In this episode of the Thrifty Titans Podcast, we catch up with LegalWiz.in founder Shrijay Sheth to unravel the complexities of being an entrepreneur or content creator in India. We delve into topics such as registration for startup India, indispensable legal documents every founder needs, and navigating the landscape of intellectual property rights in India. Additionally, we explore whether an employee can moonlight as a part-time entrepreneur and much more.
We also discuss when to consider registering an IP in India, understanding the differences between trademarks, patents, and copyrights under India copyright law, strategies to report IP infringement, and the skyrocketing popularity of NFTs.
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00:00:09
Saikat Pyne: Hello. I'm sa marketer, creative and all around Alpha nerd.
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Saikat Pyne: Welcome to the you incorporated podcast On this show, I
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Saikat Pyne: catch up with some truly bad ass entrepreneurs, business leaders,
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Saikat Pyne: marketers and content creators to discuss thoughts, stories and ideas
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Saikat Pyne: at the intersection of business influence and design. If you
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Saikat Pyne: want to stay ahead of the curve and build your
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Saikat Pyne: brand your voice your way, you're in the right place.
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Saikat Pyne: Hello. Hello. Welcome to the you Incorporated podcast. Please join
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Saikat Pyne: me in welcoming Fija, saith the founder of legal wills
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Saikat Pyne: dot i n a leading legal trade startup that empowers
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Saikat Pyne: small businesses, startups and M SME s across India with
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Saikat Pyne: their day to day legal and compliance requirements. Shrier is
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Saikat Pyne: an E-commerce veteran with over a decade of experience in
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Saikat Pyne: Silicon Valley.
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Saikat Pyne: He has worked extensively in E-commerce and legal tech startups
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Saikat Pyne: both in India and in the US. Welcome to the
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Shrijay Sheth: podcast feature. Thanks a lot for having me on the podcast.
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Saikat Pyne: So today we are discussing about the entrepreneurs legal toolkit.
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Saikat Pyne: How can we help them navigate the legalities of owning
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Saikat Pyne: a business, owning a creative asset and protecting the self-interest
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Saikat Pyne: in India and overseas?
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Saikat Pyne: So tell me if I have a business idea in mind,
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Saikat Pyne: how do I go about registering a business? What are
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Saikat Pyne: the things I should keep in mind? So there
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Shrijay Sheth: are various ways that you can actually register and start
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Shrijay Sheth: a business in India. If we simply talk about the
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Shrijay Sheth: structures that are available, that would broadly be a proprietorship,
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Shrijay Sheth: a partnership, a private limited company and an l LP structure.
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Shrijay Sheth: Apart from the other structures which are available as a
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Shrijay Sheth: not for profit structures like Section eight and so on,
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Shrijay Sheth: so forth, largely if we
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Shrijay Sheth: talk about very small businesses or people who are doing
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Shrijay Sheth: a side hustle people who are taking up commercial activities
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Shrijay Sheth: on a smaller scale, proprietorship usually is the leanest structure
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Shrijay Sheth: that is available so you can simply register as an
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Shrijay Sheth: M SME or a G S T registered business, and
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Shrijay Sheth: you can call yourself a proprietor and a proprietorship. Then
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Shrijay Sheth: it becomes very lean to start that business. Also, to
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Shrijay Sheth: maintain that business in a much simpler fashion
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Shrijay Sheth: is your entire gains lump into your own personal income taxes,
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Shrijay Sheth: and so you don't really have to worry about a
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Shrijay Sheth: lot of different compliance moving on to something where you
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Shrijay Sheth: have a partner in place or you are more than
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Shrijay Sheth: one people, then you can think of a partnership, which
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Shrijay Sheth: is also a very lean structure, and, uh, doesn't have
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Shrijay Sheth: a lot of compliance is associated with that now. The
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Shrijay Sheth: drawback with both of these is you have an unlimited liability.
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Shrijay Sheth: And so what happens is if you
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Shrijay Sheth: have a genuine business loss, that kind of gets carried
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Shrijay Sheth: forward into your personal assets and that can be recovered
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Shrijay Sheth: by selling of your personal assets. So that is why
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Shrijay Sheth: a lot of startups and New Age businesses where there
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Shrijay Sheth: is a significant amount of risk involved, they would rather
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Shrijay Sheth: want to go with a more corporate structure where there
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Shrijay Sheth: is a limited liability of the losses or limited liability
00:03:40
Shrijay Sheth: to the entrepreneurs. And in those structures are typically an
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Shrijay Sheth: L LP or a private limited company, where, in an
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Shrijay Sheth: L
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Shrijay Sheth: P, is an extended version of a partnership firm where
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Shrijay Sheth: it gets the benefit of a partnership firm and it
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Shrijay Sheth: doesn't have a lot of compliance as compared to a
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Shrijay Sheth: private limited company. And L LP can be structured by
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Shrijay Sheth: having a partnership deed in place and l LP did
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Shrijay Sheth: in place, and and that still provides you a lot
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Shrijay Sheth: of benefits, like limited liability or perpetuity of existence of
00:04:06
Shrijay Sheth: the business, like a private, limited company. The most refined
00:04:09
Shrijay Sheth: structure Definitely a company structure where in
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Shrijay Sheth: you could be a private, limited, public limited. Or, if
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Shrijay Sheth: you are a solo premier but still want to get
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Shrijay Sheth: the advantage of corporate structure. Then you can go with
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Shrijay Sheth: an O PC, which is a one person company. So
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Shrijay Sheth: these are typically the structures that you have available to you. Now,
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Shrijay Sheth: when you are thinking of these structures, one thing that
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Shrijay Sheth: you should keep in mind is, what is your risk appetite?
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Shrijay Sheth: How much risk exposure does your business have? And do
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Shrijay Sheth: you genuinely want to protect that business? Risk getting to
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Shrijay Sheth: a personal wealth or not?
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Shrijay Sheth: Because most of the businesses that we think of they
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Shrijay Sheth: don't really have that much of risk involved in that.
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Shrijay Sheth: And so if that's not the case, then why to
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Shrijay Sheth: go with a very complex structure where you have a
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Shrijay Sheth: lot of compliance requirements and audit requirement, which is mandatory
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Shrijay Sheth: in case of the company structure, And if it is
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Shrijay Sheth: an L LP, then Obviously, if you cross a certain
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Shrijay Sheth: amount of volume in the business, so really, it becomes
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Shrijay Sheth: a function of assessing different things, which is mainly what
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Shrijay Sheth: is the taxation structure.
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Shrijay Sheth: Is the risk appetite and the and the risk involved
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Shrijay Sheth: in the business? What is the cost of compliance and noncompliance?
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Shrijay Sheth: How quickly can you start and dissolve the business? What
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Shrijay Sheth: is the cost of maintenance of the business and all
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Shrijay Sheth: of these things? So really assessing all of these different things,
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Shrijay Sheth: one should really pick for the structure which suits his
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Shrijay Sheth: or her her own requirements in the best possible way.
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Shrijay Sheth: But these are broadly speaking, the structures that are available
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Shrijay Sheth: in India. That was
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Saikat Pyne: very comprehension,
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Saikat Pyne: but I'm sure, to many of our listeners, very overwhelming
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Saikat Pyne: as well. So let us try and break that down.
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Saikat Pyne: Let us try and get slightly deeper
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Shrijay Sheth: into it. Let's break it down. So the first thing
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Shrijay Sheth: first is whether you want to scale up your agency
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Shrijay Sheth: very quickly or not. If you would want to scale
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Shrijay Sheth: up the agency very quickly and you have business risk
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Shrijay Sheth: associated with that, whether you have a lot of payments
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Shrijay Sheth: that are Inco collectibles, whether that can really hamper your
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Shrijay Sheth: personal wealth.
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Shrijay Sheth: Not the second aspect to look at is, Are you
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Shrijay Sheth: trying to create a lot of credibility around your business
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Shrijay Sheth: structure and and if that matters to your employees or
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Shrijay Sheth: your hiring process, where they see yourself established more as
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Shrijay Sheth: a private, limited company? In some cases, if you are
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Shrijay Sheth: bidding for the government contract or if you're bidding for
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Shrijay Sheth: large scale projects, they would rather want you to be
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Shrijay Sheth: an a private, limited company, so that could be another option.
