As your firm grows, you will come in the possession of intellectual property information and valuable customer data. Guard and use them responsibly

By now your business should be up and running. Here is a checklist of issue you mustn't miss as your move into top gear.

Intellectual property right (IPR) audit

1. Trademarks which are related to brand name - the Trade Mark and Merchandise Act 1958

2. Copyright - Indian Copyright Act 1957

3. Patents such as software patents and business solutions - Indian Patents Act 1970

4. Trade Secrets - though not governed by any legislation in India are an important intellectual property that would need to be embodied in non - disclosure and employment agreements

Intellectual property right

1. May belong to the company

2. May be licensed from a 3rd party

(a) In the former case the company will have to take stock of the IPR it currently holds, copyright over any content that has vested or been developed specifically for his website.

(b) In case IPR is licensed from a 3rd party, as for example content licensed from a content development firm or the original owner, then a number of further legalities have to be met. Accordingly one would have to enter into a content licensing agreement.

An e-company must ensure protection of its IPR not only in India but in any other country where he intends carrying out operations. The usual choices are the United States, European Union and South East Asian countries. An emerging international trend today is software and business patents, obtained on business processes and software application. Although US laws allow software and business patenting, India however has as yet not allowed such patent applications.

The other area of IPR protection would be the registration of a domain name, in the name of your company. This would necessarily be carried out through various domain name bodies like ICANN etc. Registration of a domain name should be done in good faith and only where the e-company has a legitimate claim. If not it leads to cases of cyber squatting.

Taxes applicable

Every company would like to choose the most tax effective form or structure so as to ensure the minimum amount of tax liability.

For any company located in India, tax is calculated under the Income Tax Act 1961 at the rate of 38.5% of the business income of the firm.

For the relevance of international tax payable, it would depend upon the jurisdiction in which such tax becomes payable and whether India has a Double Taxation Avoidance Treaty with that particular country. For example, in the United States, where an e-company's website is hosted on a server in the United States, that server will be considered as a permanent establishment and will be liable to be taxed in the US. (A permanent establishment is the principal place of business of a company and the only such income as is attributable to a permanent establishment is taxable in the country where it is situated).

In the case of services rendered "fees for included services", will be liable to tax under the Indo-US Treaty.

In the case of royalty received, it maybe taxed in the US under the relevant provisions for royalty article of the Indo-US Treaty.

And finally if it is a case of payment for technical services, royalty etc being made by an Indian Company to a US company, the Indian company has an obligation to withhold the appropriate taxes, the fees for technical services, royalty etc.

Minimization of liabilities: The minimization of liability would include the extent to which you are liable in terms of your website. This should be embodied in the terms of use displayed on your website. The wording of the clauses in the Terms of Use is extremely important in determining your liability. If a particular clause is worded incorrectly or loosely, it could cause more harm than good. Each Terms of Use has to be specifically tailored to the web site it seeks to cover. The Terms of Use for an online auction site will therefore differ from those of an online toy store. The Terms of Use would necessarily carry certain disclaimers that would indemnify your company.

Privacy policy: Privacy is basically of three types: - the right to be free of unwanted interruptions or intrusions. The right to communicate with others without unwanted surveillance and finally the right to control information on one's own personal life. Although privacy policies are not mandatory under Indian law, it is advisable that an e-company should have inherent privacy policies, which would indicate the manner in which they intend to protect personal information collected from their user/members/subscribers. A privacy policy is practically relevant from a business point of view as users are increasingly concerned about their privacy. Further privacy laws enacted in other countries such as the European Union and the US may also have an effect on websites which attract a lot of traffic from such countries. India however does not have any specific laws pertaining to privacy norms.

Initial public offer (IPO): The last stage in the life of a dotcom is when it wishes to go public. This would happen by way of a public issue of shares or what is referred to as Initial Public Offering. From the issuer's point of view the aim would be to realize the highest value for his share. An Indian company wishing to make a public offering of its securities in India would be required to comply with the provisions of the Companies Act, 1956 as well as the guidelines of the Securities and Exchange Board of India ("SEBI") The SEBI guidelines are called the Guidelines for Disclosure and Investor Protection. As a first step towards an IPO, the company is required to appoint a SEBI registered, merchant banker to lead manage the IPO. The merchant banker will be responsible for getting all the approvals, including the SEBI approval, tying up the underwriting arrangements and the carrying out various other pre-issue and post-issue legal requirements.

ADRs and GDRs: An initial public offering of securities on an international stock exchange is carried out by the issue of Depository Receipts. Depository Receipts are basically negotiable instruments denominated in U.S. dollars, representing a non-U.S. company's publicly traded local currency equity shares. They are created when the local currency shares of an Indian company are delivered to an overseas depository bank's domestic custodian bank, against which, the Depository issues Depository Receipts in U.S. dollars. Each Depository Receipt may represent one or more underlying shares. Through these issues, companies in India have been able to tap the global equity market to raise foreign currency funds by way of equity. The Depository Receipts may be traded freely on an exchange or an over-the-counter market. Depository Receipts can be either Global Depository Receipts ("GDRs") which are usually listed on an European stock exchange, or American Depository Receipts ("ADRs") which are usually listed on an U.S. stock exchange.

To make a successful global issue, an Issuer Company requires the wholehearted co-operation and sincere efforts of many persons and agencies such as the lead manager, co-manager/underwriter, depository, custodian, legal advisors and auditors. To sum it all up, start-to-maturity traces the birth of an e-company from the point at which an idea is born to its transformation into a reality. This article has tried to in a nutshell, sum up the various stages involved.