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INTRODUCTION  As a small business owner, it’s essential to understand non-disclosure agreements (NDAs) and their significance in protecting your sensitive information. An NDA is also known as Confidentiality Agreement. A non-disclosure agreement’s is a legally binding contract between two or more parties that outlines the confidential information they will share with each other and restricts its disclosure to third parties. A non-disclosure agreement’s main purpose is to allow its parties to freely share information without any fear and to prevent sensitive and confidential information from becoming public knowledge. For example: If a contractor comes across the secret formula for the famous Mcd Burger, he would be prohibited from telling anyone else without facing serious legal consequences costing him a lot of money. WHAT IS CONFIDENTIAL INFORMATION? The term “Confidential Information” shall means and include all information and data relating to the purpose which is obtained, whether in writing , pictorially , in machine readable form, on compact disc, electronic mail, postal mail orally in connection with or during the course of the agency engagement, intellectual property and other customer related information, sales information, supplier information, sales statistics, market intelligence, marketing information and other commercial strategies of a confidential or proprietary nature. However, Confidential Information does not include information that falls under one or more of the following categories: is in or comes into the public domain without breach of this agreement by the agent; was in the agent possession prior to receipt from company and was not obtained by the agent from the company under an obligation of confidentiality or non-use; is obtained by the agent from a third party and no obligation of confidentiality or non-use of the company; is approved for release or use by written authorised from the Company; is required to be disclosed by the agent at the upon request or at the express direction of an authorized governmental or judicial agency. PURPOSE OF NON-DISCLOSURE AGREEMENT’S The main object of an NDA is to protect confidential information from unauthorized disclosure. NDAs are commonly used in various business contexts, such as during mergers and acquisitions, partnerships, employment agreements, or when sharing sensitive information with contractors, consultants, or collaborators. By signing an NDA, the parties involved can establish a legal framework that ensures the confidentiality of the disclosed information. TYPES OF NON-DISCLOSURE AGREEMENT’S Non-disclosure agreement can be of three types: UNILATERAL NDA- It involves two parties but only one party discloses information to the other and wants to protect it from further dissemination. BILATERAL NDA- It is also known as Mutual NDA. It includes two people, each of whom shares information with the other with the intention of keeping it from being shared further. MULTILATERAL NDA- When three or more parties join into an agreement, at least one of them must disclose information to the other parties while also pledging to keep it from being shared further. A single Multilateral NDA can be used in place of two to three Unilateral or Bilateral NDAs. PARTIES TO THE AGREEMENT The agreement should begin with a description of the parties involved. The revealing party and the recipient of the information may be referred to as the “disclosing party” and the “recipient party,” respectively, if the NDA is a unilateral agreement and only one party is releasing sensitive information. A clause that defines who else the recipient may disclose the sensitive material to throughout the course of due diligence and contract talks should also be included in an NDA. WHY SIGNING A NON-DISCLOSURE AGREEMENT’D IS SO IMPORTANT? Non-Disclosure Agreements are crucial for firms in order to maintain their competitive advantage. For instance, a business may need to hire someone or contract out work if it is creating a new product or something for sale. Most of the time, business owners must communicate sensitive or private information with other people or organisations.  A written confidentiality agreement that has been signed might lessen the chance of intellectual property theft. Without a signed non-disclosure agreement, misuse or inadvertent disclosure of sensitive information can occur. This is because even when discussing your product or service with another person in simple terms, you run the risk of accidentally disclosing information whether you realise it or not, you’re telling someone your “secret”. Considering that even a few minor specifics about that good or service could inspire someone to create something akin to what you just done. An individual’s product or service should be safeguarded and kept a secret for as long as feasible, similar to the KFC secret formula, which no one can use or reproduce. And when one needs to speak with anyone else to make their product or service work or to receive their advise, one must be sure to sign an NDA in order to protect their sensitive information. When you consider what you are about to say, it seems appropriate to provide additional assurance that the person you are talking to will not talk to others. WHAT ARE THE IMPORTANT CLAUSES IN NDA? Clause 1. Definition of “Confidential Information” Confidential Information must have a broad enough definition to include all types of information. Information that is both tangible and intangible can fall under this topic. Only information that is already known to the receiving party and is in the public domain cannot be referred to be confidential. Clause 2. Use of the information Some parties limit the dissemination of information to a select group of the other party’s personnel or departments. In this sentence, the word “need to know” is the one to focus on. In essence, this paragraph mandates that the information provided be shared with those who “need to know” it and that it only be used for the purposes specified in the Agreement.  Clause 3.  Exclusions from Confidentiality This clause specifies certain types of information that are not subject to confidentiality, such as information that is already publicly known or becomes publicly available through no fault of the receiving party. Clause 4. Obligation of Receiving Party This clause outlines..