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Shrijay Sheth: Apart from that, let's suppose you have a lot of
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Shrijay Sheth: capital requirement and that capital requirement can be fulfilled in
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Shrijay Sheth: terms of either a bank loan or an equity based
00:06:34
Shrijay Sheth: financing from a third party financier. In those cases, definitely
00:06:37
Shrijay Sheth: they don't want to get themselves exposed to an unlimited liability.
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Shrijay Sheth: And that is why regularly or generally a private equity
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Shrijay Sheth: or a outside funding in terms of equity financing happens
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Shrijay Sheth: strictly in an L LP or a private, limited company fashion.
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Shrijay Sheth: So that's one side of the aspect, right?
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Shrijay Sheth: The second side of the aspect is is, let's say,
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Shrijay Sheth: if you are starting up really small. If you have
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Shrijay Sheth: a couple of projects that you are managing on your
00:07:02
Shrijay Sheth: own or with a limited staff if you if you
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Shrijay Sheth: don't have really a lot of risk exposure in the business,
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Shrijay Sheth: if you don't inherit a lot of in terms of
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Shrijay Sheth: whether the campaigns go wrong or the creatives go wrong
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Shrijay Sheth: and that can jeopardise your company's reputation or a client
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Shrijay Sheth: company suing you
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Shrijay Sheth: for those kind of mishaps, so in in those cases
00:07:22
Shrijay Sheth: it is always better to keep it very lean when
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Shrijay Sheth: you don't have to spend a lot of money and
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Shrijay Sheth: really energies in terms of keeping your business compliant, you
00:07:31
Shrijay Sheth: don't have a lot of statutory and mandates around, keeping
00:07:35
Shrijay Sheth: your books of accounts and filing the returns and making
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Shrijay Sheth: sure that your balance sheet and income statements are audited
00:07:41
Shrijay Sheth: every
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Shrijay Sheth: and so on so forth. So if you are really
00:07:43
Shrijay Sheth: a small business which does not have a lot of
00:07:45
Shrijay Sheth: risk involved in it, and it's fairly a small size
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Shrijay Sheth: sort of a modest start, then I would probably propose
00:07:51
Shrijay Sheth: to be a sole proprietorship or a partnership in that situation,
00:07:55
Shrijay Sheth: because then you don't also have to unnecessarily spend time,
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Shrijay Sheth: money and energy around keeping it compliant, or you can
00:08:00
Shrijay Sheth: really focus more on your creative side of the work
00:08:03
Shrijay Sheth: rather than making sure that you
00:08:05
Shrijay Sheth: are keeping it legally compliant again. Assessing these situations, I
00:08:08
Shrijay Sheth: would probably propose that you go with more structured way
00:08:12
Shrijay Sheth: like a company in l LP versus something which is
00:08:14
Shrijay Sheth: more lean, which is more flexible, which doesn't really require
00:08:17
Shrijay Sheth: a lot of energy to maintain it, which is the structures,
00:08:20
Shrijay Sheth: like a sole proprietorship or maybe a partnership. In that case,
00:08:23
Shrijay Sheth: if we have more than one partner is into it,
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Shrijay Sheth: he
00:08:25
Saikat Pyne: spoke about the word liability,
00:08:29
Saikat Pyne: limited liability partnership. L LP. So I know what that
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Saikat Pyne: means in English. Liability is fundamentally about If something goes wrong,
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Saikat Pyne: you're liable for it right now.
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Saikat Pyne: Could you translate what liability means in English when you
00:08:48
Saikat Pyne: go for a limited liability partnership? An L LP? What
00:08:51
Saikat Pyne: does liability mean? What does liability cover? What does it
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Saikat Pyne: not cover?
00:08:55
Shrijay Sheth: So understanding the liability aspect or limited liability aspect of
00:08:59
Shrijay Sheth: the of the business structures? Let's really understand what a
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Shrijay Sheth: company or an L LP is versus a sole proprietorship, right?
00:09:06
Shrijay Sheth: So a private limited company
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Shrijay Sheth: has a separate legal existence and what does that mean
00:09:12
Shrijay Sheth: is in the books of law? It is a different
00:09:15
Shrijay Sheth: person than the owners of the company, right? It's a
00:09:18
Shrijay Sheth: virtual existence. Basically, that the company has and what it
00:09:21
Shrijay Sheth: allows by having that virtual existence in the books of
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Shrijay Sheth: law is the company can enter into contracts. The company
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Shrijay Sheth: can
00:09:30
Shrijay Sheth: get sued or sue somebody in its own name, or
00:09:34
Shrijay Sheth: the company can actually create liabilities in terms of financial liabilities,
00:09:38
Shrijay Sheth: let's say bank loans or other liabilities. For example, if
00:09:42
Shrijay Sheth: you can't indemnify yourself if a mishap if a genuine
00:09:45
Shrijay Sheth: mishap happens in the business, so all of these things
00:09:49
Shrijay Sheth: really create a liability for the business.
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Shrijay Sheth: Now that is strictly a business liability. You are not
00:09:55
Shrijay Sheth: doing any illegal activity in the business. The activities are
00:09:59
Shrijay Sheth: still fairly legal in nature, but at the same time,
00:10:02
Shrijay Sheth: you can still
00:10:04
Shrijay Sheth: create losses for yourself in the business, right? Every business
00:10:07
Shrijay Sheth: is is not always profitable, And so when we say
00:10:10
Shrijay Sheth: a limited liability, what does that mean? Is by definition
00:10:13
Shrijay Sheth: in virtue, a private limited company or an L LP
00:10:16
Shrijay Sheth: being a separate legal entity?
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Shrijay Sheth: The liability of the business does not carry forward to
00:10:23
Shrijay Sheth: the owners of the business. And so what does that
00:10:25
Shrijay Sheth: mean is, if there is a genuine business loss,
00:10:29
Shrijay Sheth: it cannot sell off the personal properties of the owners
00:10:33
Shrijay Sheth: to repay that debt versus if you are a proprietorship
00:10:37
Shrijay Sheth: or if you are a partnership, then obviously your business
00:10:41
Shrijay Sheth: loss carries forward to your personal assets, and in that
00:10:43
Shrijay Sheth: case you have to be personally liable to pay off
00:10:48
Shrijay Sheth: the business debts. And so that is what the whole
00:10:51
Shrijay Sheth: rationale of being a
00:10:52
Shrijay Sheth: separate legal entity and thus getting a benefit of being
00:10:56
Shrijay Sheth: limited liability for the business losses versus in case of proprietorship,
00:11:01
Shrijay Sheth: it carries forward. And it does not limit your liabilities
00:11:04
Shrijay Sheth: to the business but also carries forward to your personal well.
00:11:07
Shrijay Sheth: How do I even register a sole proprietor in India
00:11:10
Shrijay Sheth: for registering a sole proprietorship? You have to be a proprietor, right?
00:11:14
Shrijay Sheth: You are basically
00:11:15
Shrijay Sheth: a single person who wants to start a business or
00:11:18
Shrijay Sheth: commercial activity. You can register your sole proprietorship very simply
00:11:22
Shrijay Sheth: by either registering under the M SME rather or O. D.
00:11:25
Shrijay Sheth: M registration, or you also can call yourself sole proprietor
00:11:29
Shrijay Sheth: if you have a G S T registration to yourself.
00:11:31
Shrijay Sheth: There are various ways to just get a simple government
00:11:34
Shrijay Sheth: registration O D M certificate or a G s t registration.
00:11:38
Shrijay Sheth: And you can open your bank account in the name
00:11:40
Shrijay Sheth: of the sole proprietorship business and start trading into it.
00:11:44
Shrijay Sheth: So it is as simple as that. A lot of times,
00:11:46
Shrijay Sheth: when you when you want to open a bank account,
00:11:49
Shrijay Sheth: they depending on the state that you are in, they
00:11:51
Shrijay Sheth: might also want to get a certificate.
