Identifying Laws Applicable to Various Industries and their Initial Compliances – Setting Up of Business Entities and Closure Important Questions

Question 1.
Prepare a checklist for incorporation of One Person Company.
Answer:
Checklist for incorporation of One Person Company:

  • Obtain Digital Signature Certificate [DSC] for the proposed Directors.
  • Obtain Director Identification Number [DIN] for the proposed directors.
  • Select a suitable Company Name, and make an application to the Ministry of Corporate Affairs for the availability of a name.
  • Draft MOA & AOA.
  • Sign and file various documents including MOA, AOA, Form No. 1, Form No. 22, Form No. 32 etc. with the Registrar of Companies electronically.
  • Payment of Requisite fee to Ministry of Corporate Affairs and also Stamp Duty.
  • Receipt of Certificate of Registration/Incorporation from ROC.

Question 2.
State any five annual compliances required to be made after incorporation of Unlisted Public Company.
Answer:
Annual Compliances to be made by the Unlisted Public Company after incorporation are given below:

ComplianceParticulars
Form No. MBP-1Form No. MBP-1 should be received by the company from each director disclosing his concern or interest in any company or bodies corporate, firms, or other association which shall include the disclosure of shareholding held by him.
Form No. DIR-8Form No. DIR-8 should be received by the company from each director about his disqualification u/s 164(2).
Board MeetingEvery public company shall hold the first meeting of the Board of Directors within 30 days of the date of its incorporation. Subsequent Board Meetings: Every public company shall hold a minimum of meetings of its Board of Directors every year. The gap between the two board meetings should not be more than 120 days.
General meetingEvery public company must hold AGM and EGM of the members of the company as provisions of the Companies Act, 2013 and file with ROC necessary forms in relation to resolutions passed at such general meetings.
Appointment of auditorEvery public company has to appoint an auditor as per Section 139 of the Companies Act, 2013.
Form No. ADT- 1Every private company has to give notice of appointment of auditor to ROC within 30 days of appointment in Form No. ADT-I.
Books of AccountEvery public company should start to keep books of account as per provisions of the Companies Act, 2013.
Statutory registersEvery public company should start to keep various statutory registers as per various applicable provisions of the Companies Act, 2013.
MinutesEvery public company should prepare minutes of meetings as per Section 118 of the Companies Att, 2013.

Question 3.
Adhering to labour laws is integral to every organization, small or big. Explain.
Answer:
Adhering to labour laws is integral to every organization, small or big. When an organization is established and it hires people to work, it is subject to several labour laws regardless of the size of the organization. Laws with regards to minimum wages, gratuity, PF payment, weekly holidays, maternity benefits, sexual harassment and payment of bonus among others will ) need to be complied with.

Some major labour laws applicable to most the organization are:

  • Industrial Disputes Act, 1947
  • Trade Unions Act, 1926
  • Industrial Employment (Standing Orders) Act, 1946
  • Inter-State Migrant Workmen (Regulation of Employment & Conditions of Service) Act, 1979
  • Payment of Gratuity Act, 1972
  • Contract Labour (Regulation & Abolition) Act, 1970
  • Employees Provident Funds & Miscellaneous Provisions Act, 1952
  • Employees State Insurance Act, 1948.

An attractive employee policy can be the key to attract and retain good talent. Employee policies can also prove to be the starting point for boosting j employee morale and increasing productivity.

Question 4.
Enumerate the name of any five laws that are applicable to Oil & Petroleum Sector.
Answer:
Various laws that are applicable to Oil & Petroleum Sector are as follows:

  • Petroleum Act, 1934
  • Petroleum and Minerals Pipelines (Acquisition of Right of User Inland) Act, 1962
  • Explosives Act, 1884
  • Oilfield (Regulation & Development) Act, 1948
  • Petroleum & Natural Gas Regulatory Board Act, 2006
  • Oil Industry (Development) Act, 1974
  • Mines Act, 1952
  • Mines and Minerals (Regulations and Development) Act, 1957
  • Territorial Waters, Continental Shelf, Exclusive Economic Zone & Other Maritime Zones Act, 1976 [In short called Maritime Zone Act, 1976]
  • Offshore Areas Minerals (Development and Regulation) Act, 2002.

