Rajat Negi

Maintaining legal compliance in your company

Maintaining legal compliance in your company pko2jhbik3v977109f0vi03lbfsewxl8jyx3bd2cza - Maintaining legal compliance in your company

Maintaining legal compliances in the company should be your first step for the company. Here the company is going to form on papers.

Well, If businesses or business owners are practicing bad activities, and if it comes in the eyes of the government then they may go into trouble. Government can punish the company by imposing a fine on the business or by suing the business owner. India is full of crooks, people are hungry to become rich. 

I got you!

I guess you have seen that Web series on Harshad Mehta.

In this world, Certain rules and compliance standards must be followed by all businesses and startups.

Secretarial Legal Compliance

According to all corporate structures, these are the most basic regulations and procedures that a company must follow.

This includes many things such as GST return, Annual filings, AGM (Annual General Meeting), and many more things.

Laws related to operation and managing business

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Businesses are frequently needed to register under several licenses to comply with applicable legislation such as 

  1. PAN
  2. TAN
  3. GST registration
  4. FASSI license (if the business is related to food)
  5. BIS Certificate (Bureau of Indian Standards)

and many more.

Legal Compliance related to Intellectual Property

Intellectual property can be an intangible asset for your startup if managed and used properly. If your startup covers any such intellectual property right and these are used lawfully, then to claim exclusive rights over the power of these intellectual properties one needs to avail registration. 

Trademarks registration, Patent registrations, and copyrights registration are some of the types of intellectual property.

Legal Compliance that are required by startup

So from now on, I will categorize the compliance into two types i.e. Internal and External

Internal: Any action or steps were taken by the high authorities or admin such as directors, partners, and board of members to customize some changes within the company. 

External: action or steps taken by external authorities such as the government on the company.

Internal Legal Compliance

The company or startup can’t take decisions on its own. so the decisions concerning compliance should be fulfilled by the directors or partners or senior executives. They can decide or modify the following things:

  • Change in business operations.
  • Change in the directors/partners.

External Legal Compliance

Since any startup or company is an integral part of the corresponding country’s GDP, therefore it has to follow some rules and laws by the country’s government.

External compliances are the ones that are imposed by the state on the company or startup such as Income Tax Return Filing, GST Filing.

It purely depends on the business structure or the model which defines its exposure to the government and external authorities.

Licenses and Registrations as per business structures

Proprietorship and General Partnership:-

Since these type of business structures are unorganized and they are not a separate entity in the eyes of the government, therefore these business requires minimum compliance but a high risk of personal liability is there. Although registration is not mandatory it is highly recommended. 

LLP and Private Limited Company:-

These type of business structures are organized and they are separate entity in the eyes of the government, therefore these business requires heavy compliance such as ITR, filing of financial statements such as Balance Sheet, Profit and Loss Statement & Cash-flow Statement with MCA, and many more. Registration is mandatory.

Registrations and Licenses:-

Businesses throughout the world must adhere to specific guidelines. Licenses and registrations are frequently used to keep them under control. Let’s have a look at the obligatory registrations now.

  • PAN, TAN, and Shop & Establishment Licenses:- (It is mandatory to everyone who is filling Income Tax and doing business)
  • Professional Tax
  • GST,etc. 

Industry based Licenses:-

Voluntary based Licenses:-

  • MSME( Micro Small and Medium Enterprises): Any manufacturer or service provider who meets a set of criteria can apply for MSME status and get rewards. 
  • AGMARK: In India, it is a certification mark that is applied to agricultural goods.
  • ISI/BIS Mark: It is primarily a certification license for products and management systems. Since 1955, the ISI mark has served as a conformity mark for industrial items in India. The mark verifies that a product complies with an Indian standard (IS) produced by India’s national standards organization, the Bureau of Indian Standards (BIS).

Intellectual Property Law:-

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People want to emulate others in this society, and by doing so, they are suffocating their creativity. Businesses, too, aim to emulate others to increase profits and popularity. All enterprises who operate in the field of invention, delivering one-of-a-kind services and goods under a one-of-a-kind tradename, as well as creative work, should protect their intellectual property. It will serve as an Intangible Asset for firms in the long run. This can also be linked to a company’s goodwill. This gives the company’s owner exclusive rights to use, sell, alter, and assign the same intellectual property while also earning monetary value.

Patents:-

5 1 - Maintaining legal compliance in your company

People want to emulate others in this society, and by doing so, they are suffocating their creativity. Businesses, too, aim to emulate others to increase profits and popularity. All enterprises who operate in the field of invention, delivering one-of-a-kind services and goods under a one-of-a-kind tradename, as well as creative work, should protect their intellectual property. It will serve as an Intangible Asset for firms in the long run. This can also be linked to a company’s goodwill. This gives the company’s owner exclusive rights to use, sell, alter, and assign the same intellectual property while also earning monetary value. 

Trademark:-

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If you want to protect your company’s brand name from unlawful usage, you’ll need to register it as a trademark. It might be a logo, a phrase, a slogan, or something else entirely. Registration is required and must be renewed every ten years to continue to enjoy the benefits.

Copyrights:-

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You can claim exclusive control over an original piece of art or literature by claiming your copyright. It may be anything at all.

It is an automatic right, however, registration is recommended. There is no need to renew it because it is valid for the author’s or owner’s lifetime plus 60 years after death.

Labor and Employees Laws:-

  • The employee-employer relationship is enhanced, which reduces the likelihood of labor conflicts.
  • Act as a legal safeguard for employees against exploitation by employers or management.
  • Assists in obtaining a fair salary
  • It also helps to reduce labor discontent.

Laws that a business should comply with:-

  • Agreements/Contracts: The business should develop and have legally binding agreements and contracts. An employer must give a formal employment agreement that outlines both the employer’s and employee’s rights and responsibilities.
  • Leaves: Casual, sick, privileged, or earned leaves, as well as other leaves, must be given to an employee.
  • Maternity Benefits: A female employee is entitled to up to 12 weeks of maternity leave.
  • Gratuity: It is an employee’s statutory entitlement that functions as a form of social security for employees who offer continuous service to the organization. The amount of gratuity grows as the employee’s tenure and income increase.
  • Provident Fund: It is a retirement benefit program open to all paid employees. To their provident fund, both the employer and the employee must contribute 12% of their base wage.

Final Words

These are some fundamental regulations, however, depending on the structure, operation, or type of labor, there may be a few more that apply to your company or firm. To prevent any penalties or company danger, I strongly advise you to seek the opinion of a business specialist.

I hope, I gave you some insights about the compliances and laws for your business and startup and delivered it in the best possible way. 

If you have any queries related to the same then do leave a comment, I will respond to it. 

DO SHARE THIS ARTICLE with your friends or family who doesn’t know about the business funnel.  You can tweet out your thoughts by tagging me @rajatinr on Twitter.

To your Success

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Rajat Negi

Compound Investor (Who loves to talk to stock)
Digital Marketer (Who loves to make brands)

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