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Company Law CS Executive Programme Investments, guarantees and protection,inter-corporate loans, related party transactions An overview   In the field of inter-corporate loans, acquisitions, guarantees and security under Section 186 and related party transactions under Section 188, the Companies Act, 2013 has incorporated abundant amendments. We will have to refer to the regulations and old provisions when and where to distinguish the purpose and extended scope in order to understand its applicability and substantial coverage allowed by the new legislation.   What are Inter-Corporate Loans, Investments, Guarantees, and Security – Section 186 Section 372A, under the Companies Act, 1956, deals with Inter-Corporate Loans and Investments. In the growth of industries, Inter Corporate Loans and Investment plays a critical role as it identifies and formulates the flow of funds for the company or associates or other companies in need of those funds. In order to invest in a way that should turn

Labour Audit: Industrial and Labour Law CS Executive Labour Audit The labor and employment law audit is an important method for managing compliance with labor, employment, and industrial laws. The audit helps to identify non-compliance with labor and employment laws applicable to a company and to take corrective steps to prevent authorities from taking unjustified legal action against the company and its management. While the Labour Law Audit is not necessary, the operation of this audit is strongly recommended. The audit helps to identify non-compliance with labor and employment laws applicable to a company and to take corrective steps to prevent authorities from taking unjustified legal action against the company and its management. Scope of the Audit of Labour   The auditor of labor law shall cover all labor laws applicable to an industry/business or any other commercial institution in which the audit is carried out by the auditor of labor law. Where a specific piece of labor law is

Labor turnover is defined as the proportion of the workforce of the company leaving over the course of the year or the ratio of the number of persons leaving over the period to the average number of employees.   Labor turnover is all about retention of employees – i.e. the ability of a company to convince its employees to remain in business.   Causes of Labor Turnover     The causes of the turnover of labor could be classified into three types. They're:   Personal causes –  those that induce or force workers to leave their jobs. Retreat due to old age. The accident makes workers permanently unable to work. Women workers may leave after marriage to perform household duties/family duties I don't like the job or the place. Workers are finding better jobs in other places. Changing the job for improvement.   Inevitable causes –  those on which management is obliged to ask some or more of their employees to leave the organization; Seasonal nature of the company. Change the location

Multi-deposit system: The depository model adopted in India provides for a competitive multi-depositary system. The depository was to be a company formed under the Companies Act 2013 and a certificate of registration under the Securities and Exchange Board of India Act, 1992 was to be granted. There are currently two depositories registered with SEBI, namely:   National Securities Depository Limited (NSDL), and Central Depository Service Limited (CDSL)   Securities in Dematerialised Form: The depository model adopted in India provides for the dematerialization of securities, which is more or less similar to holding funds in bank accounts. Transfer of ownership of securities is done through simple account transfers. This method does away with all the risks and hassles normally associated with paperwork.   Fungibility: In a general sense, Fungibility is a good or asset’s interchangeability with other individual goods or assets of the same type. Assets possessing this fungibility property

What is the 2017 Amendment Bill for Companies?  The 2017 Companies (Amendment) Bill, which aims to bring in substantive amendments to the 2013 Companies Act. It aims to enhance the quality of corporate governance, initiates stern action against defaulting companies, and help boost the country's ease of doing business...   Some of the key amendments introduced in Companies Amendment Bill, 2017 are: Instead of affidavits, a declaration would be required for the incorporation of the company. In the case of a new company, the name reservation is valid for 20 days from the date of approval, instead of 60 days from the date of application. The Unlisted Company's Annual General Meeting (AGM) can be held anywhere in India. Each company must have its registered office within 30 days of incorporation, rather than the current requirement to have its registered office within 15 days. The ROC shall be informed of any improvement in the situation of the registered office within 30 days inste

