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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
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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
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Shrijay Sheth: the business, like a private, limited company. The most refined
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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
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Shrijay Sheth: financing from a third party financier. In those cases, definitely
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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
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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
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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
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Shrijay Sheth: don't have a lot of statutory and mandates around, keeping
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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
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Shrijay Sheth: every
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Shrijay Sheth: and so on so forth. So if you are really
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Shrijay Sheth: a small business which does not have a lot of
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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
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Shrijay Sheth: to be a sole proprietorship or a partnership in that situation,
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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
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Shrijay Sheth: really focus more on your creative side of the work
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Shrijay Sheth: rather than making sure that you
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Shrijay Sheth: are keeping it legally compliant again. Assessing these situations, I
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Shrijay Sheth: would probably propose that you go with more structured way
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Shrijay Sheth: like a company in l LP versus something which is
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Shrijay Sheth: more lean, which is more flexible, which doesn't really require
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Shrijay Sheth: a lot of energy to maintain it, which is the structures,
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Shrijay Sheth: like a sole proprietorship or maybe a partnership. In that case,
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Shrijay Sheth: if we have more than one partner is into it,
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Shrijay Sheth: he
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Saikat Pyne: spoke about the word liability,
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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
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Saikat Pyne: go for a limited liability partnership? An L LP? What
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Saikat Pyne: does liability mean? What does liability cover? What does it
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Saikat Pyne: not cover?
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Shrijay Sheth: So understanding the liability aspect or limited liability aspect of
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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?
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Shrijay Sheth: So a private limited company
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Shrijay Sheth: has a separate legal existence and what does that mean
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Shrijay Sheth: is in the books of law? It is a different
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Shrijay Sheth: person than the owners of the company, right? It's a
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Shrijay Sheth: virtual existence. Basically, that the company has and what it
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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
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Shrijay Sheth: get sued or sue somebody in its own name, or
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Shrijay Sheth: the company can actually create liabilities in terms of financial liabilities,
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Shrijay Sheth: let's say bank loans or other liabilities. For example, if
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Shrijay Sheth: you can't indemnify yourself if a mishap if a genuine
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Shrijay Sheth: mishap happens in the business, so all of these things
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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
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Shrijay Sheth: doing any illegal activity in the business. The activities are
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Shrijay Sheth: still fairly legal in nature, but at the same time,
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Shrijay Sheth: you can still
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Shrijay Sheth: create losses for yourself in the business, right? Every business
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Shrijay Sheth: is is not always profitable, And so when we say
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Shrijay Sheth: a limited liability, what does that mean? Is by definition
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Shrijay Sheth: in virtue, a private limited company or an L LP
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Shrijay Sheth: being a separate legal entity?
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Shrijay Sheth: The liability of the business does not carry forward to
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Shrijay Sheth: the owners of the business. And so what does that
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Shrijay Sheth: mean is, if there is a genuine business loss,
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Shrijay Sheth: it cannot sell off the personal properties of the owners
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Shrijay Sheth: to repay that debt versus if you are a proprietorship
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Shrijay Sheth: or if you are a partnership, then obviously your business
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Shrijay Sheth: loss carries forward to your personal assets, and in that
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Shrijay Sheth: case you have to be personally liable to pay off
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Shrijay Sheth: the business debts. And so that is what the whole
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Shrijay Sheth: rationale of being a
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Shrijay Sheth: separate legal entity and thus getting a benefit of being
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Shrijay Sheth: limited liability for the business losses versus in case of proprietorship,
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Shrijay Sheth: it carries forward. And it does not limit your liabilities
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Shrijay Sheth: to the business but also carries forward to your personal well.
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Shrijay Sheth: How do I even register a sole proprietor in India
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Shrijay Sheth: for registering a sole proprietorship? You have to be a proprietor, right?
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Shrijay Sheth: You are basically
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Shrijay Sheth: a single person who wants to start a business or
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Shrijay Sheth: commercial activity. You can register your sole proprietorship very simply
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Shrijay Sheth: by either registering under the M SME rather or O. D.
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Shrijay Sheth: M registration, or you also can call yourself sole proprietor
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Shrijay Sheth: if you have a G S T registration to yourself.
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Shrijay Sheth: There are various ways to just get a simple government
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Shrijay Sheth: registration O D M certificate or a G s t registration.
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Shrijay Sheth: And you can open your bank account in the name
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Shrijay Sheth: of the sole proprietorship business and start trading into it.
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Shrijay Sheth: So it is as simple as that. A lot of times,
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Shrijay Sheth: when you when you want to open a bank account,
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Shrijay Sheth: they depending on the state that you are in, they
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Shrijay Sheth: might also want to get a certificate.
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Shrijay Sheth: Get to accompany that. But generally, starting a sole proprietorship
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Shrijay Sheth: is a matter of as simple as registering yourself under
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Shrijay Sheth: the MS MS or a G S T act and
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Shrijay Sheth: you are on. I think
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Saikat Pyne: it's pretty clear that if you are two people or
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Saikat Pyne: a bunch of people trying to open a company that
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Saikat Pyne: you would go for a partnership, then the legal sense
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Saikat Pyne: of the term does it have to be two founders
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Saikat Pyne: of the company or multiple as well.
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Shrijay Sheth: Uh, there can be two or multiple in a partnership,
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Shrijay Sheth: and so anything
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Shrijay Sheth: either a partnership or an L LP or a private,
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Shrijay Sheth: limited company, they would always have two or more people.
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Shrijay Sheth: Now there are limitations for example, if you are a private,
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Shrijay Sheth: limited company, then you can only have as much as
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Shrijay Sheth: 200 members to your share subscription for an l LP.
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Shrijay Sheth: There is no bar to it.
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Shrijay Sheth: Maximum limit depends, but the bare minimum for a partnership.
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Shrijay Sheth: Private Limited or an L LP, it has to be
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Shrijay Sheth: two or more for an O PC. Obviously, it is
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Shrijay Sheth: very self explanatory that it is a one person company,
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Shrijay Sheth: and so there is only one shareholder and director in
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Shrijay Sheth: that company. When
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Saikat Pyne: is it a right time for me
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Saikat Pyne: to go from being a sole trader ship or a
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Saikat Pyne: partnership form to a private, limited company or an L LP?
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Saikat Pyne: What are the factors governing that?
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Shrijay Sheth: It's a sole proprietor driven business? You only have one
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Shrijay Sheth: owner to the business. Obviously, to convert that to any
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Shrijay Sheth: of the others, you have to have a second member
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Shrijay Sheth: or an owner added to that business. So that is
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Shrijay Sheth: a primary requirement from a partnership to L. LP. Also,
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Shrijay Sheth: if you are a partnership, you already have two or
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Shrijay Sheth: more owners to your business. Now, whether to opt for
00:13:32
Shrijay Sheth: an L LP or a
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Shrijay Sheth: private limited company again going back to the original conversation.
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Shrijay Sheth: The aspects about the taxation, for example, a private, limited company,
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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
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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