After starting a company in India, the company’s representatives will enter various business partnerships with both natural persons and legal entities. These activities will be concluded through a contract, which has to include specific provisions, as prescribed by the Contract Law in India. A legal contract signed between two legal entities in India will protect the interests of both parties, and it will prescribe the manner in which the scope of the contract will be carried out and concluded here. Our team of consultants in company formation in India can advise on the main provisions that have to be included in a contract and can offer tailored advice, depending on the scope of the respective agreement.
Main provisions of an Indian contract
Depending on the type of contract that is signed with an Indian company, the parties may need to pay the stamp duty and the regulations may vary depending on the region in which the agreement was concluded. However, all contracts in India should include the following:
• the date in which the contract was signed, which is usually mentioned at the beginning of the document;
• the parties that will enter into an agreement, with specific company details;
• the scope of the contract;
• the manner in which both parties will complete their business obligations;
• the rights and obligations deriving from the respective contract;
• financial aspects;
• the due date in which the contract will terminate.
The data regarding the parties that enter into a business agreement can vary depending on the legal form of the companies. In the case of a company representing a sole trader, the representative of the sole proprietorship will have to include his or her home address, while in the case of a limited liability company, it is necessary to mention the company’s business address. Our agents can further advise on this matter.
Other stipulations of an Indian contract
Depending on the nature of the contract, the investors may need to include non-competitive clauses or various amendments. Furthermore, it is recommended to include force majeure clauses, useful when one or both of the parties do not respect the obligations mentioned in the document, as well as dispute and settlement clauses that might be imposed in these situations.
A contract in India should include other stipulations as well and investors are invited to contact our team of representatives in company registration in India for in-depth advice of the legal requirements applicable to a corporate agreement.