India

2nd July, 2026, New Delhi: King Stubb & Kasiva successfully represented I-Chrono LLC, a United States-based company operating an online marketplace for luxury watches, before the Delhi High Court in a commercial suit against Fluper Limited concerning the development of its proprietary mobile application and website. The dispute arises out of a series of software development agreements entered into between I-Chrono and Fluper for the development of I-Chrono's digital platform. I-Chrono fully discharged its payment obligations under the First Agreement and also made substantial payments under the subsequent agreements, with the understanding that it would receive complete ownership and delivery of the source code and all related development materials. According to the suit, despite receiving the entire consideration payable under the First Agreement and substantial payments under the remaining agreements, Fluper allegedly withheld the source code and other critical project materials, thereby preventing I-Chrono from independently operating, maintaining, and further developing its technology platform. I-Chrono has contended that such conduct amounts to a breach of the contractual obligations as well as the trust reposed in Fluper as its software development partner. Recognising the urgency of the matter, the Delhi High Court granted ad interim relief directing Fluper to preserve the source code, repositories, project files, credentials and all related development materials. The Court further restrained Fluper from destroying, altering, transferring, disseminating, distributing or otherwise dealing with the source code and related materials in any manner that may prejudice I-Chrono’s rights during the pendency of the proceedings. The order highlights the proactive approach of Indian courts in safeguarding the commercial and intellectual property interests of foreign businesses and protecting them against alleged arm-twisting tactics, including the unlawful withholding of proprietary software assets. The matter is presently pending adjudication before the Delhi High Court. The Plaintiff, I-Chrono LLC, was represented by Senior Advocate Rajshekhar Rao, along with the King Stubb & Kasiva team comprising Adv. Sukrit R. Kapoor (Partner), Adv. Aayushya Aankul (Principal Associate) and Adv. Kumari Tanya (Associate) before the Delhi High Court. About King Stubb & Kasiva King Stubb & Kasiva (KSK) is a leading full-service law firm with offices across India. The firm advises domestic and international clients across diverse sectors on corporate and commercial law, dispute resolution, insolvency and restructuring, banking and finance, intellectual property, technology law, employment law, taxation, and regulatory matters. KSK is recognized for delivering practical, business-focused legal solutions backed by deep industry expertise. Media Contact: Shruti Thapa Corporate Communications Executive King Stubb & Kasiva, Advocates & Attorneys Email: [email protected] Mobile: +91-9101333234 Website: https://ksandk.com  

22 June 2026   TLH, Advocates & Solicitors advised CtrlS Datacenters Ltd. in its landmark strategic partnership with Canada Pension Plan Investment Board (CPP Investments), one of the world’s largest and renowned fund managers, involving a commitment of up to C$ 1 billion in India’s digital infrastructure sector.   The transaction comprises two components: a C$ 588 million equity investment by CPP Investments for an 8.2% stake in CtrlS Datacenters Ltd., and a C$ 441 million joint venture between CPP Investments and CtrlS to develop and operate data centre campuses across India. The partnership positions CtrlS to accelerate its hyperscale build-out as demand for AI and cloud infrastructure in India continues to grow at pace.   This transaction is a strong signal of global institutional confidence in India’s digital infrastructure story and reflects the increasing appetite of sovereign and pension capital for scaled, income-generating assets in the Indian market.     Firm’s Role   TLH acted as legal counsel to CtrlS Datacenters Ltd., advising across the full spectrum of the transaction, including deal structuring, transaction documentation, and competition law advisory in connection with the investment and joint venture arrangements.   Deal Team   The TLH team was led by Founder & Managing Partner Shailendra Komatreddy and Partner Prateek Batra and comprised Associates Anirudh Krishna and Vanshika Gupta, with competition advisory provided by Mathew George.   About TLH, Advocates & Solicitors   TLH, Advocates & Solicitors is a full-service law firm headquartered in Hyderabad, with offices in Delhi NCR and Vijayawada. The firm advises domestic and international clients on complex transactions, regulatory matters, and disputes across a wide range of sectors. Recognized for its legal excellence and client-centric approach, TLH has been consistently ranked and recommended by leading legal directories, including Chambers and Partners, The Legal 500, and Benchmark Litigation. For media enquiries, please contact: [email protected] Website: www.tlh.law

