White Papers

As defined in our previous White Paper on Smart Guide to Start-ups, Start-up is a newly established business, which is incorporated with the intention of developing new products or services through the use of innovation. Now, for the survival and growth of Start-ups in India easy availability of capital/funds is essential. However, angel investors and venture capital firms provide funds to those Start-ups only, who provide "proof of concept", which becomes impossible for the budding Start-ups to present without financial backing. Similarly, banks also provide loans only to Start-ups having assets. It is a vicious cycle. Therefore, in order to support Start-ups, the Ministry of Commerce and Industry introduced Start-up India Seed Fund Scheme ("SISFS"). The Government of India released an official announcement approving SISFS on 05.02.2021, for the duration of four years w.e.f. from 01.04.2021.

A Start-Up may be defined as a newly established business, incorporated either as a private limited company, sole proprietorship firm, registered partnership firm, or a limited liability partnership (hereinafter referred to as “LLP”). A Start-Up is engaged in developing new products or providing services through the use of innovation. It is nothing but an idea that manifests into a commercial undertaking. The Department of Industrial Policy and Promotion (hereinafter referred to as “DIPP”) defines a Start-Up as an entity incorporated or registered in India comprising the following: a. Not more than seven years have elapsed since the date of incorporation/registration of the entity (in case of start-ups in the biotechnology sector, the period will extend up to ten years from the date of incorporation/registration); b. The start-up entity should be a private limited company, registered partnership firm, or a limited liability partnership firm; c. Turnover of the entity does not exceed twenty-five crore in the last five financial years. The entity should be working towards innovation, development, or improvement of products or processes and services or if it is a scalable business model with a high potential of employment generation or wealth creation.

India has always been inclined towards cash transactions. However, with the increase in usage of mobile phones and the accessibility of the Internet in India, the Digital Payments System witnessed exponential growth in India. Therefore, the Reserve Bank of India (RBI), considering the shift towards convenience and the change in mind-set of the people, introduced NBFC Peer-to-Peer Lending Direction, 2017 to promote and facilitate the use of P2P Platform in India. Essentially, P2P lending is a platform-based lending mechanism that connects lenders directly with market-based creditors. This puts together various classes of creditors and lenders on a common forum and then analyses the desires and requirements of all parties to facilitate a deal that is ideally tailored to both. Now, in order to avail a loan through P2P Lending Platform, the person is required to register himself on the websites, which will connect him directly with different lenders. Thereafter, the website of the P2P Lending Platform will provide different prices, interest rates and conditions, depending upon the applicant's creditworthiness to make the purchase possible. Now, due to the recent boom in the use of the Digital Platform, P2P Platform has seen exponential growth, since P2P Lending Platform was earlier seen as providing financial connections to individuals that will be pushed on by traditional banks as a way to reduce student loan debt at a more attractive interest rate. However, in recent years, P2P Lending Platforms have expanded their coverage, and have now started providing Consumers with credit balance at lower interest rate, Home renovation loans and car leasing loans, in addition to providing loans to meet working capital requirement of their Consumers through their platforms.

One of the most pertinent issues which has come to the fore in recent times is the implication of Data Protection Laws on M&A transactions. Since the concerns revolving around the development and shaping of Data Protection Laws in India have gained popularity, these implications have also been widely discussed since the parties to M&A transactions shall also be bound to comply with these new Data Protection and Privacy norms and regulations. If such norms are not complied with by the Target Firm (viz. the firm that is being acquired), it will not only lead to a conflict between the parties involved, but will also instill a sense of apprehension in the parties while engaging in such similar M&A transactions in the future. In this paper we will be dealing with some emerging issues of data protection, current regulatory regime for data protection laws in India and the ways in which parties can mitigate the risk of data protection & cyber security issues in a M&A transaction.