00:11:54
Shrijay Sheth: Get to accompany that. But generally, starting a sole proprietorship
00:11:57
Shrijay Sheth: is a matter of as simple as registering yourself under
00:12:01
Shrijay Sheth: the MS MS or a G S T act and
00:12:03
Shrijay Sheth: you are on. I think
00:12:04
Saikat Pyne: it's pretty clear that if you are two people or
00:12:08
Saikat Pyne: a bunch of people trying to open a company that
00:12:11
Saikat Pyne: you would go for a partnership, then the legal sense
00:12:14
Saikat Pyne: of the term does it have to be two founders
00:12:16
Saikat Pyne: of the company or multiple as well.
00:12:18
Shrijay Sheth: Uh, there can be two or multiple in a partnership,
00:12:21
Shrijay Sheth: and so anything
00:12:23
Shrijay Sheth: either a partnership or an L LP or a private,
00:12:27
Shrijay Sheth: limited company, they would always have two or more people.
00:12:30
Shrijay Sheth: Now there are limitations for example, if you are a private,
00:12:33
Shrijay Sheth: limited company, then you can only have as much as
00:12:35
Shrijay Sheth: 200 members to your share subscription for an l LP.
00:12:39
Shrijay Sheth: There is no bar to it.
00:12:41
Shrijay Sheth: Maximum limit depends, but the bare minimum for a partnership.
00:12:44
Shrijay Sheth: Private Limited or an L LP, it has to be
00:12:47
Shrijay Sheth: two or more for an O PC. Obviously, it is
00:12:50
Shrijay Sheth: very self explanatory that it is a one person company,
00:12:52
Shrijay Sheth: and so there is only one shareholder and director in
00:12:55
Shrijay Sheth: that company. When
00:12:56
Saikat Pyne: is it a right time for me
00:12:59
Saikat Pyne: to go from being a sole trader ship or a
00:13:03
Saikat Pyne: partnership form to a private, limited company or an L LP?
00:13:09
Saikat Pyne: What are the factors governing that?
00:13:11
Shrijay Sheth: It's a sole proprietor driven business? You only have one
00:13:15
Shrijay Sheth: owner to the business. Obviously, to convert that to any
00:13:18
Shrijay Sheth: of the others, you have to have a second member
00:13:20
Shrijay Sheth: or an owner added to that business. So that is
00:13:23
Shrijay Sheth: a primary requirement from a partnership to L. LP. Also,
00:13:26
Shrijay Sheth: if you are a partnership, you already have two or
00:13:28
Shrijay Sheth: more owners to your business. Now, whether to opt for
00:13:32
Shrijay Sheth: an L LP or a
00:13:34
Shrijay Sheth: private limited company again going back to the original conversation.
00:13:37
Shrijay Sheth: The aspects about the taxation, for example, a private, limited company,
00:13:42
Shrijay Sheth: is taxed, if at all. It is under the corporate
00:13:45
Shrijay Sheth: tax structure. It's lower, taxed in and around 25% versus
00:13:49
Shrijay Sheth: an L. LP in a partnership is 30% tax right away. However,
00:13:53
Shrijay Sheth: if you are distributing the uh income in terms of
00:13:56
Shrijay Sheth: dividend for a private, limited company, then there is also
00:13:59
Shrijay Sheth: a distribution which attracts taxes. And so it gets a
00:14:03
Shrijay Sheth: little higher with that. So depending on what your situation is,
00:14:07
Shrijay Sheth: the second thing is, if you are taking an external
00:14:09
Shrijay Sheth: funding now, the basic structure of an L LP is
00:14:12
Shrijay Sheth: still a partnership and partnership lead driven structure. And so
00:14:17
Shrijay Sheth: there are rules and responsibilities of the partners,
00:14:19
Shrijay Sheth: as opposed to that. A private, limited company, the ownership
00:14:23
Shrijay Sheth: is defined as a share capital of the company, where
00:14:26
Shrijay Sheth: in the management of the company is defined by the directors.
00:14:29
Shrijay Sheth: So when you want to have an arm's length distance
00:14:31
Shrijay Sheth: between the ownership and the management to give you a
00:14:34
Shrijay Sheth: simpler example, a public limited company like reliance, if you
00:14:37
Shrijay Sheth: own one share of reliance, you're still owner of the company.
00:14:40
Shrijay Sheth: But do you get any benefits or privileges to make
00:14:43
Shrijay Sheth: decisions on behalf of the
00:14:45
Shrijay Sheth: company? You don't because you are not a director of
00:14:47
Shrijay Sheth: the company. So if you need that clarity between the
00:14:50
Shrijay Sheth: ownership and the directorship at that point of time, you
00:14:52
Shrijay Sheth: would rather go to a private, limited company. Now, in
00:14:55
Shrijay Sheth: a practical sense, how that translates is if you are
00:14:59
Shrijay Sheth: raising an external fund against the dilution in the equity
00:15:02
Shrijay Sheth: or the ownership of the business, then because it is
00:15:05
Shrijay Sheth: structured as a share capital and it is highly transferable
00:15:09
Shrijay Sheth: as compared to the ownership
00:15:10
Shrijay Sheth: of an L LP. Usually your private equity firms or
00:15:13
Shrijay Sheth: your V CS would really appreciate it being a private,
00:15:17
Shrijay Sheth: limited company than an L LP. So that's another case
00:15:20
Shrijay Sheth: scenario to kind of weigh the options apart from that. Obviously,
00:15:23
Shrijay Sheth: we talked about the the ownership rights versus the management rights.
00:15:27
Shrijay Sheth: We talked about the taxation. We have limited liability feature,
00:15:30
Shrijay Sheth: which is available in both L LP and Private Limited Company.
00:15:33
Shrijay Sheth: There are compliance requirements, which are much higher,
00:15:35
Shrijay Sheth: a private limited company, and a mandatory statutory audit, as
00:15:39
Shrijay Sheth: opposed to an L. LP does not have to have
00:15:41
Shrijay Sheth: an audit until it crosses certain volume of business again.
00:15:44
Shrijay Sheth: The compliance costs and hassles are lesser in a l
00:15:48
Shrijay Sheth: LP structure than a private, limited company. To draw the
00:15:51
Shrijay Sheth: money to the shareholders or to the owners of the
00:15:54
Shrijay Sheth: company is slightly more difficult than to manage that. And
00:15:58
Shrijay Sheth: then l LP. So depending on whether you are focusing
00:16:01
Shrijay Sheth: on more structured way, whether you are, you're ready to
00:16:04
Shrijay Sheth: take that higher compliance cost. Whether you would want to
00:16:08
Shrijay Sheth: attract investment from outsiders, may that be a private equity
00:16:12
Shrijay Sheth: or venture fund, whether you would want to very popularly
00:16:15
Shrijay Sheth: these days, whether you want to offer ownership in the
00:16:18
Shrijay Sheth: company to your employees, which is governed by an E S. O. P.
00:16:21
Shrijay Sheth: Or employee stock option or stock purchase plans that is
00:16:24
Shrijay Sheth: only available to a private, limited company.
00:16:26
Shrijay Sheth: If these are the case scenarios, and obviously a private
00:16:28
Shrijay Sheth: limited company is a better option on the other, Otherwise
00:16:31
Shrijay Sheth: you need ease in compliance. You need more leaner structure
00:16:34
Shrijay Sheth: you don't really anticipate on boarding external funders. You have
00:16:39
Shrijay Sheth: defined roles and responsibilities within the partners you don't want
00:16:42
Shrijay Sheth: a distinction between, or a large distinction between the ownership
00:16:46
Shrijay Sheth: and the management of the business. Uh, at that point
00:16:48
Shrijay Sheth: of time, an L LP could be a better structure.
00:16:51
Shrijay Sheth: About
00:16:52
Saikat Pyne: that was super helpful. Now tell me
00:16:58
Saikat Pyne: there are multiple businesses in India, including the flip cards
00:17:03
Saikat Pyne: and some of the bigger tech giants of the world
00:17:05
Saikat Pyne: that have registered internationally. You could be in India, and
00:17:09
Saikat Pyne: without leaving the country, you could set up a US corporation,
00:17:13
Saikat Pyne: a Singapore corporation,
00:17:14
Saikat Pyne: something in UK, Netherlands. Hong Kong. Dubai. Of course, quite naturally,
00:17:19
Saikat Pyne: we expect setting up a business in each of these
00:17:22
Saikat Pyne: countries to cost more than what it would cost me
00:17:25
Saikat Pyne: to set up. Let's say, a sole proprietorship or one
00:17:28
Saikat Pyne: person company in India
00:17:30
Saikat Pyne: should I consider setting up my business in any of
00:17:34
Saikat Pyne: these countries?
