Category: Legal

Categories
Legal

What is Minutes of Meeting (MOM), its Importance & Purpose

MOM stands for Minutes of Meeting
MOM stands for “Minutes of Meeting.”

Conducting meetings and planning for strategies act as fuel for the company’s growth, however, remembering all the important pointers while having meetings is not humanly possible.

Therefore, Minutes of Meetings come in place to make the information readily available to the members.

What is Minutes of Meetings (MOM)?

Minutes of Meetings (MOM) is jotting down the important details such as specific decisions, things and goals which were discussed in the meeting. These pointers are later emailed to all the people who are present in the meeting for their better understanding and remembering of the major points that were discussed in the meeting. This helps in working on future decisions and is used in all government and non-government sectors.

The Purpose of Minutes of Meetings:

Minutes of Meetings is the official record of meeting maintained at the time of meeting and it is also present in the court as the evidence. The purpose of the meeting is to provide correct information and facts about the decision taken and the approach on the futuristic decision. These records are maintained in the books as well as on emails.

Why Minutes of Meetings is important?

  • Thoughtfully and carefully jot down notes are legally valid, forged and unclear information are consider to be providing false information to the government as well as within the organization. 
  • The correct data and facts helps in understanding the specific of the meeting and the future goals. 

How to write Minutes of Meeting?

Before writing the Minutes of the Meeting, it is very important to understand what kind of data you want to record and then write things in a focused manner.

  • Title and topic of the meeting.
  • Time and date.
  • Names of participants in the meeting.
  • Organization name of all the members.
  • A summary of each special discussion.
  • Note all significant decisions.
  • Don’t forget to write down the date of the next meeting.

Some parts of the minutes of the meeting can be written in just one line, such as title, date and time. There are some things which have to be written in detail like the agenda of the meeting, decisions taken in the meeting. So, always jot down the information correctly.

Read this article in Hindi – मिनट्स ऑफ मीटिंग

Categories
Legal

5 Indian Legal Provisions that Every Startup Needs to Know and Follow

Legal Laws For Startups (Photo Credits: Pixabay)

India has been witnessing the emergence of many new-age entrepreneurs, these are the people who have the urge to set-up and run their own businesses. They have idea, aim and objective, with a clear plan to enter in the business of their own. For a start-up to survive a sound flow of funds, adequate knowledge of market condition and proper resource management skills are of utmost skills. Apart from these, one of the most important aspects of the business field which young entrepreneurs often overlook is the understanding of the legal framework on the country where the start-up is operated.

All the countries have a set of legislations to govern the business environment. In India, as well, there are various laws and legislation that deal with the establishment and functioning of a business enterprise. They supervise the internal management as well as the external relations of the business. It is important for any entrepreneur to know and comply with these legislations, in order to ensure that the business does not land in any legal troubles.

Here are Five Legal Frameworks that Every Startup Owner Should Know –

Incorporation Laws

The first step to bring a start-up idea to reality is incorporation; every firm needs to be duly incorporated under relevant laws before it could start its business. The founders are free to register their firm in any category they want. There are different legislations for different types of venture. A Limited Liability Company has to be registered with the Ministry of Corporate Affairs under the LLP Act, 2008. A Private Limited Company needs to be incorporated under the Companies Act, 2013. Partnerships can be registered under the Indian Partnership Act, 1932; though their registration is optional. For a sole-proprietor firm there is no registration required.

Labour Laws

Another important set of rules is the labour laws. It is morally and legally important to comply with the various labour laws including the laws on payment of wages, provident fund and gratuity, workplace sexual harassment, maternity benefits, etc. However if the start-up is registered under the ‘Start-Up India Initiative’, it can avail exemption from nine labour laws by signing a self-declaration, for a period of one-year from date of incorporation.  These laws are-

