Author: Ritu

Introduction Business owners get into agreements with other parties for a various reasons and they may not always be completely understood or aware of the legal ramification on the company’s priceless Intellectual Property (IP) assets, such as its trademarks, copyright, patents, and trade secrets. Your intellectual property (IP) has to be properly protected because it has a lot of conceivable worth for your company. Intellectual property in Contracts Patents, trademarks, copyright, and trade secrets are some examples of intellectual property (IP), although a definition of IP in a contract may also include confidential or proprietary information. It may encompass both local and international, registered and unregistered, intellectual property. Some Typical contracts and their purpose in relation to IPR Assignment Contract The Intellectual property rights may be fully or partially transferred from the original author to another person or entity for payment under an agreement to assign the IPR. By means of this type of contract, the original owner transfers to another individual or company his right to promote or market the relevant intellectual property. Non disclosure Agreement Companies enter into NDAs when considering commercial relationships to safeguard information falling within the branch of IP that is also dynamic for the running of the company as such as trade secrets, business plans or corporate structures, technologies. This is primarily resorted to protect the confidential information qualifying as intellectual property. Agreements for Technology Licensing or Transfer Under this agreement, the owner of the IP grants permission for another individual or business to make use of the technology that the owner created in exchange for an adequate amount that has been mutually agreed upon. It is a means of disseminating technological information. When smaller businesses buy technological licenses from larger ones to produce and market a product, it aids in their growth. Copyright Licensing The owner of the copyright can grant the other people or organizations permission or ‘License to leverage the copyright e.g, creating a reprint, or to reproduce or distribute the original works on mutually agreed terms under such an agreement. Research and Development Agreement Such agreements are made between a business and any person or group for the purpose of doing research and development for products, services, or ideas. Some typical examples are scientists working with pharmaceutical companies, academics researching at universities etc. Important Clauses in Intellectual Property Contract Ownership: Who will be the owner of the intellectual property used or continually developed throughout the relationship must be made absolutely explicit in the contract. Even if the connection is subsequently ruined, the ownership status of the intellectual property needs to be made clear. Confidentiality: The owner must be protected by a confidentiality clause, as protecting the private and confidential nature of IPR is the main goal of agreements relating to IPR. Patents, copyright, and trademarks are examples of intellectual property that has been published and is thus openly accessible. They must be kept secret since they are frequently used in conjunction with other confidential knowledge to create business results. Limit of IPR Use: The IPR owner must specify that the other party will limit access to the sensitive information to just those employee, agents, advisors, consultants, or representatives who are necessary to work on its behalf in order to carry out the contract and that no other parties should be granted access to such information. Inventory: IPR owners need to be attentive enough to record and document their IPR so that it is always possible to identify it. 6. Termination / Breaches: If a contract is substantially breached, it may be possible to claim termination. The breach needs to be sufficiently serious, a so-called repudiatory breach. In determining whether a breach was repudiatory, the court will look at whether the term that has been breached was vital to the performance of the contract. If it is, then termination is permissible, and damages can be claimed. Also Check : How To Registered Trademark In USA Ritu

What is Service Agreement? Service Agreement Meaning : A service agreement is a written contract that unites a client and a service provider. It outlines the tasks to be carried out and the obligations of both parties in order to complete the work and get payment. A service agreement, which is also known as a professional services agreement, service contract, or client services agreement or contract, specifies the dates on which the work will start and end as well as any additional deadlines that might be necessary. Who Requires a Service Contract? One strategy to control expectations while the job is being done is to have a documented service agreement. Additionally, it guarantees that both parties will receive the services and compensation they agreed upon within the anticipated time range. Businesses that offer or receive services should have a thorough service agreement