📄 Article
✓ Link checked
India
Free
Advanced
Written by one of India's top corporate law firms, this is the authoritative read on what your co-founder's current employer can actually enforce while they are still on the payroll. It confirms that a non-compete or exclusivity clause operative during employment is valid in India (unlike a post-exit non-compete, which Section 27 of the Contract Act voids), which is exactly why you check their contract before they touch your codebase, not after they quit.
Moonlighting: Legal Considerations and Contractual Regulation
From India Corporate Law (Cyril Amarchand Mangaldas) by Cyril Amarchand Mangaldas 12 min read
- Dual employment is permissible in India only when the contract allows it or the employer consents, so a co-founder's existing employment agreement may bar the side work outright
- Non-compete and exclusivity clauses that operate during the term of employment are enforceable, and firms draft them to cover consultancy and advisory arrangements, not just formal jobs
- Employers can and do clarify how IP created for another entity is treated, especially where office time or resources touch the side project, making the employer's IP claim a live risk