  • The Industrial Disputes Act, 1947
  • The Contract Labour (Regulation and Abolition) Act, 1970
  • 1The Employees’ Provident Funds and Miscellaneous Provisions Act, 1952
  • The Employees’ State Insurance Act, 1948
  • The Industrial Employment (Standing Orders) Act 1946
  • The Inter-State Migrant Workmen (Regulation of Employment and Conditions of Service) Act, 1979
  • The Payment of Gratuity Act, 1972
  • The Trade Union Act, 1926
  • Building and Other Constructions Workers’ (Regulation of Employment and Conditions of Service) Act, 1996

Laws Relating to Intellectual Property Rights –

One of the most important regulations for start-ups who are dealing in new inventions or discoveries is the Intellectual Property Rights or IPR. It is important for start-ups to safeguard the novelty and uniqueness of their product or venture. Therefore, they should be very careful in registering various intellectual property including, products, service, venture, brand name, trade mark, discoveries, data algorithms under relevant laws.  Some of the Indian laws guarding the IPR are –

  • Trade Mark Act, 1999
  • The Patents Act, 1970
  • The Copyright Act, 1957
  • The Design Act, 2000
  • The IT Act, 2000
  • The GI of Goods (Registration and Protection) Act, 1999
  • The Protection of Plant Varieties and Farmers’ Right Act, 2001

Contract Laws-

For any business to function and operate, it is essential to make deals with other firms, government or individuals. All such deals should be governed by proper legal provisions. Every contract with employees, suppliers, stakeholders, debtors, investors, creditor or customers should be binding following the provisions of various laws including the Contracts Act 1872, Sales of Goods Act 1930 among others. As per the Indian Contract Act, 1872, all agreements are contracts if they are made by the free consent of parties competent to contract, for a lawful consideration with a lawful object, and are not expressly declared to be void.

Laws Relating to Winding-Up of the Firm

No start-up owner would ever wish their firm to liquidate or wind up. However, under certain circumstances it becomes absolute necessary to close down the business. In such situation as well, the company owner should follow proper legal route to wind up the start-up. From the legal point of view, there are three ways to close a start-up. These are –

  • Fast Track Exit Mode
  • Court or Tribunal Route
  • Voluntary Closure

Of all the three ways, the Fast Track Exit Mode is the best suited for start-ups as it allows companies to speed-up the closing process at a lower cost and within a short time period. In order to apply for a fast track exit, a company should not have any assets and liabilities and not have had any business operation for the past year. If these two conditions are met, the company can be struck off the registrar of the Registrar of Companies (RoC).

For a venture to get properly established in the market, grow, diversify and succeed it is important that it does not land into any legal troubles. The consequences of not complying with the laws do not only affect the operations and productivity of the business, but also hurt the delicate goodwill of the firm. It is hence, necessary for any start-up to know, understand and comply with the legal framework and provisions.

Categories
E-Commerce Legal MSME

KVIC’s Legal Action Forces Flipkart, Amazon, Snapdeal to Remove 160 Fake Khadi Products Online

KVIC. (Photo Credit: Image grab)
KVIC. (Photo Credit: Image grab)

New Delhi, September 20: The Khadi and Village Industries Commission’s (KVIC) on Sunday informed that its firmness had forced e-commerce portals like Amazon, Flipkart, Snapdeal and others to remove over 160 web links selling products in the brand name of ‘Khadi’. The new development comes days after KVIC served legal notices to over 1000 firms using the brand name ‘Khadi India’ to sell their products.

Issuing a statement, KVIC said, “These e-commerce portals were selling products like Khadi masks, herbals soaps, shampoos, cosmetics, herbal mehandi, jackets, kurta and many such products through different sellers using the brand name ‘Khadi’. This created a false impression among online buyers that these commodities were genuine ‘Khadi’ products. KVIC also stated that a majority of the products that have been removed were being sold by one Ayush E-Traders. This firm has confirmed to KVIC that it has removed 140 links for various products that were being sold as ‘Vagad’s Khadi Products’.”

Adding more, KVIC stated that there has been a steep rise in violation of Khadi trademark as the popularity of Khadi grew manifold in recent years. It added that a number of online sellers began selling random products in the name of Khadi. For the ease of online customers to buy genuine Khadi products, KVIC has launched it’s e-portal selling a range of 300 products online at www.kviconline.gov.in/khadimask.

