4 Helpful Legal Tips For Startups To Avoid Any Judicial Mess


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4 Important Legal Tips For Startups By sumHR

  1. Termination

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  • An employee is liable to inform the organization about his/her resignation.
  • It is mandatory to serve the 30 days notice period after the resignation. This should depend essentially on the the terms of the agreement entered into between the Employee and the Employer.
  • Legal actions can be taken against employees who leave the organization without any prior notice and the relieving letter may not be provided to the employee for the same.
  • Termination of an employee should be solely dependent on the terms agreed between the Employer and the Employee.
  • In case of Lay-Off, the company is liable to give mandatory termination notice 8 days prior to the termination. As such, prior permission to lay off employees is required to be obtained from the Government. For this you have to apply to the appropriate sector of the government in the prescribed form (form Q-3). Once you get permission to lay off, only then can you proceed with laying off. Remember that lay off is permitted only for specific reasons. This being the situation the government will have to see whether the layoff applied for is really a layoff or the first step to retrenchment or closing of establishment.

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  1. Non-solicitation/Non-Compete Clauses

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  • An employee after termination, cannot work for rival companies for a defined period of time.
  • An employee after termination, cannot start his/her own company with the same services as of previous company.
  • In case if the parent company places an employee in the client company, he/she cannot take up any job in the client company for which he/she is working. The parent company can take legal actions and also demand compensation for the loss incurred.

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  1. Non-Disclosure Agreement (NDA)

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  • Keep good records of everyone who has seen your sensitive data.
  • An employee cannot copy or record confidential information pertaining to the company. If the recorded information is used or passed to any third party, the company can take legal actions against the employee and demand compensation for the same.
  • NDA is valid for a certain period even after the termination of the agreement.

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  1. Forgery

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  • Distribute the job duties on to different people for financial purposes.
  • Regularly audit all the protocols and processes of your Startup and inspect the credibility of the vendor list. Also, renew the offers every three years from existing/new vendors.
  • Background check must be done of the potential hires for any sensitive positions.
  • Increase your anti-fraud measures and prevent criminal risks by working with insurance professionals/company.
  • In case if an employee decides to make false documents under the company name without any authorization, the employee can be charged with severe criminal charges and punishment up to 3 years in jail or high compensation for the losses incurred.

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