00:17:36
Saikat Pyne: Number one number two is when, if at all, should
00:17:40
Saikat Pyne: I consider setting up a company in these countries? Number three.
00:17:44
Saikat Pyne: Why is this trend of setting up international businesses, especially
00:17:50
Saikat Pyne: in countries like Singapore and Dubai taken off in such
00:17:54
Saikat Pyne: a big way over the past
00:17:56
Shrijay Sheth: couple of years?
00:17:57
Shrijay Sheth: As you said, it might be more expensive to run
00:18:01
Shrijay Sheth: a business overseas, but at the same time, Also, there
00:18:04
Shrijay Sheth: are several advantages that it might bring on table. The first,
00:18:07
Shrijay Sheth: and the major advantage is the exposure to the world market.
00:18:11
Shrijay Sheth: So when you are trying to create the business in
00:18:14
Shrijay Sheth: a much bigger way, you are expanding your brands into
00:18:17
Shrijay Sheth: the international markets. It at times makes
00:18:20
Shrijay Sheth: a large difference where you are incorporated and where you
00:18:23
Shrijay Sheth: are originated or where you have the headquarters, at least.
00:18:25
Shrijay Sheth: And so for that reason to penetrate the local markets,
00:18:28
Shrijay Sheth: a lot of companies would pick and choose for incorporating locally,
00:18:32
Shrijay Sheth: as opposed to incorporating in India only and then doing
00:18:36
Shrijay Sheth: a business as an export of product or service. So
00:18:38
Shrijay Sheth: that could be one major reason. The second major reason
00:18:42
Shrijay Sheth: is a lot of
00:18:42
Shrijay Sheth: V C firms and private equity firms or the large
00:18:45
Shrijay Sheth: scale funders. They would rather appreciate a company Incorporated or
00:18:50
Shrijay Sheth: C Corp incorporated in the US or Singapore or Dubai,
00:18:54
Shrijay Sheth: where they are more familiar with the laws and the
00:18:57
Shrijay Sheth: laws in general has a lot more enforceability right. It
00:19:00
Shrijay Sheth: becomes a safer bet for them to play. The third
00:19:03
Shrijay Sheth: reason for incorporating
00:19:05
Shrijay Sheth: nationally could be the tax benefits right. We know that
00:19:08
Shrijay Sheth: some of the countries. Whether that is countries like Malta
00:19:12
Shrijay Sheth: or maybe Singapore and Dubai Free Trade Zone and stuff
00:19:15
Shrijay Sheth: like that, they all offer a lot more tax benefits,
00:19:19
Shrijay Sheth: as opposed to incorporating in India or any other countries alike.
00:19:23
Shrijay Sheth: So that also can be one more bigger option and
00:19:26
Shrijay Sheth: in consideration.
00:19:28
Shrijay Sheth: I think the fourth probably reason could be the arbitration clause.
00:19:32
Shrijay Sheth: And if at all, something goes wrong, then in which
00:19:35
Shrijay Sheth: courts do you fight for the justice and how streamlined
00:19:38
Shrijay Sheth: the law is and how enforceable the law is. And
00:19:41
Shrijay Sheth: at times, also, we have seen that taken advantage of it,
00:19:44
Shrijay Sheth: where you have your applicable arbitration or the jurisdiction of
00:19:47
Shrijay Sheth: law to be overseas and it stays out of the
00:19:50
Shrijay Sheth: reach of your customers in one way or the other.
00:19:53
Shrijay Sheth: All of these different factors really matter, and who do
00:19:55
Shrijay Sheth: you want to incorporate? But generally speaking,
00:19:58
Shrijay Sheth: if you have a large amount of your business happening
00:20:01
Shrijay Sheth: from India, if you are based out of India, and
00:20:04
Shrijay Sheth: if you are really functional more in India not so
00:20:07
Shrijay Sheth: much overseas, then I think it just creates a lot
00:20:10
Shrijay Sheth: more hassle to manage an international incorporation. So depending on
00:20:14
Shrijay Sheth: your scale, depending on your ambitions, depending on how the
00:20:17
Shrijay Sheth: funding opportunities are available and mandated, sometimes by the v
00:20:20
Shrijay Sheth: CS or what you would want to pick as a
00:20:23
Shrijay Sheth: governing law in general,
00:20:25
Saikat Pyne: if I have a full time job,
00:20:28
Saikat Pyne: is it legal in India for me
00:20:32
Saikat Pyne: to have a company in my lane? Whether be it
00:20:35
Saikat Pyne: a private limited, whether be it an o PC, a
00:20:38
Saikat Pyne: sole proprietorship, or even be the owner of a company
00:20:43
Saikat Pyne: that's incorporated abroad,
00:20:46
Shrijay Sheth: incorporating the company while you have a full time job?
00:20:50
Shrijay Sheth: That that answer solely depends on how your employment contract
00:20:54
Shrijay Sheth: is structured with your existing employer. And when you have
00:20:57
Shrijay Sheth: an employment contract, it is enforceable. And so if your
00:21:00
Shrijay Sheth: employment contract strictly says no, that you can't do any
00:21:03
Shrijay Sheth: other commercial activity or anything commercially that you do,
00:21:07
Shrijay Sheth: the IP gets vested in the name of your employer
00:21:11
Shrijay Sheth: and so on and so forth. It might be difficult
00:21:13
Shrijay Sheth: for you to really start a side hustle right at
00:21:15
Shrijay Sheth: times what usually, if you would want to do if
00:21:18
Shrijay Sheth: you want to start your side hustle or an off
00:21:21
Shrijay Sheth: time period is, you take an explicit consent from your
00:21:24
Shrijay Sheth: current employer that this is something that I'm starting
00:21:28
Shrijay Sheth: my off hours or in my spare time, which is
00:21:30
Shrijay Sheth: not going to impact my work at the office or
00:21:33
Shrijay Sheth: at the employment. And if there is an explicit concern,
00:21:36
Shrijay Sheth: then that's usually advisable. Apart from that, it really goes
00:21:39
Shrijay Sheth: matter by matter. Where what is the flexibilities that is
00:21:42
Shrijay Sheth: already available in your employment contract is what I would
00:21:44
Shrijay Sheth: first refer to
00:21:45
Saikat Pyne: in case I set up a company abroad.
00:21:50
Saikat Pyne: Given that it is not under the purview of Indian law,
00:21:53
Saikat Pyne: am I technically
00:21:55
Shrijay Sheth: allowed that would be very difficult to accommodate if your
00:21:58
Shrijay Sheth: employment contract does not permit it? It does not really
00:22:00
Shrijay Sheth: depend on where your incorporations happen. It might be more
00:22:05
Shrijay Sheth: difficult to trace for your employers. Speaking of the legalities,
00:22:09
Shrijay Sheth: it is still challenging. Speaking of whether there is an
00:22:12
Shrijay Sheth: enforceability of law or whether your employer would be able
00:22:15
Shrijay Sheth: to find it out, maybe it might be a little difficult.
00:22:18
Shrijay Sheth: Open a business in your relative's name or if you
00:22:21
Shrijay Sheth: open a business, which only allows you to get that
00:22:24
Shrijay Sheth: off the radar. But I think legally speaking, it might
00:22:28
Shrijay Sheth: still be as challenging to do it that way as well.
00:22:30
Shrijay Sheth: Now let's go
00:22:31
Saikat Pyne: back to the example of a creative.
00:22:36
Saikat Pyne: There are legal protections in place in this country for
00:22:41
Saikat Pyne: any creative work. We hear of these terms, like trademarks
00:22:45
Saikat Pyne: and patents and copyrights,
00:22:47
Saikat Pyne: and for most of us, it seems to be synonymous.
00:22:52
Saikat Pyne: They seem to be interchangeable, but I'm sure they are not.