in place to ensure that all parties are aware of their obligations and rights under the contract as well as what to do in the event of a dispute. Key terms in service agreements that clients should take into account Small businesses should take a number of legal factors into account when signing service agreements in order to safeguard their interests. The following constitute essential legal factors for service agreements in small companies. Scope of services: It should outline the scope and type of the services, as well as the deadlines, products, and any unique requirements. This section should be detailed and precise. Pricing and terms of payments: specify the terms of payment, the frequency, and the mode of payment. Include any additional costs, such as taxes or expenses, and, if necessary, mention late payment penalties or interest fees. Compensation: Specifies the total or ongoing payment schedule that the client and service provider have agreed upon in exchange for the services. Confidentiality and non-disclosure: Use non-disclosure and confidentiality provisions to guarantee that secret proprietary information is not shared with other parties. Termination: Specify the circumstances under which the agreement may be terminated or services suspended by either party. Include any necessary fines or repercussions along with notice periods. Intellectual Property Rights: This clause specifies who are the owner of any intellectual property (IP) is resulting from the service. It is essential to discuss ownership and usage rights if the service agreement pertains to the development or use of intellectual property.  Non-compete Clause: Specifies whether or not the service provider may collaborate with a rival of the client. Dispute resolution: Include a clause describing the process to be used to settle disagreements, such as mediation, arbitration, or litigation It is preferable to have written service agreements by this you have the chance to describe requirements for both parties to the agreement by drafting a Service contract. Contracts specify the details of the work to be done, the cost of the project, the timing of payments, and the procedures for handling disagreements misunderstandings that could occur if the agreement is not in writing. Conclusion : The service agreement represents a mutual commitment between [Service Provider’s Name] and [Client’s Name] to uphold the terms and conditions outlined herein. Both parties acknowledge their responsibilities, rights, and expectations as detailed in this agreement.  Also Check : Joint Venture Agreement   Ritu

How to incorporate a company in US from India? These days there is wave of Indian Startups inclined towards incorporating businesses in USA. As you guessed, establishing your business in the USA comes with far too many advantages. If you wish to become a renowned global brand, you should incorporate your business in USA. A lot of global brands which are known worldwide started from USA like Google, Airbnb, Apple, Facebook etc. This article gives you a startup guide on why and how you should apply for incorporation in the US. Why are the Starts-ups more inclined towards US Registration? USA provides one of the most start-up friendly environments. If you want to access the greatest startups ecosystem in the world, USA is the right destination. Starting a business in USA is completely hassle free. If you have finalized your business plan and you are all set to go, it will hardly take 3-5 business days for incorporating a business in USA. It provides ease of doing business in true letter and spirit. Advantages of incorporating a Company in US: Entrepreneur-friendly laws, rules and regulations; Security to your assets; Lesser corporate income tax; Better privacy for the shareholders and directors as they do not need to disclose their names; Better preference among investors; Better market value; Flexible structuring for companies with lesser restrictions; Special courts for corporate matters; Trade accessibility of Dollar; New market opportunities; How to get a US Registration STEP 1: Determine the type of company: The two most common types of companies to get incorporated in US are corporation (both C Corp and S Corp) and LLC. You can also register it as sole proprietorship or non-profit corporations. “C” Corporation A C corporation (or C-Corp) is a legal structure in which the owners and shareholders are taxed separately from the corporation; C-corporations are subject to Corporate Income Tax; Double taxing of profits (both at corporate level and personal level); Can have as many shareholders as they want. It is easier to raise money; They have mandatory annual shareholders’ meetings, and Annual Director’s meetings; Their board of directors is chosen by shareholder’s voting; More class of stocks and very easy to attract investors. “S” Corporation S corps are pass through taxation entities with no corporate tax, but their taxes are paid through shareholder profits; Single taxation; Taxed same as Partnerships; This is particularly true of firms established prior to the advent of the modern limited liability company; It should have 100 or