Introduction 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 Client contracts 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 Client Contracts. Know the Basics: Become familiar with the basic components of a client contracts, 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. Here are seven quick recommendations 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 Check : What is Partnership Deed? Ritu

WHAT IS PAYMENT TERMS? A legal contract between buyer and seller that specifies the payment terms is known as payment terms agreement. It can also specify what happens if the client doesn’t pay on time, as well as any potential interest charges and late fees. Both sides can benefit from such an arrangement. Customers value knowing exactly what is expected of them when it comes to paying invoices, and businesses value knowing how they will be paid if their clients fail to pay their bills. Terms contain the due date for payment, the acceptable payment options, and any reductions offered for early settlement or waiver of late fees. They aid in clarifying expectations for both customers and business owners, promoting mutual understanding and steady revenue flow for the enterprise. COMMON SECTION IN PAYMENT TERMS AGREEMENT The typical sections found in Payment Terms Agreements are listed below. You can examine these parts by clicking on the links to the sample agreement below. Payment Due Date: The specific date or deadline by which a payment must be made. It is the deadline by which the payer is anticipated to pay the remaining balance. Invoicing and Documentation: This section outlines the requirements and procedures for submitting invoices and the necessary documentation to support the payment request. It specifies the format, delivery method, and any additional information that should be included in the invoice. Interest: Interest refers to the additional amount charged on overdue payments. When a payment is not made by the specified due date, interest may be applied to the outstanding balance as a penalty for late payment. Security: Security in payment terms refers to measures taken to ensure payment or mitigate the risk of non-payment. It may include requesting collateral, bank guarantees, or other forms of financial security from the payer to protect the payee’s interests. Early Payment Discount: An early payment discount is an incentive offered to encourage prompt payment. It is a reduction in the total amount due or a percentage off the invoice amount provided to the payer if payment is made before the specified due date. Application and Term of Payment: This section defines how the payment will be applied, such as allocating the payment to specific invoices or outstanding balances. It also specifies the duration or term of the payment agreement, including any installment plans or recurring payments. Payment Methods: Payment Methods section outlines the acceptable methods by which the payer can make the payment. It may include options such as cash, check, bank transfer, credit card, or electronic payment platforms. Currency and Exchange Rates: This section specifies the currency in which the payment should be made and may address any provisions related to currency exchange rates. If international transactions are involved, it may also state the responsibility for any associated fees or currency conversion charges. Late Payment Charges: Late payment charges refer to additional fees or penalties imposed when a payment is not made by the specified due date. This section outlines the amount or percentage of the late payment charges and when they will be applied.  Event of Default: The event of default refers to a situation in which a    party fails to fulfil its payment obligations as outlined in the agreement. This section defines the specific circumstances that constitute a default, such as non-payment, repeated late payments, or violation of other terms, and the consequences or remedies that may follow.  Notices: The notices section specifies how formal communications or notifications related to payment should be delivered between the parties. It outlines the preferred method of communication, such as written notice, email, or registered mail, and provides the contact information for sending and receiving notices. WHY SHOULD PAYMENT TERMS BE INCLUDED IN CONTRACTS? Following are few point that indicate the reason to include payment terms in contracts: Client Relationship: For all parties, clear payment conditions establish clear expectations. Terms make it clear to both customers and businesses when to expect payments, deliveries, and discounts. Payment conditions can be discussed with clients, fostering greater understanding and communication in the working relationship. Legal Protection: Including payment terms in contracts helps establish a legally binding agreement between the parties involved. If any payment issues arise, having written and agreed-upon terms provides a solid foundation for resolving disputes and potentially seeking legal remedies. Cash Flow: A steady cash flow is necessary for small firms to maintain day to day operations. Accurate invoices help you forecast future income, and payment terms ensure that you have the resources necessary to provide a service or create a product. Avoidance of payment delays: Payment terms act as a reminder and encourage timely payments. By clearly specifying due dates and any applicable penalties for late payments, you increase the likelihood of prompt payment by customers. HERE ARE SOME GUIDELINES FOR DRAFTING EFFECTIVE PAYMENT TERMS IN SMALL BUSINESS CONTRACTS Be clear and accurate: Clearly state the payment amount, due dates, and acceptable payment methods. Avoid ambiguous language and include any applicable discounts, late fees, or interest charges. Define invoicing procedures: Outline how invoices should be submitted and the required information they should include. Specify the preferred format (electronic or paper) and any additional supporting documents necessary. Clearly define payment deadlines: Clearly define the due dates for payments and any grace periods provided. Consider setting shorter payment terms for quicker cash flow, but ensure they are reasonable for your customers. Include late payment penalties: Specify the consequences for late payments, such as late fees or interest charges. This incentivizes timely payments and helps compensate for any additional administrative costs or financial strain caused by late payments. Offer early payment incentives: Consider providing discounts or other incentives for customers who pay before the due date. This can encourage prompt payments and strengthen your cash flow position. Communicate payment milestones: For larger projects or long-term contracts, consider including payment milestones that align with project progress. This helps manage cash flow and ensures timely payments based on completed deliverables or specific project stages. Outline payment dispute..

