline access to authorities on the pretext that data is accessible otherwise but not accessible at a particular point in time. 2. Back-up of Accounts on servers located in India on daily basis: The accounts and other books and papers of the Company maintained electronically, whether in India or outside India shall be backed up on servers physically located in India on daily basis. Earlier, such backup had to be taken on a “periodic basis”, with the provisions being silent on the length of the period. 3. Details to be provided in case if service provider is located outside India: Sub-rule 6 to Rule 3 has been added stating that in case the service provider of Record keeping through Electronic Mode is located outside India, the company shall intimate the name and address of the person who is in control of such accounts and other Books and Papers in India to the Registrar on an annual basis at the time of filing of financial statement. --- - Published: 2022-08-25 - Modified: 2025-06-13 - URL: https://treelife.in/compliance/new-amendment-startups-need-functional-registered-offices-now/ - Categories: Compliance The Central Government vide its notification dated August 18, 2022 amended the Companies (Incorporation Rules), 2022 to insert a new rule 25B. It stipulates, What is the change? The RoC now has the power to cause a physical verification of the registered office of any company in the following manner: By visiting the registered office address of the Company By cross verifying the supporting documents of such registered office address of the company submitted during the filing. These will be collected during the physical verification and should be duly authenticated by the occupant of the property. The physical verification of the registered office address may be done in the presence of 2 independent witnesses or through the local police. How does it affect startups? In the event, the physical verification is unsuccessful, the RoC shall send a show cause notice to the Company and its directors with an intention to remove the name of the Company from the Register of the Companies under Section 248 of the Companies Act, 2013. On failure to show cause for the reason why the company is not carrying on any business or operations from the registered office address, the company becomes eligible to be struck off the Register of Companies and hence shall shut down. Checklist for ensuring compliance with the new amendment: That the registered office is functional That all documents submitted to RoC shall be kept in physical format at the registered office for verification In the event that the above is not complied with, it is recommended that the Company report accurate details about the registered office to the RoC Any change in the registered office address should be reported to the RoC. Notice of every change of the situation of the registered office, after the date of incorporation of the company, shall be given to the Registrar within thirty days of the change of registered address in form INC—22. --- - Published: 2022-08-24 - Modified: 2025-08-07 - URL: https://treelife.in/startups/10-accounting-tips-for-startups/ - Categories: Startups No creative thinking and innovative ideas can sustain a startup business when the finances run out, therefore accurate bookkeeping and accounting are crucial for every startup business to survive and grow. Here are ten bookkeeping and startup accounting tips to help you manage the startup finances: 1. Basic knowledge of the law Knowing the startup laws and rules that apply to your business and why they are so crucial is the first and most critical step you should take when attempting to handle the startup finances You should be aware of the following: • What startup registrations are necessary to launch the startup business? • What details and records are necessary to record your earnings and outgoings? • What taxes are levied on income and outgoing costs? • By what deadlines must taxes be paid and filed? • How long should invoice copies be kept on file? It is better to be prepared beforehand during tax season. 2. Knowledge of startup accounting methods Running a startup business involves more than just keeping track of the money that comes in and goes out. Instead, the timing of when you record income and expenses i. e, whether you use cash basis accounting or accrual basis accounting, influences how you manage your company’s finances. In cash-basis accounting, you only record income and costs when money has changed hands. If you raise an invoice to someone for a project, the funds will only be recorded as income once it is deposited into your account. The same goes for startup expenses. Contrarily, under accrual accounting, income is recognised when it is earned and expenses are recognised as they are incurred. If you are employed for a job, you record the money once it has been completed. While each accounting method has its own advantages and disadvantages, accrual-basis accounting provides a more realistic view of your company’s finances and performance. Accrual accounting is also better from a tax standpoint since you can claim company expenses on your tax return in the year you incur them rather than the year you actually pay them. 3. Knowledge of basic bookkeeping terminologies Undoubtedly, you’ll encounter new words and phrases, from startup balance sheets to income statements. You should be aware of certain words and expressions. Here are five of the most common bookkeeping phrases you should be aware of, since it is impossible to list them all here. Balance Sheet: This report analyses the financial position of your company. It covers the startup’s capital as well as its assets and liabilities. Its goal is to make clear what your company owes and what it possesses. Chart of Accounts: A complete list of the accounts that are utilised by your company to classify financial activities. Assets, Liabilities, equity, revenues, and various expenses can all fall under this category. Expense: These are the costs that a startup business may experience as a result of its activities, whether they are fixed, variable, accruing, or ongoing. Trial Balance: A startup business document that lists all ledgers in columns for debit and credit. This is done to ensure the mathematical accuracy of a company’s bookkeeping system. Profit and Loss: A financial report that details the revenue and expenses over a period of time. 4. Distinguish your personal and business finances It’s a common error in startup business bookkeeping to mix together personal and business finances. Your company will have trouble as a result in the future. So, as soon as you decide to move forward with your startup, it is always advised to register a separate startup business bank account. This makes it easier to keep track of all your earnings and outgoing costs, and it also helps your company establish its own credit rating. 5. Automate whatever you can Use cloud-based bookkeeping software, and do your business banking online. That way, you can sync your bookkeeping software with your company’s bank account so you always have accurate, up-to-the-date records. Additionally, your essential financial data is securely backed up off-site via the cloud. 6. Retain all documents Startup expenses can be claimed only if the invoices are available in the name of the startup business. Invoices determine the nature of the expenses incurred, whether it’s a Capital or a Revenue expenditure. Hence, if it is incurred for your business, then it has to be retained either to balance your accounts, to determine tax liabilities or to claim tax deductions! 7. Make a schedule for bookkeeping review If you need to make a crucial call, you will make time for it. Why not schedule time to review your bookkeeping as well? Plan to review your books every week or every month. This will ultimately save you time. Additionally, it guarantees that you won’t be stressed out at the end of the fiscal year! Setting aside time for your books is a wise move, even if you outsource your accounting. By monitoring your bookkeeping, you can control your cash flow. You may find it useful when making decisions. 8. Set aside funds to pay the taxes Even though the majority of individuals are aware they must pay business taxes, very few startup business owners prepare for taxes. The issue is that many startup business owners find they don’t have enough cash in hand to pay their taxes when tax season rolls around. As a result, they end up paying the taxes after the expiry of the due date along with Interest & penalty. This adds to the financial burden. As a result, one of the ideal cash flow management tactics is to set aside money for all of the business taxes you’ll have to pay during the year. 9. Create a budget for your company The last thing you would want to do when running a startup business is to rely on guesswork. Many startup business owners find they are in the middle of a project and have no money to continue. And by the time the understanding sinks in, it’s too late to make arrangements for money. That is where... --- - Published: 2022-07-29 - Modified: 2025-01-21 - URL: https://treelife.in/startups/10-things-startups-should-to-include-in-their-investment-pitch-deck/ - Categories: Startups A well-designed, comprehensive but crisp pitch deck is vital for convincing investors that a product has massive growth potential and can scale. We broke down the deck into 10 main sections, they are explained below. We firmly believe that a unique template is needed for every startup, keeping that in mind,we have attempted to build a fundamental framework around which customisations and further additions/deletions can be done for every startup. Broad framework:  Impactful mission statement The startup’s mission and objective statement should ideally encapsulate what the founders aim to achieve with its business. This should be short and crisp (8-10 words) so that it is impactful and precisely conveys to the investors what the startup is trying to solve. s Why Now? This slide should essentially denote the reason that makes the startup attractive and lucrative right now i. e what tailwinds have occurred within the space in which they are operating in which has made the business idea more relevant in the present than in the previous months or years. The Product This slide is where the founders need to accurately denote what business the startup is in. It can include essential features of the product, photos / videos, screenshots of the UI and how the end user will experience the product. The slide should convey why the product idea is viable and competitive and demonstrate what the founders are trying to build and what the investors are putting money towards. Customer Journey Mapping the customer journey gives the investors a complete idea of the customer experience. It illustrates how the end user will interact with the app or website and use the product of the company. Mapping a customer journey can be advantageous for the founders as well by giving them a clear idea of how the product experience is like from the point of view of the end-user. Competitive Differentiation With the emergence of multiple startups in each field, this slide should represent the differentiating factor(s) in the product that this startup has built that makes it stand out from the existing competition. This is the slide that outlines the startup’s competitors, positioning in the market, and the business strategy it has adopted to try and succeed. It can also talk about any exclusive or unique feature or user experience within the product which is not yet implemented by any other startup in the current market. Revenue Streams This slide is one of the most important slides that an investor will look at from a “ROI” perspective. Every possible channel of revenue streams of the startup should be explained in this slide, even if the startup is pre-revenue. It is usually an added advantage if the startup is already generating revenue, the slide can then include customer-wise and category-wise breakdown of revenue along with any existing clients working with them. Product Timelines The Product timeline slide will help the investor understand the product deployment by the startup. Including a timeslide slide in the pitch deck will convey to the investors when the product will start generating revenue, what is the most critical or time-taking phase, what are the important milestones for the startup, when will the investor’s capital be deployed to hit the milestones and goals over the coming months and years, etc. Market Sizing Investors give importance to Market size because it allows them to estimate the future potential of the product and how big can the startup get. This slide usually includes Total Addressable Market (TAM), Service Addressable Market (SAM) and Service Obtainable Market (SOM). Marketing strategies The slide should denote the marketing plan of the founders towards marketing the product to the target audiences. Founders and Management Team The face behind the idea and the execution of the product can be denoted to the investors with the Founders & Management Team slide. The contents of this slide usually include a short bio of the co-founders, their previous work experience, the roles and responsibilities undertaken by them respectively in the company, and a photo. If the Key Management team has been identified and is in place(COO, CTO etc. ), the pitch deck can also include details about them. Keeping these factors in mind while creating a pitch deck can help you be well-prepared for anything and everything that an investor might want to know before investing in your company. --- - Published: 2022-07-22 - Modified: 2025-07-21 - URL: https://treelife.in/legal/key-differences-between-saas-based-model-and-licensing-software/ - Categories: Legal While both SaaS-based and License-based models deal with provision of software, there are certain key distinguishing points between them, viz: In a SaaS-based model, the software is made available in an intangible form on a hosted platform. On the other hand, in a software license model, the software is made available in a physical form i. e. by way of CD-Roms or electronic download from a website, whereby such software is later used on a piece of hardware. In a SaaS model, the users’ information is stored with the software company, and such a company is required to provide reasonable data protection safeguards to the users. However, in a software license model, all information is stored on the user’s hardware, and the user himself manages the security aspects. In a SaaS model, the fees are usually paid on a recurring basis by way of a ‘subscription’ model and for a specific term. The price for such software is usually paid upfront and in full, in a software license model. In a SaaS model, there is no separate maintenance service provided because the same is included as part of the hosted platform service package, along with the requisite hosting and technical support. In contrast, the licensing model does require maintenance services, bug fixes, and updates to be specifically addressed. A SaaS-based model helps the software company in reducing the up-front costs since most SaaS solutions are provided on a monthly or annual subscription basis. In a software licensing model, a larger up-front investment is usually required. This is typically categorized as a capital expenditure whereas SaaS is categorized as an operating expenditure. In a SaaS-based model, software usually includes one set of features and functionality. This means that one has the option to choose a particular solution that is specifically tailored to his industry and/ or required functionality. In a SaaS based model, one can find a solution that only has the features he wants, and not pay for extras he will never use. In a software licensing model, such software might be custom-made to meet very specific needs of a particular industry or even an individual customer. This is usually applicable to those operating in niche industries and markets or organizations that require a highly specialized product that has customizable features. A SaaS-based model allows for easier file sharing, document collaboration, shared calendars, and sharing of data as most of the software data is hosted in the cloud. On the other hand, in a software licensing based model, a software license may only be installed on a limited number of devices and may pose a problem as far as sharing of files and documents may be concerned. Conclusion: As a user, opting for a SaaS-based model or a software license based model depends completely on your needs and on the mode of availability of such software. There may be certain software offerings which may be available only on the SaaS-based model and vice-versa. On the other hand, as a user you might be using a software which has features of both SaaS as well as that of a software license based model. A software company may provide its main offering online and at the same time also provide an application for users’ devices, such that the software license installed on a particular device helps the hardware communicate to the online service. However, software companies, both new and old, are jumping on the SaaS bandwagon and are moving towards a completely SaaS-based model owing to its operational flexibility and lower costs. --- - Published: 2022-07-12 - Modified: 2025-02-07 - URL: https://treelife.in/compliance/understanding-general-data-protection-regulation-gdpr-for-businesses/ - Categories: Compliance - Tags: eu-gdpr, gdpr, General Data Protection Regulation, Principles of GDPR, Understanding GDPR, What is GDPR The implementation of the General Data Protection Regulation (“EU GDPR”) in May 2018 in the European Union (“EU”) brought about new regulations to protect and control the usage and processing of personal information of European residents. The EU GDPR principles aim to harmonize data privacy laws across all member countries and regulate how businesses process and collect personal information of EU residents that interact with such businesses. These principles include lawfulness, fairness and transparency, purpose limitation, data minimization, accuracy, storage limitation, integrity and confidentiality, and accountability. Businesses that attract EU visitors must comply with the EU GDPR, even if they do not sell their goods or services to EU residents. The regulation becomes applicable any time a company stores or processes personal information about EU residents within the EU nations. The GDPR legislation defines several roles responsible for ensuring compliance with the provisions thereof such as (a) the Data Controller; (b) the Data Processor; and (c) Data Protection Officer (“DPO”). The Data Controller dictates how the personal data will be processed and is responsible for ensuring outside contractors comply with EU GDPR. Meanwhile, the Data Processor is responsible for processing data that may be outsourced to them. The GDPR holds processors and controllers liable for breaches or non-compliance. Companies must have a DPO if they: (a) process or store large amounts of EU residents' data; (b) process or store special personal data; (c) regularly monitor data subjects; or (d) are a public authority. The GDPR calls for the designation of a DPO to oversee data security strategy and GDPR compliance. Indian companies must comply with guidelines laid out by the EU GDPR regarding the processing, usage, and collection of personal data of EU residents. Personal data must be obtained for specific, explicit, and legitimate purposes, and not be processed for anything other than the same. The data must be adequate, accurate, and relevant to the purposes for which it is processed. The entities collecting such data shall also ensure that the same is kept/ stored for no longer than as may be necessary. According to the EU GDPR, "personal data" shall consist of information relating to an identifiable natural person, and the same could be personally identifiable in nature. It also mandates that entities collecting personal data of EU residents adopt internal policies and implement appropriate technical and organizational measures that meet the principles of data protection by design and default. These measures could include: (a) minimizing personal data processing; (b) enabling data monitoring by the data subject; (c) transparency with regard to the functions and processing of personal data; and (d) enabling the data controller to create and improve security features. If the processing has multiple purposes, the entities shall obtain consent from the data subjects for all of them. Obtaining consent should be specific, informed, and unambiguous, and not through means like pre-ticked boxes or inactivity. The data controller must appoint processors who provide guarantees to implement appropriate technical and organizational measures that comply with the EU GDPR. Entities must maintain various policies and procedures, including (a) the General Data Protection Policy; (b) the Data Subject Access Rights Procedure; (c) the Data Retention Policy; (d) Data Breach Escalation and Checklist; (e) Employee Privacy Policy and Notice; (f) Processing Customer Data Policy; (g) Guidance on Privacy Notes; and (h) Privacy Policy and Terms of Use for websites and applications. In case of data breaches, the Data Controller must report to the supervisory authority within 72 hours of becoming aware of it. The organization’s privacy policy should state that data subjects should be informed of data breaches without any unreasonable delay. Employees who handle personal data of either customers or other employees must be trained to handle the same in compliance with the EU GDPR. Indian companies must comply with EU GDPR to ensure that personal data is processed in a lawful, transparent and fair manner. By complying with EU GDPR, Indian companies will not only be able to protect their customers' personal data, but they’ll also be able to maintain transparency and accountability in their operations. FAQs about GDPR 1. Are Indian companies required to comply with EU GDPR regulations?   Yes, Indian companies that process or store personal data of EU residents within the EU nations must comply with EU GDPR obligations. 2. What is the definition of "personal data" under GDPR?   Personal data under GDPR is any information related to an identified or identifiable natural person (data subject). An identifiable person is one who can be identified, directly or indirectly, by reference to an identifier (which could include the person’s name, identification number, location, etc. ). 3. What measures should Indian companies adopt to comply with EU GDPR?   Indian companies should adopt internal policies and implement appropriate technical and organizational measures that meet the EU GDPR requirements. These measures could include: (a) minimizing personal data processing; (b), enabling data monitoring by the data subject; (c), transparency with regard to the functions and processing of personal data; and (d) enabling the data controller to create and improve security features. 4. What is the procedure for reporting data breaches under the EU GDPR by Indian companies?   In case of data breaches, the Data Controller must report to the supervisory authority within 72 hours of becoming aware of it. The organization’s privacy policy should state that data subjects should be informed of data breaches without any unreasonable delay. 5. What kind of employee training is required to comply with EU GDPR?   Employees who handle personal data of customers or other employees must be trained to manage the same in compliance with EU GDPR and adopt the requisite measures to ensure that the data is protected and processed in a fair and transparent manner. --- - Published: 2022-07-04 - Modified: 2025-01-21 - URL: https://treelife.in/taxation/taxation-of-social-media-influencers/ - Categories: Taxation Current Context Social media influencers are individuals who are engaged online in building a community platform via social media channels like Instagram, Facebook, Youtube, TikTok and many others. During the 2020 Covid pandemic, there was an exponential increase in the number of influencers and content creators surfacing on these platforms. They were seen garnering a huge number of followers and brand partnerships. With TV advertising decreasing and companies wanting to increase their digital brand awareness, brands nowadays reach out to influencers for promotions. Typically influencers receive freebies consisting of branded products as “PR packages” or affiliate coupon codes (customised with the influencer’s name) in exchange for the influencer promoting the brand’s product on their social platforms. This is referred to as a “Barter Collaboration” wherein an influencer receives a PR package and in return tries out the product or service and reviews it for the public. There is no money involved in this entire process. New Development Section 194R of Income Tax Act, 1961 : Deduction of tax on benefit or perquisite in respect of business or profession 194R. (1) Any person responsible for providing to a resident, any benefit or perquisite, whether convertible into money or not, arising from business or the exercise of a profession, by such resident, shall ensure that tax has been deducted in respect of such benefit or perquisite at the rate of 10% of the total value of such benefit or perquisite before providing the benefit or perquisite to such resident: Businesses are not required to withhold TDS under the provisions of this section in the following cases: If the total value of the benefit or perquisite provided or likely to be provided to a resident does not exceed INR 20,000/- in a financial year. If such benefit or perquisite is being provided by an individual or Hindu Undivided Family (HUF) with total sales, receipts, or turnover less than INR 1 crore (for businesses) or INR 50 lakhs (for professions) in a financial year. This section was inserted in the Finance Act, 2022 and shall be effective from July 1, 2022. “Person responsible for providing” means the person providing such benefit or perquisite, or in case of a company, the company itself including the principal officer. Analysis of the new provision In an interesting development, social media influencers will now receive PR Packages after the brand deducts tax at 10% of the value of the products sent (provided the influencer decides to keep the products). This regulation has come as a response to the fact that many influencers were not showing gifts received from brands as promotional income since no actual payment was made to them. Impact on Influencers Universally, individuals prefer being paid in cash than in-kind. Many influencers believe that this is a positive change since the content creation industry was not recognised as a “serious” profession. Now that it has finally come within the purview of the Indian Government so as to adapt a concrete framework for it, it reflects a change in the perspective towards the industry. Impact on Brands Up until now, the process was fairly smooth for brands, social media managers or management agencies would share a list of suitable influencers with the brand; the brand would approve and accordingly then send PR packages to influencers to promote. Since barter deals were very common in the industry, companies used to send products out to multiple influencers ranging from micro-influencers to big names in the industry with over 1-2 million followers. Now brands will have to prepare a curated list of influencers and content creators that they wish to partner with, and carefully vet and send their products to an exclusive list of influencers owing to requisite tax compliances, and needing to keep a track of which influencer has decided to keep which product or which one has sent it back to the brand. In conclusion, be aware of the TDS implications and comply with the necessary regulations while engaging in any digital marketing services, gifting activities, or influencer marketing. FAQs Q: What is the significance of social media influencers in today’s digital landscape? A: Social media influencers play a significant role in building online communities and promoting brands through popular social media platforms like Instagram, Facebook, YouTube, TikTok, and others. They have gained immense popularity and influence, especially during the COVID-19 pandemic, and are sought after by brands for digital brand awareness. Q: How do social media influencers collaborate with brands for promotions? A: Social media influencers collaborate with brands by promoting their products or services on their social media platforms. This collaboration can take various forms, including sponsored posts, product reviews, giveaways, and brand partnerships. Influencers may receive freebies or affiliate coupon codes from brands in exchange for promoting their offerings to their followers. Q: What is a “Barter Collaboration” in the context of social media influencers? A: A “Barter Collaboration” refers to an arrangement where social media influencers receive PR packages or free products from brands in exchange for promoting the brand’s products or services on their social media platforms. In this arrangement, no money is exchanged between the influencer and the brand. Q: What is Section 194R of the Income Tax Act, 1961, and how does it apply to social media influencers? A: Section 194R of the Income Tax Act, 1961 is a provision that mandates the deduction of tax on benefits or perquisites received by residents from businesses or professions. It applies to social media influencers when they receive benefits or perquisites from brands, even if those benefits are non-monetary in nature. Q: When does Section 194R apply to social media influencers? A: Section 194R applies to social media influencers when the total value of the benefits or perquisites they receive from a brand exceeds INR 20,000 in a financial year. Additionally, this section applies if the benefits are received from any person Q: When did the new provision regarding taxation of social media influencers come into effect? A: The new provision regarding the... --- - Published: 2022-06-30 - Modified: 2025-08-07 - URL: https://treelife.in/taxation/gearing-up-to-file-your-income-tax-return/ - Categories: Taxation Get Ready to File Your Income Tax Return (ITR) – A Comprehensive Guide for AY 2023-2024 As the deadline for filing your Income Tax Returns approaches, it’s time to prepare everything you need to know about filing your ITR. The due date for filing ITR for AY 2022-2023 is July 31, 2023, if audit is not applicable and October 31, 2023, if audit is applicable. It’s essential to file your ITR on time and disclose all your incomes accurately and completely. To ensure the accuracy and completeness of the information requested by the Income Tax Department in the applicable ITR form, you should keep all the required documents handy in advance and be ready with up-to-date information. Here are some essential things to keep in mind while filing your ITR. New Vs. Old Tax Regime The government introduced a new optional tax regime in Budget 2020. From FY 2020-2021 onwards, individual taxpayers can choose between two tax regimes. Under the new regime, taxpayers can offer their income to tax at a lower slab rate. However, they need to forgo various deductions and exemptions available under the old regime. Taxpayers are generally advised to choose the regime at the beginning of the year. However, if you were unable to make planned investments or expenses against which you could claim the tax deduction under the old regime, you can switch to the new regime provided it leads to lower tax liability for you. The slab rates for Assessment Year 2023-24 (AY 2023-24) are as below : Old Tax RegimeIncome Tax RateNew Tax Regime u/s 115BACIncome Tax RateUp to ₹ 2,50,000NilUp to ₹ 2,50,000Nil₹ 2,50,001 - ₹ 5,00,0005% above ₹ 2,50,000₹ 2,50,001 - ₹ 5,00,0005% above ₹ 2,50,000₹ 5,00,001 - ₹ 10,00,000₹ 12,500 + 20% above ₹ 5,00,000₹ 5,00,001 - ₹ 7,50,000₹ 12,500 + 10% above ₹ 5,00,000Above ₹ 10,00,000₹ 1,12,500 + 30% above ₹ 10,00,000₹ 7,50,001 - ₹ 10,00,000₹ 37,500 + 15% above ₹ 7,50,000₹ 10,00,001 - ₹ 12,50,000₹ 75,000 + 20% above ₹ 10,00,000₹ 12,50,001 - ₹ 15,00,000₹ 1,25,000 + 25% above ₹ 12,50,000Above ₹ 15,00,000₹ 1,87,500 + 30% above ₹ 15,00,000 ITR Forms  Choosing the appropriate ITR form for filing your Income Tax Returns is crucial. Failure to do so can result in your return not getting processed by the income tax department. The selection of ITR form is based on the nature of income or the category to which the taxpayer belongs. You are most likely to receive a defect notice from the department if you file an incorrect return form, which must be rectified within the specified time limit. ITR 1 (SAHAJ) This form is for Resident Individuals and Hindu Undivided Family (HUF) having total income up to INR 50 lakh from Salaries, One House Property, and Other Sources (Interest, Dividend, etc. ). ITR 2  This form is for Individuals and HUFs having income from Salaries, House Properties (more than one house property), and Other Sources more than INR 50 lakhs. Individuals having Income from Capital Gains, Foreign Income/Foreign Assets also need to file this ITR Form. It is also applicable for Individuals/HUFs holding unlisted equity shares or directorship in a Company. ITR 3  This form is for Individuals or HUFs having income from ‘profits and gains of business or profession’ from a proprietary business or profession. ITR 3 is also required to be filed by a person whose income chargeable to tax under the head “Profits and gains of business or profession” is in the nature of interest, salary, bonus, commission or remuneration, due to, or received by them from a partnership firm. ITR 4 (SUGAM) This form is for Resident Individuals/HUFs/Firms (Other than LLP) whose total income for the year includes: (a) Business income computed as per the provisions of section 44AD or 44AE of the Income Tax Act, 1961; or ; (b) Income from Profession as computed as per the provisions of section 44ADA of the Income Tax Act, 1961; or (c) Income from salary/pension up to INR 50 lakhs; or (d) Income from one house property (excluding cases where loss is brought forward from previous years); and/or sources of income, and ensure that all required information is accurately and completely disclosed in the appropriate ITR form. ITR 5 ITR 5 is for firms, Limited Liability Partnerships (LLP), Association of Persons (AOP), (Body of Individuals (BOI), Artificial Juridical Person (AJP), Estate of deceased, Estate of insolvent, Business trust and investment fund. ITR 6 ITR 6 is for Companies other than companies claiming exemption under section 11 (Income from property held for charitable or religious purposes). This return has to be filed electronically only. ITR 7 ITR 7 is to be filed by persons including companies required to furnish returns under section 139(4A)/section 139(4B)/section 139(4C)/section 139(4D)/section 139(4E)/section 139(4F). DEDUCTIONS There are several deductions that each individual is eligible to claim in his/her ITR. It is very important to claim a deduction based on investments done during the year under Section 80C, 80CCC, and 80CCD, of the Income Tax Act, 1961. For example, interest on NSC will be first added to income from other sources and then it can be claimed for deduction under Section 80C. Similarly, Principal Repayment of Home Loan, Investments made in PPF, etc. are eligible for claiming deductions under section 80C. However, the maximum deduction available is INR 1,50,000 as mentioned in Section 80E. The assessees can also claim deduction for Premium on Mediclaim (Section 80D), Donations (Section 80G), Interest on Education Loan taken for self, spouse, children for higher studies (Section 80E), etc. TDS and TCS details  Tax deducted at Source (TDS) and Tax Collected at Source (TCS) should be correctly mentioned in the ITR in order to avoid any issues while processing returns. Incorrect particulars can lead to notice being issued and penalty being levied. It is important to check Form 26AS before filing the ITR. Form 26AS includes all the income details, TDS, advance tax paid by you, self-assessment tax, etc. A salaried person must cross verify the details in... --- > The word “metaverse” was originally coined by an American writer, Neal Town Stephenson, in his 1992 science fiction novel Snow Crash. In his book, Stephenson described the Metaverse as an all-encompassing digital world that exists parallel to the real world. - Published: 2022-06-16 - Modified: 2025-03-05 - URL: https://treelife.in/technology/insights-on-metaverse/ - Categories: Emerging Technology Introduction The word “metaverse” was originally coined by an American writer, Neal Town Stephenson, in his 1992 science fiction novel Snow Crash. In his book, Stephenson described the Metaverse as an all-encompassing digital world that exists parallel to the real world. The Metaverse is a highly scalable, persistent network of interconnected virtual worlds where people may work, connect, do business, play, and even create in real-time. It immerses the user in the virtual environment completely using virtualization and advanced technologies (Augmented Reality (AR), Virtual Reality (VR), haptic sensors, and so on). This means that the user can interact in real-time with a world that is constantly available and accessible. It’s essentially a computer-generated three-dimensional world where users may interact with one other and items. The Metaverse has no limits or bounds because it is a virtual universe. Nothing is off-limits, and anything is possible in the Metaverse, where people can attend a virtual concert, buy a virtual gift for someone, and even vacation with a relative on the other side of the planet. Use Cases Non-Fungible Tokens and Real Estate NFTs are digital art and assets. These are created when a digital file (an image, video, or GIF) is minted. These are essentially certificates of ownership on the blockchain. An NFT can represent a song, a video, piece of art or digital real estate. An NFT gives the owner a kind of digital certificate or proof of ownership that can be bought or sold in the metaverse. Through Metaverse, NFTs can be given a platform for their display and trading through the following: Virtual Marketplace: VR Spaces can also serve as a fertile trading ground for NFTs where the sellers would be able to easily provide links and previews to NFTs on the web or mint NFTs directly in the VR landscape. The renowned brand “Nike” has already dipped its toes into the metaverse with its own virtual “Nikeland” and has acquired a studio for making NFTs of their products. Art Gallery: VR is perhaps the best possible alternative for actual brick and mortar buildings for viewing art. This type of solution differs from a marketplace as the prices are already set, the assets are all of one type and the atmosphere is much more relaxed. The metaverse’s real estate is a virtual ecology that mimics real-world situations. Every land parcel in the metaverse is one-of-a-kind and irreplicable. Land can be purchased as non-fungible tokens (NFT) using cryptocurrencies in the real estate metaverse. Buyers who are interested in purchasing a property can do so by attaching their wallets to the platforms dealing in Metaverse real estates such as Decentraland and Sandbox. These are viewed as tradable digital assets with ownership documented on the blockchain, which is a decentralized immutable ledger for recording a digital asset’s origin. The data on a blockchain is insusceptible to any alterations due to its inherent nature and design. This virtual property can also be sold on a third-party exchange or through the metaverse ecosystem. Learning Space and Virtual Work Students and teachers can connect in the virtual world via their virtual reality headsets, regardless of where they are in real life. Such functionality can lead to enhanced experience and improved education. Teachers can create virtual environments based on their lesson plans, boosting a child’s learning by allowing them to interact with them rather than just reading from a book. Perhaps the most significant impact of the metaverse on all of us will be in the workplace. Building on the pandemic-related trend of remote work, combining in-person interaction and the spontaneity it provides with the freedom to work from anywhere, at any time, might be genuinely revolutionary for businesses and employees. Virtual workplaces in the Metaverse would be extremely helpful in becoming acquainted with one’s worksite (or sites), learning the ropes by walking around digital twins of offices, factories, retail shops, hotels, and airports and being instructed along the way by other colleagues or by holograms / bots, adding their bits and pieces of information, learning about the colleagues, management, and company values. Metaverse can be used to meet with customers or partners in order to assist and guide them in a more immersive setting. This opens up possibilities similar to those in a situation room (bring in relevant information and tools), but also situations such as remote assistance with Mixed Reality. Remote meetings in financial services are common these days, but incorporating virtual space will expand opportunities for engaging and interacting with customers. This can easily be extended to job interviews and other customer-facing situations. Virtual Business and Markets Users of the Metaverse can also shop, socialize, and engage in leisure or educational activities. Brands could benefit from exclusive marketing opportunities in various virtual worlds in the metaverse. Many brands have successfully capitalized on metaverse marketing opportunities. Roblox has recently begun to place advertisements for brands such as Paramount+ and Warner Media. These ads in the metaverse resemble real life and blend in well with the gameplay, where they can be found in the right places. Virtual Tourism The primary distinction between visiting a location in person and watching it on video is the first-person perspective. The metaverse, virtual reality (VR), and augmented reality (AR) may be combined to create an immersive digital environment. People can have the perfect platform for elevating the imagination of the audience with an immersive digital reality featuring realistic content. As a result, they can experience the location as if they were physically present. One of the emerging metaverse use cases with the potential for mainstream adoption and recognition is VR tourism. Popular video streaming platforms, such as YouTube, and a variety of other content hosting services, are expanding their collections of 360-degree video content. However, there is a significant drawback with the use cases of metaverse for virtual tourism in the limited freedom. People are unable to move around a tourism destination because they can only view recorded content. Web Real-Time Communication Web real-time communication is an open-source initiative... --- - Published: 2022-06-09 - Modified: 2025-08-07 - URL: https://treelife.in/finance/is-computer-software-a-good-or-a-service/ - Categories: Finance Goods or Services? Understanding the Classification of Computer Software under GST Introduction: The classification of computer software as either a good or a service has been a contentious issue for businesses since the service tax regime. However, the Goods and Services Tax (GST) Act has provided some much-needed clarity on the matter. Classification of Computer Software: According to the GST Act, computer software is categorized as either “normal software” or “specific software”. Normalized software refers to pre-designed software that is available off-the-shelf in retail outlets. It can be supplied in any medium or storage (such as a CD-ROM or through the use of encryption keys) and is treated as a supply of goods. On the other hand, specific software is customized to the specific requirements of the customer and includes development, design, programming, customization, adaptation, upgradation, enhancement, and implementation of information technology software or permitting the use or enjoyment of any intellectual property right. Hence, it shall be treated as a supply of services. Computer Software bought over the internetComputer software bought through non-electronic medium1. Computer softwares can be procured online, i. e. directly over the internet1. Computer softwares can also be procured through a non-electronic medium, i. e. other than over the internet2. The buyer usually receives a link via e-mail through which the software can be downloaded or the software is sent as an e-mail attachment2. These are usually available in a CD or DVD format wherein the buyer has to install the same in its system and operate. 