3/1/2020 9899207016 Gupta Arun & Co. Gurgaon 1

Why we need to Deliberate about other

Laws when Management is of view that

CSCSCSCSCSCSCSCS

is for compliance of only

Secretarial Laws


Answer

is

Company Law Provisions


Why CS for other

applicable Laws


�Our own Companies Act, 2013is the Answer…is the Answer…


Secretarial AuditSecretarial Audit


OPPORTUNITIES FOR COMPANY SECRETARY IN

COMPANIES ACT, 2013

� Section 134(5)(f) of the Companies Act, 2013, provides that TheDirectors’ Responsibility Statement shall state that the directorshad devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems wereadequate and operating effectively.

� As per Section 205(1)(a). The company secretary shall report tothe Board about compliance with the provisions of this Act, therules made there under and other laws applicable to thecompany.

� Format of the Secretarial Audit Report (MR3) also talks aboutmentioning other laws as may be applicable specifically to theCompany.


OTHER LAWS APPLICABLE TO THE COMPANY

� Shop and Commercial Establishment Act

� Fire NOC

� Trade License

� Professional Tax� Professional Tax

� Legal Metrology Act, 2009

� Bed and Breakfast Scheme and Homestay Policy

� Food Safety and Standards Act, 2006

� Eating House License/ Police NOC

� POSH (The Sexual harassment of women at workplace

(Prevention, Prohibition and Redressal) Act, 2013)3/1/2020 9899207016 Gupta Arun & Co. Gurgaon 9

OTHER LAWS APPLICABLE TO THE COMPANY

� Factories Act, 1948

� Environmental Law

� Employees Provident Fund & Miscellaneous Provisions Act, 1952

� Employees State Insurance Act, 1948� Employees State Insurance Act, 1948

� The Industrial Employment (standing orders) Act, 1946

� Drugs and Cosmetics Act, 2017

� Signage License

� Music License

� Payroll Management

� Many more


Objective� Provide statutory obligation and rights to employees

and employers in the unauthorized sector ofemployment i.e. Shop and Establishment

� The Act is designed to regulate payment of wages,� The Act is designed to regulate payment of wages,hours of work, leave, holidays, terms of serviceand other work conditions of people employed inshop and commercial establishments.


Power to enact Shop Act� The Shops and Establishment Act is a state legislation

and each state has framed its own Act and Rules forthe Act. The Shop and Establishment Act in India ispromulgated by the state and may slight differ frompromulgated by the state and may slight differ fromstate to state.

� The Shop and Establishment Act is regulated by theDepartment of Labor.


Meaning of Shop� “Shop” means any premises where goods are sold,

either by retail or wholesale or where services arerendered to customers, and includes an office, a store-room, godown, warehouse or workhouse or workroom, godown, warehouse or workhouse or workplace, whether in the same premises or otherwise,used in or in connection with such trade or businessbut does not include a factory or commercialestablishment


Meaning of Commercial Establishment

� “Commercial establishment” means any premiseswherein any business, trade or profession is carried onfor profit and includes journalistic or printingestablishment and premises in which business ofestablishment and premises in which business ofbanking, insurance, stocks and shares, brokerage andproduce exchange is carried on or which is used ashotel, restaurant, boarding or eating house, theatre,cinema or other place of public entertainment or anyother place which the Government may declare, bynotification.


Generally Shop Act not applicable on

Office of Government

RBI

Establishment of doctors and medical practitioners.

Establishment of legal practitioners.

Railway Service


Registration Time LimitName of State Registration within-----days/months

from the date of commencement of establishment/Shop

Delhi, Goa, Dadar & Nagar, Daman & 90 daysDelhi, Goa, Dadar & Nagar, Daman & Diu

90 days

Gujarat 60 days

UP 6 months

All states/UT except above 30 days


Documents Required � Proof of shop (lease deed/ ownership deed)

� Photo of front including surrounding of shop

� Photo of exterior of shop

Two photo of interior of shop� Two photo of interior of shop

� Employees list in excel sheet

� Aadhar card of employer

� General details

∞ it may vary state to state


Other Laws applies with shop Act� Minimum Wages Act, 1948

� Payment of Wages Act, 1948

� The Payment of Bonus Act, 1965

� The Maternity Benefits Act, 1961

� The Equal Remuneration Act,

1976


� The Payment of Gratuity Act, 1972

� The Industrial Disputes Act, 1947

� The Employee Compensation Act, 1923

Note: After Implementing of New Labor Code, Few Acts will be mergedtherein.