What is  Master Service agreement? A Master Service Agreement (MSA) is a contract between two parties that outlines the terms and conditions of a long-term business relationship. It is a foundational document that sets the framework for any work or services that may be provided in the future. An MSA is typically used in industries requiring ongoing services, such as technology, consulting, or construction. The agreement sets out the expectations of both parties and lays the groundwork for how they will work together over the course of the relationship. It is a more complex with extremely technical language and more complicated terms and conditions. Because of the careful consideration given to legal issues during the drafting process, these contracts serve as the foundation for all succeeding transactions and agreements. However, it is important to note that an MSA is a legally binding contract and should be carefully reviewed and negotiated by both parties. It is important to ensure that the terms and conditions are fair and reasonable and accurately reflect both parties’ needs. In addition, an MSA should be periodically reviewed and updated as needed to ensure that it remains relevant and effective. As the business relationship evolves, it may be necessary to revise the terms and conditions of the MSA to reflect any changes. What Type of agreements are governed by a Master Service Agreement  Statement of Work (SOW) – an SOW is a specific document that outlines the details of a particular project or service. It typically includes project timelines, deliverables, and pricing. The MSA will often reference the SOW, and the terms of the MSA will govern the SOW. Service Level Agreement (SLA) – an SLA is a document that outlines the performance expectations for a particular service. It typically includes metrics such as uptime, response time, and resolution time. The MSA may reference the SLA, and the terms of the MSA will govern the SLA. Non-Disclosure Agreement (NDA) – an NDA is a legal agreement that prohibits the disclosure of confidential information. The MSA may include an NDA, which will govern the handling of confidential information throughout the relationship. Master Consulting Agreement (MCA) – an MCA is a type of MSA that is specifically tailored to consulting services. It typically includes clauses related to intellectual property, warranties, and indemnification. The MCA will govern any consulting services provided under the agreement. Master Purchase Agreement (MPA) – an MPA is a type of MSA that is specifically tailored to purchasing goods or services. It typically includes clauses related to delivery, pricing, and warranties. The MPA will govern any purchases made What is the purpose of Master Service Agreement? The two main reasons for using MSA: The primary purpose of an MSA is to save time and resources by eliminating the need to renegotiate terms and conditions for each new project or service provided. Instead, the parties can simply refer back to the MSA for guidance. This can help to rationalize the contracting process and make it more efficient. Another purpose of an MSA is to build trust between the parties. By establishing clear expectations up front, both parties can be confident in their roles and responsibilities throughout the relationship. This can help to reduce misunderstandings and disputes and raise a more positive working relationship. WHAT IS INCLUDED IN MASTER SERVICE AGREEMENT? 1.Product and Project Management: In the event of a problem who is responsible for delivering & installing the products or services? 2.Employee Management: Both parties should list requirements for potential employees and background checks and other employment screening activities. 3.Income and Expense: Determining how a cost will be projected and how payments will be obtained and processed. 4.Insurance Coverage: Who will be in charge of insurance acquisition and what penalties will be imposed if the responsible party fails to acquire and maintain the agreed-upon insurance coverage? 5.Escrow and Security: Who provides backup funding and payment for project or product protection? 6.Government Requirements and Liabilities: Where will the work be done? Who will be in charge of ensuring compliance with local, state, and federal regulations, as well as risk mitigation? 7.Tax Responsibility: Who will track taxes and how will tax obligations be distributed and reconciled? 8.Third-party Coverage and Concerns: How will actions involving a third party be handled and who will be responsible to resolve these problems or disputes? 9.Term & Termination: MSA should specify the term of the agreement and the conditions under which the agreement can be terminated. It may specify the notice requirements, and any obligations or liabilities that may remain after termination. It should include provisions for renewals or extensions of the agreement, as well as any notice requirements for termination. What are the essential elements of a Master service Agreement? Scope of work – The MSA should clearly define the scope of work or services to be provided under the agreement. This may include a description of the services, the deliverables, and the timeline for completion. Confidentiality -The MSA should include provisions to protect the confidentiality of any information exchanged between the parties. This may include requirements for non-disclosure agreements, confidentiality agreements, or other provisions to ensure that sensitive information is protected. Both the Parties agree not to disclose any confidential information or business secrets to any third parties without written consent. This includes forms of trade secrets and intellectual property that belong to the company. Dispute Resolution -The MSA may include provisions related to dispute resolution. It may specify the method to resolve the disputes, whether through negotiation, mediation, or arbitration, and any other relevant procedures. Jurisdiction – A jurisdiction clause specifies the jurisdiction or legal venue in which any disputes arising under the agreement will be resolved. This clause will specify a particular court or arbitration forum that will have exclusive jurisdiction over any disputes arising under the MSA. The jurisdiction may be based on the physical location of one or both parties or on a neutral location that is agreed upon by the parties. Limitation of Liability– MSA should..

