Memorandum of Understanding (MOU) for Sale of Property in India: An overview
Property buying selling

Memorandum of Understanding (MOU) for Sale of Property in India: An overview

Memorandum of Understanding (MOU) is a legal document that outlines the terms and conditions of a transaction between two parties. It is an agreement that lays out the basic framework of the sale of property, including the obligations and responsibilities of both parties. In India, the MOU is commonly used in real estate transactions to provide clarity and structure to the property sale process. In this blog, we will discuss the key elements of a Memorandum of Understanding for the sale of property in India.

  1. Property details The first and most important element of a Memorandum of Understanding is the property details. This includes the property's location, area, and boundaries. The MOU should also include the property's registration number and other relevant details such as the title deed, survey number, and land use category.

  2. Sale price and payment terms The MOU should clearly outline the sale price of the property and the payment terms. This includes the payment schedule, payment method, and any penalties or interest for late payment. The payment terms should be agreed upon by both parties and should be included in the MOU to avoid any confusion or disputes later on.

  3. Possession and handover The MOU should outline the possession and handover details, including the date of possession and any conditions for handover. This includes any documentation or legal formalities required for the transfer of ownership of the property. The MOU should also specify the responsibilities of both parties regarding the condition of the property at the time of handover.

  4. Legal and regulatory compliance The MOU should include a clause stating that the sale of the property will comply with all legal and regulatory requirements. This includes obtaining any necessary approvals, licenses, or permits required for the sale of the property. The MOU should also specify which party is responsible for obtaining these approvals and any associated costs.

  5. Dispute resolution In case of any dispute, the MOU should outline the dispute resolution process. This includes the mechanism for resolving disputes, such as mediation or arbitration, and any costs associated with the resolution process. The MOU should also specify the jurisdiction for any legal proceedings that may arise.

  6. Confidentiality and non-disclosure The MOU should include a clause stating that the details of the transaction are confidential and cannot be disclosed to any third party without the written consent of both parties. This is to ensure that any sensitive information related to the property sale is not leaked or used against either party.

  7. Termination The MOU should also include a termination clause specifying the circumstances under which the agreement can be terminated. This includes any conditions for termination, such as non-payment or failure to comply with legal or regulatory requirements. The MOU should also specify the consequences of termination, including any penalties or forfeitures.

  8. Signatures Finally, the MOU should be signed by both parties to indicate their agreement to the terms and conditions outlined in the document. The signatures should be witnessed by an authorized person, and the MOU should also include the date of signing.

In conclusion, a Memorandum of Understanding is an essential document in the sale of property in India. It lays out the basic framework of the property sale transaction, including the obligations and responsibilities of both parties. The MOU should include property details, sale price and payment terms, possession and handover, legal and regulatory compliance, dispute resolution, confidentiality and non-disclosure, termination, and signatures. The MOU should be carefully reviewed and signed by both parties to avoid any confusion or disputes later on. By including all of the necessary elements in the MOU, both parties can enter into the property sale transaction with confidence, knowing that their interests are protected and the terms of the sale are clear and unambiguous

Legal Compliances Checklist for Startups in India

Legal Compliances Checklist for Startups in India

The growth of start-ups in India has been impressive over the past years, making the Indian ecosystem conducive to them. The government of India announced an initiative – Start Up India - with regard to the same, which aimed at focussing on simplification and handling, funding support and incentives, and industry-academia partnership and incubation. The Nasscom Tech Start-up Report 2020–21 states that India has 38 unicorn companies or businesses valued at more than $1 billion. The start-ups in the Indian ecosystem have to meet with the set compliances to establish themselves. Out of this, there are certain legal requirements that start-ups are bound to comply with. These compliances are discussed below briefly:

Also ReadProcedure, Document Checklist And Costs For Incorporation Of A Private Limited Company


  1. Identification of business organisation structure: When starting a business, one should create a separate legal entity under which they will operate. It is the most important item on the legal checklist for start-ups in India.  Private Limited Companies, Limited Liability Partnerships, One Person Companies, Sole Proprietorship Firms, and Partnership Firms are the six main legal entities recognised in India. A start-up can opt for any according to the business structure it wants to establish.

  2. Registration: The two most crucial considerations for registering a start-up are as follows:  The start-up must be incorporated before registering with the "Start-up India Program," which is the second step. A start-up's incorporation includes obtaining a Directory Identity Number and a Digital Signature Certificate. By enrolling online, you can receive this recognition from the Department for Promotion and Industry and Internal Trade (DPIIT). The platform aims to encourage innovation in the nation by giving businesses access to a range of financial incentives and advantages like tax exemptions.

  3. Obtaining Licences: It's crucial to understand that these licences are necessary for businesses to function lawfully and that they must be obtained. Every business organisation has different compliances to make. A business may be subject to legal penalties, fines, or other consequences if it fails to secure the licences necessary to operate in its industry. For example, a restaurant business will want a Certificate of Environmental Clearance, a Food Security Licence, and a Prevention of Food Adulteration Act Certificate, while an e-commerce start-up will require service tax and VAT registration.

  4. Company Law Compliances: Meetings with board members, filling out crucial documents, auditing data, and producing reports are all things that a registered company must adhere to. They can be listed as:

  • Annual-General Meeting

  • Board Meetings

  • Appointment of Auditor

  • Director’s Report

  • Maintenance of statutory registers

  • Circulation of Financial Statement

  1. Taxation Compliances: The two types of taxes are taxes, both direct (Income Tax) and indirect (GST, Excise duty, Customs duty, etc.) In India, taxes are imposed according to nature and company operations. Here are several tax benefits provided to start-ups for their efficient growth while they are still in their nascent stage.

  • Three-year tax holiday in a block of seven years

  • Exemption from tax on long-term capital gains

  • Tax exemptions on investments above the fair market value

  • Tax exemptions to individual/HUF on LTCG from equity shareholding

  • GST based compliance

  1. IPR Compliances: Start-ups place a high value on originality, creativity, and uniqueness as the foundation of their success. They establish a company with the intention of introducing the world to a brand-new good, service, or method. Protecting the intellectual property rights necessary for growing their firm is vital for entrepreneurs. 

Also Read: How Can You Form A Company In USA From India?

Start-ups have a number of options for safeguarding these assets, including non-disclosure agreements, copyrights, trademarks, and patents.

  1. Labour Law Compliances: Start-ups must abide by the labour laws that come with opening a real firm. Rules like the Minimum Wage, Maternity Leave, or Protection Against Sexual Harassment in the Workplace, these laws are designed to shield employees from the possible exploitation of their employers. Additionally, they serve as a tool for holding both parties responsible for their conduct.

  2. Event-based compliances: Some are related to particular occasions or industries, such as compliance with FEMA for start-ups with FDI or Customs law for businesses who import or export. When a start-up deals with potentially hazardous goods or processes, environmental law clearance is required, whereas when it interacts with real estate, RERA approval and other compliance with property laws are required. Mergers and acquisitions or large transactions that would significantly harm competition in India would require clearance under the Competition Law.

  3. Contractual Obligations: Every business has agreements in place with various parties who play a role in how the firm operates, such as clients, workers, or vendors, through contracts.

Also Read: Startup Due Diligence explained

Any organisation must adhere to its regulatory requirements; the first step to ensure smooth operation is to comprehend and follow the applicable laws. To start a firm, every beginning entrepreneur must be familiar with all applicable regulations. One of the best ways to ensure that the business is always safe and avoids legal issues and implications is to hire an expert legal counsel who can advise, supervise, and maintain legal records.