3. In case of online procurement, companies sell two kinds of software, – a general software and – a Customised software which is developed as per the specific requirements of the customer As a customised software is tailored as per the pre-determined needs of the customers, such softwares qualify as supply of services in accordance with Sl. No. 5 (2)(d) of Schedule –II of the GST law. Majority of the computer softwares which are procured electronically from International Companies are customised softwares, hence they are classified as supply of services. 3. In such cases, the computer software is available alongwith an encryption key or is a type of software which is generally bought off the shelf. Thus, such computer softwares qualify as goods under the GST law Conclusion In conclusion, it can be said that the classification of computer software as either a good or a service depends on whether it is an off-the-shelf product or a customized product. It is important for businesses to understand this classification to determine the appropriate tax treatment for their software-related transactions under the GST Act. --- > Vesting of founder shares in SHA is a concept that signifies founder earning their equity over time. Know about founder vesting SHA in India in 2024 - Published: 2022-06-06 - Modified: 2025-07-21 - URL: https://treelife.in/legal/founder-vesting-in-a-shareholders-agreement/ - Categories: Legal - Tags: co founder vesting agreement, founder equity vesting, founder share vesting, Founder Vesting, founder vesting agreement, founder vesting schedule, SHA, Shareholder Agreements, shareholder contract, shareholders agreement, stockholder agreement, vesting agreement startup, vesting for founders, vesting of founder shares In the dynamic landscape of startups and entrepreneurial ventures, the journey of founding a company is often marked by passion, innovation, collaboration, and shared vision. However, the journey of growth is never linear and founders should be equipped with the tools to anticipate and address potential challenges that may arise along the way.   One such crucial aspect is founder lock-in and founder vesting, a mechanism usually incorporated into shareholders’ agreements (hereinafter “SHA”) when an investor comes on board, with the goal of safeguarding the interests of all stakeholders and ensuring the sustained commitment of founders towards the company’s long-term success. What is a Shareholders’ Agreement? The SHA is an arrangement among a company’s shareholders that describes how the company should be operated and outlines the shareholders’ rights and obligations. The SHA is intended to make sure that shareholders are treated fairly and that their rights are protected. Importance of a Shareholders' Agreement  The SHA is a vital roadmap for any startup. It establishes clear rules for company governance, prevents disputes from derailing progress, and assures investors of a transparent and stable organization. By outlining share transfer restrictions and founder commitment mechanisms, the agreement safeguards the interests of all parties and paves the way for long-term success. Governance & Control: Imagine the SHA as a company rulebook. It lays out how the company will be managed, outlining voting rights, decision-making processes, and the roles of shareholders and directors. This clarity prevents confusion and power struggles down the road. Shareholder Stability: The SHA restricts how shareholders can buy and sell shares. This prevents unwanted dilution (loss of ownership stake) and potential instability caused by sudden ownership changes. Dispute Resolution:  Disagreements are inevitable. The SHA establishes a clear process for resolving disputes between shareholders or between shareholders and the company. This saves time, money, and acrimony compared to drawn-out legal battles. Transparency & Trust: By outlining shareholder rights and obligations, the SHA creates transparency. Investors and banks see this as a sign of a well-organized and accountable company, making them more likely to invest. Founder Commitment: In some cases, the SHA can include founder lock-in and vesting schedules. This means founders accept a transfer restriction on their shares and gradually earn ownership over time, incentivizing them to stay committed and build long-term value. What is Founder Lock-in and Founder Vesting? Founder lock-in simply means restricting the founders from transferring their shares to any third party. This is a contractual transfer restriction and is typically instituted to prevent share transfer by a founder while the investor is a shareholder and/or for a specified period, without the investor’s express consent. Founder vesting refers to the process by which founders gradually earn full ownership of their shares over a specified period, typically contingent upon their continued involvement with the company. This arrangement mitigates the risks associated with founders departing prematurely or losing motivation, thereby protecting not only the investors’ interests, but also the integrity and stability of the business. What is the difference between Founder Lock-in and Vesting? ParticularsLock-inVestingPrimary PurposeThe primary purpose of a promoter lock-in provision is to ensure that the promoters do not exit or liquidate their holdings in the company prematurely. The primary purpose of a vesting schedule is to determine the actual share entitlement of the promoters at the time of their exit from the company. DurationAbsolute restriction usually till the time the investor holds shares in the company or for a specified period of time typically 3-5 years. Gradual earning of the shares over a period of time. This is usually pegged with the lock-in period to maintain uniformity.  Trigger EventA lock-in is triggered upon initiation of the transfer process of shares by the promoters, i. e. , the promoters are required to procure express consent of the investors before actually transferring the shares. Any exit of promoters from the company, i. e. , termination of their employment with the company due to a ‘bad leaver scenario’ such as fraud//wilful default, resignation without consent of the board, etc. or a ‘good leaver’ scenario such as resignation with approval of the board, or any other scenarios wherein the exit of the promoter is amicable.   How do Founder Lock-in and Vesting relate to each other? Vesting of founder shares or more precisely a reverse vesting provision is a concept that signifies founders ‘earning’ their equity over time. This mechanism requires all the shares held by the founder to be subject to a virtual reverse vesting schedule, wherein the shares of the founders are virtually released to such founder, over a period of years or when specific milestones are reached. This flows from the concept of the founder lock-in, where the founder agrees to subject their shares to the reverse vesting schedule.   Founder vesting is a contractual arrangement commonly used in startups and early-stage companies to ensure that founders' ownership of the company's shares is tied to their continued involvement and contribution to the business over time. Under a founder vesting agreement, founders typically agree to a schedule over which their ownership of shares gradually vests, often over a period of several years. This means that although founders may initially receive a portion of their shares when the company is founded, they must earn the right to fully own all of their shares by remaining with the company for a predetermined period. In other words, when a founder agrees to such a mechanism, the majority of their shares are locked away and thus cannot be transferred or transacted with. They fully regain such rights and “unlock” all their shares only upon completion of the vesting schedule, wherein a fixed amount of shares is periodically unlocked at predetermined, contractually agreed intervals. Why is Founder Lock-in and/or Vesting required? The purpose of founder vesting is to align the interests of the founders with the long-term success of the company. By requiring founders to earn their ownership stake over time, founder vesting incentivizes founders to stay committed to the company and actively contribute to... --- - Published: 2022-05-18 - Modified: 2025-02-10 - URL: https://treelife.in/news/adani-holcim-deal-tax-free-deal-for-holcim/ - Categories: News First Published on 18th May, 2023 The Adani-Holcim deal where the Adani group will acquire Holcim’s Indian assets for $10. 5 billion is pegged to be India’s largest-ever merger and acquisition transaction in the infrastructure and materials space. In this deal, Adani will acquire ~63% stake in Ambuja Cements and ~55% stake in ACC both being Indian listed companies. Holcim’s CEO in his address to investors mentioned that this deal is likely to be tax free for Holcim. Before discussing whether gains arising to Holcim will be tax free or not, it would be key to first understand the facts (as per publicly available information): The selling entity is likely to be Holcim’s Dutch investment company which holds investment in Holcim’s investment company in Mauritius. This Mauritius investment company, in turn, holds stake in Ambuja Cements and ACC. The Dutch company will sell the shares in the Mauritius investment company to Adani’s Mauritius based investment company. To represent this diagrammatically, Adani-Holcim deal: Tax free deal for Holcim? This seems to be a classic case of “indirect transfer” i. e. transfer of shares of foreign entities owning shares / assets in India instead of a direct transfer of such Indian shares / assets. Indian tax treaties with Mauritius, Singapore, Netherlands, etc continue to have a capital gains tax exemption for such indirect transfers of Indian shares. In other words, as per these treaties, capital gains arising on sale of shares of a non-Indian entity are taxable only in the country in which the seller is a resident i. e. in Mauritius / Singapore / Netherlands. Applying the above mentioned laws to the facts of this deal, considering that even though substantial value of Holcim’s Mauritius company arises from assets located in India (i. e. Ambuja Cements and ACC), India may not be entitled to collect tax on the gains arising on this transaction as per the India-Netherlands tax treaty. --- > Startup India is a flagship initiative of the Government of India. The campaign was first announced by Prime Minister, Narendra Modi in his speech on August 15, 2015. - Published: 2022-05-10 - Modified: 2025-03-05 - URL: https://treelife.in/legal/playbook-for-the-startup-registration-process-in-india/ - Categories: Legal Startup India is a flagship initiative of the Government of India. The campaign was first announced by Prime Minister, Narendra Modi in his speech on August 15, 2015. The Startup India Initiative is a part of the action plan to realise the government’s aim to create a networking platform for accelerators, entrepreneurs, investors, incubators, government agencies and bodies, mentors and newfound companies. It will allow registered participants access to useful tools and resources free of cost and include them in various programs targeted at Startups. In addition to that, the scheme has also provided massive networking opportunities by means of startup festivals held by the Government of India both domestically and internationally. Through this scheme, the government is looking forward to driving sustainable economic development and enhanced employment opportunities in India. Following are the list of things one must be aware of before initiating the application process: Business Structure The following business structures may register for the benefits: ● A private limited company ● Registered Partnership Firm ● Limited liability partnership upto a period of 10 years from the date of incorporation/registration provided that the turnover of the entity for any of the financial years since incorporation/ registration has not exceeded INR 100 crores and that the entity is working towards innovation, development or improvement of products or processes or services, or if it is a scalable business model with a high potential of employment generation or wealth creation. Provided that an entity is formed by splitting up or reconstruction of an existing business, it shall not be considered a startup Documentation The company will need the Charter documents of the Company i. e. MOA and AOA, Certificate of Incorporation, Pitch deck of the Company, Link of the company website(optional), Intellectual Property Registration Certificates (if applicable), Proof of any funding received by the company (MCA records, capital structure of the company, bank statements etc), Aadhar card of the authorized signatory making application on behalf of the Company, Director details (DIN, PAN, Address, contact details), Company details (CIN, Address, authorized signatory details for the Company). Legal Compliance The authorized signatory signing and making application on behalf of the Company needs to be authorized by the other director/s of the Company and the same needs to be authenticated by signing a Letter of Authorisation (in the format provided on the startup India portal). Process ● The Company needs to make a profile on the Startup India Portal. The registered email id will then receive an OTP and once that is confirmed the profile can be operated using the login credentials entered for registration. ● The User will have to complete the profile by adding the company specific details i. e. name of the company, CIN, the industry that the company operates, area of operation, stage of development the startup is currently at (ideation, validation early traction, scaling) etc ● The User will have to provide company specific responses to the questions basis which, at the discretion of the DPIIT, the application will be accepted/rejected or asked for clarification in case of any deficiency. Questions on the portal: a. Details of the innovation product/service or improvement in any existing product/service the Startup aims to create/provide b. What is the problem that the startup aims to solve c. How does your startup propose to solve this problem d. What is the uniqueness of the solution provided by the startup. e.  How does startup generate revenue. The DPIIT may, after calling for such documents or information and making such enquiries, as it may deem fit either recognise the eligible entity as Startup; or reject the application by providing reasons. The Startup India is a one of its kind scheme and it has driven more and more entrepreneurs to start their own businesses, which in turn has resulted into creating a conducive environment for increased employment opportunities and has boosted entrepreneurship. --- - Published: 2022-04-05 - Modified: 2025-07-22 - URL: https://treelife.in/compliance/liaison-office-in-india/ - Categories: Compliance What Is a Liaison Office? The Foreign Exchange Management Act (FEMA) defines Liaison Office (“LO”) as “a place of business to act as a channel of communication between the Principal place of business or Head Office by whatever name called and entities in India but which does not undertake any commercial / trading / industrial activity, directly or indirectly, and maintains itself out of inward remittances received from abroad through normal banking channel”. Permitted activities for a liaison office in India of a person resident outside India  Representing the parent company / group companies in India. Promoting export / import from / to India. Promoting technical/ financial collaborations between parent / group companies and companies in India. Acting as a communication channel between the parent company and Indian companies. Criteria Applications from foreign companies (a body corporate incorporated outside India, including a firm or other association of individuals) for establishing LO in India shall be considered by the AD Category-I bank as per the guidelines given by Reserve Bank of India (RBI). An application from a person resident outside India for opening of a LO in India shall require prior approval of Reserve Bank of India and shall be forwarded by the AD Category-I bank to the General Manager, Reserve Bank of India, Central Office Cell, Foreign Exchange Department, 6, Sansad Marg, New Delhi – 110 001 who shall process the applications in consultation with the Government of India, in the following cases: The applicant is a citizen of or is registered/incorporated in Pakistan; The applicant is a citizen of or is registered/incorporated in Bangladesh, Sri Lanka, Afghanistan, Iran, China, Hong Kong or Macau and the application is for opening a LO in Jammu and Kashmir, North East region and Andaman and Nicobar Islands; The principal business of the applicant falls in the four sectors namely Defence, Telecom, Private Security and Information and Broadcasting. The applicant is a Non-Government Organisation (NGO), Non-Profit Organisation, Body/ Agency/ Department of a foreign government. However, if such entity is engaged, partly or wholly, in any of the activities covered under Foreign Contribution (Regulation) Act, 2010 (FCRA), they shall obtain a certificate of registration under the said Act and shall not seek permission under FEMA. The non-resident entity applying for a LO in India should have a financially sound track record viz: a profit making track record during the immediately preceding three financial years in the home country and net worth of not less than USD 50,000 or its equivalent. An applicant that is not financially sound and is a subsidiary of another company may submit a Letter of Comfort (LOC) (Annex A) from its parent/ group company, subject to the condition that the parent/ group company satisfies the prescribed criteria for net worth and profit. Procedure The application for establishing LO in India may be submitted by the non-resident entity in Form FNC (Annex B) to a designated AD Category – I bank (i. e. an AD Category – I bank identified by the applicant with whom they intend to pursue banking relations) along with the prescribed documents mentioned in the Form and the Letter of Consent (LOC), wherever applicable. Before issuing the approval letter to the applicant, the AD Category-I bank shall forward a copy of the Form FNC along with the details of the approval proposed to be granted by it to the General Manager, Reserve Bank of India, CO Cell, New Delhi, for allotment of Unique Identification Number (UIN) to each LO. After receipt of the UIN from the Reserve Bank, the AD Category-I bank shall issue the approval letter to the non-resident entity for establishing LO in India. The validity period of an LO is generally for three years, except in the case of Non-Banking Finance Companies (NBFCs) and those entities engaged in construction and development sectors, for whom the validity period is two years. An applicant that has received a permission for setting up of a LO shall inform the designated AD Category I bank as to the date on which the LO has been set up. The AD Category I bank in turn shall inform Reserve Bank accordingly. Opening of bank account by LO  An LO may approach the designated AD Category I Bank in India to open an account to receive remittances from its Head Office outside India. It may be noted that an LO shall not maintain more than one bank account at any given time without the prior permission of Reserve Bank of India. The Annual Activity Certificate (AAC) as at the end of March 31 each year along with the required documents needs to be submitted: the LO needs to submit the AAC to the designated AD Category -I bank as well as Director General of Income Tax (International Taxation), New Delhi. Registration with police authorities  Applicants from Bangladesh, Sri Lanka, Afghanistan, Iran, China, Hong Kong, Macau or Pakistan desirous of opening LO in India shall have to register with the state police authorities. Copy of approval letter for ‘persons’ from these countries shall be marked by the AD Category-I bank to the Ministry of Home Affairs, Internal Security Division-I, Government of India, New Delhi for necessary action and record. Other points to be kept in mind A LO is required to register with the Registrar of Companies (ROCs) once it establishes a place of business in India if such registration is required under the Companies Act, 2013. This shall be filed in Form FC-1. The LOs shall obtain Permanent Account Number (PAN) from the Income Tax Authorities on setting up of their office in India and report the same in the AACs. Each LO are required to transact through one designated AD Category-I bank only who shall be responsible for the due diligence and KYC norms of the LO. LO, present in multiple locations, are required to transact through their designated AD. Acquisition of property by BO/PO shall be governed by the guidelines issued under Foreign Exchange Management (Acquisition and transfer of immovable property outside... --- > A company is an artificial person as we all know, having an identity separate from the members or the directors. However, since it is an artificial person it requires the Board of Directors (“BOD”) or the members to take decisions on its behalf. These decisions can be in the form of day to day decisions or bigger decisions such as taking a loan or entering into a merger etc. - Published: 2022-03-28 - Modified: 2025-07-21 - URL: https://treelife.in/compliance/resolutions-in-a-board-meeting-and-general-meeting/ - Categories: Compliance Introduction A company is an artificial person as we all know, having an identity separate from the members or the directors. However, since it is an artificial person it requires the Board of Directors (“BOD”) or the members to take decisions on its behalf. These decisions can be in the form of day to day decisions or bigger decisions such as taking a loan or entering into a merger etc. The decisions are either taken in a Board Meeting (“Board Meeting”) held among the BOD or in a General Meeting (“General Meeting”) held among the members of the company. Types of Resolutions Ordinary Resolutions As per the provisions of Section 114 (1) of the Companies Act, 2013 (“Act”)- A resolution shall be an ordinary resolution if the notice required under this Act has been duly given and it is required to be passed by the votes cast, whether on a show of hands, or electronically or on a poll, as the case may be, in favour of the resolution, including the casting vote, if any, of the Chairman, by members who, being entitled so to do, vote in person, or where proxies are allowed, by proxy or by postal ballot, exceed the votes, if any, cast against the resolution by members, so entitled and voting. This resolution is passed by a simple majority and simply means that the votes cast in favour of the resolution are higher than the ones against it. Some of the matters requiring ordinary resolutions are – Where Registrar directs to change the name of the company within 3 months Alteration of Memorandum of Association (increase /consolidate/ sub-divide/ convert/ cancellation of share capital) Where Central Government direct to change the name of the company within 3/6 months Capitalization of company profit or reserves to issue fully paid bonus shares Accepting deposits from public Ordinary Business transacted at Annual General Meeting (“AGM”) only. “Ordinary Business” means business to be transacted at an AGM relating to (i) the consideration of financial statements, consolidated financial statements, if any, and the reports of the BOD and auditors; (ii) the declaration of any dividend; (iii) the appointment of directors in the place of those retiring; and (iv) the appointment or ratification thereof and fixing of remuneration of the Auditors. Contribution to charitable trust in excess of 5 % of its Average Net Profit for 3 immediately preceding financial years Appointment of Managing Director, Whole Time Director, Manager, subjected to provision of Section 197. Along with remuneration to be paid to directors. Special Resolutions As per the provisions of Section 114 (2) of the Act – A resolution shall be a special resolution when- the intention to propose the resolution as a special resolution has been duly specified in the notice calling the general meeting or other intimation given to the members of the resolution; the notice required under this Act has been duly given; and the votes cast in favour of the resolution, whether on a show of hands or electronically or on a poll, as the case may be, by members who, being entitled so to do, vote in person or by proxy or by postal ballot, are required to be not less than three times the number of the votes, if any, cast against the resolution by members so entitled and voting. The key considerations for passing a special resolution are – The notice duly specified the intention to propose a resolution as a special resolution. Notice was given as required by the Act. The votes cast in favor of the resolution shall not exceed three times the total vote cast by members against the resolution. In other words, the resolution is adopted with 75% of the valid votes. Some of the matters that require special resolution are – Alteration of Article of Association while converting from Private Limited to Public Limited and Vice Versa To change the Registered office of the company outside the Local limits of the city, town or village For Alteration of Memorandum of Association and Article of Association of the Company For issuing further shares to Employees of the Company under the scheme of Employee Stock Option Plan & to determine the terms of issuing Debentures convertible into shares Reduction of share capital and buyback of shares To issue debenture convertible into shares, wholly or partly Restriction on power of board To make an application to Registrar for striking off the name of company Approval of scheme of Merger and Amalgamation Process of passing resolutions The resolution is proposed as a ’motion’. A motion becomes a resolution only after the requisite majority of members have adopted it. A motion should be in writing and signed by the mover and put to the vote at the meeting by the chairman. In case of company meetings, only such motions are proposed as are covered by the agenda. However, certain motions may arise out of the discussion and may be allowed where no special resolution is mandated in the Act. Para 7. 1 of Secretarial Standard 2 provides that every resolution shall be proposed by a member and seconded by another member. The motion under consideration can be amended during the debate. An alteration is any change of a member’s essential motion until it is voted on and adopted. A member who has not previously spoken on the main motion or has not previously moved an amendment may suggest an amendment, but a formal motion cannot be amended. The chairman can consider or reject an amendment for different reasons such as inconsistency, duplication, irrelevance, etc. When an amendment is passed, the key motion is adopted and seconded and the discussion on the amendment begins. Anyone who has already spoken on the main motion may speak on amendment, but nobody is permitted to talk on the same amendment twice. After detailed consideration of the proposal, it will be put to the ballot. When the amendment is approved, it shall be included in the central motion form. General Meeting... --- - Published: 2022-03-10 - Modified: 2025-07-22 - URL: https://treelife.in/legal/5-key-pointers-required-in-a-saas-agreement/ - Categories: Legal - Tags: B2B SaaS agreement, Intellectual Property Rights, SaaS Agreement, saas agreement checklist, saas agreement india In the previous article on Software as a Service (“SaaS”) Products, we understood the meaning of SaaS Products and how SaaS Agreements are different from End User License Agreements. In this blog, we will discuss the key points that should be included in any Software as a Service (SaaS) Agreement. 1. Software Subscription Model and Rights of Users: The SaaS agreement is a software service provided over the internet. The agreement should define the scope of services accessible to the user and should specify how the SaaS product shall be accessible to the users. Such clauses should enlist all major restrictions that the users shall be subjected to and should also highlight the fact that the SaaS product shall be used only by the users and the authorized personnel appointed by such users. The Agreement should also provide for maintenance and support services that shall be provided by the service provider, and the agreement should provide that the users shall be eligible to receive all software updates and upgrades. 2. Intellectual Property Rights (“IPR”):  The SaaS service provider should retain ownership of all IPR in the software, technology, and services it provides. The SaaS customer should retain ownership of all IPR in the data transmitted by it to the service provider during provision of services. The agreement should specifically mention that all the source code remains owned by the SaaS service provider.  The SaaS customers should also grant the SaaS service provider the right to use their testimonials for the duration of the SaaS agreement, for which purpose, the service provider may display the customer’s logos and other copyrighted information on its platform. 3. Subscription Plan, Model, and Pricing Clause: The agreement should provide what exactly the subscription plan includes and how the provider will provide the services. The agreement should clearly specify regarding pricing, how and when the detailed costs would be charged. As SaaS agreements typically practice a subscription model, customers shall pay the provider on a regular basis for continued use of the service. There are several pricing models, viz: Flat-rate pricing, wherein the customers may avail a single product, a single set of features, and at a single price. Usage-based pricing, which is a pay-as-you-go model Tiered pricing, wherein the customers may avail multiple "packages," with different combinations of the features provided at different price points Per-user pricing, wherein a single user pays a fixed monthly price; if another user is added, the price doubles, and so on Per-active-user pricing, wherein it does not matter how many users are registered, only those who actually use the platform will be charged. 4. Data Security Provisions The degree to which any particular data security provision, laid down in a SaaS agreement, is appropriate or realistic depends on the specific type of information to which it applies, the definition of “data security incident,” the specific obligations that arise in the event of a data security breach. SaaS agreements should include a privacy policy that details how the provider is using the customer’s data, including the information it collects and shares internally or with third parties. This section shall also include information on data encryption, how data is backed up, and the provider’s roles and responsibilities in the event of a data breach or a security issue. Data security terms should also cover systems, procedures, and consequences relating to data breaches by way of a commitment to data protection through the service provider. In India, Rule 4 of the Information Technology (Reasonable security practices and procedures and sensitive personal data or information) Rules, 2011 requires every body corporate which collects, receives, possess, stores, deals or handle information of provider of information, to provide a privacy policy for handling of or dealing in personal information including sensitive personal data or information and to also ensure that the same are available for view by such users who has provided such information under lawful contract. The policy shall be published on website of body corporate or any person on its behalf and shall provide for: Clear and easily accessible statements of its practices and policies;  type of personal or sensitive personal data or information collected under Rule 3 of the Information Technology (Reasonable security practices and procedures and sensitive personal data or information) Rules, 2011; purpose of collection and usage of such information;  disclosure of information including sensitive personal data or information as provided in Rule 6 of the Information Technology (Reasonable security practices and procedures and sensitive personal data or information) Rules, 2011;  reasonable security practices and procedures as provided under Rule 8 of Information Technology (Reasonable security practices and procedures and sensitive personal data or information) Rules, 2011. 5. Limitation of Liability and Indemnification Clause SaaS agreements should include a limitation of liability clause that limits the liability of the service provider in the event of damages or losses incurred by the customer. Indemnity provisions, which usually accompany provisions relating to limitation of liability, are a contractual promise by one party to compensate and/or defend the other party from the risk of harm, liability or loss. The agreement should also include an indemnity clause that requires the customer to indemnify the service provider for any losses or damages resulting from the customer’s use of the service. In SaaS agreements, the Indemnity clause shall apply in case of claims, damages, liabilities, costs and expenses, including reasonable attorneys’ fees, arising out of: any breach of representation and warranties by the other party; an act of gross negligence, fraud or for infringement of IPR by the other party. In conclusion, SaaS agreements are crucial for establishing a relationship between a service provider and a customer. It is essential to ensure that all these key points are included in any SaaS agreement to avoid any future legal disputes and to establish a strong business relationship. plan, model and pricing clause, and data security provisions. These clauses help protect both the provider and the customer and ensure that the SaaS product is used legally and securely.... --- - Published: 2022-02-08 - Modified: 2025-08-07 - URL: https://treelife.in/legal/avoid-these-5-common-legal-mistakes-startup-founders-make/ - Categories: Legal - Tags: Common Legal Mistakes, Legal Issues for Startups, Legal Mistakes Startups, Startup Issues Starting a successful startup requires a lot of effort and consideration, especially in terms of legal issues for startups. While developing your product, finding the right team, and creating a proof of concept, it's important to not overlook legal considerations. Establishing a strong legal foundation is essential for the longevity of your business. To ensure your startup begins on the right legal foot, consider these five crucial factors related to legal issues for startups: 1. Selecting the correct legal structure:  It's important to choose the right legal entity when forming a new business, which is one of the most important legal issues for startups. Options include Registered Company (Public or Private), Sole Proprietorship or Partnership Firm, or a Limited Liability Partnership (LLP). Key factors to keep in mind are tax treatment, individual liability, legal expenses, and growth plans. 2. Having a formal written agreement with Co-Founders:  In an environment where changes occur frequently, a Co-founders' agreement can help avoid unnecessary legal hassles and related issues for startups. It should outline key roles and responsibilities, shareholding breakdown, intellectual property rights, remuneration, non-compete & non-solicit and exit clauses. 3. Protecting intellectual property:  Protecting your intellectual property is crucial to ensure future growth and avoid potential legal issues for startups. Trademarks, patents, and copyrights are essential components of IP, and registering them will prevent infringement. This will allow startups to protect their innovation and compete against large players in the industry. 4. Complying with mandatory registrations and compliances:  Startups are required to take several licenses and registrations, along with certain compliances which have a lot of legal issues for startups associated with them. These include income tax, GST, Food Safety and Standards, Udyog Aadhaar, and any other industry-specific registrations that may be applicable. 