Introduction Partnership deed is a written legal document that is also known as partnership agreement made between two individuals who have the intention of doing business with each other and share profits and losses.  This document mentions all the essential terms and conditions related to the business, such as profit & loss sharing, obligations, admission of new partner’s, decided rules, salaries, exit process, etc. The partnership deed helps to resolve any disagreement or conflict which arises between the partners regarding the partnership terms. A Partnership deed, also known as the Partnership Agreement, is registered under the Indian Registration Act 1908, so there is no risk of the Deed of partnership being destroyed in possession of the partners. Also, registration of the partnership deed provides several benefits, such as making the organization eligible for PAN and opening a bank account. The purpose of a partnership deed is to give a clear understanding of the roles of all partners, ensuring the smooth running of the operations of the partnership firm. Importance of a Partnership Deed A partnership deed defines the position of the partners of the firm. It regulates the liabilities, rights and duties of all partners. It helps to avoid misunderstandings between the partners since all of the terms and conditions of the partnership are specified in the deed. In the case of a dispute amongst the partners, it will be settled as per the terms of the partnership deed. There will be no confusion between the partners regarding the profit and loss sharing ratio amongst them. It mentions the role of each individual partner. It contains the remuneration that is to be paid to partners, thereby avoiding any dispute or confusion. Partnership deed is written or created with the following basic information’s: Name and address of the firm as well as all the partners. Nature of business to be carried out by the firm. Date of commencement of business. Duration of partnership (whether for a fixed period/project) Capital contribution by each partner. Profit sharing ratio among the partners ESSENTIAL CLAUSES OF A PARTNERSHIP DEED The partnership deed contains the following details: NAME OF THE FIRM The partners of the firm should decide the firm’s name which adheres to the provisions of the Partnership Act. The firm name is the name under which the business is conducted. DETAILS OF THE PARTNER The deed should include details of all the partners, such as their names, addresses, contact number, designation, and other particulars. BUSINESS OF THE FIRM The deed should mention the business that the firm undertakes. It may be dealing with producing goods or rendering services. DURATION OF FIRM The deed should mention the duration of the partnership firm, i.e. if the firm is constituted for a limited period, for a specific project or for an unlimited period. PLACE OF BUSINESS The deed should contain the principal place of business where it carries on the partnership business. It should also mention the names of any other places where it conducts business. CAPITAL CONTRIBUTION Each partner will contribute an amount of capital to the firm. The entire capital of the firm and the share contributed by each partner are to be mentioned in the deed. SHARING OF PROFIT/LOSS The ratio of sharing profits and losses of the firm amongst partners should be noted in the deed. It can be shared equally amongst all partners, or according to the capital contribution ratio or any other agreed ratio. SALARY & COMMISSION The details of the salary and commission payable to partners should be mentioned in the deed. The salary and commission can be paid to the partners based on their role, capabilities or any other capacity. PARTNER’S DRWAINGS The drawings from the firm allowed to each partner and interest to be paid to the firm on such drawings, if any should be mentioned in the deed. PARTNER’S LOAN The deed should mention whether the business can borrow loans, the interest rate of loans, properties to be pledged, etc. It can also mention if a partner of the firm can borrow loans from the business or not. DUTIES AND OBLIGATIONS OF PARTNER’S The rights, duties and obligations of all the partners of the firm should be mentioned in the deed to avoid future disputes. ADMISSION, DEATH & RETIREMENT OF PARTNER’S The deed should mention the date of admission of the partner, the regulations governing the admission of a new partner, resignation, or changes after the death of a partner of the firm. ACCOUNTS & AUDIT The deed should contain details about the audit procedure of the firm. It should mention the details of how the partnership accounts are to be prepared and maintained. Below are the points to be kept in mind while drafting the partnership deed: The deed should contain the clauses as mentioned above. It must be executed by at least two or more partners. It should be drafted by mutual agreement between the partners. Ambiguous clauses and sentences must be avoided. The clauses must clearly state the details/description. It should be printed on an e-stamp paper of a value of Rs.200 or more. It should be signed by all the partners on all pages of the deed. Also Check : What is licensing Agreement 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