Legal Compliance Checklist for Indian IT & SaaS (2025)
- Rhea Verma
- Apr 24
- 4 min read
Updated: 5 days ago
A practical, founder-friendly guide to what your business needs to stay compliant — and due diligence-ready.
Why Compliance Is Your Startup's Secret Weapon in 2025
Let’s be real: no founder wakes up excited about compliance. But if you’re building something serious — raising money, signing up clients, expanding abroad — your legal setup either works for you or against you.
And too often, it’s the latter.
A recent NASSCOM report found that over 42% of Indian tech startups face funding delays because of avoidable legal gaps. Things like missing agreements, unclear equity splits, or data compliance issues. Stuff that doesn’t feel urgent — until it is.
So we pulled together this checklist for Indian IT and SaaS companies. It’s what we wish more founders had in place before they hit those growth milestones.
1. Founders' Agreements & Cap Table Clarity
Get a Founders’ Agreement in writing. Roles, responsibilities, equity splits, exits — put it all on paper.
Add vesting clauses. You don’t want a co-founder walking off with 25% of the company six months in.
Keep your Cap Table clean and updated. It should be ready to show to an investor at any time.
Why it matters: A messy equity structure is a massive red flag in due diligence. It’s one of the fastest ways to kill momentum in a fundraise.
2. IP — Make Sure You Actually Own Your Product
Ensure the company owns all code, content, and branding — not just the people who built it.
Use “work-for-hire” clauses in contracts with freelancers and devs.
Register trademarks for your brand, logo, and product name.
Get IP Assignment Agreements and NDAs signed by employees and contractors.
Why it matters: If the IP isn’t owned by the company, then technically, your company doesn’t own the product. And that’s a nightmare waiting to happen.
3. Data Protection (DPDP, GDPR, and What’s Coming Next)
India’s Digital Personal Data Protection (DPDP) Act is now in force, and it applies to just about every tech company handling user data.
Here’s what you need to lock down:
Appoint a Data Protection Officer (DPO) if your scale demands it.
Make sure your Privacy Policy and Terms of Service are actually compliant — not just copied from someone else.
Set up clear grievance and breach reporting processes.
If you work with EU clients, you’ll need to follow GDPR: things like explicit consent, data transfer protocols, and honoring user rights.
Why it matters: Beyond penalties, privacy issues hit where it really hurts — customer trust.
4. Contracts: MSAs, SLAs, and Not Relying on Email Threads
Always, always use proper contracts. No handshake deals. No “we’ll sort it out later.”
At a minimum, your Master Service Agreement (MSA) should include:
Limitation of Liability
Indemnity
Jurisdiction and Dispute Resolution
And if you’re offering services, define your Service Level Agreements (SLAs): what’s promised, what’s not, and what happens if things break.
Why it matters: Vague or DIY contracts leave you wide open — legally and financially.
5. Employment Contracts & Stock Options (ESOPs)
Every employee should have a signed Employment Contract. Include clauses for IP protection, termination terms, confidentiality, and non-competes.
If you’re giving equity, create a proper ESOP policy that complies with Indian law.
Don’t forget to file the necessary board resolutions and ROC disclosures.
Why it matters: Your team is everything — but if things go sideways, unclear contracts create headaches fast.
6. The Must-Have Registrations & Filings
Make sure your startup is properly registered and maintaining the right filings:
Startup India/DPIIT registration (for access to tax and funding benefits)
ISO certification if relevant for your customers
ROC filings — annual returns, board meeting docs, etc.
MSME registration — helpful for credit access and government incentives
Why it matters: A missing registration won’t just get you fined — it could block a deal or partnership when you least expect it.
7. Docs You Need Before Fundraising
Before you sit down with investors, your legal paperwork should be tight. Here's what should be ready:
Term Sheet
Shareholders Agreement (SHA)
Share Subscription Agreement (SSA)
A clean due diligence folder: tax returns, contracts, employment records, cap table, compliance logs
Why it matters: Investors move faster — and take you more seriously — when your legal docs don’t raise questions.
8. Don’t Do It Alone — Use a Legal Retainer
Things change. Laws evolve. You’ll need new contracts, policies, filings — sometimes at short notice.
That’s where a legal retainer comes in. You get a legal team on-call, without hiring full-time or scrambling at the last minute.
Why it matters: Having someone who knows your business, and keeps you covered, is way cheaper than cleaning up legal messes later.
Compliance Won’t Make You, But It Can Definitely Break You
You don’t need to obsess over every legal detail — but you do need to cover the basics. Especially if you’re raising, hiring, or scaling.
At Lex Certitude, we help founders build legally sound, investor-ready companies — without the jargon, and without slowing you down.
Download a PDF version of this checklist by clicking on the button below.
Disclaimer:
This checklist is designed to provide general legal guidance for Indian IT and SaaS companies and reflects best practices as of 2025. It does not constitute legal advice tailored to any specific company or situation.
Legal requirements may vary depending on business structure, jurisdiction, and regulatory changes. For personalized legal guidance, please consult Lex Certitude’s team directly.
