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Suresh kumar (Legal Consultant)     25 November 2009

Starting a company while working for another employer

Hey, i am working for a software/hardware/firmware company and i have a employment contract which states that i should not participate, direclty/indirectly , in any capacity in any business/activites that is in COMPETITION with the company.

If am starting a Law firm (as a director ) which provides legal solution for individual/corporate , this will be illegal one?


 10 Replies

Ankur Garg (Company secretary)     25 November 2009


Analyse the connection of main object of your proposed law firm with your existing company's objects. If both of them resembles then it may cause some future problems.

And if you find no connection then just go ahead.

Views of other learned members solicited.


A V Vishal (Advocate)     25 November 2009

As suggested by Mr Garg, the proposed objects with which the company is being incorporated should not collide with the terms of your employment agreement, if there is no such hitch you can go ahead with the incorporation.

Suresh kumar (Legal Consultant)     25 November 2009

Hi Mr.Garg & Mr.Vishal,

thanks for the reply.

by the way the nature of business of current employer belongs to IT related domain and am entering into new engagement which is going to deal with legal solution provider. So by looking there is no connection. So shall i consider this is safe move?


Ankur Garg (Company secretary)     25 November 2009

Yes Mr. Suresh You may go ahead...

A V Vishal (Advocate)     25 November 2009

Yes you may go ahead, but take care that you are not a wholetime director in the proposed company.

Suresh kumar (Legal Consultant)     25 November 2009

Mr.Vishal, it's a good point. but how to differentialte the timings . whole time/ parttime in new engagement legally.

A V Vishal (Advocate)     26 November 2009

Wholetime director's post is a executive post. There is no part time director, but you can designate as a non executive director. There is no such thing as timings but convienence as you own the company.

Theja (Lawyer)     01 December 2009

Also, make sure if you have any non-slolicit provision. If you have any non-solicit provision then you are restrcited to solicit the clients of the employer and you can not solicit the employees of the employer with which you have employment agreement.

Smita_L01042008 (student)     30 December 2009

is there only one concerned that IT and Legal field are different  therefore he can start his company as legal adviser.

what will happen if employee gives legal advise to client who are compititors, having litigation against  company knowingly or unknowingly,


Deepak Kumar Vasudevan ((Confidential))     01 January 2010


Your offer letter in the current organization should be guiding this. Your efforts in the new company that you are forming should not be unduly jeopardizing with the contributions to your current employer. Besides this, if the new company is trying to compete with your current employer or take benefits, it might be a violation of your employment agreements with your current employer.

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