00:22:56
Saikat Pyne: So how is a trademark different from patent different from
00:23:00
Saikat Pyne: a copyright?
00:23:01
Saikat Pyne: And when should I consider getting one for the work
00:23:05
Shrijay Sheth: that I am speaking of the intellectual properties? There are
00:23:08
Shrijay Sheth: many ways to protect your intellect. Work. We always talk
00:23:12
Shrijay Sheth: about trademarks, patents, copyright, maybe a little bit of design registrations.
00:23:16
Shrijay Sheth: I'll give you a thumb rule of assessing what is
00:23:19
Shrijay Sheth: an applicable IP protection in what cases, So simply if
00:23:23
Shrijay Sheth: you are talking about anything that
00:23:25
Shrijay Sheth: helps your customers identify your brand and branding, that is
00:23:29
Shrijay Sheth: usually a trade markable item. So to give you an example,
00:23:32
Shrijay Sheth: it can be your logo. It can be your slogan.
00:23:35
Shrijay Sheth: It can be your demonstration in the logo, which is
00:23:39
Shrijay Sheth: tech technically a device logo. So, let's say, a golden
00:23:42
Shrijay Sheth: arc of McDonald's, M or the McDonald's as a whole brand,
00:23:47
Shrijay Sheth: or I'm loving it as a slogan or Nikes. Just
00:23:50
Shrijay Sheth: do it as a slogan or the as a as
00:23:52
Shrijay Sheth: a logo or Nike as a brand. These are
00:23:55
Shrijay Sheth: all trade markable items versus when you are thinking of
00:23:58
Shrijay Sheth: a copyright. It is usually an artistic or a literary
00:24:03
Shrijay Sheth: work that is original in nature. So whether you have
00:24:05
Shrijay Sheth: written a song, a jingle, a book, paint art, all
00:24:10
Shrijay Sheth: of these things, the uniqueness in your originality of the
00:24:13
Shrijay Sheth: artwork is typically a copyrightable item. That may be also
00:24:18
Shrijay Sheth: a copy of your website, which you have written originally.
00:24:21
Shrijay Sheth: The third is a patent which has to do with
00:24:23
Shrijay Sheth: the invention and innovation,
00:24:25
Shrijay Sheth: so something that is inventive or innovative in nature, which
00:24:28
Shrijay Sheth: enhances the performance and has a commercial value to it.
00:24:31
Shrijay Sheth: That is usually a patentable item, and then designs typically
00:24:36
Shrijay Sheth: deal with the external, designing elements of the product and
00:24:40
Shrijay Sheth: so on and so forth. So that's usually a rule.
00:24:42
Shrijay Sheth: Is anything branding is trademark. Anything
00:24:45
Shrijay Sheth: unique expression in literary or artistic work is copyright. Anything
00:24:50
Shrijay Sheth: that has to do with invention, innovation is patent. Anything
00:24:53
Shrijay Sheth: that has to do with the exterior look and feel
00:24:56
Shrijay Sheth: an appearance of a of a product that's usually a design.
00:25:00
Shrijay Sheth: And
00:25:00
Saikat Pyne: when should I consider getting my trademark registered? We are
00:25:04
Saikat Pyne: speaking primarily
00:25:06
Saikat Pyne: about about creative work. So let's say, if I am
00:25:10
Saikat Pyne: a writer, when should I get a copyright for myself?
00:25:13
Saikat Pyne: If I am a designer, when should I get my
00:25:16
Saikat Pyne: trademark registered for something that I've
00:25:18
Shrijay Sheth: created? So ideally, if I talk about the trademark, usually
00:25:22
Shrijay Sheth: what happens is you get more popular and noticeable before
00:25:25
Shrijay Sheth: you actually think of
00:25:27
Shrijay Sheth: of you being popular, and other people start noticing it.
00:25:30
Shrijay Sheth: And when people start noticing it, obviously you are vulnerable
00:25:34
Shrijay Sheth: for infringement, right? So usually what I would ideally suggest
00:25:38
Shrijay Sheth: is when you start taking your business seriously and when
00:25:40
Shrijay Sheth: you think that your business is at a stage where
00:25:43
Shrijay Sheth: you have a real commercial value out of it and
00:25:46
Shrijay Sheth: people have started noticing you as a brand.
00:25:48
Shrijay Sheth: Even if it's a small brand, that's actually a good
00:25:50
Shrijay Sheth: and high time for registering a trademark for it. When
00:25:53
Shrijay Sheth: we talk about copyrights, Copyright Act works a little differently
00:25:57
Shrijay Sheth: than the other IP registrations or protections that you have
00:26:01
Shrijay Sheth: like a patent or a trademark where you need an
00:26:03
Shrijay Sheth: explicit registration. Copyright, in fact, does not require an explicit registration.
00:26:10
Shrijay Sheth: So the moment you actually create a unique content, it
00:26:14
Shrijay Sheth: becomes your ownership
00:26:16
Shrijay Sheth: by the Copyright Act. Even without registering Now, why the
00:26:19
Shrijay Sheth: registration is important is, if at all, there is any
00:26:23
Shrijay Sheth: legal challenge, then it becomes easier for you to defend
00:26:26
Shrijay Sheth: if you have a registration in place. But apart from that,
00:26:29
Shrijay Sheth: the ownership of the novel work or the artistic work
00:26:32
Shrijay Sheth: or the literary work the moment you create that it
00:26:35
Shrijay Sheth: becomes your own personal belonging and asset in terms of
00:26:40
Shrijay Sheth: intellectual property, there are also some other ways and suggestions
00:26:43
Shrijay Sheth: that I would probably like to
00:26:45
Shrijay Sheth: give to the audience Over here, who are largely as
00:26:48
Shrijay Sheth: you are the creators is, every time you create any
00:26:51
Shrijay Sheth: piece of content, may that be artistic work. May that
00:26:54
Shrijay Sheth: be a jingle, a poem? Write a page for a novel,
00:26:57
Shrijay Sheth: always been a habit to email that to yourself, because
00:27:01
Shrijay Sheth: what that does is it actually creates a time stamp
00:27:05
Shrijay Sheth: of the third party. May that be Google or Z
00:27:07
Shrijay Sheth: SoHo or any other email engine that you are using.
00:27:10
Shrijay Sheth: So there is a third party validation that at this
00:27:13
Shrijay Sheth: point in time
00:27:14
Shrijay Sheth: I had already created this original piece of content. And
00:27:18
Shrijay Sheth: so if that gets challenged, then you at least have
00:27:21
Shrijay Sheth: that point in time to prove that you already were
00:27:24
Shrijay Sheth: in possession of this original work before somebody else challenged
00:27:27
Shrijay Sheth: it for an infringement of the copyright. That's usually a
00:27:30
Shrijay Sheth: very best practise to do. Apart from that, if you
00:27:32
Shrijay Sheth: really feel that you need to protect that buyer registration,
00:27:36
Shrijay Sheth: then obviously we have to go ahead and file for
00:27:38
Shrijay Sheth: a copyright protection and registration for it. If we
00:27:41
Saikat Pyne: are creating more content
00:27:43
Saikat Pyne: every day, humanity is creating more content every day than
00:27:48
Saikat Pyne: it ever has. And some of the formats in which
00:27:51
Saikat Pyne: we are now creating content. Some of the more popular
00:27:53
Saikat Pyne: formats are not just film or TV series. They are
00:27:57
Saikat Pyne: also LinkedIn posts. They are also instagram reels. There are
00:28:02
Saikat Pyne: various formats where it might not be possible for you
00:28:06
Saikat Pyne: to necessarily email it to yourself. So if I create
00:28:11
Saikat Pyne: a LinkedIn post
00:28:13
Saikat Pyne: and I see somebody copy it and and post it
00:28:17
Saikat Pyne: in their LinkedIn profile and I as a creator, may
00:28:21
Saikat Pyne: have had, let's say, an affiliate link there, and I'm
00:28:25
Saikat Pyne: losing out on business and I want to sue.
00:28:28
Saikat Pyne: How do I prove that it's my copyright, just the
00:28:31
Saikat Pyne: fact that it is on my profile at a date
00:28:33
Saikat Pyne: earlier than it is on theirs? Is that reason enough?