less allowable shareholders. (May not be partnerships, corporations or non-resident alien shareholders); Have only one class of stock, which might be a disadvantage if you want to go public; It should be a domestic corporation, not an ineligible corporation (i.e. certain financial institutions, insurance companies, and domestic international sales corporations); LLC This structure prevails in US, but not in India just like the C corp and S corp; LLC is a hybrid structure combining the elements of both the elements of corporation and partnership. Anyone can be a member including other individuals, corporations and foreign entities and other LLCs. Banks and insurance companies cannot be made members. The liability of the members extends only to the amount of money they have invested; The profits and losses pass through its members who can file their individual tax returns. Therefore, it avoids double taxation. Articles of Organization must be filed with the state for incorporation. Sole Proprietorship Sole Proprietorship/Sole trader is basically a one man show and you have the complete power in decision making;  It has one owner who pays personal income tax on the profits he earned from the business; Your business income and personal income are the same;  They don’t necessarily need a trade name/ brand name as they are small scale businesses with specialized services that are famous among the locals. Therefore, you also don’t have a business identity; All small-scale business starts as sole proprietorship with unlimited liability on the owner, which means you are fully responsible for the profits and risks of the business. For example, beauty parlor on the street corner or a flower shop next to your house or a sweet shop on your way to school, which are all run by a single owner. Non-Profit corporation Non-profit corporations are corporate entities set up for public good; They are exempt from both state and federal taxes; They can receive donations; They can apply for grants and funds; There are two types of non-profits-one is charitable, and another is service/membership organizations. Non-profit organizations are inherently charitable organizations which have separate legal entity and exempt people from personal liability. They are also tax exempt if the organization obtains 501(c)(3), i.e. you don’t have to worry about corporate income tax. A nonprofit organization stands forever even after you are no longer able to carry on your mission. It can also have national and cross border collaborations. They can also avail government fundings. STEP 2: Choose a Unique name for your company: This goes without saying! In order to grow a brand image, it is important for you to have a unique name for your company. This is also important to register your own trademark and not to infringe someone else’s. STEP 3: Appoint a registered agent who has physical address in the state where the company is being formed: A registered agent, also known as resident or statutory agent is a necessary requirement to incorporate a company. They can be a person or a business whose address will be the address of service to the state documents which include annual reports, annual tax notices and any other legal documents necessary for the registration and running of the company. A registered agent in the state of incorporation is completely essential for the standing of the company. STEP 4: File Articles of organization (in case of LLC) Articles of Organization are sometimes referred to Certificate of Organization or certificate of formation. It is a formal document that is necessary to set up an LLC..

LICENSING AGREEMENT A licensing agreement is an agreement between two parties, i.e., the Licensor and the Licensee, in which the Licensor grants or allows the Licensee the right to use its brand name, trademark, intellectual property, patented technology, etc. In simple terms, this agreement grants the Licensee to use the intellectual property that is already being owned by the Licensor. In return of the license granted by the Licensor to use its intellectual property, the Licensee pay a fee/royalty to the Licensor to use its intellectual property. The Party that is providing license is called the Licensor and the Party that is acquiring the license is called the Licensee. One such example of a Licensing Agreement is, Nestle and Starbucks. They entered into a licensing deal. Nestle was the Licensee and agreed to pay $7.15 billion dollars in cash to Starbucks, who was the Licensor. It acquired exclusive rights to sell Starbucks products around the world and Starbucks would receive royalties. ADVANTAGES OF LICENSING  The Licensor can use the Licensee’s distribution network to quickly and easily expand their business into new areas. Setting a licensing agreement saves a lot of time. If a person uses a trademark of another person, that person can sue the one using his trademark without a licensing agreement and it can lead to legal battles. It also gives the Licensor access to other markets. DISADVANTAGES OF LICENSING  One disadvantage is of making a contract with a wrong party. In an urgency to get into new markets, the Licensor may