Company formation - is this safe association ?

Hello Learned Experts,


I’m into small consulting business, recently got an offer from a Big Pvt Ltd company whereby under company formation rules they proposed to form a separate DIVISION under its Pvt Ltd company (Parent co) and i will independently handle my business in name of this Division while passing on part of profit to them. This company has 4 Directors and i will not be on board. This division will have a separate bank account that will be controlled by me. I m considering this engagement however want to know what legal precautions to be taken :-


  1. so that this company will not be able to steal my client contracts as this Pvt Ltd co will have no role to play in operations of this Division.
  2. So that i can freely move out of this association say after a year and there should be no legal hurdles in exiting without paying any costs for exit.


Thanks in advance for your time/help

Junior advocate

Dear Ms. Desai,

After reading the facts mentioned by you, I think this is nothing but an Amalgamation of two companies. However i would request you to let me know more details about your transaction so that i can provide you with the details legal advise as this would the most important decision in your life to get along with this Big company. 




Sir ur matter is simple. Big company wants to take advantage ur specilization. Hence you must be clear about ur idea. For further inforamaion consult local lawyer.



Adv Bharat, this is a business association where two parties are collaborating for mutual benefits. However while getting into such association we want to have a proper legal framework so that we will not be used later. Thats my question , request panelists to provide me solution. I could have consulted a local lawyer but thought this forum can help....thanks


You may show the T&C in offer made to you for a considered opinion.





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