In this fast-moving world, user convenience and seamlessness is shifting everything to digitalization. This era of digitalization has an impact over various aspects of our lives including finance. In this new era, the mechanism of taking loans has been completely transformed from the traditional 3-6-5 formula to 3-1-0 formula. With the introduction of Digital Lending Platform, the business of lending has metamorphosed into a different shape altogether. Digital Lending Platform allows consumers to avail finance while shopping on ecommerce sites, allows SME to avail loans based on real time sales data available on ecommerce marketplace, allows employee to avail loans on salary, allows youth to avail small ticket sized student loans to buy gadgets, with the option of buy today pay later or other postpaid schemes, peer to peer finance, crowd funding etc. The virtual process is now instantaneous and all it takes is just 3 minute to think, 1 minute to transfer and 0 human touch. Now, Digital Lending Platform is the platform where everything is happening from capturing personal and professional data of the Borrower, use of credit engine to check credit history, creation of proposal for user, acceptance and execution of legal documents, e-KYC, online disbursement and repayment of loan within matter of minutes.

India has always been inclined towards the use of cash for financial transactions. However, rapid development of the technology, accessibility of the internet coupled with government initiatives such as 'Digital India', everything is shifting towards digitalization and this era of digitalization has an impact over various aspects of our lives including finance. The term FinTech has always been around. However, the technological advances, change in demand for financial products, and competition in Financial Service Sector has led to redefining of the business models across different segments of the Financial Services industry by enabling them to improve service delivery systems which in turn is contributing towards digital financial inclusions. Fintech as the word suggests is a fusion of "Financial services" and "Technology" and refers to those companies, which uses technology to automate and enhance procedure of providing financial services in an efficient and faster manner.

Bilateral Investment Treaties (“BITs”) in the mining sector are quite popular around the globe today. The growing number in the mining industry is due to a very high amount of returns that mining industry promises in today’s energy-hungry world. However, investment in mining is a package-deal as it also comes with very high risk and has been a constant cause of dispute among host-nations and investors.There has been substantial development in extensive clauses by investors and host-nations to protect themselves from heavy losses of mining disputes. Coherently, International Arbitration on mining investment has also grown. India is no stranger to such disputes having endeavored to attract foreign investment in India in numerous sectors, including mining.The mining investment treaties have resulted in disputes and subsequently arbitral awards where India was generally at the receiving end. India has also been endeavoring to gain recognition as an International Commercial Arbitration hub and it has been keeping a Pro-Arbitration and Pro-enforcement approach.India is also a signatory of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 1958 (“New York Convention”) and the Geneva Convention on the Execution of Foreign Arbitral Awards, 1927 (“Geneva Convention”), and the awards passed under these Conventions are also enforceable in India other than those resultant from BITs it has signed.

The Covid-19 pandemic resulted in an upturn of the economic curve, but for the Pharmaceutical industries, it opened opportunities for innovation, development, and entrance into the market. Beyond this, Pharmaceutical Companies had faced various other issues such as IP waivers put forth by many countries in order to reduce the technical barriers at this time and hold public health over private interests. Pharmaceutical Companies have faced immense problems related to “Patent Cliffs” and have also resorted to “Patent Pools” in order to find a way out of Licensing and IP waivers so as to not harm their IPs and find a way to keep them protected and unexploited by third parties during the Pandemic.

The Concept of Force Majeure can be understood to answer the questions as a way forward. Does the outbreak of COVID-19 constitute force majeure and results non-performance of commercial contracts? What steps should a company take if the supply to its customers is disrupted? When should a force majeure notice be issued? How does COVID-19 affect “Time is of the Essence” clauses in contracts? Who is responsible for losses when a supplier cannot supply to its customer due to the COVID-19 outbreak? What steps should be taken in response to a force majeure notice? How to legally tackle a supply chain disruption? How long can a party seek to avoid performance as a result of COVID-19?