Registers and Records (Vary statewise)

Form Purpose

Form A : Statement u/s 5(1)

Form B : Register of Establishments

Form C : Registration Certificate of Establishment

Form D : Notice of Change

Form E : Notice of close day or change in close day


Form G : Register of Employment and Remuneration

Form H : Register of Employment and Remuneration of Employees

Form I : Register of Leave

Form J : Notice of Holidays under Section 17

Form K : Notice showing the close day, the daily working hours and usual

period of the rest, interval fixed for employees

Form L : Renewal of Registration Certificate

Leave Provisions� Earned leave,

� Sickness leave

� Casual leave


Leave Provisions under UP Dukan Act (Vary statewise)

� Leave for Shops & Establishment � Sick Leave 15 days (after 6 months of continuous service)� Casual Leave 10 days (subject to such conditions as may

be prescribed)be prescribed)� Earned / Privileged Leave15 days (after 12 months of

continuous service)� Can be carry forwarded upto Max. 45 days leave


Other Role as CS to be complied with� Display of Different abstracts under different Acts

� Filing of Returns

� Conducting audit of Company Vendors and its ContractorsContractors

� Providing periodic review check to the company


RISKS OF NON COMPLIANCE

� Interest Payments

� Late Fees

� Penalties

� Prosecution � Prosecution

� Show cause notice

� Statutory officers conducting Search & Seizure

� Closure of business in extreme cases

Uttar Pradesh Fire Service Act, 2005

� According to Fire Service Act, any individualproposing to construct a building of more than 15meters in height for commercial or business purposesmust apply for a fire license to the Director General ofmust apply for a fire license to the Director General ofthe Fire Service. The application has to be dulyauthorised before submission along with theappropriate building plans to the concerned authoritywhich happens to be the Local Municipal Corporationunder the state law.


Purpose of Obtaining Fire License

An individual is required to obtain a fire license under

the following conditions:

� Fire license is a must for anyone seeking a trade license or an occupancy certificate from the civic body in the or an occupancy certificate from the civic body in the state.

� Fire license is necessary to carry out businesses and trading activities, as listed under the Department of Fire Services in Uttar Pradesh.

� Fire license is necessary to verify that a building is resistant or unlikeliness to observe any fire-related accident.


Fire License CategoriesThe following listed out categories are required to obtain a Fire License in Uttar Pradesh or in any other state.� Education buildings.� Residential apartment buildings� Hotels� Hotels� Hospitals� Assembly buildings� Multiplex buildings� Business buildings� Industrial buildings Low hazard� Industrial buildings Moderate hazard� Industrial buildings High hazard� Storage buildings High hazard


Documents RequiredThe below mentioned are the essential documents that should be submitted along with the application form of Uttar Pradesh fire license.� Site Plan� Basement Floor Plan� Basement Floor Plan� Stilt/Ground Floor Plan� Floor-wise plan� Terrace plan.� Sanctioned plan� Elevation plan� And if any other supporting records related to the above

documents.


Validity

� The Fire License or No Objection Certificate is valid for one year from the date of issue. Therefore, it has to be renewed every year.be renewed every year.

Applicable Fee

� The applicant need not remit an application fee to apply for No Objection Certificate in Uttar Pradesh.


Meaning of Trade License� Trade License is a license or permission issued by

municipal corporation granting permission to carry ona particular business at a particular address

� The trade license is a means to ensure that the manner� The trade license is a means to ensure that the mannerand locality in which the business is being carried onis according to the relevant rules, standards and safetyguidelines.

� The provision of Trade License is issued by themunicipal corporation of the place where business islocated.


Objective� The objective of Trade License is control business

locations by way of putting constraints on people fromrunning certain types of businesses from their home tomaintains the separate business environment andmaintains the separate business environment andpreserves locality environment

� To regulated and ensure that the citizen is notadversely affected by Health Hazard & Nuisance by theimproper carrying of a trade.


Who need Trade license ?� Every trader engaged in a trading activity within the

territorial limits of any municipal corporation isrequired to obtain a trade license.

� The class of trade license differs from state to state and� The class of trade license differs from state to state andis based on the nature of the business


Types of Trade License

Health Trade License

General Trade License

Types


Documents Required

KYC of Business organisation

KYC of Applicant

Rent agreement/Ownership Deed

Occupational Certificate

Approved Building PlanApproved Building Plan

Structural Stability Certificate

Indemnity Bond

Affidavit

Layout plan

Fire NOC


What is professional tax (PT)?

Professional Tax is a Tax which is levied by theState on the Income earned by way of profession,trade, calling or employment.