KVIC recent action has resulted in shutting down a number of stores across the country that were selling fake Khadi products. KVIC Chairman Vinai Kumar Saxena said, “Legal notices have been issued to various firms essentially to safeguard the interest of Khadi artisans. This trademark violation has a direct bearing on the livelihood of our artisans who are making genuine handcrafted products.”

Earlier in August, KVIC had issued legal notices to two firms Khadi Essentials and Khadi Global for unauthorizedly selling cosmetics and other products in the name of Khadi. The KVIC had also sought damages to the tune of Rs 500 crore from Fabindia which is pending before the Bombay High Court.

Categories
Finance Legal Startup

RBI Extends Deadline For Udyog Aadhaar Memorandum of MSME Registrations Till March 31, 2021

Reserve Bank of India
Reserve Bank of India. (Photo Credit: Facebook)

New Delhi, August 24: The Reserve Bank of India on Monday extended the validity of Entrepreneurs Memorandum (EM) Part II and Udyog Aadhaar Memorandum (UAMs) from June 30, 2020, to March 31, 2021. The RBI circular even stated that all the enterprises are required to register online and obtain ‘Udyam Registration Certificate’ to be classified as MSME as per new definition.

Issuing the circular, RBI said, “The existing Entrepreneurs Memorandum (EM) Part II and Udyog Aadhaar Memorandum (UAMs) of the MSMEs obtained till June 30, 2020, shall remain valid till March 31, 2021. Further, all enterprises registered till June 30, 2020, shall file new registration in the Udyam Registration Portal well before March 31, 2021.”

Adding more, the circular noted, “‘Udyam Registration Certificate’ issued on self-declaration basis for enterprises exempted from filing GSTR and/or ITR returns will be valid for the time being, up to March 31, 2021.”

Following this, the Ministry of MSME said that the registration for Udyog Aadhaar Memorandum website is up and the registrations are underway. The Ministry said that the need for a document for classification purpose has been dispensed for a paperless approach.

Here’s what MSME tweeted:

Apart from this, the Ministry of MSMEs said in its circular that classification and re-classification of MSMEs is the statutory responsibility of the government. These classifications are done as per the provisions of the MSMED Act, 2006. With this, all lenders will have to obtain ‘Udyam Registration Certificate’ from the entrepreneurs.

Categories
Legal

Everything You Need to Know About Company Laws

Legal Basics that Every New Business Should Know

The Companies Act of India was created in 1956 to ensure one thing, that a company is treated as a separate legal entity from the people who are running it. This was primarily done if due to any gap or removal of a member/partner, the company does not end.

When you are starting a company, there are many legalities that you should know about when you are planning to run a business.

1. Company Formation
 

The Companies Act, 2013 which is more refined and covers many more aspects of business than

the previous Act. It explains what type of a company you need to choose and run. According to the

Companies Act of India, you can choose between the following:

  • Sole Proprietorship
  • Partnership
  • LLC
  • Private Limited
  • Family Business

The companies Act, 2013 lays down the rules and regulations on how each of these firms can be set up and what are the legalities you need to follow

2. Understanding Tax & Accounting

  • One of the reasons you need to choose your legal entity smartly is also because it will decide the amount of tax you are going to pay and the Companies Act of India gives a detailed account of it.
  • You need to know the income tax you are liable to pay to the government and if there is a cess over and above that. Each legal entity has a tax structure they need to follow. Some legal entities are also entitled to a few exemptions which can be found out by going through the Act in detail
  • Maintaining of accounts and bookkeeping is essential for SMEs to manage their money smartly
  • Financial Statements will help in keeping a check of your debts incurred, expenses and profits made. This will help in managing your funds optimally

3.  Raising Money: Checking financing options

There are 3 types of financing options that you can explore:

  • Finance through Investors– When you are getting capital from a VC, then these are the must have documents- letter of intent, share subscription agreement and shareholders agreement 

There are many forums where you can get a list of Angel Investors & Venture Capitalists who would invest in your business and claim a stake in your profits

  • Finance via debt or loan- The main documents needed are- application for loan sanction papers, sanction letter, loan agreement letter and collateral documentation. Now days it has become very easy for SMEs to avail a loan from the bank.