5. Importance of agreements:  A start-up goes through several contracts with suppliers, employees, and others. It's important that all such contracts are well drafted to protect the startup from any liability on a future date, and legal issues for startups that may arise. It's best to engage an experienced legal counsel to help the startup in protecting its interests and capturing the correct language to ensure avoidance of unnecessary legal issues for startups at a later date. Following these five steps related to legal issues for startups will ensure startups begin on a solid legal foundation and minimize legal risks. --- - Published: 2022-02-03 - Modified: 2025-01-21 - URL: https://treelife.in/legal/e-mobility-space-in-india/ - Categories: Legal India’s Growing Focus on Electric Vehicles to Deal with Air Pollution and Oil Dependency The move towards Electric Vehicles (EVs) has gained momentum in India, with significant demand and on-the-ground traction in recent years. The country’s need to combat rising air pollution levels and dependence on crude oil imports is driving the increase in EV demand. India is one of the largest importers of fossil fuels globally, and according to the 2022 World Air Quality Report, the country ranks 8th on the list of worst air quality countries. As a result, EVs that reduce pollution levels and dependence on crude oil-based sources are becoming crucial for India’s transportation sector. In response to India’s e-mobility initiatives for pollution-free transportation, several established automobile manufacturers and newcomers are beginning to manufacture EVs for the last mile connectivity and bulk short/long distance transportation segment. Startups also play a significant role in the evolving electric mobility sector, with charging infrastructure and mobility services offering potential business opportunities for digital technologies like charging location finders, reservation apps, online payments, and ride-sharing services. India’s government has implemented various initiatives such as the National Electric Mobility Mission Plan 2020 (NEMMP), Production Linked Incentive (PLI) scheme, Vehicle Scrappage Policy, and National Mission on Transformative Mobility and Storage to support the EV transition. NEMMP, under which the Faster Use and Manufacturing of (Hybrid &) Electric Vehicles in India (FAME India) scheme was introduced, provides a vision and strategy for the country’s rapid adoption of EVs and their manufacturing. The government aims to make EVs 30% of new cars and two-wheelers sales by 2030. FAME was launched in two phases, with FAME II currently ongoing. PLI is a supply-side incentive scheme that rewards local manufacturers based on incremental revenue. It offers foreign corporations a chance to open factories in India, while domestic businesses are encouraged to expand or open new factories. Electric vehicles are eligible under this scheme. The Vehicle Scrappage Policy aims to reduce environmental pollution and noise by phasing out old, unsafe, and unreliable vehicles and increasing the deployment of new fuel-efficient vehicles. The National Mission on Transformative Mobility and Storage focuses on developing and implementing transformational mobility strategies and the Phased Manufacturing Program for electric vehicles, components, and batteries to encourage local production throughout the EV supply chain. India’s EV transition has significant investment potential, with several opportunities for startups to enter the market and technology development. The government’s policies and initiatives offer much-needed support to suppliers and manufacturers wanting to shift towards EVs in the country. India is witnessing a significant increase in the adoption of electric vehicles and states are also rolling out dedicated policies to promote the transition to EVs. Nearly 50% of the states in India have already approved or notified their EV policies to meet the growing demand for electric means of transportation. Among the states, Uttar Pradesh, Delhi and Karnataka have emerged as the top three in EV registrations, which is a clear indication of the growing interest and demand for electric vehicles. Several startups have been instrumental in driving the adoption of electric vehicles in India. Companies like Ather Energy, Yulu, and Tork Motors are pioneers in the EV mobility space, and they have the support of venture capitalists and mentorship from industry experts. The emergence of such startups is a positive sign for India’s EV industry and shows that the country has a vibrant startup ecosystem. Furthermore, the government is taking several measures to encourage the transition to the EV ecosystem. The battery swapping policy and the recognition of energy or battery as a service will ensure development in the EV infrastructure and bolster the adoption of EVs in public transportation. In conclusion, the awareness regarding fuel and energy efficiency is increasing globally, and the Indian government is taking appropriate measures to promote and develop the EV infrastructure across the country. The state policies, benefits to startups, and government initiatives are contributing significantly to the growth of the EV market in India. --- - Published: 2022-02-02 - Modified: 2025-01-28 - URL: https://treelife.in/finance/budget-review-2022-impact-on-startups-founders-and-investors/ - Categories: Finance Budget 2022 is here and its focus is on steering the economy over the Amrit Kaal for India for the next 25 years –India at 75 to India at 100. The Hon’ble Finance minister has also introduced various new policies for startups and incentives for investing in them, with the aim to provide a boost to the entrepreneurial spirit in the country. Some key highlights for the startup ecosystem: 1) Capping surcharge on Long term capital gain on unlisted equity to 15% bringing the effective tax rate from ~28% to ~23%. 2) Taxation framework for ‘virtual digital assets’ including Crypto and NFT 3) Introducing section 194R which may bring TDS implications for phantom stock, advisory equity and similar arrangements 4) Extension of 3 year tax holiday u/s 80 IAC for eligible startups and commencement date deferral u/s 115 BAB for lower tax rates Our awesome team at Treelife has done a focussed analysis on provisions applicable to the stakeholders i. e. Startups, Investors and Founders – check the link below --- - Published: 2022-01-31 - Modified: 2025-08-07 - URL: https://treelife.in/finance/digital-payment-systems-in-india/ - Categories: Finance Introduction The digital payments ecosystem in India has seen an excellent growth in the past few years. The term “Digital Payments” comprises of different types of systems of online payment which cover transactions done through Real Time Gross Settlement (RTGS), National Electronic Fund Transfer (NEFT), Immediate Payment Service (IMPS), Digital Wallets and Unified Payments Interface (UPI). Of these, Digital Wallets and UPI have amplified their operations in the wake of demonetization in the November of 2016. Payment systems are not only the lifeline of an economy but are increasingly being recognized as a means of achieving financial inclusion and ensuring that economic benefits reach the bottom of the pyramid. Regulating the payment and settlement systems in the country enables businesses, companies, and consumers to manage their financial transactions and payments efficiently. Implementing fintech laws and regulations ensures safety and security to financial institutions, providing services and the customers using them. The term “FinTech” is short for “financial technology” and could apply to any kind of technology that is used to drive a financial transaction or service, offered by any entity. However, in business and regulatory jargon, FinTech has come to mean the technology used by financial service providers that disrupt the traditional way of providing such services. Thus, businesses such as PayTM, PhonePe, RazorPay, MobiKwik, PayU are all classified as fintech businesses. Key Fintech Offerings Some of the key services that are offered by FinTech companies broadly fall within the ambit of either Digital Payments or digital lending. PPI – Prepaid Payment Instruments (“PPIs”) are instruments that facilitate the purchase of goods and services including financial services, remittances etc. against a stored value on such instruments. PPIs may be issued under one of the three categories – Closed system PPIs – They are issued by an entity to a holder to facilitate the purchase of goods and services from the issuer itself. An ideal example of this type of a system would be a brand-specific gift card. Semi – closed system PPIs – These are used for purchase of goods and services, including financial services, remittance facilities, etc. , at a group of clearly identified merchant locations or establishments which have a specific contract with the issuer to accept the PPIs as payment instruments. These instruments do not permit cash withdrawal, irrespective of whether they are issued by banks or non-banks. Open system PPIs – These PPIs are issued only by banks and are used at any merchant for purchase of goods and services, including financial services, remittance facilities, etc. Each of these categories permits a different scope of transactions. UPI Payments – UPI is a payment platform managed and operated by the National Payments Corporation of India (“NPCI”). The UPI enables real time, instant, mobile based bank to bank payments. It primarily relies on mobile technology and telecom infrastructure to offer easily accessible, low cost facilities to the users. UPI enabled payments constitute majority of the digital payment transactions in India. Digital Lending – With expanding propels in innovation, technology, and telecommunications foundations, several Non-Banking Financial Institutions (NBFCs) in India have moved to advanced stages of digital platforms for credit items, especially to retail and Small and Medium Enterprises (SME) clients. They have developed intuitive applications and websites to empower end-to-end digital customer journeys.   Payment Intermediaries/Aggregators and Payment Gateways – Payment intermediaries or aggregators are entities which simplify online sale and purchase transactions primarily on e-business platforms. They facilitate collecting electronic payments from customers and pool them and transfer them to the merchants. Payment Gateways provide technology infrastructure to route or facilitate processing of online payment transactions, without handling any funds. P2P lending platforms – Peer-to-peer (P2P) lending platforms are online platforms that offer loan facilitation services between lenders registered on the platform and prospective borrowers. Under RBI regulations, P2P lending platforms may be operated by eligible Indian companies registered with the Reserve Bank of India (“RBI”) as NBFC. Payment Banks – Payment banks are bodies authorized by the RBI to offer fundamental online banking services to their clients. These are allowed to accept small deposits (up to INR 100,000). However, they are not permitted to issue credit cards, give loans or offer any credit products Laws and Regulations The RBI is the primary regulator for most Fintech activities in banking, payments and lending. The jurisdiction of other regulators may also get attracted, depending on the nature of the services being offered, including of the Securities and Exchange Board of India (“SEBI”) when dealing in the securities market, the Insurance Regulatory and Development Authority of India (“IRDAI”) for the insurance sector, as well as the Ministry of Electronics and Information Technology (“MEITY”) and the Ministry of Corporate Affairs (“MCA”), as may be applicable. Regulations governing Digital Payments PPIs Regulation Master Direction on Issuance and Operation of Prepaid Payment Instruments (“Master Direction”) which was issued by the RBI by virtue of Section 18 read with Section 10(2) of the Payment and Settlement Systems Act, 2007 (“PSS Act”). PPIs can be issued as cards, wallets, and any such form / instrument which can be used to access the PPI and to use the amount therein. PPIs in the form of paper vouchers cannot be issued. Eligibility All entities (both banks and non-banks), regulated by any of the financial sector regulators and seeking approval / authorisation from the RBI under the PSS Act, shall apply to Department of Payment and Settlement Systems (DPSS), RBI, Central Office, Mumbai along with a ‘No Objection Certificate’ from their respective regulator, within 45 days of obtaining such clearance. Non-bank entities applying for authorisation shall be a company incorporated in India and registered under the Companies Act 1956 / Companies Act 2013. The Memorandum of Association (MOA) of the applicant non-bank entity shall cover the proposed activity of operating as a PPI issuer. Banks which comply with the eligibility criteria, including those stipulated by the respective regulatory department of RBI, shall be permitted to issue semi-closed and open system PPIs, after obtaining approval from RBI. Non-bank entities which comply with the eligibility criteria, including... --- - Published: 2022-01-25 - Modified: 2025-08-07 - URL: https://treelife.in/legal/directors-and-officers-liability-insurance/ - Categories: Legal - Tags: D&O, D&O Insurance, Directors and Officers, Directors and Officers Insurance, Directors and Officers Liability Insurance Directors and Officers (“D&O”) play a crucial role in running a company, making important decisions and bearing responsibilities towards various stakeholders. However, they are also susceptible to risks and personal liability for losses or harm suffered by the company arising out of the company’s acts during the course of their management. As a result, protecting such D&Os from unnecessary claims is crucial. References to D&O liability insurance (“D&O Insurance”) have been made under sections 197(13) and 149(8) read with Schedule IV of the Companies Act, 2013 (“Act”). However, obtaining a D&O Insurance has not been made mandatory under the Act. Section 166 of the Act outlines the fiduciary duties of directors, including but not limited to (a) exercising due and reasonable care, skill, and diligence; and (b) not attempting to gain any undue gain or advantage. Failure of the D&Os to follow these duties could lead to several liabilities arising upon the company. The D&Os can also be held liable under other statutes, such as the Income Tax Act, 1961 (“IT Act”), the Goods and Services Tax Act, 2017 and other environmental and consumer protection laws. The said D&O Insurance indemnifies D&Os against liabilities, except for those arising out of or in relation to fraud, wilful misconduct, bribery, insider trading, etc. Premiums paid by the company to the insurer shall not be considered to be a part of the D&Os' remuneration, but if such D&Os are proven guilty of acting in contravention of the provisions of the Companies Act, 2013, it shall be considered to be a part of their remuneration. Under the IT Act, D&Os can be prosecuted with fines and imprisonment for (a) failure to deduct TDS(b) willful tax evasion; and (c) making false statements. The IT Act also imposes joint and several liabilities on every director of a private company for the recovery of tax dues. As per the provisions of the IT Act, directors who have either resigned or joined during the relevant previous year would be covered under the purview of the same. Some of the specific exposures that make D&O Insurance necessary are: Vulnerability to shareholder/stakeholder claims Employment practice violations Regulatory investigations Accounting irregularities Exposures relating to mergers and acquisitions Corporate Governance requirements Compliance with various legal statutes Protecting D&Os through D&O Insurance is essential in today's corporate environment, as companies and directors face increased risks and exposure to liability.   --- > Non-fungible tokens (“NFTs”) are one-of-a-kind digital tokens that serve as proof of asset ownership and cannot be duplicated. NFTs use blockchain technology, which creates a digital record of all the NFT transactions over an extensive network of computers and cannot be exchanged with other items, unlike cryptocurrency. - Published: 2022-01-20 - Modified: 2025-03-05 - URL: https://treelife.in/legal/what-are-nfts-things-you-need-to-know/ - Categories: Legal Introduction Non-fungible tokens (“NFTs”) are one-of-a-kind digital tokens that serve as proof of asset ownership and cannot be duplicated. NFTs use blockchain technology, which creates a digital record of all the NFT transactions over an extensive network of computers and cannot be exchanged with other items, unlike cryptocurrency. While NFTs can represent tangible assets such as property or artwork, the bulk of NFTs are used to describe digital collectables such as digital artwork, music, images, and videos. are cryptographic assets on a blockchain with unique identification codes and metadata that distinguish them from each other. Unlike cryptocurrencies, they cannot be traded or exchanged at equivalency. This differs from fungible tokens like cryptocurrencies, which are identical to each other and, therefore, can be used as a medium for commercial transactions. NFTs are also known as nifties, representing real world objects like art, music, game items, and videos. NFTs are sold in digital card form. They are held on Etherum blockchain, primarily. An NFT has a unique owner at one time. While anyone can view a NFT, the buyer has the status of the official owner. They can be sold or transferred to another user via Blockchain technology. Due to this, the ownership can always be tracked. How are NFTs created? NFTs are created or ‘minted’ from objects that may represent tangible or non-tangible assets. These include: Music Art Videos and Highlights Video Game Skins and Avatars GIFs Collectables Tweets How To Buy NFTs? To buy NFTs, a user needs to open a digital wallet that allows them to store cryptocurrency and NFT. In most cases, NFTs can only be bought for cryptocurrencies. The following steps shall be undertaken to buy NFTs: First, you need to buy some cryptocurrency and store it in your wallet. Then you can go to an NFT exchange and buy the NFT you like. What Are The Risks? Like cryptocurrencies, NFTs are largely unregulated. Anybody can create and sell an NFT and there is no guarantee of its value. Losses can stack up if the hype dies down. In a market where many participants use pseudonyms, fraud and scams are also a risk. Laws in India Presently there is no law or legal framework that governs NFT in India. Their classification thus remains a tricky issue with the possibilities of how it can be defined. Under Indian law, NFTs are not yet categorised or recognised as “securities”, and no governmental organisation or authority regulates or recognises the trading platforms on which NFTs are traded. Some opine that NFTs fall under the ambit of mere contracts, whereas others consider NFTs to be a derivative based on their characteristics. The following shows how it can be dealt with under the existing legal framework. Copyright Many people believe that possessing an NFT is the same as owning the copyright to work; however, this is not the case. Owning an NFT involves holding a specific digital copy of the work, and it is a digital certificate filed on a blockchain that authenticates just the digital version. The property itself, artistic creation, is not transferred. This means that the underlying copyright typically stays with the work’s creator. While it is possible for a copyright holder to transfer ownership rights to the purchaser of the NFT at the time of sale, the provisions of the Copyright Act 1957, require the contract for sale to provide for such assignment of rights explicitly, in writing. Once the rights are assigned in compliance with the provisions of the Copyright Act 1957, an NFT holder would be treated as the owner of the copyrighted work. Accordingly, the rights of the parties to an NFT sale, and the extent of such rights, are determined by the governing sales contract. Most NFT-related transactions take place through smart contracts, which may stipulate the terms of a licence, provide automatic royalties in case of resale transactions, set limits to the use of copyrights, and track subsequent purchases of an NFT. A smart contract is governed by the Indian Contract Act, 1872 and the Information Technology Act, 2000. Cross Border Legal Implications NFT’s have not yet been governed by any specific act in India but there are a few specific Foreign Exchange Management Act of 1999 (“FEMA”) laws that do prevent crypto-trading. Even if allowed, the laws for crypto-trading or NFT’s would depend solely on how the assets in question have been treated in relation to ownership. Chapter VIII of the Finance Act, 2016 contains the provisions relating to Equalisation Levy(“EL”). Section 165A of the Income Tax Act, 1961 charges an equalization levy of 2% on the consideration received by an ‘e-commerce operator’ from ‘e-commerce supply or services’ made or provided or facilitated by it. If a marketplace is classified as an e-commerce operator under the Finance Act, the EL of 2% may be applied to either the gross value of the NFT or the gas fee imposed by these marketplaces or both. In addition, cross-border NFT transactions will be subject to the FEMA. GST Section 9 of the Central Goods and Services Tax Act, 2017 (CGST Act) states that GST is levied on goods, services, or both. The Act’s definition of ‘goods’ covers all types of moveable property, while the definition of ‘services’ encompasses everything that isn’t a movable property. This opens the door to the possibility of imposing GST on NFTs. On the other hand, the definition of ‘supply’ requires that the transaction take place in the course or promotion of business. NFT developers will likely have to charge GST at the point of sale. Security  If an NFT represents an asset that is classified as a security under Indian securities regulations, it might be subject to such laws. NFTs are effectively derivatives under the Securities Contract (Regulation) Act of 1956 (SCRA), according to certain legal authorities. Derivates are defined as “a security derived from a debt instrument, share, loan, whether secured or unsecured, risk instrument, contract for differences, or any other form of security; a contract whose value is... --- - Published: 2022-01-08 - Modified: 2025-02-05 - URL: https://treelife.in/legal/data-protection-laws-in-india/ - Categories: Legal - Tags: data privacy laws, data privacy laws in india, data privacy regulations, data protection, data protection act india, data protection authority india, data protection bill, data protection laws, international data protection laws, personal data protection act, privacy laws in india India’s Growth Brings Data Privacy and Protection into Focus: Understanding the Current Data Protection and Privacy Laws in India India has rapidly grown in technology and economy, but this growth has also brought up the issue of data privacy and protection. Unfortunately, India has lacked any substantive legislative framework focusing primarily on data privacy and protection privacy laws in India. However, the government has formed a committee of experts to draft a data protection bill. The first bill in 2006 was based on the European data privacy directive, highlighting the need for stronger laws like the data protection laws in Europe. Current Legislative Safeguards: IT Act and IT Rules Data protection safeguards in India are mainly provided by the Information Technology (IT) Act, 2000, and IT Rules, which constitute inter-alia, the data privacy laws in India. These regulations provide the basic legislative safeguards for data security, privacy, and protection in India. The amendment of IT Act, 2008 added Sections 43A and 72A. Section 43 and 43A deal with unauthorized access of information and leakage of sensitive personal information while the Adjudicating officer (when claim or damages amounts upto 5 crores) or competent court (where claim exceeds beyond 5 crores) appointed under the Act can handle such cases and any appeal from such order passed shall lie with the Cyber Appellate Tribunals. Section 72 deals with disclosure of information in breach of contract and punishment for it, underlining the importance of data privacy regulations in India. Judicial Safeguards After the AADHAR Judgment: The Need for Personal Data Protection Data protection was first recognized by the Supreme Court in 2017 in the Aadhar Judgment, emphasizing the need for stronger data privacy laws. The court demanded the enactment of a proper legislation on data protection which should conform with the right to privacy of the individual, and the Personal Data Protection Bill, 2018 was created after this judgment. However, the same has been withdrawn and a new bill – Digital Personal Data Protection Bill, 2022 (2022 Bill) has been released in November 2022 for inviting comments from public. The 2022 Bill recognizes various rights and duties of the citizen and the obligations of the Data Fiduciary to use the collected data lawfully extending to include data collected for offshore/ cross border arrangements, and lays out the penalty for contravention. Data Protection Bill 2022: The Need for Stronger Data Protection Laws The committee of experts headed by retired Chief Justice BN Srikrishna had drafted the Personal Data Protection Bill in 2018. However, considering the ever evolving technology and data breaches and the increasing number of citizens using and relying on digital platforms, the Ministry of Electronics and Information Technology (MeitY) withdrew the 2018 Bill and replaced it with the comprehensive 2022 Bill. The Bill also defines a child (person under the age of 18 years) and states that parents’ consent is required for data collection from a child. In Conclusion: Balancing Data Protection and Growth According to the Supreme Court in the Puttaswamy judgment, the right to privacy is a fundamental right. The government policy on data protection must not dissuade framing any policy for the growth of the digital economy, to the extent that it doesn’t infringe on personal data privacy. India has one of the world’s largest population and a lot of sectors are unorganised and data is easily breached. As businesses operate in a globalized world, there is also a need to follow international data protection laws. Therefore, understanding right to privacy and data protection in India is crucial as we move towards a digitalized future. The establishment of a data protection authority and regularising how data is collected and used in India will go a long way in achieving this balance between data protection and growth. FAQ’s Q: Can personal data be shared without permission in India? A: In India, sharing personal data without permission is not legal. The Information Technology (IT) Act, 2000, and IT Rules, 2011, provide the basic legislative safeguards for data security, privacy, and protection in India. Q: Is data sharing legal in India? A: Data sharing is legal in India, but only if the consent of the individuals whose data is being shared has been obtained prior. The Digital Personal Data Protection Bill, 2022, aims to enhance data protection in India by providing a framework for securing personal data, regulating its processing, and preventing misuse. Q: Why is data privacy important? A: Data privacy is important because it ensures that individuals have control over their personal information and can decide who can access it, how it is used, and for what purpose. Data privacy also plays an important role in preventing identity theft, fraud, and other forms of cybercrime. Q: What are the 7 rules of data protection? A: The 7 rules of data protection are transparency, accountability, purpose limitation, data minimization, accuracy, storage limitation, and security. Transparency involves informing individuals how their data is used, while accountability refers to taking responsibility for processing the data. Purpose limitation means that personal data collection and processing should only be done for specific, legitimate purposes. Data minimization aims to ensure that only the minimum amount of data is collected and processed. Accuracy involves ensuring that personal data is correct and up-to-date. Storage limitation refers to the idea that personal data should only be kept for as long as necessary. Finally, security involves protecting personal data against unauthorized access, loss, or damage. --- - Published: 2021-11-29 - Modified: 2025-07-22 - URL: https://treelife.in/compliance/how-can-a-foreign-company-enter-india/ - Categories: Compliance Foreign companies can expand their operations to India by setting up a place of business, either by themselves or through agents, physically or electronically. To be considered a ‘Foreign Company,’ one must fulfill both criteria mentioned above. The foreign company incorporation in India is divided into four categories: Project Offices (PO), Branch Offices (BO), Liaison Offices (LO), and Foreign subsidiaries. Each entry route has its set of conditions, rules and regulations that need to be followed. Project Offices (PO) If a foreign company plans to execute a specific project in India, it can set up a Project Office (PO) to represent its interests. Essentially, a PO is a branch office with a limited purpose of executing a specific project. Foreign companies engaged in construction or installation typically set up a PO for their operations in India. Branch Offices (BO) Branch Offices (BO) are suitable for foreign companies who wish to test and understand the Indian market with stringent control by the Reserve Bank of India (RBI). With BOs, companies can conduct business activities listed in the BO application. An application from a person resident outside India for BO requires prior approval from the RBI. The AD Category-I bank forwards it to the General Manager, Reserve Bank of India, Central Office Cell, Foreign Exchange Department, 6, Sansad Marg, New Delhi – 110 001, who processes the application in consultation with the Government of India. When applicants belong to certain countries such as Pakistan, Bangladesh, Sri Lanka, Afghanistan, Iran, China, Hong Kong, or Macau and apply for a BO in Jammu and Kashmir, North East region, and the Andaman and Nicobar Islands, the authority consults with the Government of India. Additionally, if the applicant’s principal business falls in the defense, telecom, private security, and information and broadcasting sector, government approval is mandatory. Furthermore, entities such as Non-Government Organization (NGO) and Non-Profit Organization, Body/ Agency/ Departments of foreign governments, must obtain a certificate of registration as per the Foreign Contribution (Regulation) Act, 2010. The non-resident entity for BO in India should have a financially sound track record of a profit-making track record during the preceding five financial years in the home country and net worth of not less than USD 100,000. The general conditions for setting up a BO in India include registering with the Registrar of Companies under the Companies Act, 2013. BOs can open non-interest bearing current accounts in India, obtain Permanent Account Number (PAN) from Income Tax Authorities, transact through one designated AD Category-I bank, and acquire property following the guidelines issued under Foreign Exchange Management. Liaison Office A Liaison Office (LO) does not conduct commercial or trading activity; it’s a place of business to act as a communication channel between the principal place of business or head office and entities in India. LO maintains itself through inward remittances received from abroad through a normal banking channel. Permitted Activities for LO in India of a person resident outside India Representing the parent company/group companies in India. Promoting export/import from/to India. Promoting technical/financial collaborations between parent/group companies and India. Acting as a communication channel between the parent company and Indian companies. Applications from foreign companies for establishing an LO in India shall be considered by the AD Category-I bank as per the guidelines given by RBI. An application from a person resident outside India for opening an LO in India requires prior approval from RBI. The non-resident entity applying for an LO in India should have a financially sound track record, viz: a profit-making track record during the immediately preceding three financial years in the home country and net worth of not less than USD 50,000 or its equivalent. Steps in setting up an LO There are two routes available under the Foreign Exchange Management Act 1999 (FEMA) for setting up an LO in India: Reserve Bank Approval Route and Automatic Route. Designate a bank and branch where an account will be opened (post-approval of RBI) and an Authorized Dealer Bank (AD Bank) for LO in India. Apply LO with all necessary documents to the RBI through the AD Bank. Obtain approval of RBI. Apply to the Registrar of Companies (ROC) to obtain a ‘Certificate of Establishment of Place of Business in India’ within 30 days of approval by RBI. Apply for Permanent Account Number with Income Tax Authority. Apply for TAN with the Income Tax Authority. Open an account with the bank and obtain a bank account number. Registration with police authorities if required. Foreign Subsidiary in India A foreign subsidiary company is any company where 50% or more of its equity shares are owned by a company incorporated in another foreign nation. In such a case, the said foreign company is called the holding company or the parent company. To operate in India through a subsidiary company, any foreign company (parent company) registered/incorporated outside India must hold at least 50% of the shareholding of the subsidiary company. The subsidiary can be registered as either a public limited company or a private limited company in India, with the latter being the preferred mode. The subsidiary company must comply with additional Reserve Bank of India (RBI) regulations since it receives foreign investment through Form FC-GPR and FC-TRS. Additionally, the subsidiary company must be compliant with FC-1, FC-3 & FC-4 forms. The subsidiary company must have a registered office in India, and out of the minimum requirement of two directors, the company must have at least one Indian citizen (a person who has stayed in India at least 182 days in the previous year) as a Director. The foreign subsidiary must be compliant with the Foreign Direct Investment policies filed through FC-TRS, which report the transfer of foreign subsidiary company shares between an Indian resident and a non-resident investor. Additionally, the foreign subsidiary must be compliant with FC-GPR which reports on the remittance received by the shareholders of the foreign subsidiary company. Steps in brief To set up a foreign subsidiary company in India, companies must: Apply for the company’s name reservation... --- - Published: 2021-11-18 - Modified: 2025-08-07 - URL: https://treelife.in/finance/neo-banks-disrupting-the-traditional-banking-landscape/ - Categories: Finance Recent years have witnessed a massive drift in the financial sector. Indian customers are embracing digital means of transactions and moving away from traditional banking methods. The integration of technology and banking services has changed the banking landscape, making transactions quicker, cheaper and more customer-oriented. One of the latest buzz words in the fintech sector is ‘Neo Banks’ What is Neo-banking? Neo banks are like digital banks, with an entirely online presence. These are fintech firms that leverage technology and artificial intelligence (AI) to provide personalised services to their customers. They provide complete digital banking experience through mobile applications. How do they operate? Neo-banks can be classified under 3 different categories depending on their style of operations – The first type features those non-licensed fintech companies that have partnered with a traditional bank. Usually, these banks have outdated infrastructure and legacy systems. Neo-banks put a layer of its digital services and products over these legacy systems to make banking services flexible, accessible and scalable. The second type is when a traditional bank launches its digital-only initiative in the form of neo-banks. The third type is the neo-bank that has its own digital banking licenses. However, these type of neo-banks exist only in those countries that permit stand-alone digital entities. (Currently, RBI does not provide banking license to any entity which does not have a physical presence) How are Neo-banks regulated? The Indian regulatory regime does not allow for the grant of virtual banking licenses. RBI (through its 2015 circular) has mandated the requirement for digital banking service providers to have some physical presence. As a result, neo-banks can provide banking related services only by partnering with licensed banking institutions and non-banking financial companies. RBI has also issued circulars in 2006 and 2010 which deal with outsourcing of financial services by banks and use of business correspondents by banks, which are relevant for neo-banks In addition to these, since neo-banks are in possession of users’ personal data, they need to comply with India’s Information Technology Act & Rules. Regulations: Neo banks must be constantly monitored and evaluated by their partner banks. The Reserve Bank of India reserves the right to monitor and track neo bank features and processes. The Reserve Bank of India has complete access to a neo bank’s records of transactions and accounts. The KYC regulations as followed by traditional banks when opening an account must be followed by neo banks. Neo banks should be able to address grievances on time just as their traditional partner banks are obligated to do. Payment/ Settlement: Like their partner banks, Neo banks must adhere to the provisions of Payment and Settlement Systems Act of 2007. Why Neo-Banking? While the earlier generations might be satisfied with the traditional banking system, the tech-savvy new generations are an impatient lot and want things done at the click of a button. Some of the key benefits associated with neo-banks are: Hassle free account opening: Since neo banks do not have a physical presence, opening up an account can be managed online / over an app within a few minutes by performing a couple of simple steps. International transactions: Traditional banks do not always issue a card with which we can transact internationally. We might have to request for this facility / request for an upgrade. However, with neo banks you can execute international transactions or transact while you’re abroad, seamlessly. User friendly interface: Neo banking is all about being a customer friendly facility which is easy to understand & operate and easily accessible. While in traditional banking you might spend time reaching out to customer support executives, in neo-banking you can simply contact the neo-bank representative through digital mediums. The issues are resolved much faster and require fewer efforts from the user. Cost effective: Since there’s no physical infrastructure involved, the transaction costs are a fraction of those charged by the traditional banks, thereby offering cheaper banking solutions Holistic view of your finances: Neo banks provide you with expense reports, investment data, to give you insights into your spending patterns and help track and budget your spending. Value added services: Neo-banks do not restrict themselves to just enabling faster banking transactions. By leveraging technology, the neo banks have started offering commission-free mutual funds, expense management tools, instant loans, and other financial planning mechanisms with a customer-centric focus. Chatbots and AI are making it possible to analyse customer patterns, credit history, and other data to create realistic data models for recommending financial services based on customers’ lifestyle choices. These neo banks are creating specialised offerings that concentrate on the under-served demands of blue-collar employees and MSMEs, which is the path forward and a much needed impetus in the current situation. How safe is Neo-banking? Security is the number one concerning factor when it comes to digital transactions. Neo bank application implements 2FA (2-factor authorization), Biometric verification, RBAC (Role-Based Access Control), encryption technology along with other security measures to protect customer data. The applications are built to ensure compliance with anti-money laundering laws, complete privacy of customers and to prevent malware attacks. Which are the Neo-banks in India? InstantPay, Niyo, Open, Fi Money and RazorpayX are some of the major players in this segment. There are more than 12 neo banks in India currently, and few more are in the process of entering the market. Growth Prospects: The global neo banking market size was valued at USD 66. 82 billion in 2022 and is expected to grow at a compound annual growth rate (CAGR) of 54. 8% from 2023 to 2030. In India, Transaction value is expected to show an annual growth rate (CAGR 2023-2027) of 17. 77% resulting in a projected total amount of USD131. 80bn by 2027 The average transaction value per user in the Neobanking segment amounts to USD 4. 