Working from apartment is LEGAL for IT companies startups

Recently, I was at Bombay on invitation by VC Circle ( India’s largest investment magazine ). Wicfy was picked up as one of the 10 promising startups across the country to pitch to India’s leading VCs.

 http://techcircle.vccircle.com/2013/07/18/startups-presenting-at-pitch-10-vccircle-india-angel-summit-2013-revealed/

I heard the pain of a fellow entrepreneur. He said he was being harassed by his society for running a startup from an apartment. Doing a startup in a country where 990 out of 1000 fail in first year itself is no less daunting. Unwarranted torture by society members can just break the morale of any innovator trying to build an infant company.  He said why should they harass us when we dont disturb any body and just silently work on our PCs/laptops.  Indians  unlike the Americans do not build garages from which Googles can take root.

A typical startup garage from which great technology companies emerge

 

I was surprised because I have always seen great support and encouragement in Edenn towers management the society in which we run our little startup. Fortunately, there was an experienced professional who was over hearing us.  ”Running a  IT company from residential area is perfectly legal “- he roared. Our heads turned and I was amazed by the firmness in his voice. I asked how can you substantiate it ? Is there any ruling ?

He blurted – “Section 3.1.1.10  page 7 of Maharashtra IT /ITES policy of 2009 makes it perfectly legal for IT companies to operate from  residential areas ” He was delighted , his heart was thumping but he was not ready to believe it.  He asked can you show me the ruling.

Quickly, the veteran opened the Maharastra govt ruling  from the govt site

https://www.maharashtra.gov.in/Site/PDF/itpolicy.pdf   * 16 Sep2013 -The file has been moved and the new url  to access the policy document is : https://www.maharashtra.gov.in/PDF/itpolicy.pdf  and opened up the page #7.

It clearly stated – “

 9. IT-ITES units (except IT hardware and Telecom Hardware Manufacturing Units) will be allowed in any Zone (including residential and no-development zones, etc).  

The entrepreneur was hugely relieved and small tears rolled in his weary eyes as he felt empowered against the undue harassment which was almost breaking him down.  He was now more confident that he can build the world class company with full faith. The eternal question ,  ”How even Infosys was founded and operated in an apartment was answered.”.  He thanked the veteran.

Before he could leave, the veteran patted entrepreneur’s shoulder and said “ Now go on and build a great company without hesitation and also remember. Power is  temporary and is an intoxicant.  When its given to the people who least deserve it, they turn arrogant. Arrogance when held for a prolonged period is a N-U-I-S-A-N-C-E. Always choose your representatives with utmost care.”

I hope this small anecdote and  is useful to a lot of people thinking of starting up or  in startup. A lot of thanks to Govt of Maharashtra for enacting this policy. This helps prevent a lot of harassment entrepreneurs face from overzealous members of societies in which they operate. Notwithstanding this, the fools will still DIE HARD.

PS : Majority of startups I have visited in Pune operate from apartments or residential areas. Please do let me know of the startups which have never or are not operating from residential areas ( Please exclude sons, daughters and son in laws of billionaires )

Comments

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About Purose

Arun Purohit is an entrepreneur and CEO of wicfy.com. He holds a masters degree in software systems from BITS PILANI and started his professional career in 1998 . In his 15 years career he has juggled multiple roles from manufacturing to missiles, from CAD to Web . He now works on product design, building the organization. His spare time is spent coaching kids on Chess, Boxing and playing squash or trekking hills near Pune
This entry was posted in Insights, Reality, Startups, Wisdom and tagged , , , . Bookmark the permalink.

9 Responses to Working from apartment is LEGAL for IT companies startups

  1. Dear Arun,

    I disagree with your post and legal position for the following reasons. Infact it cracks me up. Funny post.

    1. An IT policy is not a law and is framed for the mere purpose of providing guidance to government for devising laws or procedures in connection with IT industry in the state. It cannot be equated to an act of parliment or state legislature by any stretch of imagination which alone can be called as the law of land. Simply put its not enforceable by law.

