Business Agreements Drafted in Vadodara

Partnership deeds and the registration question

Registering a partnership firm with the Registrar of Firms, Gujarat is optional. Not registering it is a serious mistake. An unregistered firm cannot bring a suit to enforce a contractual right against a third party, and a partner of an unregistered firm cannot sue the firm or a co-partner to enforce a right under the partnership deed. Firms discover this when they try to recover money and find the courthouse door shut.

Section 69(3) leaves some openings — the bar does not affect a suit for dissolution, for accounts of a dissolved firm, or to realise the property of a dissolved firm, and it catches only rights arising from a contract. Relying on those openings is not a plan.

We draft the deed, the Form A statement and the consents, and prepare the reconstitution, retirement and dissolution deeds when the firm changes.

Job work, sub-contract and works contracts

Vadodara and the belt around it run on manufacturing, and job work agreements are a large part of what comes across this counter. These need to say clearly who owns the material at each stage, who bears loss in transit and in process, what the GST position is, what the rejection and rework terms are, and what happens to the principal's goods if the job worker's premises are attached. A one-page "job work order" does none of that.

Employment, service and the limits of restraint

Two things we will tell you before drafting rather than after:

• Post-employment non-compete clauses are largely unenforceable. Section 27 of the Indian Contract Act, 1872 makes an agreement in restraint of trade void, subject to a statutory exception for the sale of goodwill and to certain partnership restraints. Restraints operating during employment stand on much better ground; the case law on non-solicitation is mixed. We will draft what has a realistic chance of being enforced rather than what sounds strong in a meeting.
• Training bonds must be a genuine pre-estimate of cost. A bond amount plucked from the air reads as a penalty and courts treat it accordingly. Tie it to actual documented training expenditure and it has a chance.

MOUs

Whether a memorandum of understanding binds you depends entirely on its wording, never on its title. We see MOUs that are full contracts and MOUs that are worth nothing, both called the same thing. If it concerns immovable property and possession passes, registration comes back into the picture under section 17(1A) of the Registration Act.

What we draft

Partnership, reconstitution, retirement and dissolution deeds; LLP and supplementary agreements; loan agreements and guarantees; MOUs; employment, appointment, service and consultancy agreements; NDAs and confidentiality agreements; franchise, distributorship, dealership and agency agreements; job work, sub-contract, construction and works contracts; AMC, supply, vendor and transport contracts; software, SaaS and development agreements; IP licences and assignments; joint venture and shareholders' agreements; arbitration agreements; settlement and termination agreements.