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Showing posts from May, 2018

Sachin Bansal’s Exit form Flipkart- Lessons for Founders

US retailer Wallmart Inc. acquired a 77% stake in India’s largest online retailer for almost US$ 16 billions in its biggest acquisition to date. With this acquisition, brings an end to journey of Poster Boy- Sachin Bansal & Flipkart. Though it s a moment of ecstasy and celebrations for startups especially Flipkart, there are few questions which must have to looked seriously by the Founders/Startups.

Sachin Bansal- Exit from Flipkart- Sachin was involved in talks with Wallmart from the beginning and it was expected that he could get a bigger role at Flipkart after the sale then the Executive Chairman. However, a last minute disagreement with Lee Fixel and Krishnamurthy over hos role and rights after the sale led to a bitter ouster. It’s the final affirmation of who controls the Company. Sachin being a Founder of Flipkart wanted stronger rights such as preferential ‘founder rights’ & guarantees that he would havea lot more say in Flipkart’s operations, however this was strongly refu…

Taxation of Damages- “Damages paid for Breach of Contract to attract GST”

Performance is the essence of a contract and hence parties to contract generally incorporate their expectation in terms of damage caused by failure of either party to perform its obligations completely or as per the agreed terms. The contract may prescribe damages for deficiency in the performance of contract known as ‘liquidated damages’. It is to dissuade unsatisfactory performance or non-performance. For instance, contracts state that time is the essence of contract, and any delay invites say, 1% of the value of the contract for every week of delay and the like. Similarly, it is common to forfeit earnest money deposit (EMD) from a bidder in case he wins the bid but fails to act thereafter. This forfeiture clause is a deterrent for non-serious bidders entering the fray. Other examples may be rent for delay in lifting goods; agreeing to shoulder testing charges for samples to meet standards; cost of removing rejected goods, etc. Payment of damages or the forfeiture of deposit does not …