not do its research and may be stuck into a contract with a company whose objectives do not align with the Licensor. Both parties are at a risk of loosing their brand power and/or their reputation. When the Licensor and the Licensee enter into an agreement, it creates competition for the Licensor. Even though the Licensee represents the Licensor, they still compete with each other. Licensing agreements ensure that one has legal permission to use another person’s or business’s property. Mostly licensing agreements are for intellectual property such as, trademarks, patents, copyrighted materials, etc. There are specific types of licensing agreements: Trade secret licenses Trademark licenses Patent licenses  Copyright licenses A licensing agreement covers the following: Payment  Exclusivity  Subsidiary licensing  Quality assurance Sub- agreements Having a well written licensing agreement is essential for both the Licensor and the Licensee. It is important to have a licensing agreement in order to use intellectual property of another person. Also Check : Commercial Lease Agreement Ritu

DIFFERENCE BETWEEN AGREEMENTS AND CONTRACTS AGREEMENT When a person offers something to someone else, and the concerned person accept the proposal with equivalent consideration, this is known as agreement. When two or more person agreed upon same thing in the same way. In short it is defined as the contract which lack enforceability by law is known as agreement.  Types of agreement are as under: Void Agreement Wagering Agreements Contingent Agreement Voidable Agreement Illegal agreement Implied Agreement Express Agreement Example: Harsh and Harshita decided to go for shopping on Saturday. Harsh did not come for shopping, and this resulted in the waste of Harshita’s time. Now Harshita can’t compel Harsh for the damages as the decision to go for shopping is not a contract but a mutual agreement. CONTRACT A legally enforceable agreement for doing or not doing an act is known as contract.  A contract must contain offer and acceptance, intention of creating legal obligation, adequate and unconditional consideration. Types of contracts are as under: Void Contract Voidable Contract Contingent Contract Express Contract Implied Contract Bilateral Contract Unilateral Contract Executory Contract Executed Contract Example: Siddharth promises his friend to pay his debt, and the agreement was in writing as well as registered. This is a valid agreement and can be enforceable.                                         DIFFERENCE BETWEEN CONTRACTS AND AGREEMENTS Basis for Comparison Contracts Verbal Agreements Meaning When an agreement is enforceable by law, it becomes a contract When a proposal is accepted by a person to whom it is made, with requisite consideration Section Section 2 (h) of Indian Contract Act, 1872 Section 2(e) Indian Contract Act, 1872 Elements Agreement and enforceability Offer and acceptance Scope Narrow Wide Consideration There must be a consideration Agreement can be made without any consideration Preferred mode Contract must be in writing Agreements may be made in orally or in writing Legality There is a legal obligation in every contract Legal obligation may or may not be included in verbal agreement One in other All contracts are agreements But all agreements need not to be a contract Clarity & Details Can provide specific and detailed terms and conditions Relies on memory and subjective interpretation Modification Amendments or modifications may require written consent Can be modified verbally, but proving the modification may be difficult Legal Protection Offer greater legal protection and clarity in case of disputes or breaches Lack of written evidence may make it challenging to resolve disputes or prove the terms Complexity Suited for complex agreement that require detailed provision Suitable for simpler or informal agreements Professionalism Indicate a high level of professionalism Less formal and may indicate a more casual approach Also Check : Franchise Agreements Ritu

HOW TO REGISTER A TRADEMARK IN THE USA WHAT IS TRADEMARK? A trademark serves as a means for individuals and businesses to distinguish their goods and services from others in the market. It can take the form of a brand name, logo, phrase, or word, and is a valuable asset that needs legal protection through intellectual property rights. In the United States, the registration and administration of trademarks are overseen by the US Patent and Trademark Office (USPTO). While federal registration through the USPTO is the primary avenue for trademark protection, individual states also offer their own trademark registration systems. State-level registrations typically provide limited protection within a specific geographical area. On the other hand, federal registration provides comprehensive protection across the entire United States, offering broader recognition and legal benefits. 