    2. The society for apartments is created by registration at sub-registrar office under maharastra societies registration act or the local state’s societies registration act or central societies registration act as case may be. All of these acts provide that the society which is the elected body of society members (apartment owners in this case) is the sole representative and has wide ranging powers vested by the Act

    3. The powers include removal of nusiance and to do all such acts to promote collective harmonious living of society members (apartment owners)

    4. The above is also in consonance with Maharastra apartment ownership act

    5. Therefore all that the society needs to do is to pass a resolution that IT entrepreneurial ventures would not be allowed in the society by any members and based on voting the resolution will be passed with majority.

    6. Thereafter the single entrepreneur member(apartment owner) has absolutely no powers to do anything legally except to challenge the decision in the court of law

    7. In certain cases the society (representative of majority apartment owners) can also complain to sub registrar for action against the erring entrepreneurial apartment owner leading to cancellation of registration, levy of fine and even order for stoppage of illegal entrepreneurial activities

    8. Any further action will be thoroughly illegal and would result in contempt action

    Therefore the society is supreme as far as the apartment regulations is concerned. The only way out is compromise and consultation or action in court against the order

    Quoting fancy words out of context from it policy has no relevance whatsoever in the eyes of law.

    Please care to read the header of 3.1.1.10 “Additional FSI and other benefits for IT Parks and infra-structural benefits”. This is it policy guidance for state.

    Source:
    I am a practicing advocate.

      • Thank you for your link. But one should see that the cases are for profession not for business. CA office or lawyer office is different from IT business. But if yoga classes are held to be allowable then there is a case to argue your point. But you would need to substantiate how IT Business with large number of employees does not disturb societal harmony and peace as compared to ca office or lawyer office (with 1 or 2 employees) unless you have a direct case law on IT business being allowed.
        Thanks again for the link and sorry for the language. Decided cases have legal validity as compared to it policies that is of no relevance. Also kindly do not brush aside completely the powers vested under Societies Act and apartment ownership act

        • Imran Saaheb,

          An IT startup on most cases works for the first 2 to 3 years in building the product where majority of work is writing the code/software.. This work is mostly intellectual and conceptual in nature. The society office bearers often start harassing entrepreneurs when they raise question of corruption against them. In my case, I was also the owner of an apartment in the same society where I took an apartment to do my startup.

          It was less intrusive than even the Yoga classes as 6 to 7 of us just worked on our laptops or PCs but the Secretaries and Chairman went vengeful because I was exposing their corruption.

          The societies under MCS acts have passed several idiotic resolutions and when they violate principles of natural justice, the resolutions have been overturned by co operative and other courts. Some stupid resolutions : Not allowing bachelors to take apartment on rent, not allowing people who eat non veg to take flats on rent. Charging monthly maintenance on per square feet basis in a society..

          Mostly, the societies are run by illiterates who never in their life have opened up IPC or India evidence act. In all such cases we the guys who have done 6 yrs of military service see very heavy on them

  2. Abhinay Somani says:

    Nice article . . ! Thanks for penning down cum sharing.

  3. gaurav gupta says:

    I wouldnt give a damn what the so called society members think about working out of my place, even if this law wasnt there.

    I would happily tell them to buzz off, if they dared to even bring up this issue, let alone taking action.

    In India, the sad truth is that everything is illegal, including breathing if you start listening to people around you. Society Members are just the symptom of a very deep scorpian mentality malaise.

    • Gaurav,

      A society member has security guards under his command. He can instruct the guards to do something which he is supposed to do. Now you can neither bark or give a damn to that poor security guard who is just doing his duty.
      Buzz off may not work. The guard will not let your employees come in or harass them in multiple ways.

      I donot agree to your prophecy that in India everything is illegal. That bad indoctrination

      When you are on right side of law and fight, there is a very good chance that your case will prevail but when you are on the wrong side even if you are a Sanjay Dutt you go to jail.

  4. Veetrag says:

    Too much useful. Thanks for sharing !

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