97k in 2023. --- - Published: 2021-11-11 - Modified: 2025-07-22 - URL: https://treelife.in/compliance/understanding-pros-and-cons-for-setting-up-a-llp/ - Categories: Compliance Introduction A Limited Liability Partnership (“LLP”) is an alternative business form that gives the benefits of limited liability of a company and the flexibility of a partnership. It has a separate legal entity distinct from that of its partners. It is capable of entering into contracts and holding property in its own name. Further, no partner is liable on account of the independent or un-authorized actions of other partners, thus individual partners are shielded from joint liability created by another partner’s wrongful business decisions or misconduct. Mutual rights and duties of the partners within a LLP are governed by an agreement between the partners or between the partners and the LLP as the case may be. The LLP, however, is not relieved of the liability for its other obligations as a separate entity. Since LLP contains elements of both ‘a corporate structure’ as well as ‘a partnership firm structure’ LLP is called a hybrid between a company and a partnership. All LLP’s are governed by the Limited Liability Partnership Act, 2008 (“LLP Act”). Features of LLP It has a separate legal entity. Each partner’s liability is limited to the contribution made such partner. Less compliance and regulations. No requirement of minimum capital contribution. The minimum number of partners to incorporate an LLP is 2. There is no upper limit on the maximum number of partners of LLP. Among the partners, there should be a minimum of two designated partners who shall be individuals, and at least one of them should be resident in India. The rights and duties of designated partners are governed by the LLP agreement. They are directly responsible for the compliance of all the provisions of the LLP Act 2008 and provisions specified in the LLP agreement. Advantages Separate legal entity: An LLP is a separate legal entity. This means that it has assets in its own name and can sue and be sued in its own capacity. No partner is responsible or liable for any other partner’s misconduct or negligence. No owner/manager distinction: An LLP has partners, who own and manage the business. Just like a private limited company, whose directors may be different from shareholders. Primarily for this particular reason, venture capital funds do not invest in the LLP structure. Flexible agreement: The partners are free to draft the LLP agreement with respect to their rights and duties. Limited liability: The liability of the partners is limited to the extent of their contribution made to the LLP. At the time of winding up, only the LLP’s assets are used for the clearing of debts. The partners have no personal liabilities and hence are free to conduct the business in the best manner possible without the fear of attachment of their property. Fewer compliance requirements: An LLP is much easier and cheaper to run than a private limited company as there are only a few compliances per year. On the contrary a private limited company has a lot of compliances to fulfil along with conducting an audit or other such compliance requirements. The LLP is required to get an audit done when turnover exceeds, in any financial year, forty lakh rupees, or when contribution exceeds twenty five lakh rupees. Other Compliances which are not required in LLP Vis-à-vis a private limited company are having no requirement of minimum number of board meetings in the financial year, no requirement to distribute dividend and no payment of dividend distribution tax. However the tax compliances for both a private limited company and a LLP is similar. A LLP is charged a flat rate of 30% on its total income. The amount of income-tax shall be further increased by a surcharge at the rate of 10% of such tax, where total income exceeds one crore rupees. Easy to wind-up: Not only is it easy to start, it’s also easier to wind-up an LLP, as compared to a private limited company. No requirement of minimum capital contribution:  The LLP can be formed without any minimum capital. There is no requirement of having a minimum contribution before preparing an agreement. It can be formed with any amount of capital contributed by the partners. Disadvantages Difficulty in raising capital and funding: The LLP does not have the concept of equity or shareholders like a company. Angel investors and venture capitalists can only invest in the form of partners in a LLP if they would want to. This would entail them to take up all the responsibilities of a partner. Thus, angel investors and venture capitalists prefer to invest in a company rather than an LLP making it difficult for the LLPs to raise capital. Also, Foreign Direct Investment (FDI) in LLP is more restrictive as compared to companies. Public disclosure: The documents filed through the MCA portal are public documents. Any person can pay a small fee and can access the copy of LLP’s incorporation documents other than the LLP agreement and financial statements. These documents are not accessible in the case of sole proprietorship or traditional partnership firm are not available for public viewership. Non-Compliance is Expensive: Even though the compliance requirements for an LLP are relatively low, it is essential to adhere to them, else it can lead to heavy penalties.  In case of non-compliance, penalty of ten thousand rupees shall be levied and in case of continuing contravention, with a further penalty of one hundred rupees for each day after the first during which such contravention continues, subject to a maximum of one lakh rupees for the LLP and fifty thousand rupees for every partner of such LLP. In the case of a proprietorship or traditional partnership firm, there is no such requirement to bear non-compliance expenses. Who should prefer a LLP? From the business perspective it is essential to understand the advantages and disadvantages of setting up a LLP in general, however it is also essential to understand if it is the best structure for your business. To understand if setting up a LLP is the right start to... --- - Published: 2021-07-20 - Modified: 2025-01-28 - URL: https://treelife.in/finance/reporting-under-caro-2020-vs-caro-2016/ - Categories: Finance Introduction CARO 2020 is a new format for the issue of audit reports (attachment to the primary report) in case of statutory audits of eligible companies under the Companies Act, 2013. CARO 2020 has included additional reporting requirements after consultations with the National Financial Reporting Authority (an independent regulatory body for regulating the audit and accounting profession in India) as compared to CARO 2016. The primary aim of CARO is to enhance the overall quality of reporting and disclosure of overall material matters of the Company by the company auditors. Effective date CARO, 2020 is applicable for the Financial years commencing on or after 1st April 2020. (earlier it was applicable from 1st April 2019) Applicability There are no changes proposed in the applicability section of CARO, 2020. It applies to all companies (including exceptions) as per the previous CARO, 2016. We have listed down below the category of such companies to have a ready reference. CARO, 2020 applies to all companies including foreign companies, except: Banking company; Insurance company; Company licensed to operate under Section 8 of Co. Act, 2013; Small Company; Private Limited Company, not being a subsidiary or holding of public company, having: Paid up capital and Reserves & surplus not more than 1 Crore as on balance sheet date; Borrowing not exceeding 1 Crore from bank/financial institution at any point of time during financial year; Revenue not exceeding 10 Crore during financial year as per the financial statements Comparative Clauses There are in total 21 clauses in CARO 2020 as compared to the existing CARO 2016 that has 16 clauses. Key Changes/ Highlights between CARO, 2020 and CARO, 2016 Let’s analyze the proposed changes clause-wise between CARO 2020 and CARO 2016. --- - Published: 2021-05-18 - Modified: 2025-01-21 - URL: https://treelife.in/compliance/taxation-fouls-by-e-commerce-businesses/ - Categories: Compliance E-Commerce is India’s fastest growing and most exciting channel for online commercial transactions. It deals with cross-border transactions and eases the international brands to reach Indian customers. To outline, many E-Commerce businesses or person dealing with such platform are unaware of the applicable tax compliances resulting from conceptual flaws. What is E-Commerce E-Commerce refers to buying and selling of goods/ services via internet- For e. g. , Online shopping. Any person who supply goods/ service through the portal is called “E-Commerce Participant”. Further, any person who manages the portal is referred as “E-Commerce Operator”. Fouls under Goods and Services Tax (GST) Registration E-Commerce operator Usually, when suppliers reaches the threshold limit is required to get GST registration. However, the GST law has prescribed few classes of person including E-Commerce Operator to register mandatorily irrespective of the threshold limit.  (as per Section 24 of the Central GST Act) E-Commerce participant Any person who supplies goods/ services or both, through an e-commerce operator (except notified supplies) needs to obtain GST registration irrespective of the threshold limit. Notified supplies: It namely includes such as restaurant services, including cloud kitchens, housekeeping and accommodation services, and motor cabs – the GST liability falls on the E-Commerce Operator.  (as per Section 9(5) of the Central GST Act) Analysis of Tax Collected at Source (TCS) TCS means the tax collected by an E-Commerce Operator from the consideration received by it on behalf of the supplier and remit the same to his GST account. It will be charged as per prescribed percentage of the net taxable supplies depending upon the supplies.  (as per Section 52 of the Central GST Act) TCS will be deducted during the month in which the supply is made and will be deposited within 10 days from the month-end of supply. Fouls under Income-tax (IT) Tax Deduction at Source (TDS) The Finance Bill 2020 widened the scope of TDS by bringing E-Commerce Participants within tax range and asked E-commerce Operators to deduct TDS while making a payment to resident E-Commerce Participant basis the defined criteria in the IT Act.  (as per Section 194-O of the IT Act) TDS to be deducted on the Gross amount of sales/ services along with an exception to the Individual/ HUF subject to the transaction limit of 5 Lakhs in case if PAN is furnished. Equalization Levy 2. 0 (EL) The first EL was introduced via Finance Act, 2016 and is made applicable to the specified services (namely advertisement services) provided by non-resident service providers. The government has extended the scope and introduced EL 2. 0 via the Finance Act, 2020. This EL 2. 0 imposes the tax mandate on consideration receivable by the non-resident E-Commerce Operator. Applicability The EL 2. 0 will be charged at the rate of 2% on the amount of consideration and unlike in the case of EL 1. 0, the deduction of the levy is the responsibility of the non-resident E-Commerce Operator and is to be discharged by the operator itself. Further, the levy has to be discharged on a quarterly basis. This EL 2. 0 covers the following E-commerce supplies subject to the condition that the recipient should be Indian resident or IP address shall be located in India: Online sale of goods owned by the e-commerce operator; Online provision of services provided by the e-commerce operator; Online sale of goods or provision of goods facilitated by the e-commerce operator; Any combination of the above It also provide few exceptions on EL 2. 0 applicability: The non-resident E-Commerce Operator has a permanent establishment in India and the supply are effectively connected to such permanent establishment; The EL 1. 0 is applicable; The gross receipts/ turnover of such Operator from online supply is less than 2 crores in a year. The EL 2. 0 payment schedule stated below: Quarter closing dateDue Date30 June7 July30 September7 October31 December7 January31 March31 March Payment Schedule In case of defaults, simple interest will be imposed on late payments, and failure to pay the levy will incur a penalty equivalent to the amount of the levy. An Annual Statement in Form-1 to be furnished to the tax authorities (Income-tax portal) on or before 30th June of the subsequent financial year. If a taxpayer fails to furnish the statement within the prescribed time, he has to pay a penalty of INR 100 per day till the default continues. --- - Published: 2021-03-22 - Modified: 2025-01-21 - URL: https://treelife.in/legal/intermediary-guidelines-2021/ - Categories: Legal - Tags: Digital Media Ethics Code, Intermediary Guidelines, Intermediary Guidelines 2021, Social Media Guidelines The Ministry of Electronics and Information Technology (“MeitY”), on 25 February 2021, had notified the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021 (“Intermediary Guidelines”) which superseded the Information Technology (Intermediary Guidelines) Rules, 2011 (“Intermediary Guidelines, 2011”) and brought under their scope numerous online entities by introducing broad new terms and definitions. The Intermediary Guidelines 2021 have been amended recently vide the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Amendment Rules, 2022 published and notified in the Gazette dated October 28, 2022 (“Amending Rules”). Intention of the Ministry The lack of transparency, accountability of intermediaries and social platforms on the internet and violation of rights of users of digital media had been a growing concern for the nation in the changing and ever-advancing technology and digital media space. Considering the need of the hour, the MeitY issued the Intermediary Guidelines, 2021 covering many issues related to use of digital media and defining the responsibilities of the intermediaries, including social media intermediaries, and also providing a code of ethics to be followed and outlining grievance redressal mechanisms to be followed. The Intermediary Guidelines sought to address all the issues faced by social media and internet users and to regulate the following categories of intermediaries and digital media entities: Intermediaries including social media intermediaries and significant social media intermediaries; Publishers of news and current affairs content, including news aggregators, news agencies, and individual news reporters to the extent they are transmitting content in the course of a commercial activity Publishers of online curated content, including individual creators transmitting content in the course of a systematic business, professional or commercial activity. This has been a major step forward in today’s digital world, establishing a practice of regulating a critical sphere of our lives and also the nation’s economy. Further, in its press release, the MeitY stated that the Amending Rules were being notified in view of the complaints against the intermediaries due to their action/inaction regarding user grievances regarding objectionable content or suspension of their accounts Definitions The Intermediary Guidelines provided the following definitions: News Aggregator (Rule 2(o))An entity who, performing a significant role in determining the news and current affairs content being made available, makes available to users a computer resource that enables such users to access the news and current affairs content which is aggregated, curated and presented by such entity. Publisher of news and current affairs content (Rule 2(t))An online paper, news portal, news aggregator, news agency and such other entity called by whatever name, which is functionally similar to publishers of news and current affairs content but shall not include newspapers, replica e-papers of the newspaper and any individual or user who is not transmitting content in the course of systematic business, professional or commercial activity. Publisher of online curated content (Rule 2(u))A publisher who, performing a significant role in determining the online curated content being made available, makes available to users a computer resource that enables such users to access online curated content over the internet or computer networks, and such other entity called by whatever name, which is functionally similar to publishers of online curated content but does not include any individual or user who is not transmitting online curated content in the course of systematic business, professional or commercial activity. Significant social media intermediary (Rule 2(v))A social media intermediary having a number of registered users in India above such threshold as notified by the Central Government. This threshold has been set at fifty (50) lakh users. Social media intermediary (Rule 2(w))An intermediary which primarily or solely enables online interaction between two or more users and allows them to create, upload, share, disseminate, modify or access information using its services. Other important definitions include communication link, news and current affairs content and online curated content which together fulfill the government’s purpose of regulating numerous kinds of information available on the internet. The Intermediary Guidelines are divided into two parts: Due diligence obligations applicable to intermediaries and grievance redressal, and Code of ethics and related safeguards and procedures applicable to entities in the digital media space It must be noted here that; Rule 3 of the Intermediary Guidelines require an intermediary to observe due diligence while discharging its duties. If this mandate of due diligence is not complied with, such an intermediary shall not qualify for ‘safe harbor’ protection, as granted under Section 79 of the Information Technology Act, 2000 (“IT Act”). The due diligence obligations include publishing, in a prominent manner, the rules and regulations, privacy policy and user agreement for access or usage by any person (these shall, thereafter, be collectively referred to as “Access Policy”). The Amending Rules require such Access Policy to be in English or any of the official languages of India as specified in the Eighth Schedule to the Constitution so that it can be understood by the users in the country easily. The Access Policy must also inform the user to not host, display, upload, modify, publish, transmit, store, update or share any prohibited information. After the Amending Rules were enforced, there are nine categories of such prohibited information ranging from unauthorized information as a consequence of it belonging to another person to information which threatens the unity, integrity, defense, security or sovereignty of India. As part of its due diligence obligations, an intermediary must also do the following: Periodically inform its users that their non-compliance with the Access Policy allows the intermediary a right to terminate such users’ right to access or usage of the intermediary’s website or mobile application (hereinafter collectively referred to as “Platform”). Not host, store or publish any unlawful information, or if so done, the intermediary shall remove or disable access to such information at the earliest but not later than thirty-six (36) hours of having received actual knowledge of the unlawfulness of the impugned information. A similar obligation was placed upon an intermediary under the Intermediary Guidelines, 2011; however, an intermediary was also required in case it obtained knowledge of... --- - Published: 2021-03-18 - Modified: 2025-02-10 - URL: https://treelife.in/legal/saas-contract-negotiation-checklist-top-ten-considerations/ - Categories: Legal - Tags: B2B SaaS, B2B SaaS agreement, B2B SaaS agreement negotiations, negotiating SaaS agreement, negotiating saas contracts, SaaS Agreement, saas contract negotiation checklist While SaaS has simplified enterprise software in multiple ways, however, subscribing to an “enterprise-class” system still requires a fairly complex contract negotiation process. Here is a SaaS contract negotiation checklist that covers the top ten crucial factors to consider when negotiating your SaaS Agreement: 1. Commercials Usually discussed by the sales and/or the business teams and are negotiated before commencing the legal negotiation process. Pricing, payment terms, taxes, and billing methods should be negotiated with the sales or business teams before legal negotiation. 2. Liability Cap The liability cap is the most important clause for protecting parties in claims as it sets a limit on the liability brought. Usually incorporated in an agreement to safeguard a party from any potential liability that may arise and to safeguard from any unlimited liabilities. 3. Intellectual Property (IP) Rights While negotiating SaaS agreement, IP rights are of integral importance. The IP clause determines who owns IP rights and ensures that the agreement covers areas such as indemnity if a third-party claims IP infringement. 4. Effect of Termination It’s important to stipulate what happens to data after termination of the agreement and for how long the customer has access to the platform, data backup frequency, and procedures. 5. Term If a vendor offers pricing discounts, subscription metrics and additional fees, in such cases extended contract terms may be required. Vendors prefer longer terms because it provides more predictability in their revenue forecasting. Terms can range from 30 days to five years. 6. Indemnities Clarify when indemnification is required and if limitations of liability apply to an indemnification claim. Ensure the contract provides indemnification for data as well as for security breaches and IP infringement. 7. Service Level Agreements (SLAs) The SLA is the vendor’s commitment to keeping the system up and running and is typically expressed as a percentage of “up time”. You will almost always see the SLA represented as 95 to 99. 9% or thereabouts. However, there is a wide variation in how the vendor calculates system uptime. A breach of the up time can result in grant of service credits, or a proportionate extension of the subscription period. 8. Data Protection Provisions Include a differentiation between processor and controller and respective obligations in the agreement and ensure that it is GDPR-compliant. 9. Data Export Two key things for consideration: (a) you must ensure that data ownership is retained; and (b) that you know how to export data in case of migrating to another system or the vendor going out of business and you need access to your data even before you select a new system. 10. Warranties Generally, cloud service contracts contain many of the following warranties: (1) that the service will materially conform to the documentation, (2) the services will be performed in a workmanlike and professional manner, (3) the provider will provide the necessary training for the customer to use the services (4) the provider has sufficient authority to enter into this agreement Other important considerations include disclaimers of warranties, force majeure, survival clause, and confidentiality provisions. Always ensure the customer fully understands that the services provided always carry inherent risks. By prioritizing these ten factors in your SaaS contract negotiation checklist, you can create a solid SaaS agreement that aligns with your business’ needs, protects your interests, and ensures a successful and stress-free implementation. FAQs on Points of Negotiation for SaaS Agreements Q: How to negotiate the price for SaaS? A: When negotiating the price for SaaS, it’s important to understand the service you’ll be receiving and what it’s worth to your business. You can request a detailed breakdown of the pricing structure and compare it with other vendors on the market. Be prepared to discuss payment terms and negotiate for discounts or bundling options when possible. Q: How do you politely negotiate a contract?   A: When negotiating a contract, it’s important to approach the process with an open and collaborative mindset. Be clear about your needs and priorities, but also take the time to understand the vendor’s perspective. Listen carefully and ask questions when necessary, and seek common ground where possible. Ultimately, aim for a mutually beneficial agreement that meets both parties needs. Q: What are the key points in a SaaS agreement?   A: The key points in a SaaS agreement include commercial terms, liability cap, intellectual property rights, effect of termination, terms, indemnities, service level agreements, data protection provisions, data export provisions and warranties. These areas cover crucial aspects such as pricing, data protection, and vendor responsibilities, and should be negotiated and agreed upon before signing the contract. Q: What are the payment terms for SaaS contracts? A: Payment terms for SaaS contracts can vary depending on the vendor and specific agreement. Some vendors may require payment upfront or on a monthly or annual basis. Others may offer more flexible payment schedules or subscription models. It’s important to review and negotiate payment terms to ensure they align with your business’ budget and cash flow needs. --- - Published: 2021-03-18 - Modified: 2025-08-07 - URL: https://treelife.in/legal/are-trademark-and-brand-name-two-sides-of-the-same-coin/ - Categories: Legal - Tags: brand vs trademark, difference between brand and trademark with example, difference between logo and trademark, difference between trademark and brand name, trademark, trademark and branding Importance of Trademarks and Brand Names for Your Business: Understanding the Differences Between a Brand & a Trademark If you own a business, you have probably heard of the terms “brand” and “trademark. ” While these words are often used interchangeably, they have distinct meanings. In this post, we will discuss the differences between a brand and a trademark, as well as the importance of each. First, let’s define what brands and trademarks are. A ‘brand’ is a collection of features and elements that create a company’s identity in association with certain product(s) or service(s) that helps create brand value of the entity. This includes the brand name, logo, image, goodwill, personality, culture, and reputation. On the other hand, a Trademark is defined in the Trademark Act, 1999 as, “a mark capable of being represented graphically and which is capable of distinguishing the goods or services of one person from those of others and may include the shape of goods, their packaging and combination of colors. ” A trademark is the intellectual property of a business. A trademark can be a visual symbol, logo, design, word, slogan, tagline, jingle or combination of these elements, created in relation to a particular brand. It differentiates a company’s products and services from competitors in the market. Similarly, a brand name is the primary name of a company under which the company markets and sells its products or services, while a trademark is a representation in the form of logo or symbol or word or their combination for that brand name. A registered trademark allows a company to take legal action against those who copy or use the brand name or such trademark without permission in relation to the same goods or services. Trademarks often act as a distinguisher between two brands with similar names. Registration of a trade mark is not mandatory, however, it is also not an inherent right available to the creator like is the case in copyright. Hence, it is important to protect your brand and intellectual property from infringement and misuse in the market and to secure your trademark’s creation, by opting for trademark registration. A registered trademark creates a niche in the industry, thus safeguarding your brand value and maintaining your position in the market. It also helps customers identify fraudsters trying to dupe them by using your mark. A brand value is one of the most important criteria that hold a company together and continuous usage of a certain trademark in relation to one’s brand helps build that brand value. In summary, while brand and trademark are closely linked, they are separate concepts. A brand creates awareness and trust in a company, while a trademark provides a symbolic or graphic representation, and protection if it is registered to prevent theft or misuse of intellectual property. FAQ’s Q: What are examples of trademarks and brand names? A: Some examples of trademarks include the Nike swoosh, the Apple logo, and the McDonald’s golden arches of ‘M’, or Coca-Cola in its unique italics font. Brand names include Coca-Cola, Google, and Amazon. Q: What is the difference between brand, trademark, and copyright? A: A brand is a collection of features that create a company’s identity, including the brand name, logo, image, personality, culture, and reputation. A trademark is a mark symbolizing that brand of a company and constitutes as its intellectual property, such as symbols, graphic representation, logos, designs, words, slogans or colors or combination. Copyright protects original works of authorship, including literary, artistic, cinematographic and musical works, and grants exclusive rights to the creator of the original work. --- - Published: 2021-03-18 - Modified: 2025-01-21 - URL: https://treelife.in/startups/b2b-saas-how-sales-can-be-driven-efficiently/ - Categories: Startups Unlock the Secrets to Efficiently Drive B2B SaaS Sales – Boost Your Revenue Now B2B SaaS or Business to Business Software as a Service is a cloud-based software distribution model that allows companies to sell access to their software to other businesses. Rather than downloading software to a desktop PC, businesses can access SaaS products through an internet application or web browser. B2B SaaS products can include any kind of software such as office management, customer support or communication software used within a business. Here are some advantages of B2B SaaS that make it valuable to a business: Accessibility: B2B SaaS products can be accessed from any web browser, allowing businesses to manage operations effectively without the need to be at a specific location or operating system. Automatic updates: As a cloud-based service, B2B SaaS businesses can automatically update the product without impacting the user’s operations. Additionally, with cloud-based applications, there is no requirement for storage or hardware on the end-users side. Data capture and analytics: Since B2B SaaS software is centralized and automated, it is easier to capture data and provide in-depth analytics. Cost-effective: B2B SaaS eliminates the need for businesses to own products, systems, and hardware that can be costly. Efficient operations: B2B SaaS allows businesses to automate internal functions and operations at a relatively low cost. Examples of some B2B SaaS Companies are: HubSpot: A cloud-based inbound marketing and sales platform that provides tools for CRM, web analytics, content management, SEO, and social media analytics. Google: Famous for its search engine, Google also owns and operates more than 130 different SaaS products. Some of Google’s services include a search engine, online advertising, document creation, digital analytics, and other services. While B2B SaaS and B2C SaaS sales and marketing share the same end goal of helping customers, there are many differences in the process that make the need for a strong sales strategy important. The B2B SaaS sales cycle is much longer and more complex than the B2C SaaS sales cycle. Businesses generally have more than one buyer on a team communicating with many sales reps and maybe even sales teams, where consumer purchases are usually done between one customer and one sales rep. With B2C SaaS, a user can directly input their credit card information and start using the product, while a B2B SaaS deal often requires a demo and onboarding process. As B2B SaaS companies grow, they usually deploy an enterprise sales team that enables them to effectively target enterprise-sized companies who have unique needs. B2B SaaS Selling Tactics For startups finding the right marketing strategy that will attract new sales and build brand awareness can be challenging. From targeting the right audience to preparing sales teams for a competitive market, marketers may find it challenging to get their SaaS product in customers’ hands. Some of the sales tips and marketing strategies used in B2B SaaS sales that can help any startup succeed are: Position your software around competitor brands: The SaaS market is incredibly competitive. To meet company sales goals, marketers need to elevate their company above the competition. To do so, this often requires positioning your software above and against your competitors. Use data-based metrics to prove why your SaaS products are the superior choice for meeting your client’s needs. This could mean using case studies or conducting surveys. Focus on customer retention: As business needs and software solutions are constantly changing, building a strategy that includes customer retention could set your business apart from others. To ensure that your business is well-positioned, continue to prove to customers why your software fits their needs. To encourage customer retention, SaaS sales reps Best Practices for Selling B2B SaaS Effectively Curate a Targeted Portfolio In a digital marketplace flooded with too many options, B2B SaaS buyers can quickly become overwhelmed. To effectively address their pain points and boost revenue, start small with software that is highly targeted to potential customers. By curating the choices buyers have, you act as an expert advisor, steering them to solutions that will work best for them. As your software ecosystem evolves with services targeted to different buyer segments, you can significantly increase your marketplace’s revenue. Highlight the Value of Your App Never assume potential buyers understand the value of your app. To stand out from the competition, clearly communicate how your B2B SaaS offerings are relevant and different. Don’t overlook the obvious benefits your app provides, as these may not be as clear to potential buyers as they are to you. Bundle Apps with Core Services While buyers love a good deal, multi-app bundles can complicate the sales message and cycle in B2B SaaS. Instead, package apps with your core services. For instance, a telecom provider bundled a mobile broadband subscription with a tablet device and Microsoft Office 365, generating 1,500 active users in just a few months. Avoid attempting to solve too many challenges simultaneously, which makes the offer too complex and the business use unclear. Use a Human Touch to Sell While consumer devices have programmed us to believe apps sell themselves, this isn’t the case with B2B SaaS. Buyers need human assistance to make informed decisions. Sell Solutions To effectively sell B2B SaaS, put potential customers and their challenges first. Sales teams need to adopt a different mindset and focus on how the SaaS product can help customers solve their issues, leading to further growth for both the customer and the company. By prioritizing solutions, instead of speeds and feeds, you can sell B2B SaaS effectively. --- - Published: 2021-03-01 - Modified: 2025-08-07 - URL: https://treelife.in/startups/how-convertible-notes-make-fundraising-seamless-for-startups/ - Categories: Startups If you’re a seed or early-stage startup in need of funds for hiring and operations, you may find it difficult to determine a fair valuation. That’s where convertible notes come in. A convertible note is a short-term debt instrument that startups can use to raise funding. It allows holders to convert their debt into equity in the company at a future date. The biggest advantage of convertible notes for early-stage startups is that they don’t need to determine the value of the company when issuing them. Unlike traditional equity financing, issuing a convertible note is quick and efficient. There’s only one document to deal with, which saves time and money for both the company and investors. Until 2016, convertible notes were not legally recognized in India. However, the Companies (Acceptance of Deposits) Rules, 2014 were amended to recognize them as a fundraising instrument for startups. DPIIT-registered startups can now raise funding through convertible notes, subject to certain conditions. The investment amount must be at least INR 25 lakhs in a single note and converted within 10 years. The terms of conversion must also be determined upfront. By linking convertible notes to expected returns instead of valuation and percentage of ownership, startups can avoid the valuation quagmire that often comes with very early-stage investments. --- - Published: 2021-03-01 - Modified: 2025-07-22 - URL: https://treelife.in/finance/determining-the-exercise-price-of-a-stock-option/ - Categories: Finance - Tags: exercise price, exercise price of ESOPs, strike price, strike price of stock options Exercise price or strike price is the price at which the holder of stock options has the right, but not the obligation, to purchase vested options within the term period. ESOPs that have vested can be exercised. To do this, the employee has to reach out to the CHRO or the finance team, and initiate the process of exercising ESOPs. Note that the employee has to pay a tax while exercising ESOPs, and only after that he/she will receive the shares and then may choose to sell. The strike price of options can be anything that is chosen by the company while giving out the ESOP grant letter. Some startups choose the exercise price as a nominal amount (say INR 10) while some startups choose the exercise price based upon the last round valuation of the company. In the latter case, the difference in the company’s valuations between when the employee joined and the liquidity event in which he/she sells ESOPs, represents the money gained by the employee. While there is no concrete formula to arrive at the ideal exercise price, we suggest founders set the exercise price at a nominal value (face value of shares at minimum). There are two advantages of a nominal exercise price: Employee-friendly: Employees won’t have to pay a larger value for exercising their ESOPs Independent of Valuation: If the valuation of the startup goes down significantly, employees might end up losing money from the ESOPs they would have exercised Let’s say the exercise price of ESOPs as per the last round valuation of the company is INR 80, and the employee was offered 100 ESOPs at an exercise price of INR 70. The company went on to raise another round of funding 3 years after ESOPs were granted to this particular employee. Assuming that the valuation of the company has gone down and the FMV of shares is INR 65 now, the employee will make a loss of INR 5 per share if he/she exercises and sells the shares on the present day. Now if the employee was granted ESOPs at a nominal exercise price of INR 10 each, the employee will make some money despite the decreased valuation. --- - Published: 2021-02-14 - Modified: 2025-07-22 - URL: https://treelife.in/compliance/post-incorporation-formalities-for-plcs-llps/ - Categories: Compliance - Tags: post incorporation formalities, post incorporation formalities for companies, post incorporation formalities for LLPs, post incorporation formalities for PLCs, post incorporation formalities for PLCs and LLPs After incorporating a Private Company (“PLC”) or Limited Liability Partnership (LLP), specific regulations in the Companies Act, 2013 and the Limited Liability Partnership Act, 2008 (“LLP Act”) must be followed to ensure compliance with the law. Certain post-incorporation compliances must be met before starting business operations to avoid any issues during the process. These activities exist due to provisions outlined in the Act or state-level laws such as the Shops and Establishment Act, State Stamp Act, and Professional Tax. LLPs are a unique organizational form with characteristics of both a partnership firm and company and are governed by the LLP Act, 2008. Both PLCs and LLPs are administered by the Registrar of Companies (ROC). The following compliances must be met after receiving a certificate of incorporation. Incorporation of a Private Limited Company (PLC) is a significant step in starting a business in India. However, it is important to note that certain compliances must be met to avoid penalties and ensure a smooth start to operations. Here are the mandatory post-incorporation compliances for PLCs: 1. Hold the first Board Meeting According to Section 173, sub-section (1) of the Companies Act 2013, the company must hold the first board meeting within 30 days from the date of incorporation. The meeting must discuss important agenda items such as annual disclosures from directors, authorisation of share certificates, appointment of statutory auditor and such other agenda items. Failure to comply with this can result in a penalty of INR 25,000 for every officer of the company responsible for giving notice. 2. File Form INC-20A All companies with share capital incorporated on or after November 2, 2018 having share capital, must file Form INC-20A within 180 days of incorporation in order to commence business or borrow funds. Failure to do so can result in a penalty of INR 50,000 for the company and a penalty of INR 1,000 per day for each officer in default during which the default continues, up to a maximum of INR 1,00,000. 3. Issue share certificates to first subscribers Section 46(1) and 56, (4)(a) of the Companies Act 2013 mandates PLCs to issue share certificates to first subscribers, duly signed by two directors of the company and the company secretary, wherever the company has appointed a Company Secretary, if any, within a period of two months from the date of incorporation. Failure to comply can result in a penalty of INR 50,000 for the company and every officer of the company who is in default. 