2. WHO CAN APPLY FOR A TRADEMARK? In the United States, any individual or entity that meets the eligibility requirements can register a trademark. The bellow mentioned parties are eligible to apply for a trademark in the USA: Individuals: Any person who uses a mark in connection with their goods or services can register a trademark. This includes individuals who operate businesses as sole proprietors or entrepreneurs. Corporations and Companies: Business entities, such as corporations, limited liability companies (LLCs), partnerships, and other legally recognized organizations can register a trademark to protect their brands. Foreign Entities: Foreign individuals or entities that use or intend to use a trademark in commerce within the United States can also register a trademark. It’s worth noting that foreign applicants are required to have a U.S.-licensed attorney represent them in most cases. Non-Profit Organizations: Non-profit organizations that use or plan to use a trademark in connection with their goods or services are eligible to apply for trademark registration. Government Entities: Government agencies or departments can also apply for trademark registration if they use a mark to distinguish their goods or services. 3. WHAT CAN BE TRADEMARKED? In the United States, a wide range of elements can be trademarked to protect a brand’s identity and distinguish its goods or services from others. The following are examples of what can be trademarked: Brand Names: A brand name, such as Nike or Coca-Cola, can be trademarked to provide exclusive rights to use that name in connection with specific goods or services. 2. Logos and Symbols: Unique logos, symbols, or graphic designs that represent a brand or its products can be trademarked. For example, the Apple logo or the Nike “swoosh” symbol. Slogans and Taglines: Catchy slogans, memorable phrases, or taglines associated with a brand can be trademarked. Such as “A to Z” for Amazon or “Das Auto” for Volkswagen. Product Packaging: Distinctive product packaging, such as the shape of a Coca-Cola bottle or the design of a Pringles can be trademarked to protect the unique visual elements that consumers associate with a particular brand. Product Names: Names given to specific products or services can be trademarked. For instance, the name “iPad” is a registered trademark for Apple’s tablet device. Sounds: Unique sounds or rings that are used to identify a brand, such as the Intel “bong” sound or the NBC chimes, can be trademarked. Colors: In certain circumstances, specific colors can be trademarked when they are closely associated with a brand and have acquired distinctiveness, such as the Tiffany blue color. Fragrances: Rare or distinctive scents used in connection with products such as perfumes or air fresheners can possibly be trademarked. Additionally, the element should not be commonly used to describe the goods or services or directly describe a characteristic or quality of the goods or services. Generic and descriptive elements typically do not qualify for trademark protection. 4. WHAT IS THE PROCEDURE FOR APPLYING FOR TRADEMARKS IN THE USA? The procedure for register a trademark in the United States includes some steps. Below mentioned is an overview of the registration process: Before filing an application, it is advisable to conduct a thorough trademark search to ensure that your desired mark is available and does not conflict with existing trademarks. This search can be performed independently using the USPTO’s trademark database or with the assistance of professional search firms. Determine whether you will be filing based on the actual use of the mark in commerce or on the intent to use the mark in the future. This will depend on your specific circumstances and whether the mark is already in use at the time of filing. Complete the Trademark Electronic Application System (TEAS) form, providing accurate information about the applicant, the mark itself and the goods or services associated with the mark. File the trademark application electronically through the USPTO’s Trademark Electronic Application System (TEAS) and pay the required filing fee. The fee amount will depend on the filing basis and the number of classes of goods or services included in the application. Once the application is submitted, it will be assigned to a trademark examiner at the USPTO. The examiner will review the application for compliance with legal requirements and assess potential conflicts with existing marks. If any issues or objections arise, they will be communicated through an Office Action. If you receive an Office Action, you must respond within the specified timeframe, typically within six months, addressing any objections or issues raised by the examiner. If you do not respond then it may result in rejection of the application. If the application is approved by the examiner, it will be published in the USPTO’s Official Gazette for a specified period, typically 30 days. During this time, third parties can oppose the registration if they believe it infringes on their existing rights. If no opposition is filed, the application proceeds to the next step. If there are no successful oppositions, or if the application was based on intent to use and the mark has been used in commerce, the USPTO will issue a Notice of Allowance. You will need to submit evidence of actual use of the mark or file a request for an extension of..