Eligibility for Bonus & Its Payment Eligibility for Bonus:   In compliance with the Payment of Bonus Act, 1965, an institution that has hired 20 or more workers shall pay an annual bonus to its qualifying employees*.   Employees who have worked for no less than 30 working days in that year and earn a salary of Rs. 10,000 or less per month are qualified employees. And an apprentice is not eligible for the bonus, as per a decided case law.   Note: Now, from Rs. 10,000 to Rs. 21,000 per month, the cap has been adjusted.   Bonus disqualification   If an employee has been terminated from service for being involved in the Payment of Bonus Act, 1965, pursuant to Section 9,   (a) fraud; or, (a) fraud; or   (b) riotous or violent activity while on-site or in the establishment; or (b) riotous or violent behavior while on-site or in the establishment;   (c) fraud, misappropriation or sabotage of any property belonging to the establishment, and then prohibited from earning a bonus in complian

To borrow   Money is required to operate a business. Now, it can either be in the form of investment in money, or it can be borrowed from outsiders. Capital investment can be made by the issuance of equity securities, while money can be borrowed from external sources, i.e. external sources, through issuing debentures, bonds, bank loans, external commercial borrowings, etc.   Basically, borrowing means arranging cash with the intention of running a company and generating income and eventually returning the money borrowed.   Borrowing means borrowing cash. Loans can come in many ways, such as short-term loans, long-term loans, secured loans, unsecured loans, private borrowing, public borrowing, etc.   The firm's power to borrow     In its articles for borrowing capital, a corporation has its own life and has articulated powers. The company's power to borrow money is exercised by its directors by passing a resolution authorizing them to borrow money, and that resolution should als

The Negotiable Instrument Act is a very interesting subject of Economic, Business and Commercial Law, explained below:   The Negotiable Instruments Act was enacted in India in 1881 and entered into force on 1 March 1881. Prior to its enactment, the provisions of the English Negotiable Instrument Act were applicable in India and, with certain modifications, this Act is also based on the English Act. It extends to the whole of India, with the exception of the state of Jammu and Kashmir. The Act operates subject to the provisions of Sections 31 and 32 of the Indian Reserve Bank Act, 1934.   What's the Negotiable Instrument?   A "negotiable instrument" means a promissory note, a bill of exchange or a check payable either to the ordering party or to the holder.   EXPLANATION – A promissory note, bill of exchange or check is payable to an order which is expressed as being payable or which is expressed as being payable to a particular person and does not contain words prohibiti

  The Tax on Goods and Services (GST) is a tax on the consumption of goods and services dependent on destinations. It is planned to be charged from production to final use at all stages, with the tax credit paid at previous stages available as a setoff. In a nutshell, only value-added will be charged and the tax burden will be borne by the final user levy and GST collection will be carried out in the case of intra-state supply and inter-state supply, according to the provisions of the CGST Act 2017 and IGST Act 2017.   In the case of intra-state supply, GST is levied as per CGST (Central Goods and Services Tax) Act, 2017, and in the case of inter-state supply, GST is levied as per IGST (Integrated Goods and Services Tax) Act, 2017. CGST is levied on all the supplies of goods or services or both supplied within the state, except on the supply of alcoholic liquor for human consumption at such a rate as notified by the Central Government on the recommendation of the GST Council.   The Cen

  EXEMPTION UNDER GST – GST EXEMPTION – SECTION 11 of CGST ACT The scope of the article mainly concerns the power of governments under section 11 of the CGST Act, 2017, to grant exemptions from the Goods and Services Tax (GST). The nature of the clause, however, is pretty straightforward and clear in that it addresses the reasons for the government's exemption. Let's first understand the definition of exemption and how Section 11 takes its place in the GST exemption before moving into Section 11 provisions of the CGST ACT.   GST EXEMPTION – EXEMPT SUPPLY Exempt supply, under GST, means the distribution of products and services that are not tax-consuming. Since we all know that GST is focused on supply, GST cannot attract GST despite the trigger. The tax credit charged for input in connection with these materials is obviously not available for use and the GST liability will not be excluded. To put into simple words, the following are three types of supply which are considered as