00:28:37
Saikat Pyne: Or would I need to register every single piece of content?
00:28:42
Saikat Pyne: Whether that's a single line tweet. Whether I put out
00:28:45
Saikat Pyne: a jingle, everything has to be registered. What's the best
00:28:48
Saikat Pyne: way forward
00:28:49
Shrijay Sheth: on this? So definitely we create tonnes of content and
00:28:52
Shrijay Sheth: expressions every day, and so it would just be very
00:28:55
Shrijay Sheth: insane
00:28:56
Shrijay Sheth: to really register every piece and very costly as well.
00:28:59
Shrijay Sheth: So again, email is just an example, right, having a
00:29:02
Shrijay Sheth: third party validation like you posted on LinkedIn. So there
00:29:04
Shrijay Sheth: is a time stamp of LinkedIn also suffices to prove
00:29:08
Shrijay Sheth: that you had created this originally at this point in time.
00:29:11
Shrijay Sheth: Having said that, there is also a concept of a
00:29:14
Shrijay Sheth: fair use of content, wherein, if it is being circulated
00:29:19
Shrijay Sheth: or used for news purposes or for
00:29:22
Shrijay Sheth: non-commercial purposes for awareness purposes, that also becomes a fair
00:29:26
Shrijay Sheth: use of of content. And that might also make it
00:29:29
Shrijay Sheth: challenging for the creator to actually claim for the damages.
00:29:33
Shrijay Sheth: So a very good example is a lot of news
00:29:35
Shrijay Sheth: channels you would see who are reporting certain things in
00:29:38
Shrijay Sheth: court now. Obviously, that content is being created by somebody else.
00:29:42
Shrijay Sheth: But because it is for news and news and awareness purposes,
00:29:46
Shrijay Sheth: it might fall under the fair use of content
00:29:48
Shrijay Sheth: in that sense. But generally speaking, if there is a
00:29:51
Shrijay Sheth: legitimate copyright infringement, definitely you can go back with those
00:29:55
Shrijay Sheth: times stamps. Try and prove that you were the original
00:29:58
Shrijay Sheth: creator of this particular content and it's been misrepresented or
00:30:01
Shrijay Sheth: without actually giving you a fair credit of that particular
00:30:05
Shrijay Sheth: post or creative or infographic or anything that you posted
00:30:08
Shrijay Sheth: on the social media. And if somebody else is taking
00:30:11
Shrijay Sheth: a commercial advantage of it, definitely that becomes a case
00:30:14
Shrijay Sheth: of
00:30:14
Shrijay Sheth: infringement. And you may definitely call for the damages and
00:30:18
Shrijay Sheth: and financial rewards from those damages being claimed.
00:30:21
Saikat Pyne: So tell me if I see somebody using, let's say,
00:30:25
Saikat Pyne: my logo on their company's letterhead, which is my trademark.
00:30:30
Saikat Pyne: Or if I create a script for a movie and
00:30:34
Saikat Pyne: I see some movie studio using my script without paying
00:30:39
Saikat Pyne: due credit, how can I
00:30:41
Saikat Pyne: claim that my trademark has been infringed or my copyright
00:30:46
Saikat Pyne: has been infringed. How do I go
00:30:47
Shrijay Sheth: about that? So you can formally file an infringement case? Typically,
00:30:52
Shrijay Sheth: what happens is you would ideally want to hire a
00:30:55
Shrijay Sheth: lawyer and send an infringement notice for them to pay
00:31:00
Shrijay Sheth: you the reasonable amount for infringement and damages that they
00:31:03
Shrijay Sheth: have done to your brand. And also ask them to
00:31:06
Shrijay Sheth: very quickly remove that from their website.
00:31:10
Shrijay Sheth: Let ahead or whatever the case might be. If it
00:31:12
Shrijay Sheth: does not get settled off the court just through a
00:31:14
Shrijay Sheth: legal notice, then obviously you can file an infringement case
00:31:18
Shrijay Sheth: under the copyrights or under the IP Act, and you
00:31:21
Shrijay Sheth: can formally take that up in the in the courts
00:31:23
Shrijay Sheth: of law. Then that becomes a legal battle, and you
00:31:26
Shrijay Sheth: can file for an infringement and actually claim for all
00:31:29
Shrijay Sheth: the damages, including the
00:31:31
Shrijay Sheth: says that you would have incurred and the losses that
00:31:35
Shrijay Sheth: you have incurred because somebody else misled the customers by
00:31:39
Shrijay Sheth: using your brand name or logo and and your brand
00:31:42
Shrijay Sheth: suffered commercially because of we
00:31:44
Saikat Pyne: are well aware of the history of how long legal
00:31:49
Saikat Pyne: battles take to win or even to lose in India.
00:31:53
Saikat Pyne: And there is this history of abuse of IP rights
00:31:57
Saikat Pyne: in India, especially
00:32:00
Saikat Pyne: over the past couple of years with the boom of
00:32:02
Saikat Pyne: the Internet. And there has been this parallel rise of N. F.
00:32:06
Saikat Pyne: T s, where creators are starting
00:32:09
Saikat Pyne: to be mindful from day one. What's your take on N. F.
00:32:13
Saikat Pyne: T s when
00:32:13
Shrijay Sheth: we talk about IP in relation with N. F. T s.
00:32:18
Shrijay Sheth: First of all, we have to understand that when somebody
00:32:22
Shrijay Sheth: sells an N f T, it is usually an artwork.
00:32:26
Shrijay Sheth: Let's suppose it is an artwork. The artwork is being
00:32:29
Shrijay Sheth: sold by an with an underlying asset. So it is
00:32:32
Shrijay Sheth: not just a
00:32:33
Shrijay Sheth: picture that you are selling it to somebody. It is
00:32:36
Shrijay Sheth: an underlying asset, which is either is cryptographically certified that
00:32:41
Shrijay Sheth: this is a This is essentially a true copy of
00:32:44
Shrijay Sheth: this particular artwork. So it's not only about the picture,
00:32:47
Shrijay Sheth: which you can forward on your emails or WhatsApp chat,
00:32:51
Shrijay Sheth: it is us. It usually has a value of the
00:32:54
Shrijay Sheth: underlying asset to the N F. T s.
00:32:56
Shrijay Sheth: Now, having said that, let's try and relate that with
00:32:59
Shrijay Sheth: the IP law, right? And then you actually sell an
00:33:02
Shrijay Sheth: N F. T. You are selling
00:33:05
Shrijay Sheth: a digitally or a cryptographically
00:33:08
Shrijay Sheth: approved copy of that, but you don't necessarily selling the
00:33:12
Shrijay Sheth: IP rights associated with that. So whether that is a
00:33:15
Shrijay Sheth: commercial usage and a trademark associated with that or whether
00:33:19
Shrijay Sheth: it is the originality of the artwork and the ability
00:33:22
Shrijay Sheth: to reproduce the same artwork under the Copyright Act, you
00:33:26
Shrijay Sheth: are not actually selling that. So And so the original
00:33:30
Shrijay Sheth: owner or the original creator of the artwork is likely
00:33:34
Shrijay Sheth: not selling
00:33:36
Shrijay Sheth: their ability to reproduce the same artwork, which is protected
00:33:40
Shrijay Sheth: by the Copyrights Act. Because it's the originality of the
00:33:43
Shrijay Sheth: artwork itself, it is actually selling a particular copy, which
00:33:47
Shrijay Sheth: is which is certified by the N F T Token
00:33:51
Shrijay Sheth: or the cryptographic token, which is being sold. And so
00:33:54
Shrijay Sheth: even when you are buying an N F. T, you
00:33:57
Shrijay Sheth: really have to think, What exactly are you buying and
00:34:00
Shrijay Sheth: and what are the IP rights
00:34:02
Shrijay Sheth: that you are inheriting with that whether you are inheriting
00:34:05
Shrijay Sheth: the rights of reproduction, whether you are inheriting the copyrights
00:34:08
Shrijay Sheth: and the trademark rights associated with that or not? In
00:34:11
Shrijay Sheth: the most cases, it is not so when you are
00:34:13
Shrijay Sheth: a creator of an N F. T. Ideally, you should
00:34:16
Shrijay Sheth: think of whether getting a copyright or the trademark whatever
00:34:19
Shrijay Sheth: case that might be to get yourself protected from that
00:34:23
Shrijay Sheth: because they are very highly likely to be infringed. The
00:34:26
Shrijay Sheth: second thing is, if you are actually using
00:34:28
Shrijay Sheth: a unique technology right within within the Blockchain to actually
00:34:33
Shrijay Sheth: certify that in case of Nike I think that is
00:34:36
Shrijay Sheth: that is one of the good examples that how they
00:34:38
Shrijay Sheth: have actually patented the technology if I'm not, if I'm
00:34:41
Shrijay Sheth: not wrong. So if you are using a unique technology
00:34:43
Shrijay Sheth: under the Blockchain universe to actually certify and validate those
00:34:48
Shrijay Sheth: tokens or issue the
00:34:50
Shrijay Sheth: then that might also be an example of patenting that technology.