RULES AND REGULATIONS IN IMPORT EXPORT BUSINESS Legal Metrology Act, 2009:  Legal Metrology Act, 2009 along with Legal Metrology (Packaged Commodities) Rules, 2011 provides rules and regulations in import export business relating to standard units to be used for weights and measurement of goods. Every unit of weight or measure shall be in accordance with the metric system based on the international system of units. Using or keeping any weight or measure otherwise than in accordance with the provisions of the said Act is an offence. Further the rules require every manufacturer, packer and importer who pre-packs or imports any commodity for sale, distribution or delivery to get him registered under these Rules. 2 Goods and Services Tax (GST): GST laws were enacted in the year 2017 to subsume various other indirect taxes. GST is levied on supply of goods and services. Supply is further classified as Inter-state supply (Where supply is made in different state) or intra state supply (Where supply is made within the state). Imports or export of goods is also considered as interstate supply, since the movement of goods is from area outside the state. As per section 24 of CGST Act, 2017 which lays down grounds for compulsory registration states that any person involved in inter-state supply shall obtain registration under GST irrespective of his turnover. 3 Customs Act, 1962 and Customs Tariff Act, 1975: The customs act, 1962 provide for rules and regulations in import export business to control import and export activity in India, whereas the Customs Tariff Act, 1975 provides applicable import duties or export duties on the goods. The customs act also provides regulation related to registration for Custom brokers governed under Customs Brokers Licensing Regulations, 2018 4 Foreign Exchange Management Act, 1999:  FEMA or Foreign Exchange Management Act, 1999 along with its rules and regulations in import export business  governs foreign investment made in India or foreign investment made from India. Foreign investment are categorized into two forms i.e., approval route and automatic route. Activities falling under approval route require prior approval from RBI whereas on the other hand activities under automatic route do not require any prior approval of RBI. However reporting of foreign investment in mandatory in all the cases. Further FEMA also imposes several restrictions on citizens of country that share land border with India such as Pakistan, China, Bangladesh, etc.   5 Foreign Trade Policy: FTP or Foreign Trade Policy 2023 has recently been issued by Ministry of Commerce and Industry. FTP is a policy that incentivizes exports from India by providing them various government incentives and benefit. The 2023 policy aims at making India a 2 Trillion USD export market by the year 2030.  The FTP further mandates every person involved in import or export activity of goods to get an Import Export Code (IEC) whose validity is lifetime. 6 General laws: Various general laws such as Companies Act, 2013, Income tax act, Consumer Protection Laws, Information technology act etc., would in general be applicable on all the companies. Such acts might be applicable only on occurrence of specific event. Also different labor laws and code might also be applicable to the person depending upon requirements as prescribed under different act. These are the rules and regulations in Import Export Business. Also Check : How to Export to Dubai From India Ritu

Introduction Contracts For small businesses to safeguard their interests and ensure a positive working relationship with their clients, navigating the legal aspects of client contracts is essential. No company is immune to legal concerns; small businesses must abide by the same regulations as the multinational businesses. Some Components of Client Contracts for small businesses Client contracts  for small businesses also known as (service contracts, service agreements, or client agreements) and it constitute a vital component for your company for a number of reasons. They line up you and your client’s desired objectives; They lay out in detail every aspect of your working arrangement; They shield your business from potential legal action. The Fundamental Steps That You Have To Execute In Order To Draft a Straightforward Client Contract That Contains All of the Required Information for Your Service Agreement. Know the Basics: Become familiar with the basic components of a contract, including offer, acceptance, consideration, and the desire to establish legal relations. All of this data will assist you in efficiently creating and reviewing contracts. Include Both Parties’ Information: The parties to the contract shall be identified by their full names, addresses, and contact information. This makes the contract enforceable and avoids confusion. Define the Terms and Scope of the work: The work’s scope, deliverables, and deadlines must all be specified precisely and any other terms and restrictions. It’s vital to be as detailed as you can when describing the obligation you have been and the expectations on both sides Termination and Renewal: Insert clauses outlining the conditions under which either party may terminate the agreement as well as the necessary notice time. If applicable, take into account all relevant factors including clauses for contract extension or renewal. Consider Including an Arbitration Provision: In the event of a disagreement relating to the Agreement, the decision will be made by a neutral third party after hearing testimony from both parties such as litigation, arbitration, or mediation. The jurisdiction and venue for resolving disputes should be specified in a clause. Review and Update Contracts: Consistently check that your contract templates reflect changes in your company’s operations and adhere to all applicable laws. Contracts should be updated as needed to account for new risks and changing conditions. Have the contract signed by both parties: Only when both parties have signed a contract is it considered legally binding. Therefore, after your contract is ready, make sure to sign it and get your client’s signature before continuing with the contract. These are the seven quick recommendations for contracts for small business that, ideally, will prevent you from getting involved in time-consuming and expensive legal disputes. Your company has a decent chance of a profitable future devoid of significant legal difficulties as long as you adhere to these tips! Also see : Common Mistake to avoid in Contracts for small businesses Ritu