This form of tax was first levied in India in theyear 1949 and the power to levy Professional Taxhas been given to the States by way of Clause (2)of Article 276 of the Constitution of India.

Professional tax being levied by StateGovernment, is different in different states. Everystate has its own laws and regulation to governprofessional tax of that particular state


CONT….

When this tax was first introduced in India,the maximum limit on the tax to be collectedwas Rs. 250. However, this limit was raisedfrom Rs. 250 to Rs. 2500 in the year 1988. Stillfrom Rs. 250 to Rs. 2500 in the year 1988. Stillit is Rs. 2500 per year for a company.

Any amount paid as Professional Taxto the State Govt. is allowed as adeduction under Section 16 of theIncome Tax Act, 1961 and Income Tax onthe Balance Amount is levied as per theIncome Tax.


Person Responsible to pay PT

� In case of Employees, an Employer is the personresponsible to deduct and pay professional tax to theState Government subject to monetary threshold ifany provided by respective State’s legislationany provided by respective State’s legislation

� Additionally, Employer (Corporates, Partnershipfirms, sole proprietorship etc) also being a personcarrying on trade/profession is also required to payprofessional tax on his trade/profession again subjectto monetary threshold if any provided by respectiveState’s legislation


CONT….� In such case, employer needs to register and obtain

both Professional Tax Registration Certificate tobe able to pay professional tax on his trade/professionand Professional Tax Enrolment Certificate to beand Professional Tax Enrolment Certificate to beable to deduct the tax from his employees and pay


State in which PT applicable-17states

Kerala

Tamil Nadu

karnatkakarnatka

Telangana

Andhra Pradesh

Maharashtra

Gujarat

Aasam

West Bengal


CONT….

Bihar

Jharkhand

MeghalayaMeghalaya

Sikkim

Tripura

Madhya Pradesh

Odisha, and

Punjab


Registration�The provision relating to registration is different for

each state.

�In the State of Gujarat

� Within sixty days from the date of commencement of � Within sixty days from the date of commencement of his profession, trade, calling or employment in Form I

�In the State of Maharashtra

� Employer should obtain the Registration Certificatefrom Department within 30 days from date of hisliability.


Return�In the State of Gujarat

� Every employer registered shall furnish to the prescribedauthority with fifteen days of the expiry of a previousmonth, a return in Form 5month, a return in Form 5


Return�In the State of Karnataka

• Employer must file a monthly return within twentydays of the succeeding month

• Annual return within 60 days from the end of• Annual return within 60 days from the end ofFinancial year.


Objective

To establish and enforce standard of

weights and Regulate trade and weights and measures

Regulate trade and commerce in weights

and measures


Applicability

W.e.f. 1stW.e.f. 1April, 2011 It extends to the

whole of India


Legal Metrology � Section 2(g). Means that part of metrology which

treats units of weighment and measurement, methodsof weighment and measurement and weighing andmeasuring instruments, in relation to the mandatorymeasuring instruments, in relation to the mandatorytechnical and legal requirements which have theobject of ensuring public guarantee from the point ofview of security and accuracy of the weighments andmeasurements


Pre-Packaged Commodity� Section 2(L) Means a commodity which without the

purchaser being present is placed in a package ofwhatever nature, whether sealed or not, so that theproduct contained therein has a pre-determinedproduct contained therein has a pre-determinedquantity.


Registration� Every individual, firm, Hindu undivided family,

society, company or corporation who or which pre-packs or imports any commodity for sale, distributionor delivery shall make an application, accompanied byor delivery shall make an application, accompanied bya fee of Rs.500, to the Director or the Controller forthe registration of his or its name and completeaddress within 90 days from the date on which he orit commences such pre-packing (Rule 27 of The LegalMetrology (Packaged Commodities) Rules, 2011)


Base unit of weights and measures.

Length shall be the metre

Section-5(1) The base unit of –

Electric current shall be the ampere

Time shall be the second

Mass shall be the kilogram


One Interesting Case under LMA


� IN THE HIGH COURT OF KARNATAKA AT BANGALORE

DATED THIS THE 16th DAY OF JANUARY, 2013

Between:

Cadbury India Ltd.,And:

1. Controller of Legal Metrology Department

2.The Inspector, Department of LegalMetrology,


� Respondent No.2 issued a notice/letter dated15.12.2011 to the petitioner-company under

Section 11 r/w 29 of the Act stating that they have

violated Section 11 by using the expression"angula" in their "5 star" chocolate advertisement."angula" in their "5 star" chocolate advertisement.The expression 'angula' means, 'an inch', andthat being a non metric system of length, theyallegedly violated the provisions contained in

Section 11(1)(c) of the Act.