00:34:55
Shrijay Sheth: But that is a little far fetched, considering that we
00:34:57
Shrijay Sheth: are thinking of creators and not the technologists who would
00:35:01
Shrijay Sheth: build the technology but creators who would actually build their
00:35:04
Shrijay Sheth: digit artwork. Usually it is the trademarks and the Copyright Act,
00:35:08
Shrijay Sheth: which is in the question and consideration at that point
00:35:11
Shrijay Sheth: of it.
00:35:12
Saikat Pyne: Now let's go back again to the example of the
00:35:18
Saikat Pyne: solo entrepreneur. What are the couple of things that the
00:35:22
Saikat Pyne: person needs to take care of after they have registered
00:35:28
Saikat Pyne: their business things. We are speaking about
00:35:30
Saikat Pyne: things like maybe trademarking their logo, maybe getting their G
00:35:34
Saikat Pyne: s t registration in place, legal drafting of appointment letters.
00:35:39
Saikat Pyne: What are the couple of things that they need to
00:35:42
Saikat Pyne: know and have in place to be able to run
00:35:46
Saikat Pyne: a business once they have registered it?
00:35:48
Shrijay Sheth: I think that's a great question and something that that
00:35:52
Shrijay Sheth: really needs a little broad education for the new entrepreneurs.
00:35:58
Shrijay Sheth: And usually when somebody asked me this, I like to
00:36:01
Shrijay Sheth: break that down into four different segments. Right,
00:36:04
Shrijay Sheth: So first is you start right, which is by registering
00:36:08
Shrijay Sheth: the business in the right format, and we discussed briefly
00:36:11
Shrijay Sheth: earlier about that. The second is about managing the business,
00:36:16
Shrijay Sheth: which basically deals with getting the right set of registration.
00:36:20
Shrijay Sheth: If you are a food business, then you have an
00:36:22
Shrijay Sheth: F s SI registration. If you are a production business,
00:36:25
Shrijay Sheth: you might need a
00:36:26
Shrijay Sheth: factories act applicable to it. If you have employees, then
00:36:31
Shrijay Sheth: you might have P f N E s IC registrations.
00:36:34
Shrijay Sheth: If you are paying people, then you might need to
00:36:37
Shrijay Sheth: collect to submit the T DS to the government department.
00:36:40
Shrijay Sheth: So the second big aspect is managing your business right,
00:36:44
Shrijay Sheth: and it also includes annual compliance and so on and
00:36:47
Shrijay Sheth: so forth.
00:36:48
Shrijay Sheth: The third major aspect is the protection aspect, which is
00:36:52
Shrijay Sheth: which might not be mandatory as it is for the
00:36:55
Shrijay Sheth: managing the business, But it definitely is a great value added,
00:36:59
Shrijay Sheth: because it gives you either a unique position in the
00:37:02
Shrijay Sheth: market or it gives you some sense of exclusivity to
00:37:06
Shrijay Sheth: sell certain things in the market. And so definitely it's
00:37:09
Shrijay Sheth: a competitive edge. And when we talk about protection, there
00:37:12
Shrijay Sheth: are two different ways. One is your intellectual property,
00:37:15
Shrijay Sheth: which is either your trademarks, patents, copyrights, design registrations, trade
00:37:20
Shrijay Sheth: secrets as it is applicable. And we discuss that the
00:37:23
Shrijay Sheth: second is actually entering into right kind of contracts with
00:37:27
Shrijay Sheth: the right parties. For example, if it is an employee
00:37:30
Shrijay Sheth: that an employer agreement or employment agreement, if it is
00:37:34
Shrijay Sheth: a third party vendor may be a vendor El agreement.
00:37:37
Shrijay Sheth: If you're discussing a brilliant business idea with me and
00:37:40
Shrijay Sheth: you don't want it to be stolen,
00:37:42
Shrijay Sheth: then maybe a non disclosure agreement with me if you
00:37:45
Shrijay Sheth: if you have people or if you have a digital
00:37:48
Shrijay Sheth: marketing agency or a website development agency working with you,
00:37:52
Shrijay Sheth: then maybe a service level agreement to clarify the roles
00:37:55
Shrijay Sheth: and responsibilities and deliverables and the payment schedules and and
00:37:58
Shrijay Sheth: so on so forth. There might be non solicitation clause
00:38:01
Shrijay Sheth: where in, you know, there is no poaching of employees
00:38:04
Shrijay Sheth: or
00:38:04
Shrijay Sheth: talent and stuff like that. So So, depending on the
00:38:07
Shrijay Sheth: parties that you're dealing with internal and external, maybe within
00:38:10
Shrijay Sheth: the co-founders, you want a clarity of the roles and
00:38:12
Shrijay Sheth: responsibilities and the vesting of shares and ownerships and stuff,
00:38:15
Shrijay Sheth: and then the co-founders agreement is important. So the second
00:38:18
Shrijay Sheth: big aspect is to have your agreements and contracts in
00:38:21
Shrijay Sheth: place for protecting your business, apart from protecting it with
00:38:25
Shrijay Sheth: the IP registrations.
00:38:26
Shrijay Sheth: And the fourth big block is the visibility. Now this
00:38:30
Shrijay Sheth: is something which is very important and most neglected when
00:38:33
Shrijay Sheth: people do their accounting at the end of the year,
00:38:36
Shrijay Sheth: just because they have to do it for the sake
00:38:38
Shrijay Sheth: of compliance. So the fourth big aspect to run a
00:38:41
Shrijay Sheth: successful business is to stay in visibility of your finances
00:38:45
Shrijay Sheth: all the time, and that actually makes you a successful
00:38:48
Shrijay Sheth: entrepreneur because you have visibility to your cash. Burn out
00:38:51
Shrijay Sheth: your your visibility to profitability. You have livers in your
00:38:55
Shrijay Sheth: hand that you can
00:38:56
Shrijay Sheth: actually pull and push and pivot your business very quickly,
00:38:59
Shrijay Sheth: at least at the early stage. That is more important
00:39:02
Shrijay Sheth: to steer away from failures. And so the fourth big
00:39:04
Shrijay Sheth: component is keeping track of or visibility of your finances,
00:39:08
Shrijay Sheth: which happens through regular accounting, bookkeeping and your cash flow management.
00:39:12
Shrijay Sheth: So I think those are four big aspects that I
00:39:14
Shrijay Sheth: would always encourage the entrepreneurs to be in control with.
00:39:18
Shrijay Sheth: One is Start your business, which is by picking the
00:39:20
Shrijay Sheth: business structure that gives you the most advantages. Second, is
00:39:23
Shrijay Sheth: protecting your or second is managing
00:39:25
Shrijay Sheth: your business right, which is through the right registrations and
00:39:28
Shrijay Sheth: regular filings with the government agencies, and stay compliant with law.
