Legal Pathfinders Global Advocates LLP

POSH at work: what an employer must do, and how the Internal Committee works

21 October 2026 · Team Legalpathfinders

The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (the POSH Act) applies to every workplace in India, public or private. It places duties on the employer and sets out a fixed complaint process. This note explains both in plain terms.

What counts as sexual harassment

The Act covers unwelcome conduct of a sexual nature. Examples are physical contact or advances, a demand or request for sexual favours, sexually coloured remarks, showing pornography, and any other unwelcome physical, verbal or non-verbal sexual conduct. Promises of preferential treatment, threats about employment, and a hostile work environment can also amount to harassment in the circumstances set out in the Act.

The Internal Committee

An employer with ten or more employees must set up an Internal Committee (IC) by a written order. Where a workplace has offices or units at different places, each one needs its own IC. The IC has a Presiding Officer, who must be a woman in a senior position among the employees; at least two employee members who are committed to the cause of women, have social work experience, or have legal knowledge; and one external member from an NGO or association working for women, or a person familiar with sexual harassment issues. At least half of all members must be women. Members hold office for a period fixed by the employer, not more than three years from nomination. Where an establishment has fewer than ten workers, or the complaint is against the employer, the complaint goes to the Local Committee that the District Officer sets up for each district.

The complaint process

The woman files a written complaint within three months of the incident, or of the last incident in a series. The committee may extend this by a further three months for reasons it records. If she cannot write it, the committee must help her, and certain persons may file on her behalf if she cannot.

The committee sends a copy of the complaint to the respondent, who replies within the time the rules allow. The inquiry follows natural justice. At least three members, including the Presiding Officer, must be present, and neither party may be represented by a lawyer. The inquiry is to be completed within 90 days; courts have treated this period as directory, not mandatory. While it is pending, the committee can recommend interim steps such as a transfer, up to three months of leave for the complainant, or restraining the respondent from supervising or assessing her.

If the allegation is proved, the committee recommends action under the service rules and, where appropriate, a deduction from the respondent's pay to compensate the complainant. The employer must act on the recommendation within 60 days. Throughout, the contents of the complaint, the identity of the parties and the proceedings must not be made public.

What the employer must do

The employer must provide a safe working environment, including from third parties who deal with the workplace; display the penal consequences of sexual harassment and the order constituting the IC; run regular awareness programmes and orientation for IC members; give the committee the facilities and information it needs; help the woman if she chooses to file a criminal complaint; treat sexual harassment as misconduct under the service rules; and make sure the IC files its annual report, including the number of cases filed and disposed of in the employer's own annual report.

Penalty for non-compliance

An employer who fails to constitute an IC, fails to act on its recommendations, or otherwise contravenes the Act or its rules is liable to a fine of up to Rs 50,000. A repeat breach can attract twice the penalty and the cancellation, withdrawal or non-renewal of the licence or registration needed to run the business.

This article is for general information. It is not legal advice, and reading it does not create an advocate-client relationship.

Founders' agreement: what it should cover

21 October 2026 · Team Legalpathfinders

Most start-ups begin with a handshake. A founders' agreement turns that handshake into written terms, before money, work or a dispute makes the conversation hard. It is signed between the founders. It is separate from a shareholders' agreement with investors, and from the company's articles of association. This note lists what such an agreement usually covers.

Ownership, roles and vesting

Record each founder's shareholding, or each partner's share where the vehicle is an LLP, and what each person puts in: money, time, assets or know-how. State who does what, who holds which office, and whether each founder works full-time. Unclear roles are a common cause of later disagreement.

Vesting means a founder earns the right to their shares over time, often over several years with an initial cliff. If a founder leaves early, the unvested shares can be bought back or returned. Without vesting, a founder who leaves in month three can keep a full stake.

Intellectual property

Founders are usually not employees of the company, so work they create before incorporation does not automatically belong to it. Under the Copyright Act, 1957, an assignment of copyright must be in writing and signed. The agreement should assign to the company all IP created for the business, including code, designs, brand names and domain names.

Decisions, deadlock and transfers

Say which decisions need every founder's consent, such as new shares, borrowing, selling the business or hiring senior staff, and which one founder can take alone. Include a way out of a deadlock, such as escalation, a cooling-off period, mediation or a buy-sell mechanism.

Typical share-transfer terms are a lock-in period, a right of first refusal for the other founders, tag-along and drag-along rights, and a ban on pledging shares. For a company, it is safer to also place these restrictions in the articles of association, since the articles bind the company and its members.

Exit, confidentiality and non-compete

Set out what happens if a founder resigns, is removed, dies or becomes unable to work: who can buy the shares, at what valuation method, and how the price is paid. Define the grounds for removal clearly.

Confidentiality duties can run beyond exit. Non-competes need care. Section 27 of the Indian Contract Act, 1872 makes an agreement in restraint of trade void. Courts have generally enforced restrictions that apply while the person remains a founder or partner, and have been reluctant to enforce them after the person leaves. Draft the restriction to what is reasonable, and do not rely on it alone.

Money, disputes and stamp duty

Cover founder salaries, expenses, further funding by founders, and what happens if one cannot contribute when more money is needed. Choose arbitration or courts, the seat, and the governing law. Stamp duty on agreements differs from State to State. An unstamped agreement is not void, but it cannot be used in evidence until the duty and penalty are paid.

If the business is an LLP

The LLP Agreement under the Limited Liability Partnership Act, 2008 does much of this work. It sets out the partners' rights and duties. The LLP must file the agreement and any change to it with the Registrar within 30 days.

This article is for general information. It is not legal advice, and reading it does not create an advocate-client relationship.