Investments are considered as one of the most important factors of economic growth. This is so because it can majorly affect the production of goods and services by investing capital in technology, research and development.Such an increase in capital goods like machinery or infrastructure leads to an increase in capital accumulation of the nation that further leads to higher production and ultimately an increase in the economy.Therefore, an increase in investments contributes to the increase in GDP. In order for the economy to boost multi-dimensionally, it is essential that firstly, a person (natural or artificial) is encouraged to invest and secondly, such an investment is made in order to holistically improve the economic situation of the nation. Therefore, it stands as a duty on the part of the Government that appropriate regulatory legislations are introduced with that respect. Such legislations should intend to address factors like stability, mitigation of risk capital, flexibility in terms of procedure and compliance along with a wide variety of options to invest, including socially desirable sectors like venture capitals (start-ups), SMEs, social ventures, etc. In this paper, a veritable attempt is made to assess and analyze the developing concept of Alternative Investment Funds (AIF), its legal framework, and implications of AIF Regulations, 2021 in India.

LEGALOS | April,2021 Monthly bulletin of AMLEGALS which incorporates the significant issues of law including case laws to help legal decision makers to take an informed decision.The laws covered under this edition is IBC, IPR, Employment laws,Arbitration, Telecom & AIF. Readers can receive their LEGALOS bulletin in their email after they fill the form below.

The past one year has shown us all the power of Social Media to an extent beyond imagination. With COVID - 19 at its peak, Social Media only added to the fear mongering through all the conspiracy theories and rumors. Such power of Social Media has very apparent since last many years. Regardless of the fact that the news is about a certain individual or if it is about national interest, everyone has an opinion and Social Media provides a carefree platform for everyone to express it. It is often joked that news on Social Media travels faster than light. But what is the credibility of such news? How accountable one is while using Social Media? Can we make someone accountable or does it come across as a restriction to Freedom of Speech and Expression? There are several such questions that employers today look for answers to. The goodwill of an organization can be most impacted by the goodwill of an employee. Social Media can be a very important tool in making or breaking that reputation.

The Ordinance has introduced a Pre-Packaged Insolvency Resolution Process (‘PIRP’) for corporate persons who have been classified as Micro, Small and Medium Enterprises("MSME") under the Micro, Small and Medium Enterprises Development Act, 2006 ("MSMED Act"). A Pre-Packaged Scheme is an arrangement under which a Stressed Company and the Purchaser negotiate the sale of all or part of a company’s business or assets prior to the appointment of an Insolvency Professional as an Administrator. The main objective of bringing in this concept is to aid the Insolvency framework, avoid spending time and money in Court proceedings & legal battles and directly move to getting a fair resolution for the company, which was the very objective of the Insolvency and Bankruptcy Code, 2016 ("IBC") in the first place. Pre-Packaged Schemes are already prevalent in the UK and the USA and the idea behind it is to approach the Court with the already-negotiated Restructuring Plan for the company. This is being implemented in India with the motive that with a timely resolution of Stressed Companies, their actual market value can be capitalised upon without any depreciation or deterioration. We have dealt this scheme in a detailed manner in this whitepaper.

Mines & Minerals ( Development & Regulations) Amendment Bill,2021 With over 1500 operating Mines that produce almost 100 minerals, India is the second largest producer of coal and crude steel. The mining sector in India is regulated by the Mines and Minerals (Development and Regulation) Act, 1957 (MMDR Act). The Act was aimed at affording a mineral concession regime in the background of the metal producing public sector undertakings. The MMDR Act provides for the process and conditions for acquiring a mining or prospecting license in India. The mining of minor minerals comes under the purview of State Governments.

The new Financial Year 2021-22 brings many changes from 01.04.2021. This white paper covers such changes in GST, Direct Tax, Company Law & Employment Law. These are crucial changes which need to be addressed with a readiness to comply and to avert unforeseen liabilities in future. Entire white paper can be accessed in your inbox.