4. Payment of stamp duty on the share certificates PLCs are required to pay stamp duty on the total consideration amount mentioned in the share certificates within 30 days of issuance. Failure to do so can result in a penalty as suggested by the Collector or officer in charge. 5. Appointment of first statutory auditor As per Section 139, sub-section 6 of the Companies Act 2013, PLCs must appoint their first auditor within 30 days of incorporation. However, in case the Board fails to appoint, the shareholders must appoint the auditor within 90 days at an extraordinary general meeting. While there is no fine or penalty for failure to file Form ADT-1 for appointment of the first auditor, it is advisable to do so. 6. Shops and Establishment Registration/License PLCs are required to obtain Shop and Establishment Registration under respective State’s as applicable. Penalty amount varies from state to state. 7. Professional Tax Registration (PTEC and PTRC) PLCs must enroll under registration called (PTEC) and pay an annual mandatory fee of INR 2,500. Companies employing people with salaries above a specified limit (which varies from State to State) must obtain Professional Tax – Employee Registration (PTRC) when they begin to employ staff. The penalty amount for non-compliance varies from state to state. 8. Goods and Services Tax Registration Every business whose annual turnover exceeds Rs. 40 lakhs or Rs. 20 lakhs for service providers, Rs. 10 Lakhs for North-Eastern States, Himachal Pradesh and Uttarakhand and J & K is required to obtain GST Registration under the Goods and Services Tax Act, 2017 and rules. While it is not mandatory to obtain GST Registration immediately upon incorporation, failure to pay tax can result in a penalty of 10% of the tax amount due subject to a minimum of Rs. 10,000. In cases of deliberate tax evasion, the penalty will be at 100% of the tax amount due. 9. Trademark Registration PLCs are encouraged to secure their business name through trademark registration under Section 18 of The Trademark Act, 1999. 10. MSME/SSI Registration PLCs can also register under the MSME Development Act to get benefits such as collateral-free bank loan, preference in government tenders, and tax rebates. Starting a Limited Liability Partnership (LLP) in India is a crucial milestone, and it’s essential to ensure compliance to avoid penalties and smoothly operate the business. Let’s go through the post-incorporation compliances required for LLPs: i. File Form 3 After incorporating the LLP, the partners need to execute the LLP Agreement and file it with the Registrar. The LLP agreement is mandatory, and even in the absence of a specific LLP Agreement, the default LLP agreement given in Schedule I of the LLP Act shall apply. The form must be filed within 30 days of incorporation, and the penalty for non-compliance is Rs. 100 per day with no ceiling on the maximum fine. ii. Apply for a PAN Card The Issuance of PAN is integrated with the LLP incorporation process in form FiLLiP. iii. Open a Bank Account LLPs must open a bank account and transfer their capital to conduct transactions. No penalty or due date exists for this compliance. FAQs Q: When can a private company commence business? A: A private company can commence business after filing form INC-20A within 180 days of Incorporation. . Q: What is the procedure after incorporation of a company? A: After the incorporation of a company, the following procedures need to be carried out: Hold first Board Meeting Open a bank account for the... --- - Published: 2021-02-12 - Modified: 2025-02-07 - URL: https://treelife.in/legal/implications-of-a-force-majeure-clause/ - Categories: Legal - Tags: force majeure, force majeure clause, force majeure clause in contract, force majeure covid, force majeure event, implications of a force majeure clause, sample force majeure clause Are you worried about force majeure events impacting your contract in India? It’s crucial to understand the force majeure clause’s meaning and its legal definition. A force majeure clause in contract explicitly sets out the terms that excuses a party from performing its contractual obligations under certain force majeure conditions or events. The recent COVID-19 pandemic has forced organizations to revisit their force majeure clauses, and it is essential to have a sample force majeure clause in your contract to avoid breaching the contract. It is important to read the force majeure clause carefully, determine the force majeure event’s legal definition, and evaluate payment obligations under the clause. For instance, some contracts may have carve-outs for payment obligations, which may not be covered even if the force majeure event delays the performance of the contract. In India, the government has declared the current situation of COVID-19 as a force majeure event, making it necessary for organizations to include a force majeure clause in their contracts to protect themselves during these uncertain times. To give you a better force majeure clause example, suppose your business is bound by a contract to deliver goods to a customer, but a natural calamity occurs, resulting in the transportation means being shut down. In this case, the force majeure clause in your contract can protect you from breaching the contract due to non-performance. In summary, understanding the force majeure clause meaning and having a sample force majeure clause in your contract is essential to protect your business during unprecedented events like the current COVID-19 pandemic. Are you wondering how force majeure events like COVID-19 are affecting contractual obligations in India?   As per the force majeure legal definition, the Force Majeure (FM) clause in contract allows parties to be excused from the contractual obligations in case of events beyond their control, such as pandemics, natural disasters, and government orders. Due to the outbreak of COVID-19, labor shortages and shutdown of services have affected the physical and legal performance of contractual obligations in India. Parties that are unable to perform are taking help of FM clauses to avoid any contractual remedies for non-performance. However, some FM clauses do not include pandemics, which can lead to possible disputes and even breach of contract. Hence, to avoid any discrepancies, it is essential to have a well-drafted sample force majeure clause that clearly defines force majeure events. A well-drafted FM clause can make both parties aware of which events are force majeure events and which are not, making it simpler and more effective to deal with force majeure conditions. In summary, it is crucial to understand the force majeure clause meaning and have a strong FM clause in your contract, which includes pandemics, to avoid any disputes or breach of contract during force majeure events like COVID-19. So, make sure to evaluate payment obligations and seek good counsel while drafting a force majeure clause to protect yourself and your business during such uncertain times. FAQs Q: How to write the force majeure clause in a contract? A: A force majeure clause is an essential section of any contract that outlines the terms that excuse a party from fulfilling its contractual obligations in certain force majeure events. Writing a force majeure clause in a contract involves a few key steps: Identify Force Majeure Events: You need to identify the force majeure events that would be covered under the clause. These events may include natural disasters, wars, pandemics, government orders, and other similar situations. Be Specific: The language of the clause should be specific and unambiguous. It should identify the events that would excuse the parties from fulfilling their obligations Evaluation of Payments: It is important to evaluate the payment obligations under the clause, as some contracts may have carve-outs for payment obligations, which may not be excused even if the force majeure event delays the performance of the contract. Review Applicable Laws: You also need to review applicable laws and regulations to ensure that the language in the clause is legally enforceable. Notice of Force Majeure: The clause should also include a notice of force majeure provision that requires the parties to inform each other when a force majeure event will delay or prevent performance of contractual obligations. In summary, drafting a force majeure clause requires a careful and detailed approach. It is essential to identify force majeure events, be specific in the language, evaluate payment obligations, review applicable laws, and include a notice of force majeure provision. An experienced lawyer can help draft a comprehensive force majeure clause that protects your interests in case of a force majeure event. --- - Published: 2021-01-28 - Modified: 2025-01-28 - URL: https://treelife.in/finance/understanding-saas-or-software-as-a-service/ - Categories: Finance - Tags: B2B SaaS, b2b saas agreement template, B2B vs B2C, B2C SaaS, EULA, SaaS, SaaS Agreement, saas agreement checklist, saas agreement clauses, saas agreement india, saas agreement template, saas contract, saas contract example, SaaS versus EULA, SaaS vs EULA, software as a service agreement SaaS or Software-as-a-Service is a software distribution model in which a third-party provider hosts applications centrally and licenses them to customers over the internet on a subscription basis. It is one of the three main categories of cloud computing-based services, alongside Infrastructure-as-a-Service (IaaS) and Platform-as-a-Service (PaaS). Pros and Cons of SaaS SaaS has turned out to be quite helpful to organizations in terms of flexibility and cost-effectiveness, enabling businesses to provide efficient software-based services to large customer bases, using the widespread and ubiquitous availability of the cloud. However, recent stories around hacking and data leaks have shed light on the vulnerability of centrally and cloud-hosted software systems. In this regard, it is essential for SaaS-based startups and businesses to have well-drafted agreements, like a SaaS contract or software-as-a-service agreement, as well as strong technical and procedural security safeguards, to protect legal responsibility and safeguard the distribution and subscription licensing of the offering. B2B vs B2C B2B SaaS companies offer cloud business management solutions (products and services) to other companies and businesses, while B2C SaaS businesses sell products and services to consumers directly. Both B2B and B2C are subscription-based and track customer acquisition cost, churn rate, and user lifetime value metrics. However, their marketing strategies and approaches are different. The Importance of a SaaS Agreement A SaaS agreement, also known as a software-as-a-service agreement, sets out the provision and delivery of software services to customers through the internet, eliminating the hassle around conventional software licensing models. SaaS agreements are serious undertakings that require careful consideration. Once properly drafted, a SaaS agreement eliminates the hassle around conventional software licensing models. The terms in a SaaS agreement can be renewed when the subscription period expires. A properly drafted SaaS agreement is crucial to prevent disputes from arising. Essentials of Every SaaS Agreement Here are the essential elements that every SaaS agreement should include: Subscription and grant of rights, services, and functionality: Specify the type of service that you render to the client under the agreement, as well as ensure access to the software provided to users, subject to conditions, on a case-to-case basis. Data Protection: Include a clause that highlights the protection of data that will be transmitted to the providers and how they will further process that data. Intellectual Property (IP) Rights: Outline the intellectual properties of all parties involved in the SaaS agreement. Confidentiality Clause: Safeguard confidential and proprietary information that will be shared between the parties. Indemnities: Parties involved in an agreement may suffer certain losses and/or damages for which they shall stand liable and indemnify the other party for all losses, including costs that will be incurred during the course of legal suits. Disclaimer: Include a disclaimer specifying what will not hold the provider liable. Limitation of Liabilities: Limit liabilities of the provider under the SaaS agreement. Representations and Warranties: Include the representations and warranties of both parties in the SaaS agreement. Since the provider will usually be the data processor and the user is the data controller, both parties should have certain warranties set out in the agreement Terms of Service: Set out the term based on the subscription that the user has subscribed for. Force Majeure: This clause will include the course of action at the time of extreme events that can be termed as ‘act of god’ – including hurricanes, tornadoes, floods, etc. Service Level Agreements (SLA): A SaaS agreement should always include an SLA that covers the provisions of technical and support services, including availability and penalties. SaaS vs EULA While a SaaS provides the provision and delivery of software services to customers through the internet, an End User License Agreement (EULA) licenses the end user to use the software in a limited manner. Under SaaS applications, users do not get a copy of the software. SaaS is usually hosted and accessed through the internet, similar to other commonly-used subscriptions availed by consumers for media, gaming, and more. A well-drafted SaaS example can provide more clarity and help in avoiding legal disputes. SaaSEULAFull FormSoftware-as-a-ServiceEnd User License AgreementOwnershipVendor offers the software and users access it on the internet on a subscription basis. Ownership of software is not transferred to the userSoftware is purchased by the end user. Users have all rights – including copyrights. The user can make copies of the software for personal useTermination of UsageUser’s right to the software ends upon termination of the SaaS agreementUser owns the software and has the grant of copying, downloading and installing it but is not allowed to resell itLicensing/AccessThe customer is usually granted an access to use the softwareThe customer is provided with the licensing of the product/software FAQs about SaaS Agreements Q: What is included in a SaaS agreement? A: A SaaS (Software as a Service) agreement typically includes terms and conditions related to the usage, access, and hosting of software applications provided via the internet. Key provisions that may be included are payment terms, data privacy and security, intellectual property rights, warranty, indemnification, termination, and liability limitations. Q: Why use a SaaS agreement? A: A SaaS agreement is used to establish a legal relationship between the provider and the customer for the use of software programs provided as a service. It sets out the terms and conditions of use to protect the rights of both parties. Q: What is the difference between a license agreement and a SaaS agreement? A: A license agreement typically refers to an agreement for the use of software installed on a specific computer or server, while a SaaS agreement governs access to software that is hosted on the internet and accessed via a web browser. Q: What is the IP clause in the SaaS agreement? A: The IP (intellectual property) clause in a SaaS agreement addresses ownership and licensing rights related to the software and its components. It defines what proprietary material is considered to be part of the software, how the provider can utilize the software, and how the user can transfer or sublicense the software. Q: What is the... --- - Published: 2021-01-18 - Modified: 2025-02-07 - URL: https://treelife.in/finance/what-is-an-income-statement/ - Categories: Finance An income statement helps business owners decide whether they can generate profit by increasing revenues, by decreasing costs, or both. It also shows the effectiveness of the strategies that the business set at the beginning of a financial period. The business owners can refer to this document to see if the strategies have paid off and they can come with the best solutions to yield more profit. What is an Income Statement An income statement is a financial statement that shows you the company’s income and expenditures. It also shows whether a company is making profit or loss for a given period. The income statement, along with balance sheet and cash flow statement, helps you understand the financial health of your business. The income statement is also known as a profit and loss statement, statement of operation, statement of financial result or income, or earnings statement. Components of an Income Statement While all financial data helps paint a picture of a company’s financial health, an income statement is one of the most important documents a company’s leadership team and individual investors can review, because it includes a detailed breakdown of income and expenses over the course of a reporting period. This includes: Revenue: The amount of money a business takes in during a reporting period Expenses: The amount of money a business spends during a reporting period Income before taxes: All revenue less expenses but before taxes Net income: Income before taxes less taxes Earnings per share (EPS): Division of net income by the total number of outstanding shares Above categories may be further divided into individual line items, depending on a company’s policy and the granularity of its income statement. Analysis of an Income Statement There are two methods commonly used to read and analyze an organization’s financial documents: vertical analysis and horizontal analysis. The difference between the two is in the way a statement is read and the comparisons you can make from each type of analysis. Upright Analysis It refers to the method of financial analysis where each line item is listed even as a percentage of a base figure. In short, it’s the process of reading down a single column of data in a financial statement, determining how individual line items relate to each other (e. g. , showing the relative size of different expenses, as line items may be listed as a percentage of operating expenses). This type of analysis makes it simple to compare financial statements across periods and industries, and between companies, because you can see relative proportions. It also helps you analyze whether performance metrics are improving. Parallel Analysis It reviews and compares changes in the amounts in a company’s financial statements over multiple reporting periods. It’s frequently used in absolute comparisons, but can be used as percentages, too. Horizontal analysis makes financial data and reporting consistent along with growth comparison to it’s competitors. Conclusion In conjunction with the cash flow statement, balance sheet, and annual report, income statements help company leaders, analysts, and investors understand the full picture of a business’s operational results so they can determine its value and efficiency and, ideally, predict its future trajectory. Financial analysis of an income statement can reveal that the costs of goods sold are falling, or that sales have been improving, while return on equity is rising. Income statements are also carefully reviewed when a business wants to cut spending or determine strategies for growth. We simplify your business so that you can spend time on things that matter. --- - Published: 2020-09-24 - Modified: 2025-01-21 - URL: https://treelife.in/taxation/tax-calculator-for-tax-regime-old-vs-new/ - Categories: Taxation Are you wondering which tax regime you should opt for? While there is no clear-cut solution to the same, this blog post may go some ways in providing some clarity to this question. We shall detail the new tax regime and have shared the download link to a simple tax calculator prepared by us. The Budget 2020 has brought a unique concern to the taxpayers through announcement of a new tax regime. It offers more tax slabs and lower tax rates. This was long demanded by most taxpayers, but it came with the catch of removal of all the deductions and exemptions available. To add to this confusion, the finance minister gave taxpayers a choice between the new regime and existing one, leaving it to the citizens to decide on the basis of their preference. Instead of providing simplicity, understanding the tax regime in India may have become more complex. Let us understand the new tax regime and what does it bring as a package. Applicability: The New tax regime is applicable to resident Individuals and HUF (“Hindu Undivided Family”), from the Financial Year 2020-21. Proposed Tax Rates: Health and Education Cess and Surcharge provision remains the same irrespective of the option chosen. Point to Choose: Tax payers can either choose to continue with existing tax system or select the new tax regime. Tax Calculator for Tax Regime - Old vs New What benefit does it offer? There are various benefits to this, some of them listed below: It provides an opportunity to increase the take home salary to the taxpayers; No need to worry about investments/deductions every year; Reduced compliances/paperwork as deductions/exemptions are not available; Easy and Self-competent payment of taxes and filing of returns; A good scheme for small taxpayers for a moderate class income range What is there to lose: Under this scheme, there is a list of exemptions/ deductions that have been withdrawn. Here is the list of exemptions/deductions not available anymore – Click. Currently, under the old regime, the exemptions/ deductions allow you to lower your tax amount by investing, saving, or spending on specific items. However, it also means every year you have to find ways to optimize your salary and savings/investments so as to keep your taxable income to the minimum. The Choice: So basically, every person will have his own unique New Tax Slab Vs Old Tax Slab calculations as the deductions claimed by the person may be unique to him. Each individual tax payer ideally has to do their own calculations and depending on the amount of deductions/ exemptions being claimed, it is better to pick the better one between the two. Here are steps you can follow: Ascertain your income under each head; Determine your exemptions/ deductions; Calculate the tax liability using the tax calculator given below; Decide where do you pay less Tax Calculator: We have created a simple tax calculator which will help you to determine your tax liability under both the tax regime considering the steps above. You can access the calculator here – Download Tax Calculator Our Support: We care for the challenges and troubles that you face. We simplify your business so that you can spend time on things that matter. Please refer the “Resources” tab above to find more useful things. --- - Published: 2020-07-07 - Modified: 2025-02-03 - URL: https://treelife.in/startups/data-privacy-for-telemedicine-platforms/ - Categories: Startups - Tags: data privacy for telemedicine, data privacy obligations for telemedicine, telemedicine data concerns, telemedicine india, telemedicine legal obligations, telemedicine privacy india Telemedicine Platforms are those that provide a technology platform (website or an app) to facilitate online medical care, through audio, visual and text based means. Such Telemedicine Platforms must be cognisant of: (a) their practices relating to handling data of patients, Medical Professional(s) (“MP(s)”) and other caregivers (hereinafter referred to as “User Data”); and (b) what impact mishandling of such User Data would have. In India: (a) the Information Technology Act, 2000 (“IT Act”); (b) the Information Technology (Reasonable security practices and procedures and sensitive personal data or information) Rules, 2011 (“Data Protection Rules”); and (c) the Information Technology (Intermediaries Guidelines) Rules, 2011 (“Intermediary Guidelines”), presently regulate how Platforms providing telemedicine services handle the data of its users. Platforms which: (a) provide services that enable recording of Sensitive Personal Data or Information (“SPDI”); and (b) place cookies to record user behaviour, could become liable under the IT Act, the Data Protection Rules and the Intermediary Guidelines. Given the sensitivity of health care data, the Indian Government proposed the Digital Information Security in Healthcare Act (“DISHA“) in the year 2018, and has been deliberating upon the establishment of a National e-health Authority (“NeHA”) since 2015 with a goal to ensure the development of an e-health ecosystem and enable people centric health services in a cost-effective manner. DISHA aims to establish NeHA and State e-health Authorities (SeHA). Moreover, the enactment of the Digital Personal Data Protection Bill, 2022 (“DPDP Bill”), and its consequent effect will be something that would impact how Platforms provide their services. Role of Platforms as Intermediaries: Active or Passive? The applicability of the IT Act is slightly different for Platforms which are set up to only facilitate the interaction between the patient and the MP, and are not directly involved in the provision of medical care. In such cases the Platform would be considered as an ‘Intermediary’ under the IT Act and the Intermediary Guidelines. Under the Indian legal framework, Intermediaries are exempt from many of the liabilities/obligations placed by the IT Act on entities processing personal data. As per section 79 of the IT Act, an Intermediary is not liable for any third party information, data, or communication link made available or hosted by it. This exemption applies only if: the function of the intermediary is limited to providing access to a communication system over which information made available by third parties is transmitted or temporarily stored or hosted; the intermediary does not – initiate the transmission; select the receiver of the transmission AND select or modify the information contained in the transmission; and the intermediary observes due diligence (as prescribed under the Intermediaries Guidelines) while discharging its duties under the IT Act. One of the key elements of section 79 of the IT Act is that a Platform must not, (a) initiate the transmission of communication/data by, between its users; and (b) select the receiver of the transmission; and (c) select or modify the information contained in the transmission. The manner in which a Telemedicine Platform provides its services, would more often than not, require it to facilitate a transaction and/or transmission of data initiated by their users (i. e. MPs and patients), and thereby, many a times, placing more responsibility on a Telemedicine Platform than would be applicable to an Intermediary, under the IT Act. Since a Platform would need to build their tech framework in a manner that facilitates transactions/transmissions, this circumstance may seem harsh. However, when it comes to initiating a transmission, selecting the receiver of a transmission or selecting or modifying the information contained in the transmission, the Courts in India have laid down the test of passivity. Essentially, the following are the factors that could determine that a Telemedicine Platform is playing a passive role in the ecosystem, and is therefore granted the protection of an Intermediary: Whether the role played by that service provider is neutral, in the sense that its conduct is merely technical, automatic and passive, pointing to a lack of knowledge or control of the data which it stores; Whether the platform is responsible for initiating the transmission, i. e. , placing the listing on the website (for Platforms the important question would be whether there is any active uploading, suggesting or placing on such Tech Platform, the services of an MP); Whether the platform is involved selecting the persons who receive the information (for Platforms this would mean whether they choose/have a say (apart from legally mandated due diligence requirements on MPs) in who/what gains access to their services); and Does the entity controlling the platform have the power to select or modify the information that is being exchanged on its platform. Thus, Platforms would only be considered as Intermediaries if their conduct is passive, technical and automatic in their facilitation of Telemedicine based care. Privacy related Protocols to be followed by Telemedicine Platforms 1. A Platform would be required to have in place a set of rules and regulations in place that determine how data of users of its Platform will be used. This would require the publishing of a privacy policy, user agreement, terms and conditions et al. that determine the terms of access and use of the service provided by the Platform. 2. The privacy policy and terms of use/user agreement of a Tech Platform, should be designed and stated in such a way that the patients using the Platform, are aware of the type of SPDI collected, the purpose for which the same is done, the intended recipients of the SPDI and the requirement and the persons/parties to whom SPDI will be disclosed to. 3. Before the SPDI of a patient/user is disclosed to a third party, or before the same is transferred, consent of such patient/user must be acquired. 4. The Platform shall be required to have in place a grievance officer, the details of which are provided on the user agreement/privacy policy of the Platform, and such an officer shall be required to deal with the grievances of the patients/users in relation to their processing... --- - Published: 2020-07-07 - Modified: 2025-02-05 - URL: https://treelife.in/startups/telemedicine-guidelines-indian-laws-for-tech-platforms/ - Categories: Startups - Tags: ethical and legal aspects of telemedicine, Indian telemedicine laws, telemedicine guidelines for tech platforms, telemedicine guidelines India, telemedicine laws for tech platforms, telemedicine laws in India, telemedicine practice guidelines, telemedicine requirements Telemedicine is changing the way healthcare services are delivered. As more and more patients opt for virtual healthcare, it’s crucial for med-tech platforms to comply with telemedicine requirements. The Notification of the Telemedicine Practice Guidelines (“Telemedicine Guidelines”/ “Guidelines”) as a part of Appendix 5 of the Indian Medical Council (Professional Conduct, Etiquette & Ethics) Regulations, 2002 (“MCI Code”), has made: (a) the practice of the medical profession; and (b) provision of medical care over technology platforms, legal and regulated. These Guidelines impact a cross-section of stakeholders, such as medical professionals (“MP”), registered medical practitioners (“RMPs”), patients, caregivers and med-tech platforms. While med-tech platforms are primarily responsible for ensuring that the MPs providing services comply with the ethical and legal aspects of telemedicine, they must also abide by the relevant laws and regulations. The Guidelines are for guidance purposes, laying out the primary principles, i. e. the contours within which telemedicine practice in India is to be followed. However, the Guidelines need to be read in conjunction with other applicable laws. The laws that med-tech offering telemedicine services in India must comply with include: (a) the Indian Medical Council Act, 1956 (MCI Act) and the MCI Code; the Drugs and Cosmetics Act, 1945 and Rules made thereunder (D&C Act); the Telecom Commercial Communication Customer Preference Regulations, 2018 (TCCP Regulations); the Consumer Protection Act, 2019 (CPA); and the Foreign Exchange Management Act, 1999 (FEMA). In conclusion, while the Guidelines are crucial, the med-tech platforms offering telemedicine services must comply with the necessary ethical and legal aspects of telemedicine in order to avoid penalties and potential liabilities. Before implementing tech-based solutions for telemedicine, businesses should evaluate the mandatory requirements and ensure compliance with relevant laws and regulations, in order to reduce potential liabilities FAQ’s Q: How to start a telemedicine service in India? A: Before starting telemedicine services in India, med-tech platforms must comply with telemedicine requirements laid out by the Ministry of Health and Family Welfare and NITI Aayog. They must evaluate the nature of services and ensure compliance with the relevant laws and regulations, such as the Indian Medical Council Act, 1956 and the Indian Medical Council (Professional Conduct, Etiquette & Ethics) Regulations, 2002 the Drugs and Cosmetics Act, 1945 and Rules made thereunder; the Telecom Commercial Communication Customer Preference Regulations, 2018; the Consumer Protection Act, 2019; and the Foreign Exchange Management Act, 1999. Q: What are the requirements of telemedicine standards? A: The requirements of telemedicine standards in India contain a set of Telemedicine Practice Guidelines (“Guidelines”) as part of Appendix 5 of the Indian Medical Council (Professional Conduct, Etiquette & Ethics) Regulations, 2002, which outlines the legal and regulatory aspects with respect to the practice of medical professionals through med-tech platforms, for medical care and consultations. These guidelines provide legal and ethical frameworks and impact various stakeholders like medical professionals, registered medical practitioners, patients, caregivers, and med-tech platforms. Q: What are the protocols used in telemedicine services?   A: Telemedicine services transmit medical information from the patient to the doctor via telecommunication technology as per the applicable laws. The protocol used in telemedicine services depends on the type of service provided, including audio-only consultation, video consultation, or text-based services. These protocols combine the use of equipment such as smartphones, tablets, laptops, and medical devices to assist edical professionals in providing the necessary healthcare services. Q: Are telemedicine services legal in India?   A: Yes, telemedicine services are legal in India provided that the businesses offering med-tech platforms comply with the Telemedicine Practice Guidelines (“Guidelines”) as a part of Appendix 5 of the Indian Medical Council (Professional Conduct, Etiquette & Ethics) Regulations, 2002, in addition to other relevant applicable laws and regulations. Med-tech platforms offering telemedicine services must evaluate the nature of services and comply with necessary legal and ethical aspects of telemedicine, in order to reduce potential liabilities and ensure better and qualitative healthcare. --- > In the workplace, the ultimate responsibility for implementing and enforcing POSH (Prevention of Sexual Harassment) policies falls squarely on the employer’s shoulders. - Published: 2018-05-19 - Modified: 2025-07-22 - URL: https://treelife.in/compliance/implementing-posh-policy-on-sexual-harassment/ - Categories: Compliance - Tags: get posh, how to implement posh policy, implement posh, Policy on Sexual Harassment, POSH, POSH at workplace, posh awareness email to employees, posh compliance applicability, POSH policy, posh policy applicability, posh startup, what is posh act   Introduction: Learn how start-ups and small businesses can effectively implement the Sexual Harassment of Women at Workplace (Prevention, Prohibition, and Redressal) Act, 2013 (POSH Act). This legislation gained global attention due to the significant impact of the ‘MeToo’ movement, emphasizing the importance of protecting women against sexual harassment, particularly in the workplace. Sexual Harassment at workplace is an extension of violence in everyday life and is discriminatory and exploitative, as it affects women’s right to life and livelihood. In India, for the first time in 1997, a petition was filed in the Supreme Court to enforce the fundamental rights of working women, after the brutal gang rape of Bhanwari Devi a social worker from Rajasthan. As an outcome of the landmark judgment of the Vishaka and Others v State of Rajasthan the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, was enacted wherein it was made mandatory for every employer to provide a mechanism to redress grievances pertaining to workplace sexual harassment and enforce the right to gender equality of working women. The Act is also unique for its wide ambit as it is applicable to the organized sector as well as the unorganized sector. What is POSH and why was it enacted? The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, popularly known as POSH Act, is a landmark legislation in India enacted on December 9, 2013. It aims to protect women from sexual harassment at their workplace and provide a safe and respectful working environment for them. The POSH Act defines sexual harassment as any unwelcome sexual advances, requests for sexual favours, or other verbal or physical conduct of a sexual nature that: Affects the dignity of a woman employee. Creates a hostile work environment for her. Interferes with her work performance. Leads to her intimidation or humiliation. The Act applies to all workplaces in India, regardless of their size or nature, whether public or private.  