Bengaluru, June 17th 2026: In a significant legal victory for Andhra Pradesh Deputy Chief Minister and Jana Sena Party President Sri Konidala Pawan Kalyan, the Bengaluru City Civil Court has granted an interim injunction restraining the publication and circulation of allegedly defamatory content concerning him across various digital and social media platforms. The suit was instituted following the circulation of a series of videos, articles, social media posts, and online publications alleging that Sri Pawan Kalyan had encroached upon public land and water bodies in Telangana. The Plaintiff asserted that the allegations were entirely false, malicious, and designed to tarnish his reputation as a public servant, political leader, and public figure. Recognising the seriousness of the allegations and the potential for irreparable reputational harm, the Court passed an interim order restraining the defendants and all persons acting through them from publishing, republishing, broadcasting, transmitting, uploading, displaying, or otherwise disseminating the impugned content. The Court further directed the concerned social media intermediaries to block access to the allegedly defamatory material pending adjudication of the dispute. In a subsequent hearing, the Court expanded the scope of protection by modifying its earlier order to expressly include additional URLs, videos, and content sources identified by the Plaintiff, ensuring comprehensive interim relief against the continued circulation of the impugned material. The matter assumes particular significance given Sri Pawan Kalyan's stature as the Deputy Chief Minister of Andhra Pradesh and one of India's most prominent political leaders. The order highlights the judiciary's willingness to intervene where digital publications are alleged to cause serious and immediate harm to an individual's reputation, while reaffirming that freedom of expression carries with it corresponding responsibilities. The case also represents an important development in the evolving legal landscape governing online defamation, intermediary liability, and the regulation of digital content in India. Senior Counsel Dr. Aruna Shyam M appeared on behalf of the Plaintiff and successfully advanced the case before the Court. The matter was led and strategically handled by Navod Prasannan, Rahul Mehta, and Atul Menon, Partners at King Stubb & Kasiva, along with Mehak C and Maya B from the firm's Dispute Resolution team. Statement from the Legal Team "This order reinforces a fundamental principle that reputation is an invaluable right deserving of protection, irrespective of the medium through which defamatory content is disseminated. In an era where digital publications can spread instantly and cause far-reaching harm, timely judicial intervention remains critical in safeguarding individuals from the consequences of false and misleading allegations." The matter is presently pending further proceedings before the Bengaluru City Civil Court. Appearances For the Plaintiff: Sri Konidala Pawan Kalyan Dr. Aruna Shyam M, Senior Counsel Navod Prasannan, Partner, King Stubb & Kasiva Rahul Mehta, Partner, King Stubb & Kasiva Atul N. Menon, Partner, King Stubb & Kasiva Mehak Chaichani, Associate, King Stubb and Kasiva Maya B, Associate, King Stubb and Kasiva  

Introduction Employee Stock Option Plans (ESOPs) have emerged as one of the most effective tools for attracting, motivating and retaining talent in India’s increasingly competitive startup ecosystem. As startups seek to conserve cash while competing for skilled employees, equity-based compensation has become a critical component of employee reward structures. From early-stage ventures to unicorns and publicly listed companies, ESOPs are widely used to align employee interests with long-term business growth. However, despite their popularity, many startups fail to appreciate that ESOPs are not merely compensation tools, they are legal instruments governed by corporate, tax, foreign exchange and securities regulations. Improperly structured ESOP schemes can create significant issues during funding rounds, mergers and acquisitions, investor due diligence exercises, employee exits and public listings. Investors routinely scrutinise ESOP compliance, and defects in implementation can delay transactions, increase legal costs and result in unexpected liabilities. This article examines the twenty most common legal mistakes startups make while implementing ESOPs in India and outlines practical measures to mitigate legal and regulatory risks. What Is an ESOP? An Employee Stock Option Plan (ESOP) gives employees the right to acquire shares of a company at a predetermined price after satisfying specified vesting conditions. ESOPs are designed to: Retain key talent; Reward long-term contribution; Align employee and shareholder interests; Promote an ownership culture; and Reduce dependence on cash-heavy compensation structures. For startups, ESOPs often serve as a strategic alternative to higher salaries, particularly during early growth stages. Legal Framework Governing ESOPs in India For private and unlisted companies, ESOPs are primarily governed by: The Companies Act, 2013; The Companies (Share Capital and Debentures) Rules, 2014; Foreign Exchange Management Act (FEMA) regulations, where applicable; Income-tax Act, 1961; and Applicable accounting standards. Listed companies must additionally comply with SEBI regulations governing employee benefit schemes. Understanding these requirements at the outset is essential to avoid compliance failures later. 