Emergency Arbitration In India Emergency Arbitration (hereinafter referred to as ‘EA’) is another Alternate Dispute Resolution (ADR) mechanism which seeks to protect the interests of the parties by the way of granting an interim relief. Though arbitration is aimed at fast tracking the process of dispute resolution and protecting the autonomy of the parties, there are various challenges encircling the proceedings, enforcement being the most pertinent. In a situation where the party urgently requires an interim measure, EA plays a pivotal role in enabling the party with such relief. The concept of EA recently came into limelight due to the tussle between Future Group and Amazon Inc. The dispute between the two behemoths primarily arose due to Future Group’s breach by transferring its retail assets to a ‘restricted person’ thereby violating the agreement. On 18.03.2021, the Delhi High Court adjudicated that "the interim relief granted in an EA was enforceable under the Indian law and further stated that no amendment in the legislative framework was necessary for upholding it." This decision comes in contrast to the precedents pertaining to EA in India. This white paper deals on an Emergency Arbitration in a holistic manner.

Corporate Social Responsibility - An Interplay There is an interplay between Companies Act,2013 and CGST Act,2017 to see as to how the eligibility of Input Tax Credit(ITC) is dependent upon Corporate Social Responsibility(CSR). The CSR is mandated by law and every company with a specified threshold as provided under the Companies Act has to incur the same and there comes the challenge of availment of ITC under CGST Act,2017

5G : The Future of Networking 5G is the crucial next step for the Indian telecommunication sector as well as the Indian economy, since the significant increase in speed of the network and the drop in latency – which signifies the amount of time it takes to reconnect to the internet once disconnected – will help immensely in grappling with the ever-increasing number of internet users as well as the number of essential services that are more dependant than ever on the Internet, in a post-pandemic world. Even aside from the infrastructural importance that 5G holds for India at this juncture, it will also, overall, bring India in line with the global mainstream, especially since 5G is intrinsically linked with and demonstrates the advancement in the ‘Internet of Things’ (IOT), which term is used to describe the way the smallest of devices, today, connect with each other and exchange data over the Internet.

This white paper deals with series of orders passed by Supreme Court in 2020 and 2021 while invoking Article 142 and 141 to make such orders applicable throughout India.Due to outburst of Pandemic COVID-19, Supreme Court excludes 15.03.2020 to 14.03.2021 from limitation period.

Code on Wages,2019 The Second National Commission on Labour, 2002 tabled a report that the existing labour laws are very complex and inconsistent in the present times. Therefore, the legislature has come up with idea of unified legislation for wages wherein two major points are deliberated as under: a.Rationalization, simplification & consolidation of the existing laws relating to labour in the organised sector; and b.Umbrella legislation for ensuring minimum level of protection to the workers in the unorganised sector.

The Information Technology (Guidelines for Intermediary & Digital Media Ethics Code) Rules, 2021 were formally notified on the 25th of February, 2021. These new, comprehensive set of Rules supersede the IT Rules, 2011 in several aspects. They allow the Government to regulate digital news media platforms, and also bring OTT Streaming Services and Social Media platforms under the regulatory ambit. The Rules have been notified and prescribed in exercise of the powers conferred on the Central Government under Section 87 of the Information Technology Act, 2000.

Gujarat Solar Power Policy,2021 The State’s solar policies has always given positive and remarkable results and with the introduction of this new Solar Power Policy, 2021, Gujarat looks ready to maintain its top position in the renewable energy arena. Besides the policy, the huge 30 GW Kutch Project is finally commencing and is said to be completed by 2025 and all of these look very promising to the industry.

AMLEGALS YEARBOOK, 2021 It deals with those laws and issues which will not only matter the most in 2021 but will also have a big impact on every business at large.

The budget 2021 has brought many facets and amongst these, the prominent being subjective Input Tax Credit under CGST Act,2017 and refund on exports under IGST Act,2017. To know as to how it impacts and also how a retrospective amendment in Section 7 originated, refer this white paper.

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