It covers not only employees but also interns, trainees, apprentices, and domestic workers. Prior to the POSH Act, there was no specific law addressing sexual harassment at workplaces in India. This often led to underreporting of incidents and inadequate grievance redressal mechanisms. The POSH Act was enacted to address this gap and ensure effective prevention, prohibition, and redressal of sexual harassment at workplaces. Popular Sections of POSH Act are: Section 3: Defines sexual harassment and its various forms. Section 4: Mandates every employer to constitute an Internal Complaints Committee (ICC) to investigate complaints of sexual harassment. Section 5: Outlines the composition and functions of the ICC. Section 6: Defines the procedure for filing a complaint of sexual harassment. Section 7: Specifies the powers of the ICC to investigate complaints and recommend appropriate action. Section 8: Provides for penalties for sexual harassment, including dismissal from service. Section 9: Mandates employers to organize awareness programs on sexual harassment for all employees. Who is responsible for implementing POSH policies in the workplace? In the workplace, the ultimate responsibility for implementing and enforcing POSH (Prevention of Sexual Harassment) policies falls squarely on the employer's shoulders. This legal obligation, often mandated by national and regional regulations, requires employers to take proactive steps to foster a safe and respectful work environment for all employees. This encompasses various tasks, including crafting a comprehensive POSH policy outlining prohibited behaviors, establishing a dedicated Internal Complaints Committee (ICC) to handle harassment reports, conducting regular training sessions for employees and managers on recognizing and preventing sexual harassment, and ensuring prompt and fair investigation and resolution of any reported incidents. By taking ownership of POSH implementation, employers demonstrate their commitment to creating a workplace free from harassment and discrimination, fostering a culture of mutual respect and dignity for all. Applicability of the Act: The Act applies to all employers, whether in public or private establishments, including institutions, organizations, and establishments with contractual obligations towards their employees. Key Compliance Steps to be followed for POSH: Establish an Internal Policy: Formulate and widely disseminate an internal policy outlining workplace guidelines, defining sexual harassment, explaining the grievance and complaints redressal mechanism, and providing details about the Internal Committee and Local Committee. The Policy must be notified or displayed prominently at a common place and employees must be aware of it and should have ready access to it at all times. Set up an Internal Committee: Create an Internal Committee and inform employees about its existence in writing. The committee should consist of a Presiding Officer (a senior-level woman employee), at least two members with social work or legal knowledge, and one member from an NGO or someone familiar with sexual harassment issues. Ensure that at least half of the committee members are women. Tenure of each member of the Internal Committee shall be maximum 3 years. Raise Awareness: Conduct workshops and seminars at the workplace to promote general awareness of sexual harassment, its prevention, and the Act’s provisions. Importance of Internal Complaints Committee for POSH  If your organization has more than 10 employees, it is mandatory to establish an Internal Complaints Committee. A. Structure This committee consists of - Chairperson/Presiding Officer: Women who hold top positions in the company's workforce shall serve in these roles. Two Members: They must be staff members and ideally dedicated to the advancement of women's rights, possess social work expertise, or be knowledgeable about the law. External Member: NGOs that oppose women's rights, physicians, and advocates are examples of external members. They also provide external member empanelment and capitalize on tax refunds where applicable B. Responsibilities The Internal Complaints Committee is essential to the operation of the Act's provisions and the accomplishment of the Internal Complaints Committee Policy's goals. Therefore, the Internal Complaints Committee's primary duty is: Putting into practice the internal complaints committee's anti-sexual harassment policy. addressing grievances filed by parties in accordance with the Internal Complaints Committee Policy. Advising the Employer to take certain measures This committee serves as an internal platform for addressing and resolving sexual harassment complaints. It provides... --- --- ## Faqs - Published: 2025-07-30 - Modified: 2025-07-30 - URL: https://treelife.in/faq/what-is-corporate-regulatory-compliance-for-tax-incentives-and-exemptions/ - FAQ Category: About Tax & Regulatory Services Many businesses can benefit from tax incentives and exemptions available under Indian law. Treelife helps you ensure that your business is eligible for these benefits while remaining compliant with all necessary regulations. We assist with claims for exemptions, deductions, and other tax-saving opportunities. --- - Published: 2025-07-30 - Modified: 2025-07-30 - URL: https://treelife.in/faq/why-are-customs-duty-and-tax-regulatory-compliance-services-essential-for-businesses/ - FAQ Category: About Tax & Regulatory Services For businesses involved in imports and exports, staying compliant with customs duties and tax regulations is essential. Treelife provides services that help you navigate complex customs regulations and tax compliance, ensuring your goods are cleared without delays and your business avoids costly fines. --- - Published: 2025-07-30 - Modified: 2025-07-30 - URL: https://treelife.in/faq/what-are-tax-compliance-services-for-businesses/ - FAQ Category: How Treelife Ensures Tax Compliance & Efficiency Tax compliance services for businesses are essential to ensure that your company meets all its tax obligations. At Treelife, we assist businesses with accurate tax filings, timely submissions, and adherence to all applicable tax laws. Whether it's income tax, GST, or other taxes, we help streamline the compliance process, minimizing the risk of penalties and ensuring you remain tax-compliant. --- - Published: 2025-07-30 - Modified: 2025-07-30 - URL: https://treelife.in/faq/how-can-regulatory-compliance-services-help-startups/ - FAQ Category: How Treelife Ensures Tax Compliance & Efficiency Startups often face unique regulatory challenges as they grow. Treelife provides regulatory compliance services specifically tailored for startups, helping them navigate the complexities of business laws, licensing, and taxation. From company registration to maintaining statutory records, we ensure that your startup complies with all regulatory requirements, allowing you to focus on scaling your business. --- - Published: 2025-07-30 - Modified: 2025-07-30 - URL: https://treelife.in/faq/what-are-corporate-tax-filing-and-advisory-services/ - FAQ Category: How Treelife Ensures Tax Compliance & Efficiency Corporate tax filing and advisory services involve preparing and filing your business’s tax returns while also providing strategic tax advice to optimize your company’s tax position. At Treelife, we offer expert tax filing services and provide advisory on tax-saving strategies, structuring deals, and ensuring compliance with corporate tax regulations in India. --- - Published: 2025-07-30 - Modified: 2025-07-30 - URL: https://treelife.in/faq/why-are-comprehensive-tax-and-regulatory-compliance-services-important-for-businesses/ - FAQ Category: How Treelife Ensures Tax Compliance & Efficiency Comprehensive tax and regulatory compliance services combine tax filing, regulatory reporting, and strategic advice, ensuring your business adheres to all legal requirements. Treelife offers an all-in-one solution to handle both tax compliance and regulatory obligations, minimizing your business risks and maximizing efficiency. We ensure your company is fully compliant with tax laws, corporate governance, and industry regulations. --- - Published: 2025-07-30 - Modified: 2025-07-30 - URL: https://treelife.in/faq/how-can-treelife-help-with-company-tax-filing-in-india/ - FAQ Category: How Treelife Ensures Tax Compliance & Efficiency As company tax filing experts in India, Treelife ensures that your business’s tax returns are filed accurately and on time, meeting all the requirements set by Indian tax authorities. We help businesses calculate their tax liabilities, apply deductions, and file returns with complete accuracy, saving you time and reducing the risk of penalties. --- - Published: 2025-07-30 - Modified: 2025-07-30 - URL: https://treelife.in/faq/what-are-business-tax-services-for-smes-in-india/ - FAQ Category: How Treelife Ensures Tax Compliance & Efficiency SMEs in India often face difficulties with tax compliance due to limited resources. Treelife provides business tax services tailored specifically for SMEs, including GST registration, income tax filings, and guidance on tax-saving schemes. We offer affordable solutions to help SMEs stay compliant with tax laws while focusing on their growth and operations. --- - Published: 2025-07-30 - Modified: 2025-07-30 - URL: https://treelife.in/faq/how-can-tax-advisory-services-benefit-startups-in-india/ - FAQ Category: How Treelife Ensures Tax Compliance & Efficiency Tax advisory services for startups in India help entrepreneurs structure their businesses in the most tax-efficient way. Treelife offers expert guidance on tax planning, tax-saving opportunities, and compliance with local tax laws. We help startups navigate challenges like funding, investment structuring, and taxation, ensuring they make informed financial decisions from the outset. --- - Published: 2025-07-30 - Modified: 2025-07-30 - URL: https://treelife.in/faq/are-there-affordable-tax-service-providers-for-companies-in-india/ - FAQ Category: How Treelife Ensures Tax Compliance & Efficiency Yes, there are affordable tax service providers for companies in India, and Treelife is one of them. We understand that managing taxes can be a significant burden, especially for small and medium businesses. Our affordable tax services ensure your company remains compliant without exceeding your budget. We provide efficient, cost-effective tax solutions tailored to meet your business's needs. --- - Published: 2025-07-30 - Modified: 2025-07-30 - URL: https://treelife.in/faq/how-do-ca-firms-help-with-business-tax-services-in-india/ - FAQ Category: How Treelife Ensures Tax Compliance & Efficiency Chartered Accountants (CAs) are essential for businesses in India, offering expertise in tax filing, financial reporting, and compliance. At Treelife, our team of CA professionals provides comprehensive business tax services, including corporate tax planning, filing returns, and offering strategic tax advice to minimize your liabilities and ensure you meet all legal requirements. --- - Published: 2025-07-30 - Modified: 2025-07-30 - URL: https://treelife.in/faq/what-are-indirect-tax-compliance-services-gst-vat-etc/ - FAQ Category: About Tax & Regulatory Services Indirect tax compliance services are essential for businesses to stay on top of taxes like GST, VAT, and similar indirect taxes. At Treelife, we make this process easier for you by handling everything from registration to filing returns and assisting with audits. This ensures you stay compliant while avoiding the risk of penalties. --- - Published: 2025-07-30 - Modified: 2025-07-30 - URL: https://treelife.in/faq/why-do-businesses-need-income-tax-compliance-services/ - FAQ Category: About Tax & Regulatory Services Income tax compliance can be complex and time-consuming, but it's critical for every business. Treelife provides expert services to help businesses file their income tax returns accurately and on time. Our team ensures that you minimize your liabilities while staying fully compliant with tax laws. --- - Published: 2025-07-30 - Modified: 2025-07-30 - URL: https://treelife.in/faq/how-can-tax-return-filing-services-benefit-my-company/ - FAQ Category: About Tax & Regulatory Services Filing tax returns can be overwhelming, but it’s a key part of maintaining a healthy business. With Treelife’s tax return filing services, you get expert support to ensure that your returns are filed accurately and promptly. We ensure that you take full advantage of deductions and credits, reducing your tax burden. --- - Published: 2025-07-30 - Modified: 2025-07-30 - URL: https://treelife.in/faq/what-are-tax-planning-and-compliance-services-for-entrepreneurs/ - FAQ Category: About Tax & Regulatory Services Entrepreneurs often face unique challenges when it comes to taxes. At Treelife, we offer tailored tax planning and compliance services to help you structure your business in the most tax-efficient way. Our experts work with you to ensure you’re not only compliant but also minimizing your tax liabilities for the long term. --- - Published: 2025-07-30 - Modified: 2025-07-30 - URL: https://treelife.in/faq/what-is-direct-and-indirect-tax-compliance-outsourcing/ - FAQ Category: About Tax & Regulatory Services Outsourcing direct and indirect tax compliance allows you to focus on growing your business while we handle your tax obligations. Whether it's income tax or GST, Treelife manages everything from filings to reporting, ensuring you meet all deadlines without the hassle of managing it yourself. --- - Published: 2025-07-30 - Modified: 2025-07-30 - URL: https://treelife.in/faq/how-does-transfer-pricing-and-tax-regulatory-compliance-work/ - FAQ Category: About Tax & Regulatory Services For businesses with international operations, ensuring that intercompany transactions are priced correctly is essential. Treelife provides comprehensive transfer pricing and tax regulatory compliance services to help you document and report these transactions in line with both Indian and international tax laws. --- - Published: 2025-07-30 - Modified: 2025-07-30 - URL: https://treelife.in/faq/what-are-customs-and-excise-tax-compliance-services/ - FAQ Category: About Tax & Regulatory Services Customs and excise taxes can complicate cross-border trade, but with Treelife’s compliance services, we ensure that your business follows all customs regulations smoothly. Whether it’s import duties or excise taxes, we guide you through every step, helping you avoid delays and penalties. --- - Published: 2025-07-30 - Modified: 2025-07-30 - URL: https://treelife.in/faq/how-can-treelife-help-with-regulatory-compliance-for-fdi-and-foreign-companies-in-india/ - FAQ Category: About Tax & Regulatory Services If you’re a foreign investor or company looking to set up in India, navigating regulatory compliance can be tricky. Treelife specializes in ensuring compliance with India’s FEMA guidelines and other regulations, making it easier for foreign businesses to operate smoothly in India without any legal hurdles. --- - Published: 2025-07-30 - Modified: 2025-07-30 - URL: https://treelife.in/faq/what-are-tax-regulatory-services-for-cross-border-transactions/ - FAQ Category: About Tax & Regulatory Services Cross-border transactions come with their own set of tax challenges. Treelife provides tax regulatory services to ensure that your international deals are structured tax-efficiently and comply with both Indian and international tax regulations. Whether it's transfer pricing or tax treaties, we help you navigate the complexities of cross-border transactions. --- - Published: 2025-07-30 - Modified: 2025-07-30 - URL: https://treelife.in/faq/how-can-tax-and-regulatory-advisory-for-ipo-and-fundraising-benefit-my-company/ - FAQ Category: About Tax & Regulatory Services Planning for an IPO or fundraising? Treelife’s tax and regulatory advisory services help you structure your company’s finances in a way that complies with all necessary regulations. From tax planning to compliance, we ensure that your IPO or fundraising efforts go smoothly, helping you meet the expectations of investors and regulatory authorities. --- - Published: 2025-07-30 - Modified: 2025-07-30 - URL: https://treelife.in/faq/what-are-indirect-tax-and-customs-compliance-services-for-imports-and-exports/ - FAQ Category: About Tax & Regulatory Services If your business deals with imports and exports, compliance with indirect taxes and customs regulations is critical. Treelife provides specialized services to ensure that your business complies with all GST, customs duties, and documentation requirements. We help streamline the process and reduce the risk of penalties, ensuring smooth international trade operations. --- - Published: 2025-07-30 - Modified: 2025-07-30 - URL: https://treelife.in/faq/how-can-fema-and-tax-compliance-advisory-services-benefit-foreign-investors/ - FAQ Category: About Tax & Regulatory Services For foreign investors in India, complying with FEMA and tax regulations is crucial. Treelife offers expert advisory services to help foreign investors understand and navigate India’s foreign exchange regulations, repatriate funds smoothly, and minimize tax implications on their investments. --- - Published: 2025-07-23 - Modified: 2025-07-23 - URL: https://treelife.in/faq/how-does-treelife-leverage-ai-to-provide-exceptional-quality-of-services/ - FAQ Category: About Treelife Treelife leverages AI to improve the efficiency and accuracy of its legal, financial, and compliance services. By utilizing advanced AI tools for data analysis, document automation, and compliance checks, Treelife ensures faster, more precise outcomes for clients. This integration allows Treelife to deliver personalized solutions, minimize errors, and optimize decision-making processes, providing exceptional quality and value in every service offered. --- - Published: 2025-06-04 - Modified: 2025-06-04 - URL: https://treelife.in/faq/what-is-the-role-of-the-internal-committees-ic-formerly-internal-complaints-committee-icc/ - FAQ Category: About POSH Compliance The IC / ICC is responsible for receiving, investigating, and resolving complaints of sexual harassment. It must be constituted with prescribed members including a woman representative. --- - Published: 2025-06-04 - Modified: 2025-06-04 - URL: https://treelife.in/faq/who-should-be-appointed-on-the-internal-complaints-committee-icc/ - FAQ Category: About POSH Compliance The IC / ICC should have a minimum of four members, with at least half of them being women. The IC / ICC must comprise of (i) One Presiding officer, who must be a woman employee at a senior level in the organization. (ii) At least two members from among employees committed to the cause of women or with experience in social work or legal knowledge (iii) One external independent member from an NGO or someone familiar with issues related to sexual harassment. --- - Published: 2025-06-04 - Modified: 2025-06-04 - URL: https://treelife.in/faq/how-soon-must-a-complaint-be-resolved/ - FAQ Category: About POSH Compliance The Act recommends completion of the inquiry within 90 days from the date of receipt of the complaint. --- - Published: 2025-06-04 - Modified: 2025-06-04 - URL: https://treelife.in/faq/what-are-the-penalties-for-non-compliance/ - FAQ Category: About POSH Compliance Organizations failing to comply with the POSH Act can face fines starting from INR 50,000, with repeated non-compliance attracting higher penalties and possible cancellation of business licenses. --- - Published: 2025-06-04 - Modified: 2025-06-04 - URL: https://treelife.in/faq/what-are-the-compliance-requirements-under-posh/ - FAQ Category: About POSH Compliance Every organisation employees needs to, inter alia, ensure that  (i) To appoint an Internal Complaints Committee (ICC), including the appointment of an external independent member;  (ii) adopting a POSH Policy has been adopted, communicated to all employees, and visibly displayed at the workplace; (iii) regular training sessions and awareness programs are conducted for employees and IC / ICC members to educate them on identifying, preventing, and reporting sexual harassment (iv) filing of annual return yearly --- - Published: 2025-06-04 - Modified: 2025-06-10 - URL: https://treelife.in/faq/why-is-financial-due-diligence-important/ - FAQ Category: Due Diligence for Investors Financial due diligence is more than just validating numbers—it's about assessing sustainability, scalability, and credibility. Our financial due diligence services help answer: Is the revenue recurring or project-based? Are the margins stable or declining? Is working capital stretched? Are the books investor-ready? Are there any founder liabilities? --- - Published: 2025-06-04 - Modified: 2025-06-10 - URL: https://treelife.in/faq/why-is-legal-due-diligence-important/ - FAQ Category: Due Diligence for Investors Legal due diligence is essential for uncovering legal risks that can impact the deal or post-investment operations. It ensures the business is legally sound, compliant, and free of critical issues that could derail the transaction. Our legal due diligence helps answer: Are all contracts, licenses, and agreements valid and enforceable? Is there any ongoing or potential litigation exposure? Who owns the intellectual property—and is it protected? Are there any breaches of laws, shareholder rights, or corporate governance norms? Will any legal issues impact deal closure or post-investment integration? --- - Published: 2025-06-04 - Modified: 2025-06-10 - URL: https://treelife.in/faq/what-do-you-get-in-our-due-diligence-report/ - FAQ Category: Due Diligence for Investors Our investor-focused due diligence report provides: Executive summary with key red flags Detailed analysis of financial statements Legal and compliance observations Tax risks and open exposures Cap table and shareholder agreements review Actionable insights and risk mitigation plans --- - Published: 2025-06-04 - Modified: 2025-06-04 - URL: https://treelife.in/faq/what-is-due-diligence/ - FAQ Category: Due Diligence for Investors Due diligence refers to a structured and thorough review of a business prior to an investment, acquisition, or partnership. It covers all critical aspects of the business, including legal, financial, tax, operational, and regulatory matters. In short, it’s the process that helps validate a company’s claims and ensures you're not buying into unexpected liabilities. --- - Published: 2025-06-04 - Modified: 2025-06-10 - URL: https://treelife.in/faq/why-is-due-diligence-important/ - FAQ Category: Due Diligence for Investors Clarity : Understand the company’s true financial, legal, and operational position Uncover what’s behind the numbers Risk Identification: Spot red flags (tax issues, liabilities, legal disputes) Avoid hidden surprises after investment Informed Decisions : Make confident investment/acquisition decisions Decide deal structure, valuation, and terms wisely --- - Published: 2025-06-04 - Modified: 2025-06-10 - URL: https://treelife.in/faq/what-key-red-flags-do-you-typically-uncover-during-due-diligence/ - FAQ Category: Due Diligence for Investors Common red flags include: Non-compliance with tax or regulatory laws Undisclosed liabilities or legal disputes Misstated revenues or margins Weak internal controls Unclear ownership of IP or corporate structure --- - Published: 2025-06-04 - Modified: 2025-06-04 - URL: https://treelife.in/faq/how-do-you-interact-with-the-target-company-during-due-diligence/ - FAQ Category: Due Diligence for Investors We share a detailed Information Request List (IRL), set up a secure data room, and coordinate calls with management to understand the business model. Throughout the process, we share queries, clarify gaps, and ensure transparent communication. --- - Published: 2025-06-04 - Modified: 2025-06-04 - URL: https://treelife.in/faq/what-if-red-flags-are-found-do-you-assist-in-resolving-them/ - FAQ Category: Due Diligence for Investors Absolutely. We not only identify red flags but also support in drafting conditions precedent (CPs) or post-deal clean-up plans, enabling investors to move forward with greater confidence. --- - Published: 2025-06-04 - Modified: 2025-06-04 - URL: https://treelife.in/faq/what-is-due-diligence-and-why-does-it-matter/ - FAQ Category: About Due Diligence Due diligence is a deep review of your business—financials, tax, legal and compliance, done before a major transaction like fundraising, mergers, or acquisitions. Think of it like a background check on your company investors or buyers want to verify your numbers, check compliance, and understand risks before trusting you with their money. --- - Published: 2025-06-04 - Modified: 2025-06-04 - URL: https://treelife.in/faq/why-do-you-need-due-diligence-support/ - FAQ Category: About Due Diligence Doing it yourself or waiting for investors to find the gaps—can cost you the deal. With our support, you: Fix red flags before investors find them Build trust through clean, professional reporting Get a higher valuation by showing you're prepared Save time during investor queries and negotiations Focus on running your business while we handle the heavy lifting Support with responding to buyer/investor queries --- - Published: 2025-06-04 - Modified: 2025-06-04 - URL: https://treelife.in/faq/what-do-you-gain-from-our-due-diligence-support/ - FAQ Category: About Due Diligence When done right, due diligence becomes a tool for building trust and accelerating transactions. Key outcomes include: A clear, investor-ready picture of your business Early identification and resolution of risks A professional-grade Data Room ready for VC/PE scrutiny A smoother investment or exit process Long-term governance readiness --- - Published: 2025-06-04 - Modified: 2025-06-04 - URL: https://treelife.in/faq/what-is-the-best-financial-model-for-startups/ - FAQ Category: About Financial Modeling There is no one-size-fits-all. Popular models include the DCF, three-statement and custom revenue models based on your business type. --- - Published: 2025-06-04 - Modified: 2025-06-04 - URL: https://treelife.in/faq/how-is-financial-modeling-used-in-startup-valuation/ - FAQ Category: About Financial Modeling It projects future cash flows and applies valuation techniques like DCF to determine your startup’s worth and valuation and guide equity discussions. --- - Published: 2025-06-04 - Modified: 2025-06-04 - URL: https://treelife.in/faq/what-should-a-startup-financial-model-include/ - FAQ Category: About Financial Modeling Revenue projections, operating expenses, unit economics (CAC, LTV), cash flows and scenario testing. --- - Published: 2025-06-04 - Modified: 2025-06-04 - URL: https://treelife.in/faq/why-is-financial-modeling-important-for-startups/ - FAQ Category: About Financial Modeling Financial modeling for startups goes far beyond spreadsheets. It's a structured approach to forecasting revenue, costs, and cash flow while aligning your business strategy with financial viability. A robust model empowers you to: Forecast performance and set realistic growth targets Track KPIs and business metrics over time Communicate effectively with investors and stakeholders Make informed strategic decisions with scenario testing --- - Published: 2025-06-04 - Modified: 2025-06-04 - URL: https://treelife.in/faq/what-do-we-deliver-financial-models/ - FAQ Category: About Financial Modeling We design custom, flexible, and dynamic models—not cookie-cutter templates. Every model is tailored to your business’s unique drivers and growth strategy. Our startup financial models include: Revenue projections by product, channel, and cohort Direct & indirect cost breakdowns Payroll and hiring forecasts Key metrics: CAC, LTV, churn, retention Cash flow projections & working capital requirements Capital expenditure & fundraising plans --- - Published: 2025-06-04 - Modified: 2025-06-04 - URL: https://treelife.in/faq/what-is-financial-modelling-for-startups/ - FAQ Category: About Financial Modeling Financial modeling for startups involves forecasting revenue, expenses, and key financial metrics to evaluate a business’s profitability and feasibility. It forms the foundation of your startup business plan, enabling you to: Create accurate budgets Track performance Set growth targets Communicate clearly with investors A robust model empowers founders and stakeholders to make informed decisions, understand cash flow needs, and ensure long-term sustainability. --- - Published: 2025-06-04 - Modified: 2025-06-04 - URL: https://treelife.in/faq/why-use-a-financial-model/ - FAQ Category: About Financial Modeling A financial model is more than just a planning tool—it’s an essential part of building and scaling a successful startup. Planning & Forecasting: Project revenue, costs, and cash flow to build realistic goals and prepare for different growth scenarios. Investor Communication: Impress investors with a detailed, data-backed forecast that clearly explains your business model and financial potential. Resource Allocation: Identify profitable segments and eliminate inefficiencies by understanding where your money works hardest. Risk Evaluation: Use scenario and sensitivity analysis to plan for best-case, worst-case, and most likely outcomes. Strategic Decision-Making: Evaluate new product launches, pricing models, expansion plans, or investment opportunities with confidence. Performance Tracking: Set financial KPIs and use your model as a benchmark to review and adjust business performance over time. --- - Published: 2025-06-04 - Modified: 2025-06-04 - URL: https://treelife.in/faq/what-is-the-process-for-filing-a-trademark-online/ - FAQ Category: Process and Validity Identify the appropriate class for your goods/services. Conduct a trademark search for similar marks. File your application on the official IP India website (https://ipindiaonline. gov. in). Await examination, handle objections if any, and proceed to publication and certification. --- - Published: 2025-06-04 - Modified: 2025-06-04 - URL: https://treelife.in/faq/for-how-long-is-trademark-protection-valid/ - FAQ Category: Process and Validity Trademarks are valid for 10 years from the date of registration and need to be renewed. --- - Published: 2025-06-04 - Modified: 2025-06-04 - URL: https://treelife.in/faq/for-how-long-is-copyright-protection-valid/ - FAQ Category: Process and Validity Copyrights are valid for the lifetime of the creator + 60 years. --- - Published: 2025-06-04 - Modified: 2025-06-04 - URL: https://treelife.in/faq/when-is-the-right-time-to-apply-for-trademark-or-copyright-registration/ - FAQ Category: About IPR Registration Timeline The right time to apply for a trademark is when the brand is crystallised. The name and the logo are considered as different marks.   For copyright, once any publishable work is fully done, one can apply for copyright registration. --- - Published: 2025-06-04 - Modified: 2025-06-04 - URL: https://treelife.in/faq/how-much-time-to-register-a-trademark-in-india/ - FAQ Category: About IPR Registration Timeline Trademark registration typically takes 8-15 months in straightforward cases without objections or oppositions. Cases involving disputes may take longer as they go through resolution procedures. --- - Published: 2025-06-04 - Modified: 2025-06-04 - URL: https://treelife.in/faq/how-long-does-it-take-to-register-a-copyright/ - FAQ Category: About IPR Registration Timeline Typically, 3–6 months, depending on workload and objections (if any). Cases involving disputes may take longer as they go through resolution procedures. --- - Published: 2025-06-04 - Modified: 2025-06-04 - URL: https://treelife.in/faq/which-organizations-are-required-to-comply-with-the-posh-act/ - FAQ Category: About POSH Compliance All workplaces in India (including private companies, public sector units, NGOs, and government bodies) with 10 or more employees must comply with the POSH Act by implementing a complaints mechanism and preventive measures. --- - Published: 2025-06-04 - Modified: 2025-06-04 - URL: https://treelife.in/faq/who-can-file-a-complaint-under-the-posh-act/ - FAQ Category: About POSH Compliance Any employee, including full-time, part-time, contractual, temporary, interns, or even clients and customers, can file a complaint if they face sexual harassment at the workplace. --- - Published: 2025-06-03 - Modified: 2025-06-03 - URL: https://treelife.in/faq/what-is-the-difference-between-trademark-copyright/ - FAQ Category: About IPR Simply put, a trademark protects a brand name while a copyright protects any kind of publishable content.   For example: A name of a production house will fall under trademark whereas a script of a movie will fall under copyright. --- - Published: 2025-06-03 - Modified: 2025-06-03 - URL: https://treelife.in/faq/is-registration-of-trademark-or-copyright-compulsory/ - FAQ Category: About IPR No, it is not mandatory to register a trademark or copyright in India. However, it is advisable to register your brand or copyright any work for credibility and robust protection from infringement by any third party. Copyright exists automatically upon creation of the work. --- - Published: 2025-06-03 - Modified: 2025-06-03 - URL: https://treelife.in/faq/when-do-i-use-or-in-my-brand-name/ - FAQ Category: About IPR When a trademark registration application is filed, ™ can be used with the name or logo applied for and ® is used once it is registered. --- - Published: 2025-06-02 - Modified: 2025-06-02 - URL: https://treelife.in/faq/what-documents-are-typically-involved-in-a-fundraising-transaction/ - FAQ Category: About Fundraising Transactions A fundraising transaction usually involves documents such as the term sheet, Share Subscription Agreement (SSA), and Shareholders’ Agreement (SHA). If the transaction includes a secondary investment via exit of an existing shareholder, a Share Purchase Agreement (SPA) is also executed. --- - Published: 2025-06-02 - Modified: 2025-06-02 - URL: https://treelife.in/faq/what-is-the-typical-process-in-an-investment-round/ - FAQ Category: About Fundraising Transactions The process generally begins with signing a term sheet between the investor and the company, followed by investor due diligence. Upon satisfactory due diligence, the parties execute transaction documents, fulfill conditions precedent, transfer funds, and issue shares accordingly. --- - Published: 2025-06-02 - Modified: 2025-06-02 - URL: https://treelife.in/faq/what-types-of-securities-can-a-company-issue-to-incoming-investors/ - FAQ Category: About Fundraising Transactions Companies typically issue Convertible Notes (CNs), Equity Shares, Compulsorily Convertible Preference Shares (CCPS), or Compulsorily Convertible Debentures (CCD) to investors. --- - Published: 2025-06-02 - Modified: 2025-06-02 - URL: https://treelife.in/faq/are-there-any-compliances-required-during-an-investment-round/ - FAQ Category: About Fundraising Transactions Yes, compliances include board and shareholder resolutions, filing forms with the Registrar of Companies (RoC) such as Form MGT-14, PAS-3, circulating PAS-4 to investors, and RBI filings like FC-GPR or FC-TRS for foreign investors. --- - Published: 2025-06-02 - Modified: 2025-06-02 - URL: https://treelife.in/faq/what-is-a-cap-table/ - FAQ Category: About Fundraising Transactions A cap table is a detailed record of all shareholders, their shareholding amounts, and percentage ownership on a fully diluted basis. --- - Published: 2025-06-02 - Modified: 2025-06-02 - URL: https://treelife.in/faq/is-a-term-sheet-legally-binding/ - FAQ Category: About Term Sheet Typically, a term sheet is non-binding except for specific clauses like validity, exclusivity, confidentiality, and governing law. It is advisable to clearly state these exceptions to avoid misunderstandings. --- - Published: 2025-06-02 - Modified: 2025-06-02 - URL: https://treelife.in/faq/is-signing-a-term-sheet-mandatory-before-investment/ - FAQ Category: About Term Sheet No, signing a term sheet is not mandatory but recommended to ensure both parties are aligned on key investment terms. --- - Published: 2025-06-02 - Modified: 2025-06-02 - URL: https://treelife.in/faq/what-terms-are-generally-included-in-a-term-sheet/ - FAQ Category: About Term Sheet Terms include investor and promoter details, investment amount, securities to be issued, management rights, transfer restrictions, shareholder rights, and exit mechanisms. --- - Published: 2025-06-02 - Modified: 2025-06-02 - URL: https://treelife.in/faq/can-the-shareholders-agreement-sha-include-terms-that-differ-from-the-term-sheet/ - FAQ Category: About Term Sheet Yes, parties can mutually agree to modify terms post-term sheet execution in the SHA. --- - Published: 2025-06-02 - Modified: 2025-06-02 - URL: https://treelife.in/faq/what-is-the-difference-between-pre-money-and-post-money-valuation/ - FAQ Category: About Term Sheet Pre-money valuation is the company’s value before investment, and post-money valuation is after factoring in the investment amount:Pre-money valuation + Investment amount = Post-money valuation. --- - Published: 2025-06-02 - Modified: 2025-06-02 - URL: https://treelife.in/faq/does-the-term-sheet-need-to-be-on-stamp-paper/ - FAQ Category: About Term Sheet No, a term sheet does not require stamp paper. --- - Published: 2025-06-02 - Modified: 2025-06-02 - URL: https://treelife.in/faq/who-are-the-typical-parties-to-a-sha/ - FAQ Category: About Shareholders’ Agreement (SHA) Usually, the company, promoters, incoming investors, and existing shareholders execute the SHA. --- - Published: 2025-06-02 - Modified: 2025-06-02 - URL: https://treelife.in/faq/do-all-shareholders-need-to-be-parties-to-the-sha/ - FAQ Category: About Shareholders’ Agreement (SHA) Ideally, all shareholders should be parties to the SHA for enforceability. Alternatively, in cases of many shareholders, authority to execute on their behalf can be delegated to a representative. --- - Published: 2025-06-02 - Modified: 2025-06-02 - URL: https://treelife.in/faq/what-rights-do-investors-commonly-seek-in-a-sha/ - FAQ Category: About Shareholders’ Agreement (SHA) Investors often seek information rights, pre-emptive rights for future rounds, transfer rights, exit rights, and liquidation preferences. --- - Published: 2025-06-02 - Modified: 2025-06-02 - URL: https://treelife.in/faq/what-exit-mechanisms-can-a-company-offer-investors/ - FAQ Category: About Shareholders’ Agreement (SHA) Common exit routes include initial public offerings (IPO), third-party sales, strategic sales, or buybacks. --- - Published: 2025-06-02 - Modified: 2025-06-02 - URL: https://treelife.in/faq/can-the-sha-be-signed-digitally/ - FAQ Category: About Shareholders’ Agreement (SHA), About Term Sheet Yes, digital signatures on SHA are legally valid. --- - Published: 2025-06-02 - Modified: 2025-06-02 - URL: https://treelife.in/faq/does-the-sha-need-to-be-on-stamp-paper/ - FAQ Category: About Shareholders’ Agreement (SHA) Yes, SHA should be executed on stamp paper with appropriate stamp duty paid as per the respective state’s laws. --- - Published: 2025-05-30 - Modified: 2025-05-30 - URL: https://treelife.in/faq/how-do-i-register-an-alternative-investment-fund-aif-in-india/ - FAQ Category: About AIF Setup Services To register an Alternative Investment Fund (AIF) in India, applicants must comply with SEBI’s AIF Regulations, 2012. The process includes selecting the appropriate AIF category (I, II, or III) and legal structure (trust, company, LLP, or body corporate), appointing a Sponsor and Manager (with at least one NISM-certified team member from May 10, 2024), and applying online via the SEBI Intermediary Portal. The application involves submitting Form A, a draft Private Placement Memorandum (PPM), and other required documents. An initial fee of ₹1 lakh + GST is payable, followed by a registration fee upon approval (ranging from ₹2 lakh to ₹15 lakh depending on the category). Once all requirements are met, SEBI issues a Certificate of Registration. --- - Published: 2025-05-30 - Modified: 2025-05-30 - URL: https://treelife.in/faq/who-is-a-virtual-cfo/ - FAQ Category: About Virtual CFO A Virtual CFO (Chief Financial Officer) is an outsourced service provider who offers high-level financial strategy, planning, and management to a business, typically on a part-time or contract basis. They perform the same functions as an in-house CFO but are not a full-time employee. --- - Published: 2025-05-30 - Modified: 2025-05-30 - URL: https://treelife.in/faq/does-a-contract-need-to-be-mandatorily-in-written-format/ - FAQ Category: Contract General Questions Written contracts are always recommended, although oral contracts are valid in India. However, certain agreements (e. g. , property sales) are legally required to be in writing. --- - Published: 2025-05-30 - Modified: 2025-05-30 - URL: https://treelife.in/faq/do-i-have-to-get-a-stamp-paper-for-every-contract/ - FAQ Category: Contract General Questions It’s advisable to use stamp paper. While an unstamped contract isn’t invalid, it cannot be used as evidence in court unless properly stamped and penalized (through a process called adjudication). Stamping is crucial for enforceability. --- - Published: 2025-05-30 - Modified: 2025-05-30 - URL: https://treelife.in/faq/can-a-contract-be-signed-electronically-in-india/ - FAQ Category: Contract General Questions Yes, under the Information Technology Act, 2000, electronic signatures are legally recognized in India. As long as the signature is verifiable (e. g. , using DSC or Aadhaar eSign), the contract is valid and enforceable. --- - Published: 2025-05-30 - Modified: 2025-05-30 - URL: https://treelife.in/faq/what-happens-if-one-party-breaches-a-contract/ - FAQ Category: Contract General Questions The non-breaching party can seek remedies such as specific performance (fulfilling the contract), monetary damages, or injunctions, depending on the nature and terms of the contract. --- - Published: 2025-05-30 - Modified: 2025-05-30 - URL: https://treelife.in/faq/is-a-contract-valid-if-its-signed-digitally-or-by-scanning-signatures/ - FAQ Category: Contract General Questions Generally, yes—digitally signed contracts are valid under Indian law if they meet requirements of the IT Act. Scanned signatures may be accepted in some cases but could be challenged in court. For higher enforceability, using a secure electronic signature is recommended. --- - Published: 2025-05-30 - Modified: 2025-05-30 - URL: https://treelife.in/faq/what-exactly-is-a-master-service-agreement-msa-and-why-is-it-so-crucial-for-businesses/ - FAQ Category: About Master Service Agreement (MSA) An MSA acts as the main framework for an ongoing business relationship. It sets out general terms for current and future services so that parties can execute statements of work (SOWs) without re-negotiating detailed agreements each time. This is especially useful in B2B, SaaS, and enterprise models where the MSA serves as the ‘umbrella agreement’ for all services or subscriptions procured by the customer. --- - Published: 2025-05-30 - Modified: 2025-05-30 - URL: https://treelife.in/faq/what-are-the-core-components-of-an-msa/ - FAQ Category: About Master Service Agreement (MSA) Key components typically include the scope of services, payment terms, confidentiality, intellectual property rights, term and termination conditions, liability limitations, and dispute resolution mechanisms. --- - Published: 2025-05-30 - Modified: 2025-05-30 - URL: https://treelife.in/faq/when-do-you-need-an-msa/ - FAQ Category: About Master Service Agreement (MSA) Businesses should consider using MSAs when you anticipate ongoing or long-term business relationships involving multiple projects, services, or transactions with the same client or vendor. It establishes a consistent legal framework for all future engagements and reduces multiplicity of documents/agreements (and the resulting conflicts). --- - Published: 2025-05-30 - Modified: 2025-05-30 - URL: https://treelife.in/faq/how-does-an-msa-differ-from-a-statement-of-work-sow/ - FAQ Category: About Master Service Agreement (MSA) An MSA provides the overarching, general terms and conditions for the entire business relationship. A Statement of Work (SOW), conversely, is a specific document outlining the details of each individual project or service, including scope, deliverables, timelines, and pricing, all referencing the established MSA. --- - Published: 2025-05-30 - Modified: 2025-05-30 - URL: https://treelife.in/faq/can-an-msa-be-changed-after-its-signed/ - FAQ Category: About Master Service Agreement (MSA) Yes, however, amending or changing an MSA typically requires mutual agreement from all parties involved, formalized and signed through a written amendment or addendum. --- - Published: 2025-05-30 - Modified: 2025-05-30 - URL: https://treelife.in/faq/what-are-essential-clauses-in-an-indian-employment-agreement/ - FAQ Category: About Employment Agreement Important clauses cover job description, salary and benefits (including PF/gratuity), employment duration, leave policy, confidentiality, intellectual property ownership, termination notice periods, and dispute resolution. While not strictly mandated, a written agreement is highly recommended in India. --- - Published: 2025-05-30 - Modified: 2025-05-30 - URL: https://treelife.in/faq/do-i-need-employment-agreements-with-all-my-permanent-and-part-time-employees-consultants-interns-etc/ - FAQ Category: About Employment