Question 5.
Enumerate the name of any five laws that are applicable to the Insurance Sector.
Answer:
Various laws that are applicable to Insurance Sector are as follows:

  • Insurance Act, 1938
  • Insurance Regulatory and Development Authority Act, 1999
  • General Insurance Business (Nationalization) Act, 1972
  • Industrial Disputes (Banking and Insurance Companies) Act, 1949
  • Marine Insurance Act, 1963.

Question 6.
Harischander wants to start a manufacturing business but he is not able to decide on the form of business (Type of Business Entity). He seeks your advice about the legal implication and requirements for the various business forms in India on the basis of the following parameters.
(i) Registration f ii) Members liability
(iii) No. of members required
(iv) Taxation
(v) Legal status [June 2019 (5 Marks)]
Answer:
Identifying Laws Applicable to Various Industries and their Initial Compliances - Setting Up of Business Entities and Closure Important Questions 1

Question 7.
Write a short note on Labour Welfare Fund for social assistance to workers [June 2019 (3 Marks)]
Answer:
To extend a measure of social assistance to workers in the unorganized sector/the concept of the ‘Labour Welfare Fund’ was evolved and five welfare funds were set up under the Ministry of Labour and Employment. These funds are aimed to provide housing, medical care, educational and recreational facilities to workers employed in the beedi industry, certain non-coal mines and cine workers.

Such funds are financed out of the proceeds of the cess levied under respective Acts. Various legislations so enacted are as follows:
1. Mica Mines Labour Welfare Fund Act, 1946: It was enacted to provide for the constitution of a fund for financing the activities which promote the welfare of labour employed in the mica mining industry.

2. Limestone and Dolomite Mines Labour Welfare Fund Act, 1972: It was enacted to provide for the levy and collection of a cess on limestone and dolomite for financing the activities which promote the welfare of persons employed in the limestone and dolomite mines.

3. Iron Ore Mines, Manganese Ore Mines & Chrome Ore Mines Labour Welfare Fund Act, 1976: It was enacted to provide for financing the activities which promote the welfare of persons employed in the iron ore mines, manganese ore mines and chrome ore mines.

4. Beedi Workers Welfare Fund Act, 1976: It was enacted to provide for financing the measures which promote the welfare of persons engaged in beedi establishments.

5. Cine Workers Welfare Fund Act, 1981: It was enacted to provide for financing the activities which promote the welfare of certain cine-workers.

Question 8.
Prabhat is proposing to start a new business wants to know from you the mandatory annual compliances for an LLP and a partnership firm. [Dec. 2019 (3 Marks)]
Answer:
Mandatory Annual Compliance of LLP
All LLPs registered under the LLP Act, 2008 need to file Annual Returns and Statement of Accounts for every Financial Year. It is mandatory for an LLP to file a return irrespective of whether it has done any business or not.

There are three mandatory compliance requirements to be followed by LLPs which are given below.
1. Filing of Statement of Account and Solvency: Every LLP shall, within a period of 6 months from the end of each financial year, prepare a Statement of Account and Solvency in Form No. 8 and such statement shall be signed by the designated partners of the LLP. Every LLP shall file the Statement of Account and Solvency with the ROC every year on or before 31st October.

2. Audit of accounts: Every LLP whose turnover exceeds, in any financial year, ₹ 40,00,000 or its contribution exceed ₹ 25,00,000 has to get accounts audited from a Chartered Accountant.

3. Filing of Annual Return: Every LLP shall file an annual return duly authenticated with the ROC within 60 days of closure of its financial year in the prescribed form. Annual return has to be filed in Form No. 11. The annual return of an LLP having turnover up to ₹ 5 Crore during the corresponding financial year or contribution up to ₹ 50 lakh shall be accompanied with a certificate from a designated partner, other than the signatory to the annual return, to the effect that annual return contains the true and correct information.

In all other cases, the annual return shall be accompanied with a certificate from a Company Secretary in practice to the effect that he has verified the particulars from the books and records of the limited liability partnership and found them to be true and correct.

4. Filing of Income Tax Return: Every LLP has to file an Income Tax Return every within the due date prescribed in Income-tax Act, 1961.

Mandatory Annual Compliance of Partnership:
In partnership, there is no requirement for filing an Annual Return. There is no requirement for a certificate from the company secretary.

Partnership need to file an Income tax return

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