Industry bodies moots need to lay guidelines on business closures

Demand comes in backdrop of recent issues related to online hotel room booking start up Stayzilla

Leaders of various industry bodies, including CII Start Up Council Chairman Kris Gopalakrishnan, Nasscom Executive Council Member Ravi Gururaj, on Wednesday said there was an immediate need to lay guidelines on business closures. They also urged the Tamil Nadu government to intervene and support an early hearing of the bail plea filed by Yogendra Vasupal, the founder and CEO of online hotel room booking start-up Stayzilla, according to a joint statement published in a website created to support the jailed start-up founder.
 
The statement explained that start-ups have become the growth engine of innovation for India and the Prime Minister’s vision for Startup India has given a tremendous boost to the youth of the country and their dream to be an entrepreneur.
 
“However, as start-ups grow and scale, they will pivot, change priorities or close down. Hence it is important that the right legal framework is provided to address any business closures,” according to a statement uploaded in help-yogi.com, a web page supporting Vasupal.  “Any actions that go beyond the provisions of the law to create undue fear and harassment to the founders and their families as have been reported in this case, would raise the insecurity for startup founders, and make the cost of failure unacceptable to the vision of Startup India. This will set a very undesirable precedent,” they added.
 
Stayzilla is still a functional company and has not ceased its operations as the company has declared that it intends to restructure operations, and reboot its model and will also repay their partners and vendors. They requested that the bail application to be expedited and a proper legal procedure to be followed to resolve the dispute.
 
“The startup ecosystem needs to be nurtured and such acts of harassment that extend to children and family of the founders are condemnable. Entrepreneurship is India’s future and everybody needs to respect the law of the land and not engage in any unlawful activities,” added the statement.
 
The others who joined to issue the statement include A Didar Singh, secretary general, FICCI, Sharad Sharma, co-founder and member governing council, iSPIRT, Shubho Ray, president of IAMAI, Naganand Doraswamy, member governing council of TiE Bangalore, R Narayanan, president of TiE Chennai, Pramod Bhasin, president of TiE Delhi and Pradeep Mittal, president of TiE Hyderabad.
 
According to legal sources, the bail application of Vasupal was heard on Wednesday and a decision on it is expected on Thursday. Vasupal was arrested on March 14, following a complaint from one of Stayzilla's vendor, Jigsaw Solutions.