Agreement It's highly recommended to enter into detailed employment agreements with permanent and part-time employees, which clarify terms, roles, and statutory benefits. For consultants and interns, distinct service agreements or internship agreements are crucial to define scope, compensation, intellectual property, and to avoid misclassification risks by clearly distinguishing them from permanent employees. --- - Published: 2025-05-30 - Modified: 2025-05-30 - URL: https://treelife.in/faq/are-employment-agreements-different-from-offer-or-appointment-letters/ - FAQ Category: About Employment Agreement Yes, these vary in their scope, timing, and/or purpose. An Offer Letter expresses the mere intent to hire and outlines initial basic terms. An Appointment Letter formalizes the offer and may act as a basic contract once acknowledged in writing or by conduct. A comprehensive Employment Agreement, however, provides much more detailed terms and conditions, covering rights, obligations, policies, intellectual property, and termination in greater depth. This is essential for start-ups looking to maintain strong governance and internal controls from an early stage. --- - Published: 2025-05-30 - Modified: 2025-05-30 - URL: https://treelife.in/faq/can-i-sign-an-employment-agreement-between-a-foreign-company-and-a-citizen-resident-of-india/ - FAQ Category: About Employment Agreement While direct employment relationships are not advisable, foreign companies can open branch offices, Indian subsidiaries, or engage employees through a secondment arrangement or an employer of record’. --- - Published: 2025-05-30 - Modified: 2025-05-30 - URL: https://treelife.in/faq/is-non-compete-and-non-solicitation-in-an-employment-contract-enforceable/ - FAQ Category: About Employment Agreement Both types of clauses are generally enforceable during employment. However, in India, (a) post-employment non-compete clauses are generally not enforceable due to Section 27 of the Indian Contract Act (which, very simply, voids restraints of profession or trade), unless very narrowly defined and reasonable; and (b) post-employment non-solicitation clauses (preventing soliciting former clients/employees) are generally more enforceable if they are reasonable, protect a legitimate business interest, and don't amount to a complete restraint of profession or trade. --- - Published: 2025-05-30 - Modified: 2025-05-30 - URL: https://treelife.in/faq/when-is-an-nda-used/ - FAQ Category: About Non-Disclosure Agreement (NDA) A Non-Disclosure Agreement (NDA) is a legal contract that obligates a party to protect sensitive, confidential information. It's used during business negotiations, when engaging employees/freelancers, for investment discussions, or when sharing proprietary data with clients/vendors. --- - Published: 2025-05-30 - Modified: 2025-05-30 - URL: https://treelife.in/faq/what-are-some-clauses-essential-for-an-nda/ - FAQ Category: About Non-Disclosure Agreement (NDA) An effective NDA defines confidential information (and its exclusions), specifies the purpose of disclosure, outlines the receiving party's obligations, sets the term of confidentiality, details return/destruction of information, and states remedies for breach. --- - Published: 2025-05-30 - Modified: 2025-05-30 - URL: https://treelife.in/faq/how-do-i-decide-between-a-mutual-or-non-mutual-nda/ - FAQ Category: About Non-Disclosure Agreement (NDA) Choose a non-mutual (unilateral) NDA when only one party is disclosing confidential information (e. g. , hiring an employee, pitching to an investor). Opt for a mutual NDA when both parties will be sharing sensitive information with each other (e. g. , joint ventures, strategic partnerships, M&A discussions). --- - Published: 2025-05-30 - Modified: 2025-05-30 - URL: https://treelife.in/faq/are-ndas-enforceable-in-india/ - FAQ Category: About Non-Disclosure Agreement (NDA) Yes, an NDA is legally enforceable under the Indian Contract Act, 1872. --- - Published: 2025-05-30 - Modified: 2025-05-30 - URL: https://treelife.in/faq/how-long-should-my-nda-be-enforceable/ - FAQ Category: About Non-Disclosure Agreement (NDA) The enforceability term of an NDA varies with the information's nature. For trade secrets or highly sensitive data, it can be indefinite (perpetual). For other business information, a common duration is 3 to 5 years, though it should be reasonable and justifiable based on the information's commercial value. --- - Published: 2025-05-30 - Modified: 2025-05-30 - URL: https://treelife.in/faq/what-remedies-are-typically-available-if-an-nda-is-breached/ - FAQ Category: About Non-Disclosure Agreement (NDA) If an NDA is breached, typical remedies include seeking monetary damages for losses incurred, including indirect and foreseeable damages in certain cases. Crucially, courts can also issue an injunction, which is a court order prohibiting the breaching party from continuing to misuse the confidential information. --- - Published: 2025-05-30 - Modified: 2025-05-30 - URL: https://treelife.in/faq/what-is-a-co-founders-agreement-and-why-is-it-crucial-for-startups/ - FAQ Category: About Co-Founders' Agreement This vital legal document outlines the roles, responsibilities, ownership, rights, and liabilities of startup co-founders. It's essential for defining equity allocation and vesting, protecting IP, establishing decision-making processes, planning exit strategies, and mitigating potential disputes among founders. --- - Published: 2025-05-30 - Modified: 2025-05-30 - URL: https://treelife.in/faq/is-a-co-founders-agreement-legally-binding-in-india/ - FAQ Category: About Co-Founders' Agreement Yes, when properly executed on stamp paper, it's a legally enforceable contract under Indian law, though not legally mandated for company formation. It's a commercially prudent step for any multi-founder startup. --- - Published: 2025-05-30 - Modified: 2025-05-30 - URL: https://treelife.in/faq/when-should-i-enter-into-a-co-founders-agreement-in-my-start-up/ - FAQ Category: About Co-Founders' Agreement You should enter into a Co-Founders' Agreement as early as possible, ideally before formally commencing material business operations or making significant decisions. This ensures all founders are aligned on roles, responsibilities, equity split, and decision-making from the very beginning, preventing future disputes. --- - Published: 2025-05-30 - Modified: 2025-05-30 - URL: https://treelife.in/faq/what-is-vesting-for-a-co-founder/ - FAQ Category: About Co-Founders' Agreement "Vesting" is the process by which a co-founder's ownership of their equity (shares) in the startup becomes absolute over a period of time or upon achieving specific milestones. It ensures that co-founders earn their stake through continued contribution, protecting the company and other founders if someone departs prematurely. A common structure includes a "cliff" period before vesting begins. --- - Published: 2025-05-30 - Modified: 2025-05-30 - URL: https://treelife.in/faq/what-happens-if-a-co-founder-leaves-the-company-and-how-can-a-co-founders-agreement-help/ - FAQ Category: About Co-Founders' Agreement Without an agreement, a co-founder's departure can lead to messy disputes over equity, valuation, and intellectual property. A Co-Founders' Agreement proactively outlines clear exit clauses, such as: the terms on which co-founder can be terminated or resign, how vested and unvested shares are handled, buy-back options for vested shares, valuation methods, and the handling of IP, ensuring a smoother transition and protecting the remaining founders' interests. --- - Published: 2025-05-30 - Modified: 2025-05-30 - URL: https://treelife.in/faq/what-are-website-tcs/ - FAQ Category: About Privacy Policy & Website Policies Website Terms and Conditions are a legal agreement between the website owner and users, setting rules for website usage, defining rights and obligations, and covering aspects like intellectual property, disclaimers, and governing law. --- - Published: 2025-05-30 - Modified: 2025-05-30 - URL: https://treelife.in/faq/what-is-a-website-privacy-policy-and-its-key-requirements-in-india/ - FAQ Category: About Privacy Policy & Website Policies A Privacy Policy informs users how their personal data is collected, used, stored, and protected. --- - Published: 2025-05-30 - Modified: 2025-05-30 - URL: https://treelife.in/faq/does-a-privacy-policy-need-to-be-compliant-with-gdpr/ - FAQ Category: About Privacy Policy & Website Policies In India, a privacy policy should primarily comply with laws like the Digital Personal Data Protection Act, 2023 (DPDP Act), detailing data types collected, purpose, consent, sharing practices, security measures, data retention, and user rights (e. g. , access, correction, deletion). --- - Published: 2025-05-30 - Modified: 2025-05-30 - URL: https://treelife.in/faq/do-i-need-to-regularly-check-and-update-my-website-terms-and-conditions-and-privacy-policy/ - FAQ Category: About Privacy Policy & Website Policies Yes, regular review and updates are crucial. Laws and regulations (like India's Digital Personal Data Protection Act, 2023 and laws applicable in other jurisdictions where you have customers or users) evolve, your business practices or website features may change, and new technologies emerge. Keeping your T&Cs and Privacy Policy current ensures continuous legal compliance, mitigates risks, and maintains user trust. --- - Published: 2025-05-30 - Modified: 2025-05-30 - URL: https://treelife.in/faq/are-terms-conditions-and-privacy-policy-mandatory-in-india/ - FAQ Category: About Privacy Policy & Website Policies Yes, for most entities operating online in India, both are mandatory. A Privacy Policy is explicitly required for "data fiduciaries" (those processing digital personal data) under the Digital Personal Data Protection Act, 2023, and for "body corporates" handling sensitive personal data under earlier IT Rules. Similarly, Terms & Conditions (user agreement) are mandated for "intermediaries" (which include many websites, apps, and online platforms) under the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021. Even for businesses not affected by these requirements, having both is crucial for legal protection, defining user responsibilities, and managing legal liabilities in the long-term. --- - Published: 2025-05-26 - Modified: 2025-05-26 - URL: https://treelife.in/faq/what-is-the-difference-between-accounts-payable-and-accounts-receivable/ - FAQ Category: About Virtual CFO Accounts payable refers to the money your business owes to suppliers and vendors, while accounts receivable is the money owed to your business by customers. Proper management of accounts payable vs accounts receivable is critical for maintaining healthy cash flow, which we handle as part of our accounting and bookkeeping service. --- - Published: 2025-05-26 - Modified: 2025-05-26 - URL: https://treelife.in/faq/what-payroll-consultancy-and-payroll-outsourcing-services-do-you-offer/ - FAQ Category: About Virtual CFO At Treelife, all payroll services—including payroll processing, payroll outsourcing, payroll consulting, and payroll software management—are handled entirely in-house by our team of chartered accountants. This ensures accuracy, confidentiality, and compliance tailored specifically to your business needs without relying on external providers. --- - Published: 2025-05-26 - Modified: 2025-05-26 - URL: https://treelife.in/faq/can-you-explain-the-difference-between-form-16-and-form-16a/ - FAQ Category: About Virtual CFO Form 16 is the certificate issued by employers detailing the income tax deducted at source (TDS) on salary income, whereas Form 16A is issued for TDS deducted on payments other than salary, such as rent or professional fees. Our accounting taxation services include assistance with these forms for accurate tax filing. --- - Published: 2025-05-26 - Modified: 2025-05-26 - URL: https://treelife.in/faq/how-do-i-hire-a-ca-for-tax-filing-through-treelife/ - FAQ Category: About Virtual CFO You can fully outsource your tax filing and compliance to Treelife. We have an expert team of Chartered Accountants (CAs), Company Secretaries (CSs), and Lawyers who provide end-to-end services—from tax return preparation and filing to regulatory compliance and advisory. Whether you prefer online support or direct consultation, our dedicated professionals ensure timely and accurate tax filing tailored to your business needs. --- - Published: 2025-05-26 - Modified: 2025-05-26 - URL: https://treelife.in/faq/how-can-treelifes-accounting-and-bookkeeping-services-benefit-my-business/ - FAQ Category: How Treelife Supports Your Financial Operations? Our comprehensive accounting and bookkeeping services ensure your financial records are accurate, compliant, and up to date. This includes accounting consultancy services tailored to your needs, tax compliance, payroll services, and accounts receivable reconciliation — helping you focus on your core business while we manage your accounts payable and receivable efficiently. --- - Published: 2025-05-26 - Modified: 2025-05-26 - URL: https://treelife.in/faq/do-you-provide-accounting-services-in-india-and-specifically-in-mumbai/ - FAQ Category: How Treelife Supports Your Financial Operations? Yes. Treelife offers specialized accounting services in India, including accounting services in Mumbai and other major cities. Whether you need business accounting service support or tax filing assistance, our team of Chartered Accountants are equipped to deliver timely and compliant services. --- - Published: 2025-05-26 - Modified: 2025-05-26 - URL: https://treelife.in/faq/can-treelife-help-with-income-tax-filing-and-compliance/ - FAQ Category: How Treelife Supports Your Financial Operations? Absolutely. We provide end-to-end income tax compliance services, including income tax filing and return filing with experienced Chartered Accountants for tax filing and income tax return filing consultants. We also assist with tax saving options and instruments, including investment advice beyond Section 80C, to optimize your tax liabilities. --- - Published: 2025-05-26 - Modified: 2025-05-26 - URL: https://treelife.in/faq/do-you-offer-accounting-services-for-small-businesses/ - FAQ Category: How Treelife Supports Your Financial Operations? Yes, Treelife specializes in accounting services India-wide, providing small business accounting services that include bookkeeping, accounting consultancy services, GST filing, and tax filing services near you. Our virtual CFO services enable startups to manage finances efficiently without hiring full-time staff. --- - Published: 2025-05-26 - Modified: 2025-05-26 - URL: https://treelife.in/faq/how-does-treelifes-virtual-cfo-service-assist-with-foreign-remittances-and-tax-regulations/ - FAQ Category: How Treelife Supports Your Financial Operations? Treelife’s VCFO team helps you navigate complex tax and regulatory requirements related to foreign inward remittances. We ensure compliance with tax deduction at source (TDS) and tax collection at source (TCS) regulations, such as TCS on foreign remittance. Our experts provide end-to-end guidance on documentation, filing, and accounting to keep your business fully compliant with Indian tax laws. --- - Published: 2025-05-26 - Modified: 2025-05-26 - URL: https://treelife.in/faq/what-kind-of-fundraising-support-does-treelife-provide-for-startups-and-businesses-in-india/ - FAQ Category: About Our Legal Services Treelife offers end-to-end fundraising support tailored to startups and businesses in India. We assist with structuring fundraising rounds, preparing term sheet and transactional agreements (like SHA, SSA, and others), negotiating with investors and ensuring compliance with applicable regulations, during a fundraising round. --- - Published: 2025-05-26 - Modified: 2025-05-26 - URL: https://treelife.in/faq/how-can-treelife-assist-with-mergers-and-acquisitions-ma-in-india/ - FAQ Category: About Our Legal Services Our legal team specializes in mergers and acquisitions, guiding companies through deal structuring, due diligence, drafting of transactional agreements, and regulatory approvals. We work closely with investors, companies, and all other parties involved to facilitate smooth and successful transactions. --- - Published: 2025-05-26 - Modified: 2025-05-26 - URL: https://treelife.in/faq/why-is-patent-registration-important-for-startups-and-businesses/ - FAQ Category: About Our Legal Services Patent registration safeguards your inventions and grants exclusive rights, preventing unauthorized use by others. Treelife assists you through the patent registration process in India, ensuring your intellectual property is protected, adding value to your business and enhancing competitive advantage. --- - Published: 2025-05-26 - Modified: 2025-05-26 - URL: https://treelife.in/faq/what-types-of-contracts-does-treelife-help-startups-and-businesses-draft-and-review/ - FAQ Category: About Our Legal Services We assist with a wide range of contracts including investment agreements, shareholder agreements, employment contracts, non-disclosure agreements (NDAs), service agreements, vendor contracts, and licensing agreements. Our experts ensure all contracts are legally sound and aligned with your business objectives. --- - Published: 2025-05-26 - Modified: 2025-05-26 - URL: https://treelife.in/faq/where-does-treelife-offer-its-legal-support-services/ - FAQ Category: About Our Legal Services Trellife provides legal support services across India, including major hubs like Mumbai, Delhi, Bangalore, and GIFT City. We offer comprehensive legal services, enabling startups and businesses nationwide to access expert legal assistance remotely with ease and convenience. --- - Published: 2025-05-26 - Modified: 2025-05-26 - URL: https://treelife.in/faq/what-services-do-you-offer-for-intellectual-property-ip-protection-including-patents-and-copyrights/ - FAQ Category: How Treelife Handles Legal Matters We provide comprehensive IP services including copyright registration and patent registration. Our experts help you understand how to register a patent (or any other IP) in India, prepare and file applications, and manage your IP portfolio to protect your innovations and creative works effectively. --- - Published: 2025-05-26 - Modified: 2025-05-26 - URL: https://treelife.in/faq/can-treelife-help-with-copyright-registration/ - FAQ Category: How Treelife Handles Legal Matters Yes, we offer full copyright registration services to protect your creative works, software, branding, and content. Our legal experts guide you through the registration process, ensuring your rights are secured under Indian law. --- - Published: 2025-05-26 - Modified: 2025-05-26 - URL: https://treelife.in/faq/how-does-treelife-support-dispute-resolution-for-startups/ - FAQ Category: How Treelife Handles Legal Matters We help startups and businesses resolve disputes efficiently through negotiation, mediation, and litigation support. Our team handles employment disputes, founder conflicts, contract enforcement, and debt recovery, ensuring your business interests are protected. --- - Published: 2025-05-26 - Modified: 2025-05-26 - URL: https://treelife.in/faq/can-treelife-help-negotiate-contract-terms-with-investors-partners-or-vendors/ - FAQ Category: How Treelife Handles Legal Matters Yes. We provide end-to-end contract negotiation support, working on your behalf to secure favorable terms with investors, business partners, and vendors. Our approach balances legal protection with commercial practicality to foster strong business relationships. --- - Published: 2025-05-26 - Modified: 2025-05-26 - URL: https://treelife.in/faq/how-does-treelife-ensure-that-contracts-comply-with-indian-laws-and-regulations/ - FAQ Category: How Treelife Handles Legal Matters Our in-house legal team stays updated with the latest laws and regulations applicable to startups and businesses in India. We review and draft contracts to ensure full compliance with statutory requirements, minimizing legal risks and protecting your interests. --- - Published: 2025-05-26 - Modified: 2025-05-26 - URL: https://treelife.in/faq/how-can-i-check-my-mca-annual-filing-status/ - FAQ Category: About Secretarial Compliance Services You can check your MCA annual filing status online through the MCA portal. Treelife also assists clients by monitoring and managing MCA annual, quaterely and monthly filings to ensure timely compliance and avoid penalties. --- - Published: 2025-05-26 - Modified: 2025-05-26 - URL: https://treelife.in/faq/what-is-the-process-for-annual-property-return-online-filing/ - FAQ Category: About Secretarial Compliance Services Annual property return filing is required under the Companies Act for certain companies to report their immovable property holdings. Treelife provides end-to-end assistance with online filing of annual property returns, ensuring accuracy and compliance with MCA requirements. --- - Published: 2025-05-26 - Modified: 2025-05-26 - URL: https://treelife.in/faq/how-do-i-check-the-mca-strike-off-list/ - FAQ Category: About Secretarial Compliance Services The MCA strike off list is publicly available on the MCA website. Treelife can help you verify if your company or any company is listed and assist with necessary actions if your company is at risk of being struck off. --- - Published: 2025-05-26 - Modified: 2025-05-26 - URL: https://treelife.in/faq/how-can-i-register-my-startup-in-india/ - FAQ Category: About Secretarial Compliance Services Treelife guides you through the entire process of registering a startup in India, from selecting the appropriate business structure, preparing incorporation documents, to completing the registration with relevant authorities. --- - Published: 2025-05-26 - Modified: 2025-05-26 - URL: https://treelife.in/faq/what-is-the-difference-between-a-private-limited-company-and-llp/ - FAQ Category: About Secretarial Compliance Services A private limited company is a separate legal entity governed by the Companies Act, with shareholders and directors, limited liability, and more stringent compliance requirements. An LLP (Limited Liability Partnership) combines the benefits of a partnership and company, offering limited liability to partners but with fewer compliance formalities. Treelife advises on the best structure for your business and assists with registration of both private limited companies and LLPs. --- - Published: 2025-05-26 - Modified: 2025-05-26 - URL: https://treelife.in/faq/can-treelife-help-with-llp-company-registration/ - FAQ Category: How Treelife Manages Statutory Compliance Yes, Treelife offers LLP company registration services, guiding you through the LLP registration process, documentation, and compliance requirements. --- - Published: 2025-05-26 - Modified: 2025-05-26 - URL: https://treelife.in/faq/what-is-company-registration-and-how-can-treelife-assist/ - FAQ Category: How Treelife Manages Statutory Compliance Company registration is the process of legally incorporating a business entity with the Registrar of Companies (ROC) in India. Treelife helps startups and businesses with company registration, including preparing and filing all required documents to ensure smooth and timely incorporation. --- - Published: 2025-05-26 - Modified: 2025-05-26 - URL: https://treelife.in/faq/do-you-provide-company-registration-services-specifically-in-mumbai/ - FAQ Category: How Treelife Manages Statutory Compliance No, Treelife offers dedicated company registration services in Mumbai, along with other major Indian cities. We assist startups and businesses locally and across India with comprehensive secretarial compliance support. --- - Published: 2025-05-26 - Modified: 2025-05-26 - URL: https://treelife.in/faq/what-documents-are-needed-for-company-incorporation/ - FAQ Category: How Treelife Manages Statutory Compliance The documents required depend on the business structure. For private limited companies, these include identity and address proofs of directors and shareholders, registered office proof, Memorandum and Articles of Association, and statutory declarations. LLPs require identity and address proofs of partners and designated partners, the LLP agreement, and registered office proof. Partnership firms need a partnership deed along with identity and address proofs of partners. Sole proprietorships generally require basic identity and address proof of the proprietor and business address proof. Treelife assists with preparing and filing all necessary documents for smooth registration and compliance across these structures. --- - Published: 2025-05-26 - Modified: 2025-05-26 - URL: https://treelife.in/faq/can-treelife-assist-with-gst-registration-and-compliance/ - FAQ Category: How Treelife Manages Statutory Compliance Yes. We assist with registering GST, including registering HSN codes and GST rates, understanding the threshold for GST registration, and managing GST compliance. We also support clients with GST registration status tracking and filing. --- - Published: 2025-05-26 - Modified: 2025-05-26 - URL: https://treelife.in/faq/how-can-startups-benefit-from-tax-exemptions-under-the-startup-india-scheme/ - FAQ Category: About Tax & Regulatory Services Under the Startup India scheme, eligible startups can avail various tax exemptions, including a three-year income tax holiday. Treelife assists startups in navigating the application process for these exemptions and ensuring compliance with eligibility criteria. --- - Published: 2025-05-26 - Modified: 2025-05-26 - URL: https://treelife.in/faq/can-i-access-tax-advisory-services-online/ - FAQ Category: About Tax & Regulatory Services Yes, Treelife offers tax advisory services online, allowing you to consult with our experts remotely. This ensures that you receive professional guidance regardless of your location. --- - Published: 2025-05-26 - Modified: 2025-05-26 - URL: https://treelife.in/faq/how-do-i-find-a-tax-advisor-near-me/ - FAQ Category: About Tax & Regulatory Services If you’re looking for a tax advisor near you, Treelife’s extensive network across Mumbai, Delhi, Bangalore, and GIFT City ensures local availability. You can also connect with our income tax advisors online for virtual consultations. --- - Published: 2025-05-26 - Modified: 2025-05-26 - URL: https://treelife.in/faq/what-is-the-difference-between-tax-advisory-and-tax-compliance/ - FAQ Category: About Tax & Regulatory Services Tax advisory focuses on strategic planning to optimize tax liabilities, while tax compliance involves adhering to tax laws, filing returns, and meeting statutory obligations. Treelife’s services encompass both aspects to ensure holistic tax management. --- - Published: 2025-05-26 - Modified: 2025-05-26 - URL: https://treelife.in/faq/how-can-treelife-help-with-due-diligence-and-financial-modeling/ - FAQ Category: About Tax & Regulatory Services We assist businesses with comprehensive due diligence and financial modeling to identify potential risks and evaluate financial viability. Our services include analyzing financial statements, compliance checks, and projecting future performance. --- - Published: 2025-05-26 - Modified: 2025-05-26 - URL: https://treelife.in/faq/what-are-tax-advisory-services-and-how-can-treelife-help/ - FAQ Category: How Treelife Ensures Tax Compliance & Efficiency Tax advisory services involve providing expert guidance on tax planning, compliance, and optimization. Treelife offers comprehensive tax advisory services to startups and businesses, helping them minimize tax liabilities while ensuring compliance with applicable regulations. --- - Published: 2025-05-26 - Modified: 2025-05-26 - URL: https://treelife.in/faq/does-treelife-offer-accounting-and-taxation-services/ - FAQ Category: How Treelife Ensures Tax Compliance & Efficiency Yes, Treelife provides end-to-end accounting & taxation services, including financial reporting, GST compliance, and income tax filing. Our accounting taxation services are designed to streamline your financial processes and maintain compliance with Indian tax laws. --- - Published: 2025-05-26 - Modified: 2025-05-26 - URL: https://treelife.in/faq/do-you-provide-income-tax-advisory-services/ - FAQ Category: How Treelife Ensures Tax Compliance & Efficiency Yes, Treelife’s income tax advisory services include tax planning, filing of returns, and compliance with changing regulations. Our team of experienced tax advisors helps you understand your obligations and optimize your tax strategy. --- - Published: 2025-05-26 - Modified: 2025-05-26 - URL: https://treelife.in/faq/how-can-treelife-assist-with-gst-compliance/ - FAQ Category: How Treelife Ensures Tax Compliance & Efficiency Our GST advisory services include GST registration, filing, and compliance management. We assist businesses with GST invoicing, input tax credit management, and filing of GST returns to ensure seamless adherence to GST regulations. --- - Published: 2025-05-26 - Modified: 2025-05-26 - URL: https://treelife.in/faq/where-does-treelife-provide-tax-and-regulatory-services/ - FAQ Category: How Treelife Ensures Tax Compliance & Efficiency Treelife provides tax advisory and accounting services PAN India through virtual consultations. Our experts are accessible from anywhere in the country, ensuring that startups and businesses receive professional guidance regardless of their location. We also have a strong presence in major cities like Mumbai, Delhi, Bangalore, and GIFT City. --- - Published: 2025-05-26 - Modified: 2025-05-26 - URL: https://treelife.in/faq/what-is-an-alternative-investment-fund-aif/ - FAQ Category: About AIF Setup Services An Alternative Investment Fund (AIF) is a privately pooled investment vehicle that collects funds from investors to invest in assets as per a defined investment policy. AIFs in India are regulated by SEBI under the SEBI (Alternative Investment Funds) Regulations, 2012, and are classified into three categories: Category I, Category II, and Category III. --- - Published: 2025-05-26 - Modified: 2025-05-26 - URL: https://treelife.in/faq/what-are-the-different-categories-of-aifs-in-india/ - FAQ Category: About AIF Setup Services AIFs are categorized into three types based on investment strategy: Category I AIF: Invests in socially or economically desirable sectors like infrastructure or social ventures. Category II AIF: Includes private equity funds and debt funds that do not take leverage or borrow. Category III AIF: Includes hedge funds that use complex trading strategies, including leverage. Treelife assists in setting up all types of AIFs as per SEBI norms. --- - Published: 2025-05-26 - Modified: 2025-05-26 - URL: https://treelife.in/faq/what-is-the-difference-between-equity-funds-and-debt-funds-in-aifs/ - FAQ Category: About AIF Setup Services Equity funds primarily invest in equity or equity-linked instruments, aiming for capital appreciation. Debt funds focus on fixed-income instruments, generating steady returns. Treelife helps in structuring both types of funds, balancing risk and return based on investor preferences. --- - Published: 2025-05-26 - Modified: 2025-05-26 - URL: https://treelife.in/faq/what-are-the-key-regulations-under-sebi-aif-regulations-2012/ - FAQ Category: About AIF Setup Services SEBI AIF Regulations, 2012, mandate registration, disclosure norms, fund reporting, and compliance with investment and leverage limits. Treelife assists with adhering to these regulations, including preparing and filing necessary documents with SEBI. --- - Published: 2025-05-26 - Modified: 2025-05-26 - URL: https://treelife.in/faq/how-do-i-register-a-trust-in-india-for-setting-up-an-aif/ - FAQ Category: About AIF Setup Services To register a trust in India, you need to prepare a trust deed, file it with the local sub-registrar, and obtain the trust registration certificate. Treelife guides you through the procedure to register a trust, ensuring compliance with local laws and SEBI requirements. --- - Published: 2025-05-26 - Modified: 2025-05-26 - URL: https://treelife.in/faq/what-is-the-difference-between-aif-and-pms-portfolio-management-services/ - FAQ Category: About AIF Setup Services AIFs pool investments from multiple investors and invest based on a defined strategy, while PMS manages individual portfolios on a client-by-client basis. AIFs typically cater to HNIs and institutional investors, whereas PMS focuses on personalized investment management. Treelife provides insights on both to help you choose the right investment vehicle. --- - Published: 2025-05-26 - Modified: 2025-05-26 - URL: https://treelife.in/faq/how-can-treelife-help-with-aif-setup-and-registration/ - FAQ Category: How Treelife Helps You Launch Your Fund Treelife provides comprehensive AIF setup services, including fund structuring, documentation, and application processing with SEBI. We help you navigate the SEBI AIF regulations, prepare a Private Placement Memorandum (PPM), and ensure compliance throughout the registration process. --- - Published: 2025-05-26 - Modified: 2025-05-26 - URL: https://treelife.in/faq/can-treelife-help-with-the-sebi-registration-process-for-aifs/ - FAQ Category: How Treelife Helps You Launch Your Fund Yes, Treelife assists with the entire SEBI registration process for AIFs, including application submission, PPM preparation, compliance checks, and ensuring adherence to the SEBI Alternative Investment Funds Regulations, 2012. --- - Published: 2025-05-26 - Modified: 2025-05-26 - URL: https://treelife.in/faq/do-you-assist-with-aif-documentation-and-compliance/ - FAQ Category: How Treelife Helps You Launch Your Fund Yes, Treelife provides end-to-end support for AIF documentation, including drafting the PPM, trust deed, and other mandatory filings. We ensure compliance with SEBI AIF regulations and manage ongoing reporting and disclosure requirements. --- - Published: 2025-05-26 - Modified: 2025-05-26 - URL: https://treelife.in/faq/how-can-treelife-support-investment-management-for-aifs/ - FAQ Category: How Treelife Helps You Launch Your Fund Treelife’s team offers investment management support, including fund administration, investor relations, financial reporting, and adherence to regulatory requirements. We help maintain compliance while optimizing fund performance. --- - Published: 2025-05-26 - Modified: 2025-05-26 - URL: https://treelife.in/faq/where-does-treelife-provide-aif-setup-and-regulatory-support/ - FAQ Category: How Treelife Helps You Launch Your Fund We offer our AIF setup services PAN India through virtual consultations. Our team operates from major cities like Mumbai, Delhi, Bangalore, and GIFT City, providing expert assistance regardless of your location. --- - Published: 2025-05-26 - Modified: 2025-05-26 - URL: https://treelife.in/faq/what-is-due-diligence-and-why-is-it-important-in-investment-support/ - FAQ Category: About Investment Support Services Due diligence is the comprehensive process of evaluating a company’s financial, legal, commercial, and operational aspects before making an investment decision. It helps investors understand potential risks, validate financial data, and make informed strategic choices. Treelife’s investment support services include detailed due diligence to ensure accurate and insightful analysis. --- - Published: 2025-05-26 - Modified: 2025-05-26 - URL: https://treelife.in/faq/what-are-the-different-types-of-due-diligence/ - FAQ Category: About Investment Support Services The main types of due diligence include: Financial Due Diligence: Analyzing financial statements, revenue, and profitability. Legal Due Diligence: Reviewing legal contracts, compliance, intellectual property and potential litigations. Commercial Due Diligence: Assessing market position, competitors, and growth potential. Vendor Due Diligence: Examination of vendors’ financial, legal, and operational standing. Treelife conducts comprehensive due diligence covering all these aspects to minimize risks. --- - Published: 2025-05-26 - Modified: 2025-05-26 - URL: https://treelife.in/faq/how-can-treelife-assist-with-transaction-advisory-services/ - FAQ Category: About Investment Support Services Treelife provides end-to-end transaction advisory services, including deal structuring, negotiations, transactional agreements, and strategic advisory. Our team ensures that transactions are structured to mitigate risks, comply with regulations, and align with business objectives. --- - Published: 2025-05-26 - Modified: 2025-05-26 - URL: https://treelife.in/faq/what-does-the-due-diligence-process-involve/ - FAQ Category: About Investment Support Services The due diligence process typically includes collecting and analyzing financial data, legal documents, operational records, and business strategies. It also involves interviews with key stakeholders and verification of compliance. Treelife’s structured due diligence checklist ensures a thorough evaluation, identifying red flags and potential deal breakers. --- - Published: 2025-05-26 - Modified: 2025-05-26 - URL: https://treelife.in/faq/what-is-a-due-diligence-report/ - FAQ Category: About Investment Support Services A due diligence report is a comprehensive document that outlines the findings from the due diligence process. It covers financial health, legal standing, commercial viability, operational strengths, and potential risks. Treelife prepares detailed due diligence reports, providing actionable insights for investors. --- - Published: 2025-05-26 - Modified: 2025-05-26 - URL: https://treelife.in/faq/how-does-treelife-tailor-due-diligence-for-investor-exits/ - FAQ Category: About Investment Support Services At the time of an investor’s exit, Treelife conducts focused due diligence to verify the financial, legal, tax, and compliance readiness of the target company. This ensures the exit is backed by validated data, identifies any last-mile risks, and supports clean documentation. Our diligence helps investors confidently structure exits that are commercially sound and regulatorily compliant. --- - Published: 2025-05-26 - Modified: 2025-05-26 - URL: https://treelife.in/faq/what-types-of-transactions-does-treelife-provide-advisory-support-for/ - FAQ Category: About Investment Support Services Treelife provides transaction advisory support for a wide range of deals, including mergers and acquisitions (M&A), private equity and venture capital investments, debt fund arrangements, strategic partnerships, and joint ventures. Our goal is to ensure that every transaction is executed efficiently and in line with the client’s strategic objectives. --- - Published: 2025-05-26 - Modified: 2025-05-26 - URL: https://treelife.in/faq/how-can-treelife-assist-with-transaction-advisory-services-2/ - FAQ Category: How Treelife Advises on Transactions Treelife provides end-to-end transaction advisory services, including deal structuring, negotiations, transactional agreements, and strategic advisory. Our team ensures that transactions are structured to mitigate risks, comply with regulations, and align with business objectives. --- - Published: 2025-05-26 - Modified: 2025-05-26 - URL: https://treelife.in/faq/can-treelife-assist-with-transaction-documentation/ - FAQ Category: How Treelife Advises on Transactions Yes, Treelife offers end-to-end support with transaction documentation, including drafting and reviewing investment agreements, shareholder agreements, joint venture contracts, and purchase agreements. We ensure that all documents accurately capture the agreed terms and protect your interests. --- - Published: 2025-05-26 - Modified: 2025-05-26 - URL: https://treelife.in/faq/who-does-treelife-represent-in-transaction-advisory-services-investors-or-startups/ - FAQ Category: How Treelife Advises on Transactions Treelife represents both investors and startups, depending on the specific transaction and client engagement. Our team has extensive experience in advising startups during fundraising, mergers, and strategic partnerships, as well as supporting investors in conducting due diligence, deal structuring, and compliance checks. We ensure that our advisory approach aligns with the interests and goals of our client, whether it’s a startup or an investor. --- - Published: 2025-05-26 - Modified: 2025-05-26 - URL: https://treelife.in/faq/does-treelife-assist-with-international-transactions/ - FAQ Category: How Treelife Advises on Transactions Yes, Treelife provides comprehensive support for international transactions, including cross-border mergers and acquisitions, foreign investment structuring, and compliance with international regulatory requirements. Our expertise covers handling legal, financial, and compliance aspects of international deals, ensuring seamless execution for both startups and investors. --- - Published: 2025-05-26 - Modified: 2025-05-26 - URL: https://treelife.in/faq/can-treelife-help-with-ma-due-diligence/ - FAQ Category: How Treelife Advises on Transactions Yes, Treelife specializes in M&A due diligence, assessing financial, legal, and operational factors before mergers or acquisitions. We ensure a smooth transaction by identifying potential liabilities and ensuring compliance with regulatory requirements. --- - Published: 2025-05-26 - Modified: 2025-05-26 - URL: https://treelife.in/faq/how-does-treelife-ensure-accuracy-in-transaction-documentation/ - FAQ Category: How Treelife Advises on Transactions We draft and review