The Government has also introduced many schemes and initiatives under which SMEs can apply for a loan

  • Self-funded- Obviously self-funding is the easiest and the most hassle-free finance option out of the lot. You can use your own money or borrow from your close relatives or friends to give your business that boost

4. Labour Laws

Like the Companies Act of India is needed to set up a company, similarly you need to abide by the Labour Laws when you are hiring for the company and formulating employee agreements

5. Dispute Resolution & Contracts

When you are starting a company and formalizing a structure it also important to know how contracts are formulated and if a dispute arises, how can you solve it.

The main aim is to:

  • What works under Indian law and what does not?
  • Traps to avoid; and
  • Practical drafting solutions

It is advised to agree to an offshore arbitration where possible, if not then go for an Institutional arbitration with a neutral party. Try and keep it as simple as possible

If you are setting up a company and going to run a business, it is important to understand the know-how of the Companies Act 2013 because this sets the foundation of all the legalities involved in running and managing an organization. 

Categories
Legal

Must-Have Terms in a Partnership Agreement

एमएसएमई
एमएसएमई

Critical Points in a Partnership Agreement
 

A Partnership is a legal agreement between two or more individuals who decide to do business together. All the partners involved have a share in the assets as well as the profit and loss of business. It documents the responsibilities of all the partners.

However, the partnership agreement differs from business to business depending upon its scale and objectives. Also, a partnership agreement is subjected to laws governed by the state. 

Let us see the key aspects of a partnership agreement that business owners need to keep in mind.

1. Percentage of Contribution-

The first and foremost thing that needs to be documented in a deed is that how much each partner will contribute in the business.

The agreement should clearly define the contribution by each partner in terms of money, time and efforts 

2. Distribution of Profits-
 

This is one of the most fundamental aspects of a business partnership agreement. How much would be the share of each partner in profits?  The agreement must outline how the profits will be distributed amongst the partners.

It must also state how what each partner will be paid. 

Decision making-

This is the most crucial aspect of the agreement and important for smooth business operations.

You must differentiate between the decisions that require a unanimous voice or the ones that can be taken by a single partner.

A provision must be there in the agreement to address the disagreement or dispute between the partners.

3. Partner Authority-
 

Can any of the business partners bind the others to a contract without consent? The answer is Yes! That’s why it becomes important that the binding power or the partner authority is clearly defined in the business partnership agreement.

It will save the company from unmanageable risks.

4. Resolving Conflicts-

A clause regarding the dissolution of the disputes must also be included in the terms and conditions of the agreement. 

If an issue has not been resolved with the business partners then a provision in the agreement will help ease the process of dissolution.

5. Withdrawal or Demise of a partner-

An unfortunate contingency can occur anytime. A smart business owner should be able to foresee and must be prepared for it.

If a partner withdraws due to disagreements or god forbids has a sudden death then a clause of departure must be included in the agreement. 

A good agreement has a buyout provision that helps in determining the business value and how the departing partner will be paid. 

Discretionary Clauses that can be included in a Partnership Agreement:
 

The above-mentioned aspects constitute an essential part of the business partnership agreement. However, there are a few other factors that should be considered before drafting the agreement. These are: 

Non-Competitive Clause-
This clause not only limits the partner from leaving the partnership but also restricts him from competing with the business partners within a restricted time frame.

Non-disclosure Clause, Non-
Solicitation Clause: This clause limits business partners from revealing the proprietary business. In other words, you cannot revel to any other person, corporation or firm any confidential information about the enterprise. 

It also restricts partners from soliciting employees away from the business partnership which means prohibiting an employee from utilizing the company’s clients, customers and contact lists for personal gain once they leave the company

A business partnership agreement is significant for every business arrangement. It not only ensures the smooth functioning of the company but it also protects the rights of all the partners, their overall investment and the longevity of the business. 

Categories
Legal

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