20 Common ESOP Mistakes Startups Make Creating an ESOP Pool Without Shareholder Approval A common misconception among founders is that a board resolution alone is sufficient to create an ESOP pool. Under the Companies Act, shareholder approval by way of a special resolution is generally required before granting employee stock options. Failure to obtain appropriate approvals may call into question the validity of grants and allotments. Key Takeaway: Ensure that both board and shareholder approvals are obtained before implementing the ESOP scheme. Using Generic ESOP Templates Without Customisation Many startups rely on publicly available ESOP templates that fail to address business-specific requirements. Generic plans often omit provisions relating to: Founder exits; Change of control transactions; Good leaver and bad leaver scenarios; Accelerated vesting; Buyback rights; and Liquidity events. Poor drafting frequently leads to disputes at critical stages of the company’s growth journey. Failing to Clearly Define Vesting Conditions Unclear vesting provisions are among the most common causes of ESOP disputes. Common issues include: Ambiguous performance criteria; Undefined milestones; Contradictory vesting schedules; and Unclear employment continuity requirements. Vesting conditions should be objective, measurable and clearly documented. Ignoring Good Leaver and Bad Leaver Provisions What happens when an employee resigns, retires or is terminated? Many ESOP schemes fail to address these scenarios adequately. A well-drafted ESOP policy should clearly define: Treatment of vested options; Treatment of unvested options; Exercise periods after exit; and Consequences of termination for misconduct. Poor ESOP Pool Planning One of the most common founder mistakes is creating an ESOP pool without understanding its impact on dilution. Improper planning can result in: Excessive founder dilution; Investor concerns; Fundraising complications; and Cap table imbalances. ESOP pool creation should always be integrated into broader capitalisation planning. Granting Options Without Reserving Adequate Shares Some startups grant options without ensuring that sufficient authorised and reserved share capital exists. This becomes problematic when employees seek to exercise vested options and shares are unavailable for allotment. Companies should periodically review authorised capital and ESOP reserves. Failure to Maintain Statutory Records Many startups focus heavily on granting options but neglect compliance documentation. Essential records include: Board resolutions; Shareholder resolutions; ESOP registers; Grant records; and Exercise records. Missing documentation frequently becomes a due diligence issue during fundraising and acquisitions. Inadequate Grant Letters An ESOP scheme alone is insufficient. Each employee grant should be supported by a detailed grant letter specifying: Number of options granted; Exercise price; Vesting schedule; Expiry date; and Applicable conditions. Poor documentation often leads to conflicting interpretations of employee rights. Ignoring ESOP Tax Implications One of the most frequently asked questions is: How are ESOPs taxed in India? Tax implications generally arise at two stages: Exercise Stage: The difference between the fair market value of shares and the exercise price may be taxable as a perquisite. Sale Stage: Subsequent appreciation may be subject to capital gains tax. Employees should be educated about these tax consequences at the time of grant. Misunderstanding Startup ESOP Tax Benefits Certain eligible startups may benefit from deferred taxation provisions relating to ESOPs. However, many companies incorrectly assume automatic eligibility without verifying statutory conditions. Companies should obtain tax advice before relying on such benefits. Overlooking FEMA Compliance Requirements Cross-border ESOP structures require careful legal review. Where employees are granted options in an overseas parent entity, businesses must evaluate: FEMA compliance; Reporting obligations; Pricing considerations; and Remittance requirements. Cross-border employee stock option plans should always be reviewed from a foreign exchange perspective. Ignoring Foreign Employee Requirements As startups expand globally, ESOP plans increasingly cover employees located outside India. Different