Prohibition of Quotation �Section 11(1). No person shall, in relation to any

goods, things or service-

� Quote, or make announcement of, whether by wordof mouth or otherwise, any price or charge,of mouth or otherwise, any price or charge,

� Issue or exhibit any price list, invoice, cash memo orother document,

� Prepare or publish any advertisement, poster orother document, or


CONT….• Express in relation to any transaction or protection, any

quantity or dimension,

otherwise than in accordance with the standard unit ofweight, measure or numeration.

The provisions of sub-section (1) shall not be�The provisions of sub-section (1) shall not beapplicable for export of any goods, things orservice.

�Whoever violates section 11 shall be punished withfine which may extended upto Rs.10,000 and, for thesecond or subsequent offence, with imprisonment fora term which may extend to one year, or with fine, orwith both.(u/s 29)


Declaration on pre-packaged Product

� Section 18(1) No person shall manufacture, pack, sell,import, distribute, deliver, offer, expose or possess forsale any pre-packaged commodity unless such packageis in such standard quantities or number and bearsis in such standard quantities or number and bearsthereon such declarations and particulars in suchmanner as may be prescribed


CONT….� Section 18(2) Any advertisement mentioning the

retail sale price of a pre-packaged commodity shallcontain a declaration as to the net quantity or numberof the commodity contained in the package in suchof the commodity contained in the package in suchform and manner as may be prescribed.


Declaration to be made packageRule 6 of The Legal Metrology (Packaged Commodities) Rules, 2011

� The Name and Address of the Manufacturer, orwhere the manufacturer is not the packer, the nameand address of the manufacturer and packer and forand address of the manufacturer and packer and forany imported package the name and address of theimporter shall be mentioned

� The common or generic names of the commoditycontained in the package and in case of packages withmore than one product, the name and number orquantity of each product shall be mentioned on thepackage


CONT….� The net quantity, in terms of the standard unit of

weight or measure, of the commodity contained in thepackage or where the commodity is packed or sold bynumber, the number of the commodity contained innumber, the number of the commodity contained inthe package shall be mentioned

� The month and year in which the commodity ismanufactured or pre-packed or imported shall bementioned in the package

� The retail sale price of the package


CONT….


Where it will not applyRule 6 of The Legal Metrology (Packaged Commodities) Rules, 2011

� The Hon’ble Bombay High Court in the matter Larsen & Toubro Limited

vs. Union of India [2012 (275) ELT 153 (Bom)] while deciding on the issuewhether Rule 6 declarations (under the erstwhile Standard Weights andMeasures (Packaged Commodities), Rules, 1977) are required on packagedMeasures (Packaged Commodities), Rules, 1977) are required on packaged

commodities sold to institutional or industrial consumerthrough a stockiest, has held that Rule 6 would not apply to industrial andinstitutional consumers who buy the commodities directly from themanufacturer.

� All other industrial and institutional consumers of the packed commodityto whom the retail package are not sold directly to the provisions of Rule 6shall apply.


ExemptionRule 26 of The Legal Metrology (Packaged Commodities) Rules, 2011

�Nothing contained in act/rules shall apply to anypackage containing a commodity if

� The net weight or measure of the commodity is ten� The net weight or measure of the commodity is tengram or ten milli litre or less, if sold by weight ormeasure

� Any package containing fast food items packed byrestaurant or hotel and the like

� Agricultural farm produces in packages of above 50kg


Penalty for use of non standard

�Section 25 Whoever uses or keeps for use any weightor measure or makes use of any numeration otherwisethan in accordance with the standards of weight ormeasure or the standard of numeration, as the casemeasure or the standard of numeration, as the casemay be specified by or under this Act, shall bepunished with fine which may extend to Rs.25,000and for the second or subsequent offence, withimprisonment for a term which may extend to sixmonths and also with fine.


