Basic Business Law Which an Entrepreneur should be familiar with

1. Basic Business Law Which an Entrepreneur should be familiar with Prof Richard Regis in FDP On ED VITTBI 27.11.2009

2. Public Ltd Vs Pvt. Ltd For a public limited company there is no maximum limit for its members but for private limited company there must be minimum 7 members and maximum of 50 members. Transfer of share from one person to another is possible in public limited company but it is not for private limited company. Public limited company need not required to add abbreviation but private limited company must add "Pvt Ltd" at the end of its name.

3. Some of the stringent requirements which are applicable to public limited companies are not there in the case of private limited companies.Public sector company is a company where the central govt or state govt or both of them combined together holds the majority of shares. But in Private sector companies the private individuals or business houses holds the majority of shares.

4. Salient Features of Industrial Laws The Factories Act, 1948 The Industrial Employment (Standing Order) Act, 1946 The Trade Union Act, 1926 The Industrial Disputes Act, 1947 The Payment of Wages Act, 1936 The Payment of Bonus Act, 1965 PF & ESI

5. The Factories Act, 1948 Social Welfare Legislation What is a Factory? (manufacturing process is being carried on in any part of the premises of that establishment & there are prescribed number of workers working in any part of the premises where manufacturing process is being carried on.) Deals with – Health, Welfare and Safety of Workmen Working Hours of Adults and Annual Leave with Wages Employment of women and young persons

6. What are envisaged in the Factories Act, 1948 Minimum stds of lighting, ventilation, health, safety and welfare of workers and precautions to be taken in cases of hazardous processes Factories employing over 30 women to provide crèche for their children If employing more than 150 workers shelters, rest rooms and lunch rooms to be provided If more than 250 workers, a canteen Appointment of welfare officer if >500 workers

7. Appointment of Safety officer if > 1000 workers At least one first aid box with prescribed contents for every 150 workers under responsible person Ambulance room to be provided if >500 workers

8. The Industrial Employment (Standing Orders) Act, 1946  The Object of the Act is “to require employers in industrial establishment to define with sufficient precision the conditions of employment and make the said conditions to known to the workmen employed by them” Applies to every industrial estt employing 100 or more workmen To be certified by the Certifying Officer Matters to be provided in the S.O - in Schedule Model Standing Order Modification

9. The Trade Union Act, 1926 Registration of Union (registered trade union vs unregistered) – Procedure 10% or 100 whichever is less Recognition

10. The Industrial Disputes Act, 1947 "industry' means any systematic activity carried on by cooperation between an employer and his workmen (whether such workmen are employed by such employer directly or through any agency, including a contractor) for the production, supply or distribution of goods or services industrial dispute: any dispute or difference between employers and employers, or between employers and workmen, which is connected with the employment or non-employment or with the conditions of labour, of any person

11. Lay-off means the failure., refusal or inability of an employer on account of shortage of coal, power or raw materials or the accumulation of stocks or the breakdown of machinery (or natural calamity or for any other connected reason) to give employment to a workman whose name is borne on the muster rolls of his industrial establishment and who has not been retrenched. Retrenchment: the termination by the employer of the service of a workman for any reason whatsoever, otherwise than as a punishment inflicted by way of disciplinary action, but does not include - (a) voluntary retirement (b) superannuation (c) termination due to non renewal of contract, (d) due to continued to ill-health

12. Strike :cessation of work by a body of persons employed in any industry acting in combination, or a concerted refusal, or a refusal under a common understanding, of any number of persons who are or have been so employed to continue to work or to accept employment Lock–out: means the temporary closing of a place of employment or the suspension of wirjm ir tge refusal by an employer to continue to employ any number or persons employed by him Public Utility Service: railways; port/dock; sections essential for the safety of indl estt.; P&T,industry supplying electricity, water; any system of public sanitation and industry specified in Schedule I.

13. Machineries to settle disputes Works Committees Conciliation (conciliation officer/board of conciliation) Arbitration (Voluntary) Labour Court Industrial Tribunal National Tribunal Section 2A – Sec 9A – Sec 10 – Sec 12(3) & Sec 18(1)

14. The Payment of Wages Act, 1936 To regulate the payment of wages to persons employed in any factory whose wages do not exceed Rs.6500/- Wage period Payment to be made on or before 7/10 days after the end of wage period depending on < or > 1000 workmen

15. Other Acts – PF, ESI, Bonus Bonus – minimum of 8.33% irrespective of loss or profit is a must – set off and set on concept – 3500 eligibility, but calculation ceiling 2500 ESI – all drawing 10000 and less eligible - Employee's contribution 1.75% Employer's 4.75% - Sickness Benefit, Maternity Benefit, Disablement benefit, Dependant Benefit, Funeral Benefit, Medical Benefit PF – 12% Pension 8.33% of Employer’s share – Rs.6500 ceiling for calculation if total wage is > that amt.