transaction agreements with precision, ensuring that terms are legally sound and aligned with investor interests. Our documentation process is meticulous, covering every aspect of the transaction to prevent disputes. --- - Published: 2025-05-26 - Modified: 2025-05-26 - URL: https://treelife.in/faq/where-does-treelife-provide-investment-support-services/ - FAQ Category: How Treelife Advises on Transactions Treelife offers investment support PAN India through virtual consultations, ensuring accessibility to startups and businesses across the country. Our teams in Mumbai, Delhi, Bangalore, and GIFT City are equipped to handle both domestic and international investment needs. --- - Published: 2025-05-26 - Modified: 2025-05-26 - URL: https://treelife.in/faq/what-is-corporate-governance-and-why-is-it-important/ - FAQ Category: About Lifecycle Assistance Services Corporate governance refers to the system by which companies are directed and controlled. It encompasses policies, regulations, and practices that ensure accountability, transparency, and fairness in a company's relationships with stakeholders. Good governance enhances corporate accountability and mitigates risks, fostering sustainable growth. Treelife provides comprehensive corporate governance support to ensure compliance with legal frameworks and best practices. --- - Published: 2025-05-26 - Modified: 2025-05-26 - URL: https://treelife.in/faq/what-is-fund-accounting-and-why-is-it-essential-for-investors/ - FAQ Category: About Lifecycle Assistance Services Fund accounting is a system that tracks and reports on assets and liabilities specific to investment funds, ensuring clarity and accuracy in NAV calculations, investor reporting, and compliance. Treelife provides fund accounting services to investors, helping maintain transparency and accountability across multiple investment vehicles. --- - Published: 2025-05-26 - Modified: 2025-05-26 - URL: https://treelife.in/faq/what-is-the-role-of-a-registrar-and-transfer-agent-rta/ - FAQ Category: About Lifecycle Assistance Services An RTA manages investor records, tracks transactions, and handles transfer and dematerialization of securities. Treelife collaborates with RTAs to facilitate smooth fund operations and compliance with SEBI regulations, including managing dematerialization processes. --- - Published: 2025-05-26 - Modified: 2025-05-26 - URL: https://treelife.in/faq/what-is-dematerialization-and-how-does-treelife-assist-with-it/ - FAQ Category: About Lifecycle Assistance Services Dematerialization is the process of converting physical securities into electronic format, making them easier to manage and transfer. Treelife assists businesses with the dematerialization process, liaising with custodians and RTAs to ensure compliance with regulatory requirements. --- - Published: 2025-05-26 - Modified: 2025-05-26 - URL: https://treelife.in/faq/what-is-the-importance-of-payroll-management-in-lifecycle-assistance/ - FAQ Category: About Lifecycle Assistance Services Payroll management involves processing employee salaries, tax deductions, and compliance with statutory regulations. Treelife offers payroll management systems and support, ensuring timely and accurate payroll processing while adhering to TDS and tax compliance norms. --- - Published: 2025-05-26 - Modified: 2025-05-26 - URL: https://treelife.in/faq/what-is-the-role-of-corporate-governance-in-strategic-management/ - FAQ Category: About Lifecycle Assistance Services Corporate governance ensures that strategic decisions align with the organization’s values and legal requirements. It also establishes accountability structures for management. Treelife helps businesses develop governance mechanisms that support long-term strategic goals and enhance stakeholder confidence. --- - Published: 2025-05-26 - Modified: 2025-05-26 - URL: https://treelife.in/faq/how-does-treelife-help-with-corporate-governance-and-legal-support/ - FAQ Category: How Treelife Supports Fund Governance & Operations We assist businesses in establishing high standards of governance through drafting policies, conducting governance audits, and offering guidance on compliance with Indian corporate laws. Our team helps set up governance structures, monitor compliance, and provide insights into best practices for corporate governance in India. --- - Published: 2025-05-26 - Modified: 2025-05-26 - URL: https://treelife.in/faq/how-can-treelife-help-investors-with-vendor-and-fund-operations-management/ - FAQ Category: How Treelife Supports Fund Governance & Operations Treelife acts as a Single Point of Contact (SPOC) for managing vendor contracts, compliance, and performance monitoring. For fund operations, we streamline interactions with custodians, RTA, accountants, brokers, and other stakeholders to ensure efficient management and compliance. --- - Published: 2025-05-26 - Modified: 2025-05-26 - URL: https://treelife.in/faq/can-treelife-help-with-itr-filing-and-tax-compliance/ - FAQ Category: How Treelife Supports Fund Governance & Operations Yes, Treelife provides comprehensive tax compliance services, including ITR filing, GST compliance, lower TDS deduction certificate applications, and FATCA reporting. Our tax advisors ensure accurate filing and compliance with Indian tax regulations, minimizing potential legal exposure. --- - Published: 2025-05-26 - Modified: 2025-05-26 - URL: https://treelife.in/faq/how-does-treelife-support-fund-based-accounting/ - FAQ Category: How Treelife Supports Fund Governance & Operations Fund-based accounting involves managing financial transactions according to specific funds or purposes. Treelife assists in setting up accurate accounting frameworks, including private equity fund accounting, ensuring compliance with Indian and international standards. --- - Published: 2025-05-26 - Modified: 2025-05-26 - URL: https://treelife.in/faq/how-can-treelife-help-with-compliance-frameworks-including-sebi-and-rbi-compliance/ - FAQ Category: How Treelife Supports Fund Governance & Operations We assist businesses in complying with regulatory frameworks set by SEBI, RBI, and other authorities, including SEBI cyber security requirements and RBI compliance for financial entities. Our team develops customized compliance frameworks and ensures adherence to evolving regulatory norms. --- - Published: 2025-05-26 - Modified: 2025-05-26 - URL: https://treelife.in/faq/can-treelife-help-with-performance-benchmarking-and-portfolio-valuation/ - FAQ Category: How Treelife Supports Fund Governance & Operations Yes, we provide performance benchmarking to evaluate business efficiency against industry standards and offer portfolio valuation services, including NAV calculation and market value assessment. Our expertise helps funds and businesses make data-driven decisions. --- - Published: 2025-05-26 - Modified: 2025-05-26 - URL: https://treelife.in/faq/where-does-treelife-provide-lifecycle-assistance-services/ - FAQ Category: How Treelife Supports Fund Governance & Operations Treelife provides lifecycle assistance services PAN India through virtual consultations, ensuring that businesses across the country can access expert support. We have dedicated teams in Mumbai, Delhi, Bangalore, and GIFT City, making our services widely accessible. --- - Published: 2025-05-26 - Modified: 2025-05-26 - URL: https://treelife.in/faq/what-is-a-business-exit-strategy-and-why-is-it-important-for-investors/ - FAQ Category: About Exit Support Services A business exit strategy outlines how investors plan to liquidate their investment in a company, maximizing returns while minimizing risks. Effective exit planning ensures timely and profitable exits through various routes such as mergers, acquisitions, IPOs, or secondary sales. Treelife helps investors craft exit strategies aligned with their financial goals. --- - Published: 2025-05-26 - Modified: 2025-05-26 - URL: https://treelife.in/faq/what-types-of-due-diligence-are-involved-in-the-exit-process/ - FAQ Category: About Exit Support Services The exit process involves multiple due diligence types, such as financial due diligence, legal due diligence, tax due diligence, complaince due diligence and vendor due diligence. Treelife conducts comprehensive due diligence audits and prepares detailed due diligence reports to support informed exit decisions. --- - Published: 2025-05-26 - Modified: 2025-05-26 - URL: https://treelife.in/faq/what-is-financial-due-diligence-and-why-is-it-critical-during-exits/ - FAQ Category: About Exit Support Services Financial due diligence evaluates the financial health of the target company, verifying assets, liabilities, revenues, and cash flows. This process helps investors assess risks, validate valuations, and negotiate better terms during exits. Treelife provides expert financial due diligence services with thorough analysis and reporting. --- - Published: 2025-05-26 - Modified: 2025-05-26 - URL: https://treelife.in/faq/what-are-common-exit-strategies-for-investors-in-startups/ - FAQ Category: About Exit Support Services Common exit strategies include Initial Public Offerings (IPOs), mergers and acquisitions (M&A), secondary sales, buybacks, and liquidation. Treelife advises investors on selecting and executing exit strategies that maximize returns and align with market conditions. --- - Published: 2025-05-26 - Modified: 2025-05-26 - URL: https://treelife.in/faq/what-is-the-scope-of-due-diligence-in-mergers-and-acquisitions/ - FAQ Category: About Exit Support Services Due diligence in M&A covers financial audits, legal compliance, operational reviews, commercial viability, and risk assessments. Treelife ensures thorough due diligence to identify potential liabilities and support successful transaction closures. --- - Published: 2025-05-26 - Modified: 2025-05-26 - URL: https://treelife.in/faq/what-is-the-typical-timeline-for-an-investor-exit-process/ - FAQ Category: About Exit Support Services The exit timeline varies based on the chosen exit route, complexity of the transaction, and regulatory requirements. Treelife provides project management support to streamline the exit process, reducing delays and ensuring timely completion. --- - Published: 2025-05-26 - Modified: 2025-05-26 - URL: https://treelife.in/faq/how-does-treelife-support-investors-with-exit-planning/ - FAQ Category: How Treelife Helps You Plan & Execute Your Exit Treelife provides end-to-end exit planning services, including strategic advisory, due diligence, transaction documentation, and tax planning. Our experts guide investors through each phase of the exit process, ensuring smooth transitions and optimal financial outcomes. --- - Published: 2025-05-26 - Modified: 2025-05-26 - URL: https://treelife.in/faq/how-does-treelife-handle-enhanced-due-diligence-and-vendor-due-diligence/ - FAQ Category: How Treelife Helps You Plan & Execute Your Exit Enhanced due diligence involves deeper analysis of compliance, risk, and governance factors, especially in sensitive or complex transactions. Vendor due diligence assesses third-party risks related to suppliers or service providers. Treelife’s specialists conduct both to mitigate risks and ensure a seamless exit process. --- - Published: 2025-05-26 - Modified: 2025-05-26 - URL: https://treelife.in/faq/how-does-treelife-assist-with-tax-planning-during-exits/ - FAQ Category: How Treelife Helps You Plan & Execute Your Exit Exit transactions have significant tax implications. Treelife’s tax advisors develop customized tax-efficient exit plans, including strategies for capital gains tax, transfer pricing, and compliance with Indian tax laws, optimizing investor returns. --- - Published: 2025-05-26 - Modified: 2025-05-26 - URL: https://treelife.in/faq/does-treelife-support-exit-related-legal-due-diligence/ - FAQ Category: How Treelife Helps You Plan & Execute Your Exit Yes, our legal team conducts exit-related legal due diligence, reviewing contracts, intellectual property rights, regulatory approvals, and litigation risks. This helps investors avoid legal pitfalls during exits. --- - Published: 2025-05-26 - Modified: 2025-05-26 - URL: https://treelife.in/faq/where-does-treelife-offer-exit-support-services/ - FAQ Category: How Treelife Helps You Plan & Execute Your Exit Treelife provides exit support services PAN India. Our teams in Mumbai, Delhi, Bangalore, and GIFT City offer localized expertise with national reach. Additionally, we support international investors and cross-border exit transactions, ensuring seamless advisory and execution for global clients. --- - Published: 2025-05-26 - Modified: 2025-05-26 - URL: https://treelife.in/faq/what-is-involved-in-global-expansion-for-startups-and-businesses/ - FAQ Category: About Setting Up Foreign Business Global expansion involves entering new international markets, setting up legal entities, complying with local regulations, and structuring tax-efficient operations. Treelife guides businesses through this process to ensure smooth and compliant expansion. --- - Published: 2025-05-26 - Modified: 2025-05-26 - URL: https://treelife.in/faq/what-are-the-key-limitations-of-tax-planning-in-international-business-setups/ - FAQ Category: About Setting Up Foreign Business Limitations of tax planning include dealing with multiple tax jurisdictions, risks of double taxation, complex transfer pricing rules, and evolving global tax policies. Treelife advises clients on these limitations to optimize their tax position. --- - Published: 2025-05-26 - Modified: 2025-05-26 - URL: https://treelife.in/faq/what-is-transfer-pricing-and-why-is-it-important-for-international-companies/ - FAQ Category: About Setting Up Foreign Business Transfer pricing is the pricing of transactions between related entities in different countries. It is crucial to comply with transfer pricing principles and regulations to avoid tax penalties and disputes. Treelife provides expertise on transfer pricing meaning, methods, and audit preparation. --- - Published: 2025-05-26 - Modified: 2025-05-26 - URL: https://treelife.in/faq/how-does-transfer-pricing-applicability-affect-my-foreign-business-operations/ - FAQ Category: About Setting Up Foreign Business Transfer pricing rules apply when transactions occur between related parties across borders. Compliance with transfer pricing applicability ensures proper documentation and arm’s length pricing, reducing the risk of tax adjustments. Treelife guides you on domestic and international transfer pricing applicability. --- - Published: 2025-05-26 - Modified: 2025-05-26 - URL: https://treelife.in/faq/what-are-the-oecd-transfer-pricing-guidelines-and-how-do-they-impact-business/ - FAQ Category: About Setting Up Foreign Business The OECD transfer pricing guidelines provide internationally accepted standards for transfer pricing compliance. Treelife helps businesses align their transfer pricing policies with these guidelines to meet global tax authority expectations. --- - Published: 2025-05-26 - Modified: 2025-05-26 - URL: https://treelife.in/faq/what-are-the-advantages-and-disadvantages-of-transfer-pricing-for-multinational-companies/ - FAQ Category: About Setting Up Foreign Business Advantages include tax optimization and regulatory compliance, while disadvantages involve increased documentation burden and audit risk. Treelife supports you in balancing these factors through effective transfer pricing strategies. --- - Published: 2025-05-26 - Modified: 2025-05-26 - URL: https://treelife.in/faq/how-can-treelife-assist-with-us-company-registration-and-us-based-companies-operating-in-india/ - FAQ Category: How Treelife Supports Your Global Expansion Trellife provides end-to-end support for US company registration and advises US-based companies looking to establish operations in India, ensuring compliance with both US and Indian regulations. --- - Published: 2025-05-26 - Modified: 2025-05-26 - URL: https://treelife.in/faq/how-does-treelife-support-parent-subsidiary-structuring-and-transfer-pricing-for-global-companies/ - FAQ Category: How Treelife Supports Your Global Expansion We assist in designing optimal parent-subsidiary models, implementing compliant transfer pricing mechanisms, and preparing necessary documentation to minimize tax risks and support seamless global operations. --- - Published: 2025-05-26 - Modified: 2025-05-26 - URL: https://treelife.in/faq/what-is-the-process-for-company-formation-in-dubai-and-offshore-company-formation-in-dubai/ - FAQ Category: How Treelife Supports Your Global Expansion We assist with selecting the appropriate free zone or mainland entity in Dubai, preparing documentation, and handling regulatory filings to ensure timely and compliant offshore company formation in Dubai. --- - Published: 2025-05-26 - Modified: 2025-05-26 - URL: https://treelife.in/faq/how-do-i-register-a-company-in-singapore-and-what-is-the-cost-of-registering-a-company-in-singapore/ - FAQ Category: How Treelife Supports Your Global Expansion Trellife helps with company registration in Singapore by managing all statutory requirements and filings. We also provide transparent cost estimates tailored to your business needs. --- - Published: 2025-05-26 - Modified: 2025-05-26 - URL: https://treelife.in/faq/what-is-transfer-pricing-and-why-is-it-important/ - FAQ Category: About Global Compliances & Transfer Pricing Services Transfer pricing refers to the pricing of transactions between related entities across different tax jurisdictions. It is important to comply with transfer pricing regulations to avoid tax penalties and ensure fair taxation. Treelife provides comprehensive transfer pricing advisory aligned with global standards. --- - Published: 2025-05-26 - Modified: 2025-05-26 - URL: https://treelife.in/faq/what-are-the-common-transfer-pricing-methods-used-by-businesses/ - FAQ Category: About Global Compliances & Transfer Pricing Services Common transfer pricing methods include the Comparable Uncontrolled Price (CUP) method, Resale Price Method, Cost Plus Method, Transactional Net Margin Method (TNMM), and Profit Split Method. Treelife helps you select and implement the appropriate method based on your business model and regulatory requirements. --- - Published: 2025-05-26 - Modified: 2025-05-26 - URL: https://treelife.in/faq/how-does-transfer-pricing-applicability-affect-multinational-companies/ - FAQ Category: About Global Compliances & Transfer Pricing Services Transfer pricing rules apply when transactions occur between related entities across borders. Ensuring transfer pricing applicability means documenting and pricing intercompany transactions at arm’s length, complying with domestic laws and international guidelines such as OECD transfer pricing guidelines. --- - Published: 2025-05-26 - Modified: 2025-05-26 - URL: https://treelife.in/faq/what-is-involved-in-a-transfer-pricing-audit/ - FAQ Category: About Global Compliances & Transfer Pricing Services A transfer pricing audit reviews the pricing and documentation of related-party transactions to verify compliance with applicable tax laws. Treelife supports clients by preparing necessary documentation, defending transfer pricing positions, and managing audit proceedings. --- - Published: 2025-05-26 - Modified: 2025-05-26 - URL: https://treelife.in/faq/what-are-the-oecd-transfer-pricing-guidelines-and-how-do-they-impact-businesses/ - FAQ Category: About Global Compliances & Transfer Pricing Services The OECD transfer pricing guidelines provide internationally accepted principles for setting and documenting transfer prices to prevent tax avoidance. Treelife helps businesses align their transfer pricing policies with these guidelines to meet global compliance standards. --- - Published: 2025-05-26 - Modified: 2025-05-26 - URL: https://treelife.in/faq/how-can-treelife-assist-with-offshore-company-formation-and-registration/ - FAQ Category: How Treelife Manages Transfer Pricing & Global Compliances Trelife provides end-to-end support for offshore company formation, including offshore company registration in Dubai and other jurisdictions. We assist with compliance, documentation, and regulatory filings to ensure smooth setup and ongoing adherence to local laws. --- - Published: 2025-05-26 - Modified: 2025-05-26 - URL: https://treelife.in/faq/what-are-the-steps-to-register-an-offshore-company-in-dubai/ - FAQ Category: How Treelife Manages Transfer Pricing & Global Compliances Registering an offshore company in Dubai involves selecting the appropriate free zone, submitting required documentation, obtaining regulatory approvals, and fulfilling compliance requirements. Treelife guides you through this entire process to minimize delays and risks. --- - Published: 2025-05-26 - Modified: 2025-05-26 - URL: https://treelife.in/faq/how-does-treelife-support-company-registration-in-singapore-and-the-us/ - FAQ Category: How Treelife Manages Transfer Pricing & Global Compliances We assist with company registration in Singapore, managing filings, fees, and compliance. Similarly, Treelife helps with US company registration, including registrations in California and other states, ensuring compliance with all local regulations. --- - Published: 2025-05-26 - Modified: 2025-05-26 - URL: https://treelife.in/faq/how-does-tax-on-foreign-remittance-affect-international-business-operations/ - FAQ Category: How Treelife Manages Transfer Pricing & Global Compliances Tax on foreign remittance involves regulations governing taxes on cross-border payments, including withholding taxes and reporting obligations. Treelife advises clients on navigating tax on foreign remittance to ensure compliance and optimize tax liability. --- - Published: 2025-05-26 - Modified: 2025-05-26 - URL: https://treelife.in/faq/what-is-the-guidance-note-on-transfer-pricing-issued-by-tax-authorities/ - FAQ Category: How Treelife Manages Transfer Pricing & Global Compliances The guidance note provides clarifications and detailed instructions on implementing transfer pricing laws. Treelife helps clients interpret these notes and align their transfer pricing documentation and policies accordingly to avoid disputes. --- - Published: 2025-05-26 - Modified: 2025-05-26 - URL: https://treelife.in/faq/what-types-of-business-entities-can-i-register-in-india/ - FAQ Category: About Setup India Business Services You can register various entities such as Private Limited Company, Limited Liability Partnership (LLP), branch office, liaison office, or a wholly-owned subsidiary. Treelife helps you choose the right structure based on your business goals and regulatory needs. --- - Published: 2025-05-26 - Modified: 2025-05-26 - URL: https://treelife.in/faq/what-is-the-process-for-company-incorporation-in-india/ - FAQ Category: About Setup India Business Services The incorporation process includes name approval, preparation of incorporation documents, filing with the Registrar of Companies (RoC), obtaining Digital Signature Certificates (DSC), and receiving the Certificate of Incorporation. Treelife manages this end-to-end for you. --- - Published: 2025-05-26 - Modified: 2025-05-26 - URL: https://treelife.in/faq/can-foreign-companies-set-up-operations-in-india/ - FAQ Category: About Setup India Business Services Yes, foreign companies can enter India via subsidiaries, branch offices, or liaison offices. Treelife assists with RBI and FEMA compliance, entity registration, and other regulatory approvals required for foreign companies. --- - Published: 2025-05-26 - Modified: 2025-05-26 - URL: https://treelife.in/faq/what-ongoing-regulatory-compliance-should-a-company-in-india-follow/ - FAQ Category: About Setup India Business Services Companies must comply with annual RoC filings, tax returns, labor laws, GST filings, RBI and FEMA regulations (for foreign investments), and corporate governance norms. Treelife provides ongoing compliance management and advisory. --- - Published: 2025-05-26 - Modified: 2025-05-26 - URL: https://treelife.in/faq/what-documents-are-required-for-company-registration-in-india/ - FAQ Category: About Setup India Business Services Required documents include identity and address proofs of directors and shareholders, proof of registered office address, and digital signatures. Treelife guides you on document preparation and verification to ensure smooth registration. --- - Published: 2025-05-26 - Modified: 2025-05-26 - URL: https://treelife.in/faq/what-are-the-benefits-of-registering-a-private-limited-company-in-india/ - FAQ Category: About Setup India Business Services Private Limited Companies enjoy limited liability, easier access to funding, separate legal identity, and better credibility with customers and investors. Treelife helps you leverage these benefits through proper registration and compliance. --- - Published: 2025-05-26 - Modified: 2025-05-26 - URL: https://treelife.in/faq/what-does-setting-up-a-business-in-india-involve/ - FAQ Category: How Treelife Supports Your India Entry Setting up a business in India involves selecting the right legal structure (private limited company, LLP, branch office, liaison office), registering with government authorities, obtaining necessary licenses, and ensuring compliance with RBI/FEMA regulations. Treelife guides you through every step for a hassle-free setup. --- - Published: 2025-05-26 - Modified: 2025-05-26 - URL: https://treelife.in/faq/how-can-treelife-assist-with-company-incorporation-and-registration-in-india/ - FAQ Category: How Treelife Supports Your India Entry We provide end-to-end support for company incorporation, including drafting incorporation documents, filing with the Registrar of Companies (RoC), obtaining Digital Signature Certificates (DSC), and ensuring timely compliance with regulatory requirements. --- - Published: 2025-05-26 - Modified: 2025-05-26 - URL: https://treelife.in/faq/how-does-treelife-assist-with-tax-registration-and-compliance-in-india/ - FAQ Category: How Treelife Supports Your India Entry We support GST registration, Income Tax Permanent Account Number (PAN) and Tax Deduction and Collection Account Number (TAN) registration, and ongoing tax filings, ensuring full compliance with Indian tax laws. --- - Published: 2025-05-26 - Modified: 2025-05-26 - URL: https://treelife.in/faq/how-does-treelife-help-with-tax-legal-and-accounting-advisory-in-india/ - FAQ Category: How Treelife Supports Your India Entry Our experts provide tax planning, GST registration and compliance, income tax filing, and legal advisory tailored for your Indian operations. We ensure your business adheres to Indian tax laws while optimizing financial efficiency. --- - Published: 2025-05-26 - Modified: 2025-05-26 - URL: https://treelife.in/faq/what-ongoing-compliance-and-regulatory-support-does-treelife-offer/ - FAQ Category: How Treelife Supports Your India Entry We assist with annual filings, RBI/FEMA compliance, labor laws, accounting standards, and corporate governance requirements. Treelife’s continuous compliance support keeps your Indian business aligned with evolving regulations. --- - Published: 2025-05-26 - Modified: 2025-05-26 - URL: https://treelife.in/faq/does-treelife-help-with-setting-up-branch-or-liaison-offices-in-india/ - FAQ Category: How Treelife Supports Your India Entry Yes, we assist foreign companies in setting up branch and liaison offices, including necessary registrations, licenses, and compliance with RBI and FEMA guidelines. --- - Published: 2025-05-26 - Modified: 2025-05-26 - URL: https://treelife.in/faq/can-treelife-help-with-post-incorporation-services-like-secretarial-and-accounting-compliance/ - FAQ Category: How Treelife Supports Your India Entry Absolutely. After incorporation, we provide secretarial compliance, annual filings, bookkeeping, tax compliance, and other regulatory services to keep your business legally sound and operationally efficient. --- - Published: 2025-05-26 - Modified: 2025-05-26 - URL: https://treelife.in/faq/what-is-gift-ifsc-and-why-is-it-important-for-businesses/ - FAQ Category: About GIFT IFSC Setup Services Gujarat International Finance Tec-City (GIFT) International Financial Services Centre (IFSC) is a designated financial hub offering global business advantages such as tax benefits, regulatory ease, and access to international financial markets. It enables businesses to operate under a specialized legal and tax regime. --- - Published: 2025-05-26 - Modified: 2025-05-26 - URL: https://treelife.in/faq/what-regulatory-and-tax-advisory-services-do-you-offer-for-gift-ifsc-businesses/ - FAQ Category: About GIFT IFSC Setup Services We guide clients through the complex regulatory landscape, including compliance with IFSCA regulations, GST, income tax, and other applicable laws to optimize tax efficiency while maintaining full compliance. --- - Published: 2025-05-26 - Modified: 2025-05-26 - URL: https://treelife.in/faq/what-types-of-businesses-can-be-set-up-in-gift-ifsc/ - FAQ Category: About GIFT IFSC Setup Services GIFT IFSC supports a wide range of businesses including banking, fund management, insurance, capital markets, and financial advisory services. Treelife helps you evaluate and select the most suitable structure for your business. --- - Published: 2025-05-26 - Modified: 2025-05-26 - URL: https://treelife.in/faq/how-long-does-it-take-to-set-up-a-business-in-gift-ifsc/ - FAQ Category: About GIFT IFSC Setup Services Setup timelines vary based on the complexity of the business and regulatory approvals required. Treelife expedites the process through proactive coordination with GIFT IFSC authorities and compliance teams. --- - Published: 2025-05-26 - Modified: 2025-05-26 - URL: https://treelife.in/faq/are-there-tax-benefits-to-operating-in-gift-ifsc/ - FAQ Category: About GIFT IFSC Setup Services Yes, GIFT IFSC offers multiple tax incentives including exemptions or reduced rates on income tax, GST, stamp duty, and other levies, designed to attract global financial services businesses. --- - Published: 2025-05-26 - Modified: 2025-05-26 - URL: https://treelife.in/faq/how-can-treelife-assist-with-setting-up-a-business-in-gift-ifsc/ - FAQ Category: How Treelife Helps You Set Up in GIFT IFSC Treelife provides comprehensive support, including feasibility analysis, entity incorporation, regulatory approvals, tax structuring, and post-setup compliance to ensure your business operates smoothly in GIFT IFSC. --- - Published: 2025-05-26 - Modified: 2025-05-26 - URL: https://treelife.in/faq/what-ancillary-services-does-treelife-provide-for-ongoing-gift-ifsc-operations/ - FAQ Category: How Treelife Helps You Set Up in GIFT IFSC Our ancillary services include managing compliance filings, liaison with regulators, handling accounting and reporting requirements, and supporting operational needs to ensure your business remains compliant and efficient. --- - Published: 2025-05-26 - Modified: 2025-05-26 - URL: https://treelife.in/faq/does-treelife-provide-ongoing-compliance-support-after-gift-ifsc-setup/ - FAQ Category: How Treelife Helps You Set Up in GIFT IFSC Yes, we provide continuous regulatory and tax compliance support, ensuring your business stays aligned with changing regulations and operates without disruptions. --- - Published: 2025-05-26 - Modified: 2025-05-26 - URL: https://treelife.in/faq/can-treelife-assist-foreign-companies-interested-in-establishing-a-presence-in-gift-ifsc/ - FAQ Category: How Treelife Helps You Set Up in GIFT IFSC Absolutely. We help foreign companies with jurisdictional analysis, entity incorporation, regulatory approvals, and tax planning to facilitate their entry into GIFT IFSC. --- - Published: 2025-05-26 - Modified: 2025-05-26 - URL: https://treelife.in/faq/how-does-treelife-ensure-a-smooth-gift-ifsc-setup-experience/ - FAQ Category: How Treelife Helps You Set Up in GIFT IFSC Our expert team offers end-to-end project management, thorough feasibility studies, regulatory navigation, and post-setup assistance, making your GIFT IFSC journey efficient and hassle-free. --- - Published: 2025-05-19 - Modified: 2025-05-19 - URL: https://treelife.in/faq/what-are-virtual-cfo-vcfo-services/ - FAQ Category: About Virtual CFO Virtual CFO services provide outsourced financial leadership and management for startups and small businesses. Treelife’s VCFO offerings include accounting and bookkeeping services, financial reporting, budgeting, cash flow management, and strategic financial planning — all designed to help your business grow with expert guidance from experienced Chartered Accountants. --- - Published: 2024-07-31 - Modified: 2024-12-18 - URL: https://treelife.in/faq/how-is-your-pricing-model/ - FAQ Category: Pricing Treelife offers a flexible and transparent pricing model tailored to the specific needs of your business. Our pricing is structured based on the scope and complexity of the services required and works on the following basis: project-based, where there is a one-time fee; retainer, with ongoing services for a fixed monthly fee; hourly, based on the number of hours worked; and an equity sharing model, where payment is made through a share of equity in your business. This approach ensures you receive the best value for your investment. --- - Published: 2024-07-31 - Modified: 2024-12-18 - URL: https://treelife.in/faq/are-there-any-hidden-fees-or-additional-costs/ - FAQ Category: Pricing No, Treelife believes in transparency and ensures there are no hidden fees or unexpected charges. All costs are clearly outlined in our engagement proposal, and any additional expenses will be discussed and approved by you before being incurred. --- - Published: 2024-07-31 - Modified: 2024-12-18 - URL: https://treelife.in/faq/what-is-the-typical-turnaround-time-for-your-services/ - FAQ Category: Pricing The turnaround time for our services depends on the complexity and scope of the project. During the initial consultation, we provide an estimated timeline based on your specific needs and ensure timely delivery through efficient project management. --- - Published: 2024-07-31 - Modified: 2024-12-18 - URL: https://treelife.in/faq/what-is-your-payment-schedule/ - FAQ Category: Pricing Our payment schedule is designed to be convenient and flexible. Typically, we operate on a milestone-based payment system, where payments are made at key stages of the project. We also offer customized payment plans based on your specific requirements. --- - Published: 2024-07-31 - Modified: 2024-12-18 - URL: https://treelife.in/faq/how-can-i-pay-you/ - FAQ Category: Pricing Treelife accepts various payment methods to ensure ease and convenience for our clients. You can pay us via bank transfer, or other electronic payment methods. Detailed payment instructions will be provided upon engagement. --- - Published: 2024-07-25 - Modified: 2024-12-18 - URL: https://treelife.in/faq/can-treelife-assist-with-international-market-entry/ - FAQ Category: About Services Yes, Treelife offers extensive support for businesses looking to expand globally. Our services include jurisdiction evaluation, regulatory assessment, and execution support for market entry, ensuring compliance and smooth operations in new markets. --- - Published: 2024-07-25 - Modified: 2024-12-18 - URL: https://treelife.in/faq/can-treelife-assist-with-setting-up-a-business-in-india/ - FAQ Category: About Services Yes, Treelife provides end-to-end support for setting up a business in India. Our services include market entry strategy, company registration, regulatory compliance, and ongoing back office support to ensure a smooth and successful setup. --- - Published: 2024-07-25 - Modified: 2024-12-19 - URL: https://treelife.in/faq/i-am-based-out-of-a-location-where-treelife-does-not-have-an-office/ - FAQ Category: How do we operate? Treelife operates seamlessly with clients across various locations whether domestic or international through virtual communication and collaboration tools. We conduct meetings via video calls, share documents electronically, and stay in constant touch through emails and messaging platforms to ensure smooth operations regardless of your location. --- - Published: 2024-07-25 - Modified: 2024-12-18 - URL: https://treelife.in/faq/what-tools-or-technologies-are-you-equipped-with/ - FAQ Category: How do we operate? Treelife is equipped with a comprehensive technology stack to ensure effective and efficent way to deliver our services. For bookkeeping, we use Tally, QuickBooks, Zoho, and Xero. Our data management is handled through Slack, Dropbox, and Google Drive. For payment processing, we utilize platforms like Kodo, Razorpay, Keka, and PayPal. These tools enable us to provide high-quality, reliable services tailored to your business needs. --- - Published: 2024-07-25 - Modified: 2024-12-18 - URL: https://treelife.in/faq/who-will-manage-my-account/ - FAQ Category: How do we operate? Your account will be managed by a dedicated SPOC who will be your primary point of contact. This person will coordinate with our team of experts to ensure all your needs are met and provide regular updates on the progress of your projects. --- - Published: 2024-07-25 - Modified: 2024-12-18 - URL: https://treelife.in/faq/do-i-need-to-physically-sign-any-documents/ - FAQ Category: How do we operate? No, physical signatures are generally not required. Treelife uses secure electronic signature platforms to facilitate the signing of documents, making the process quick and convenient for our clients. However, if physical signatures are necessary, we will coordinate the process with you. --- - Published: 2024-07-25 - Modified: 2024-12-18 - URL: https://treelife.in/faq/how-do-you-ensure-data-security-and-confidentiality/ - FAQ Category: How do we operate? Treelife prioritizes the security and confidentiality of your data. We use secure servers, encryption, and access controls to protect your information. Additionally, our team adheres to strict confidentiality agreements and industry best practices to safeguard your data. --- - Published: 2024-07-23 - Modified: 2024-12-18 - URL: https://treelife.in/faq/what-is-transaction-services/ - FAQ Category: About Services Our transaction services encompass advisory and documentation support for various financial transactions, including private equity/venture capital (PE/VC) deals, mergers and acquisitions (M&A), and venture debt. We ensure smooth and compliant transactions, from due diligence to closure. --- - Published: 2024-07-23 - Modified: 2024-12-18 - URL: https://treelife.in/faq/do-you-help-in-raising-funds/ - FAQ Category: About Services Yes, Treelife supports startups and businesses during their fundraising process. While we are not an investor or fund, we offer comprehensive services such as preparing investor-ready documents, conducting due diligence, financial modeling, and providing strategic advisory to help you successfully raise the capital you need. --- - Published: 2024-07-23 - Modified: 2024-12-18 - URL: https://treelife.in/faq/what-sets-treelife-apart-from-other-service-providers/ - FAQ Category: About Treelife Treelife stands out due to our integrated approach, combining legal, financial, and compliance expertise under one roof. Our personalized service and deep domain expertise of the Indian market ensure that we deliver solutions that are both strategic and practical. --- - Published: 2024-07-23 - Modified: 2024-12-18 - URL: https://treelife.in/faq/what-is-your-experience-of-working-with-investors-and-aifs/ - FAQ Category: About Treelife Treelife has a robust track record of working with investors and Alternative Investment Funds (AIFs). We offer comprehensive support for fund setup, tax structuring, SEBI applications, due diligence, and ongoing compliance, ensuring smooth operations and successful investments. --- - Published: 2024-07-23 - Modified: 2024-12-18 - URL: https://treelife.in/faq/have-you-worked-with-startups-before/ - FAQ Category: About Treelife Yes, we have extensive experience working with startups across various industries. We understand the unique challenges faced by startups and provide tailored solutions to support their growth, from incorporation to fundraising and beyond. --- - Published: 2024-07-23 - Modified: 2024-12-18 - URL: https://treelife.in/faq/what-is-the-profile-of-the-members-working-at-treelife/ - FAQ Category: About Treelife Our team at Treelife is made up of experienced professionals, including lawyers, Chartered Accountants (CAs), and Company Secretaries (CS), with diverse backgrounds in finance, law, compliance, and business advisory. Each member brings specialized knowledge and practical expertise to help our clients navigate complex legal and financial landscapes effectively. --- - Published: 2024-07-23 - Modified: 2025-05-28 - URL: https://treelife.in/faq/what-does-treelife-do/ - FAQ Category: About Treelife Treelife provides comprehensive legal, financial, and compliance services tailored to the needs of startups, investors, and businesses. Our services include Virtual CFO, legal support, secretarial compliance, tax and regulatory advisory, and assistance with global market entry. --- - Published: 2024-07-21 - Modified: 2024-12-19 - URL: https://treelife.in/faq/i-am-just-a-startup-i-need-all-services-can-you-help-me/ - FAQ Category: About Services Absolutely! Treelife specializes in supporting startups with a wide range of services. From legal support and virtual CFO services to secretarial compliance and tax advisory, we provide end-to-end solutions to help your startup grow and succeed. --- ---