00:39:33
Shrijay Sheth: The third is protecting your business right. Whether that is
00:39:36
Shrijay Sheth: through an IP registration or the contracts and agreements in place,
00:39:39
Shrijay Sheth: and the fourth is always have a good financial visibility
00:39:43
Shrijay Sheth: by regular accounting, bookkeeping and cash flow management. So I
00:39:46
Shrijay Sheth: think that kind of sums up the four pillars for
00:39:49
Shrijay Sheth: being a successful entrepreneur. From a standpoint of of legal
00:39:53
Shrijay Sheth: and professional services domain
00:39:56
Saikat Pyne: that was so helpful the pace of doing business, accepting
00:40:01
Saikat Pyne: new agreements and the sheer scale and size and speed
00:40:04
Saikat Pyne: at which we do business has transformed. How can I
00:40:08
Saikat Pyne: digitise this process?
00:40:11
Shrijay Sheth: That's great that you asked that because that's actually one
00:40:14
Shrijay Sheth: of the biggest area where legal tech is currently focused, right?
00:40:18
Shrijay Sheth: So legal, tech or legal as a as an industry
00:40:21
Shrijay Sheth: is evolving
00:40:22
Shrijay Sheth: very quickly. It is one giant which has been, you know,
00:40:26
Shrijay Sheth: in business for centuries and
00:40:29
Shrijay Sheth: which has probably also been one of the businesses that
00:40:32
Shrijay Sheth: has been Orthodox for centuries as well. And this is
00:40:35
Shrijay Sheth: actually the most exciting time when legal tech is expanding,
00:40:40
Shrijay Sheth: disrupting and creating the new norms. And you rightly said
00:40:44
Shrijay Sheth: about the E signature portals, docusign or the alikes, they
00:40:49
Shrijay Sheth: are very convenient. Also, people are coming up with newer
00:40:52
Shrijay Sheth: and newer technologies to actually validate the authenticity of the
00:40:57
Shrijay Sheth: signature or the
00:40:58
Shrijay Sheth: E signature persons or people who are digitally sign signing it.
00:41:02
Shrijay Sheth: And so it is becoming more and more so to
00:41:05
Shrijay Sheth: give you an example. There would also be facilities and
00:41:08
Shrijay Sheth: functionalities available to do a biometric validation to do a
00:41:12
Shrijay Sheth: retina validation to do a regular E signature validation to
00:41:16
Shrijay Sheth: do an IP address validation to actually do a digital
00:41:20
Shrijay Sheth: signature validation which are approved by the government. So you
00:41:23
Shrijay Sheth: have your digital signature that you get from companies like
00:41:27
Shrijay Sheth: and whatnot.
00:41:28
Shrijay Sheth: So all of these different validations actually better your case
00:41:32
Shrijay Sheth: for proving the identity of people who are actually signing
00:41:36
Shrijay Sheth: that particular contract or an agreement now to extend that.
00:41:40
Shrijay Sheth: But since we are talking about Blockchain and crypto and
00:41:42
Shrijay Sheth: and in in general Blockchain is a technology, there are
00:41:45
Shrijay Sheth: also smart contracts which are in place right now, which
00:41:48
Shrijay Sheth: are enabled through Blockchain. And so there is a lot
00:41:50
Shrijay Sheth: of distributed validation to that as well. So overall, this
00:41:54
Shrijay Sheth: entire tracking aspect of the
00:41:56
Shrijay Sheth: A legal tech domain that is evolving at a much
00:41:59
Shrijay Sheth: rapid speed and there are several different validations that are
00:42:03
Shrijay Sheth: being input to genuinely prove that if this contract was
00:42:07
Shrijay Sheth: meant to be signed by stria, then actually it is
00:42:11
Shrijay Sheth: signed by Stria and not somebody else from his office. Now,
00:42:14
Shrijay Sheth: what is the
00:42:14
Saikat Pyne: difference between electronic signature and digital signature? Because it pretty
00:42:19
Saikat Pyne: much sounds to be exactly the same.
00:42:23
Shrijay Sheth: So when we typically say a digital signature, right? That is,
00:42:26
Shrijay Sheth: that is a DS C or a digital signature. That
00:42:28
Shrijay Sheth: has been
00:42:29
Shrijay Sheth: that it's a token that is approved and generated by
00:42:33
Shrijay Sheth: the government. For example, you are registering a new company.
00:42:36
Shrijay Sheth: You have to have a digital signature for your directors
00:42:41
Shrijay Sheth: and promoters, and that digital signature is a government issued.
00:42:45
Shrijay Sheth: Or there are agencies which are approved by the government
00:42:48
Shrijay Sheth: to issue those DS CS right. And those DS CS
00:42:51
Shrijay Sheth: typically come as a token in a pen drive,
00:42:53
Shrijay Sheth: uh, which you can hook it up and and digitally
00:42:56
Shrijay Sheth: sign or approve things, so that is usually what we
00:42:58
Shrijay Sheth: are referring to. A digital signature and e signature definitely
00:43:02
Shrijay Sheth: is an electronic signature, a lot of times interchangeably used,
00:43:06
Shrijay Sheth: but usually when people say a DS C or a
00:43:08
Shrijay Sheth: digital signature that that they are referring to a token
00:43:10
Shrijay Sheth: that you have that you've been assured by the government,
00:43:13
Saikat Pyne: we have spoken for about an hour. We have touched
00:43:16
Saikat Pyne: upon
00:43:17
Saikat Pyne: how to launch a business, whether it's legal for you
00:43:20
Saikat Pyne: to have a side hustle. If you are a creative,
00:43:23
Saikat Pyne: why is it important for you to register an IP
00:43:27
Saikat Pyne: for yourself for your business. What would be your final
00:43:31
Saikat Pyne: message to the 20 something entrepreneur
00:43:36
Saikat Pyne: who's feeling very overwhelmed at the end
00:43:38
Shrijay Sheth: of this one hour? Absolutely so I think. First of all,
00:43:41
Shrijay Sheth: let me just thank you for having me on the podcast.
00:43:43
Shrijay Sheth: It's been a brilliant conversation we've been talking about now,
00:43:46
Shrijay Sheth: and it barely felt like that. So that's been very candid.
00:43:49
Shrijay Sheth: And thanks a lot for the opportunity. If I were
00:43:51
Shrijay Sheth: to leave every 20 odd year
00:43:53
Shrijay Sheth: with one message. There is a lot of encouragement to
00:43:57
Shrijay Sheth: start up, to innovate, to invent, to get into entrepreneurship.
00:44:02
Shrijay Sheth: And it is all great and me being one of
00:44:05
Shrijay Sheth: that fraternity members, an entrepreneur. I love that. But at
00:44:08
Shrijay Sheth: the same time, what I would advise people
00:44:11
Shrijay Sheth: is you assess what you are getting into a lot
00:44:14
Shrijay Sheth: of times. Also, because I work day in, day out
00:44:17
Shrijay Sheth: with a lot of startups and solo preneurs and and
00:44:20
Shrijay Sheth: early stage startups. But it it has become a little
00:44:22
Shrijay Sheth: bit of fashion statement to own a startup in this country.
00:44:25
Shrijay Sheth: So my very genuine advice to the
00:44:29
Shrijay Sheth: the young entrepreneurs is, if you are really passionate about
00:44:33
Shrijay Sheth: what you would want to do then obviously, startup is
00:44:36
Shrijay Sheth: the route and and go on for that with the
00:44:38
Shrijay Sheth: whole heart intellect vested in it. But if that's just
00:44:42
Shrijay Sheth: one more gig for you, then probably you would want
00:44:45
Shrijay Sheth: to assess yourself and see whether you would want to
00:44:47
Shrijay Sheth: burn that energy just to look cool about it,
00:44:51
Saikat Pyne: right? And with that, it's a wrap. Thank you for
00:44:54
Saikat Pyne: being on the podcast.
00:44:56
Saikat Pyne: Please tune in next week for the next episode of
00:44:59
Saikat Pyne: the U Incorporated podcast. See ya,
00:45:13
Saikat Pyne: Thank you for tuning into the you incorporated podcast with me.
00:45:19
Saikat Pyne: You can write to us at high at the rate
00:45:22
Saikat Pyne: the u ink dot com d m me on LinkedIn
00:45:26
Saikat Pyne: or check out my blog blog dot sa p dot
00:45:30
Saikat Pyne: com for more interesting content on brand building content creation,
00:45:34
Saikat Pyne: productivity and influence.
00:45:37
Saikat Pyne: Catch you guys in the next episode