jurisdictions may impose: Securities law obligations; Employment law restrictions; Tax reporting requirements; and Disclosure obligations. International expansion often requires local law review. Not Defining Post-Exit Exercise Periods What happens to vested ESOPs after an employee resigns? Many startups fail to specify a post-employment exercise window. Clearly defining exercise periods can prevent disputes and employee dissatisfaction. Failing to Address Mergers, Acquisitions and Corporate Restructuring Startups routinely undergo: Funding rounds; Acquisitions; Mergers; Group restructurings; and Holding company transitions. ESOP documents should clearly explain how options will be treated during such events. Ignoring Investor Rights and Funding Round Requirements Investors frequently negotiate specific protections relating to ESOP pools. Common provisions include: Pre-money ESOP pool requirements; Approval rights; Anti-dilution protections; and Governance controls. Failure to align ESOP planning with investment documentation can create transaction delays. Lack of Employee Liquidity Planning Employees value liquidity as much as ownership. Many startups create ESOP programmes without considering: Buyback opportunities; Secondary transactions; Tender offers; and Liquidity events. A well-designed ESOP strategy should address how employees may ultimately monetise their holdings. Inconsistent Allocation of ESOP Grants Inconsistent grant practices may create perceptions of unfairness. Companies should establish transparent criteria based on: Seniority; Role criticality; Performance; and Retention objectives. Consistency promotes trust and programme effectiveness. Poor Employee Communication Many employees do not fully understand: Vesting schedules; Exercise mechanics; Tax implications; Valuation concepts; and Liquidity opportunities. Regular ESOP education sessions can significantly improve employee engagement. Failing to Conduct ESOP Compliance Audits ESOP compliance should be reviewed periodically. Investors and acquirers frequently examine: Shareholder approvals; Grant validity; Cap table consistency; Allotment records; and Regulatory compliance. Periodic internal audits can identify issues before they become transaction obstacles. Treating ESOPs Solely as an HR Tool Perhaps the most significant mistake is viewing ESOPs purely as a compensation mechanism. ESOPs sit at the intersection of: Corporate law; Tax law; Securities law; Employment law; Fundraising strategy; and Corporate governance. Successful ESOP implementation requires coordination between legal, finance, HR and management teams. ESOP Compliance Checklist for Indian Startups Before implementing or reviewing an ESOP programme, companies should confirm: Board approvals obtained Shareholder approvals completed ESOP scheme legally reviewed Grant letters issued Cap table updated Statutory registers maintained Tax implications assessed FEMA implications reviewed Exit provisions documented Change of control provisions included Liquidity strategy considered Employee communications completed Frequently Asked Questions About ESOPs in India Can a Startup Grant ESOPs Without Shareholder Approval? Generally, no. Shareholder approval by special resolution is typically required under the Companies Act framework. What Happens to ESOPs When an Employee Resigns? The answer depends on the ESOP scheme. Most plans distinguish between vested and unvested options and specify a limited post-exit exercise period. How Are ESOPs Taxed in India? Tax generally arises at the exercise stage as a perquisite and again upon sale as capital gains, subject to applicable exemptions and rules. How Large Should an ESOP Pool Be? While there is no universal answer, startup ESOP pools commonly range between 5% and 15%, depending on hiring plans, growth stage and investor expectations. What Do Investors Review During ESOP Due Diligence? Investors typically review approvals, grant documentation, cap tables, dilution impact, vesting provisions and compliance with applicable laws. Conclusion Employee Stock Option Plans remain one of the most powerful tools available to startups seeking to attract and retain talent while building long-term enterprise value. However, the benefits of ESOPs can be significantly undermined by poor legal structuring, inadequate governance and regulatory non-compliance. As investor scrutiny increases and Indian startups mature, businesses must approach ESOP implementation with the same level of diligence applied to fundraising, governance and strategic transactions. A carefully structured ESOP programme not only enhances employee engagement but also improves investor confidence, facilitates smoother transactions and supports sustainable growth. By avoiding the common mistakes discussed above, startups can create ESOP frameworks that are legally robust, commercially effective and aligned with long-term business objectives. By Priyanka Kwatra, Director - Legal https://ksandk.com/people/priyanka-kwatra/