Penalty for manufacture�Section 27 Every person who manufactures or causes

to be manufactured or sells or offers, exposes orpossesses for sale, any weight or measure which-

� Does not conform to the standards of weight or� Does not conform to the standards of weight ormeasure specified by or under this Act, or

� Which bears thereon any inscription of weight,measure or number which does not conform to thestandards of weight, measure or numeration specifiedby or under this Act


CONT….Except where he is permitted to do so under this Act,shall be punished with a fine which may extend toRs.25000 and for the second or subsequent offencewith imprisonment for a term which may extend towith imprisonment for a term which may extend tothree years or with fine or with both


Penalty for selling of non- standard packages�Section 36(1) Whoever manufactures, packs, imports,

sells, distributes, any pre-packaged commodity whichdoes not conform to the declarations on the package asdoes not conform to the declarations on the package asprovided in this Act, shall be punished with fine whichmay extend to Rs.25,000, for the second offence,with fine which may extend to Rs.50,000 and for thesubsequent offence, with fine which shall not be lessthan fifty thousand rupees but which may extend toone lakh rupees or with imprisonment for a termwhich may extend to one year or with both


CONT….�Section 36(2) Whoever manufactures or packs or

imports or causes to be manufactured or packed orimported, any pre-packaged commodity, with error inpre quantity as may be prescribed shall be punishedpre quantity as may be prescribed shall be punishedwith fine which shall not be less than Rs.10,000 butwhich may extend to fifty thousand rupees and for thesecond and subsequent offence, with fine which mayextend to Rs.1,00,000 or with imprisonment for aterm which may extend to one year


Compounding of offence�Section 48(1) Any offence punishable under section

25, sections 27 to 39, sections 45 to 47, or any rulemade under sub-section (3) of section 52 may, eitherbefore or after the institution of the prosecution, bebefore or after the institution of the prosecution, becompounded, on payment for credit to theGovernment of such sum as may be prescribed.

� Nothing in sub-section (I) shall apply to person whocommits the same or similar offence, within a periodof three years from the date on which the firstoffence, committed by him, was compounded


Who is liable for offence in case of Company� Section 49 Where an offence under this Act has been

committed by a company

The person, if any, who has been nominated for the� The person, if any, who has been nominated for theconduct of the business, or

� Every person who at the time the offence was committedwas in charge of, and was responsible for the conduct ofthe business of the company, if no person wasnominated and

� The company


CONT….shall be deemed to be guilty of the offence and shall beliable to be proceeded against and punishedaccordingly.

Provided that nothing contained in this sub-sectionProvided that nothing contained in this sub-sectionshall render any such person IiabIe to anypunishment provided in this Act if he proves thatthe offence was committed without hisknowledge and that he exercised all due diligenceto prevent the commission of such offence.


CONT....� Explanation-

Where a company has different establishments orbranches or different, units in any establishment orbranch, different persons may be nominated underbranch, different persons may be nominated underthis subsection in relation to different establishmentsor branches or units and the person nominated inrelation to any establishment, branch or unit shall bedeemed to be the person responsible in respect of suchestablishment, branch 01: unit.


Bed and Breakfast & Homestay Scheme

The Scheme for Approval and Registration ofIncredible India Bed and Breakfast/HomestayEstablishments of the Ministry of Tourism isvoluntary in nature. The main objective of thescheme is to provide a clean and affordable placescheme is to provide a clean and affordable placefor foreigners and domestic tourists alikeincluding an opportunity for foreign tourists tostay with an Indian family to experience Indiancustoms and traditions and relish authenticIndian cuisine.


Bed and Breakfast & Homestay Scheme

The scheme’s salient features are:(i) The classification for Approval and Registration of Incredible India Bed and

Breakfast/Homestay Establishments will be given only in those cases where the owner/promoter of the establishment along with his/her family is physically residing in the same establishment and letting out minimum one room and maximum six rooms (12 beds).

(ii) The scheme will be on bed and breakfast basis and charges will have to be (ii) The scheme will be on bed and breakfast basis and charges will have to be levied accordingly.

(iii)Classification will be valid for two years from the date of issue of orders.(iv) The quality of facilities and services of the Bed and Breakfast/Homestay

Establishment will be inspected and evaluated by the Regional Classification Committee.

(v) Two categories of classification namely, ‘Silver’ (Rs.3000) and ‘Gold’ (Rs.5000) are given under the scheme.

� The detailed scheme guidelines are available on the Ministry of Tourism’s website www.tourism.gov.in.


CS Arun GuptaCS Arun GuptaM. Com, LL.B, FCS09899207016

Gupta Arun & Co.Company SecretariesBuilding No.- NM-27, Old DLF Institutional Complex, Sector-14, Opp. ITI, M.G. Road,Gurgaon-122001(HR.)Ph. 0124-4088861PAN India Presence


3/1/2020 9899207016 Gupta Arun & Co. Gurgaon 1 - ICSI

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Transcript of 3/1/2020 9899207016 Gupta Arun & Co. Gurgaon 1 - ICSI