Contract Labour (Regulation and Abolition) (Maharashtra Amendment) Act: Changes & Impact

divyaThe Law and Judiciary Department, Government of Maharashtra vide its notification published in the Maharashtra Government Gazette on 5 January 2017 has made significant amendments in Contract Labour (Regulation and Abolition) Act for the state of  Maharashtra.

Now the said act will be applicable:

  • To every establishment in which 50 (fifty) or more workmen are employed or were employed on any day of the preceding twelve months as contract labour.
  • To every contractor who employs or who employed on any day of the preceding twelve months 50 (fifty) or more workmen.

Prior to the Amendment, the limit for applicability of the said Act in the State was 20 (twenty) or more workmen which was a small number . As we are aware that most of the medium and small enterprises are human intensive hence MSMEs were required to required to comply with more regulations.

Post 5th of January, 2017 business entities employing less than 50 contract labour or contractor employing less than 50 employees during preceding 12 months will be exempted .This will make operations easier for upcoming small scale units. Less number of compliance will lead to less complexity & the same will motivate higher number of start-ups to grow their roots in the state of Maharashtra.

Disclaimer : This is an effort by Lexcomply.com to contribute towards improving compliance management regime. User is advised not to construe this service as legal opinion and is advisable to take a view of subject experts. 

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Ease of doing business: Delhi Contract Labour

anujThe Contract Labour (Regulation and Abolition) Act, 1970 is a Central Act. However mostly all States are having their own rules. Likewise Delhi is also having its own rules namely Delhi Contract Labour (Regulation and Abolition) Rules, 1970. In the said act there are two types of approvals, one is on the part of contractor, which is called license (section 12) and second is on the part of employer, which is called registration certificate (section 7).

As Govt. of every State has been focusing on “Ease of Doing Business” and to take it forward the Labour Department Govt. of NCT of Delhi, has decided to easy the procedure for granting of registration & license in the following manner:

  1. Facility of filing of application form for license(Form IV)/registration(Form I) through online is avail.
  2. Application for license shall be supported by certificate issued by Principal Employer in form V.
  3. Application form whether for license or for registration, shall be supported by MOA & AOA or partnership deed or Proprietor’s ID proof as the case may be.
  4. Details of fee to be paid should be given in application form.
  5. Wages shall be paid to the contract workers only through A/C payee Cheque/ECS transfer.
  6. Contractor to comply all the conditions of license as provided in rule 25.
  7. License/registration certificate shall be granted by concerned officer within 7 days from the date of receiving of application.

Disclaimer : This is an effort by Lexcomply.com to contribute towards improving compliance management regime. User is advised not to construe this service as legal opinion and is advisable to take a view of subject experts. 

Ease of doing business – Delhi VAT

anujAs we know that every dealer is required to get himself registered under DVAT, if his turnover exceeds taxable quantum i.e. Rs. 20 lakh in current year; or to pay tax, or is registered or required to be registered under Central Sales Tax Act, 1956.

Department has been focusing on “Easy of Doing Business” and to proceed it further the Department of Trade & Taxes, Govt. of NCT of Delhi, has decided to easy the procedure for granting of registration as under:

  • Dealer applying through DVAT M Sewa app would be granted registration within one day, for which VAT verification is not required
  • Dealer while applying for registration is no longer mandatorily required to give his Bank Account details. However if he doesn’t provide Bank Account details at the time of registration, shall provide Bank Account details on or before filing of his first return.
  • Registration Certificate(digitally signed) can be downloaded by applicant within one day, applying through M Sewa app. This replaced the practice of granting provisional certificate.

Source: Circular No. F.3(521)/Policy/VAT/2015/1046-51 dated 13-01-2017

Disclaimer : This is an effort by Lexcomply.com to contribute towards improving compliance management regime. User is advised not to construe this service as legal opinion and is advisable to take a view of subject experts. 

Code of conducts under Insolvency and Bankruptcy Board of India Regulations, 2016

bankruptcyeditInsolvency and Bankruptcy Board of India (Insolvency Professionals) Regulations, 2016

The Insolvency and Bankruptcy Board of India has issued the Notification on Insolvency and Bankruptcy Board of India. These Regulations shall come into force on 29thNovember, 2016.

The purpose of the Act is to build up a strong legal system related to the Bankruptcy and Insolvency.
This step opens a new opportunities of practice for professionals in the areas of Corporate and Individual Insolvency, Corporate Liquidation Process. 

Some Code of Conducts to be complied by Insolvency Professionals:

  1. Insolvency professionals must maintain integrity by being honest, straightforward, and forthright in all professional relationships.
  1. Insolvency professionals must not misrepresent any facts or situations and should refrain from being involved in any action that would bring disrepute to the profession.
  1. Insolvency professionals must act with objectivity in his professional dealings by ensuring that his decisions are made without the presence of any bias, conflict of interest, coercion, or undue influence of any party, whether directly connected to the insolvency proceedings or not.
  1. An insolvency professional appointed as an interim resolution professional, resolution professional, liquidator, or bankruptcy trustee should not himself acquire, directly or indirectly, any of the assets of the debtor, nor knowingly permit any relative to do so.
  1. An insolvency professional, or his relative must not accept gifts or hospitality which undermines or affects his independence as insolvency professional.

Know More:- Insolvency and Bankruptcy Board of India Regulations, 2016

Employees’ Enrolment Campaign, 2017 (Amnesty Scheme for Provident Fund)

About EPF:

Companies in which twenty or more persons are employed are liable to register for allotment of the PF Code number with Regional Provident Fund Commissioner. The employees whose salary is less than Rs. 15000 are to be mandatorily enrolled under EPF. The employer shall deduct the employee’s contribution from his wages and within fifteen days of the close of every month pay to the fund by separate bank drafts or cheques on account of contributions and administrative charge.

Employees’ Enrolment Campaign, 2017:

  • Companies who has not enrolled employees and deposited PF for period beginning from 01.04.2009 to 31.12.2016 can avail the scheme;
  • This scheme is effective from 01.01.2017 till 31.03.2017;
  • Company shall furnish Declaration Form for Employees’ Enrolment Campaign, 2017 to the Regional Provident Fund Commissioner (Online facility also available);
  • Company shall, within fifteen days of furnishing the declaration, remit the employer’s contribution payable in accordance with the provisions of the Scheme and the employee’s contribution deducted from the employee’s wages along with interest payable (@12% p.a) in accordance with section 7Q of the Act;
  • The following incentives are available to the employer:
    1. The employee’s share of contribution, if declared by the employer as not deducted, shall stand waived.
    2. The damages to be paid by the employer in respect of the employees for whom declaration has been made under this campaign shall be at the rate of Rupee 1(one) per annum.
    3. No administrative charges shall be collected from the employer in respect of the contribution made under the declaration.
  • After furnishing declaration and depositing the contribution, a return will have to be filed with the Regional Provident Fund Commissioner in such form as may be specified by the Central Provident Fund Commissioner.
  • This scheme is not available for companies against whom inquiries have been initiated by PF authorities under section 7A of the Employees Provident Fund & Miscellaneous Provisions Act, 1952. (http://www.epfindia.com/site_en/circulars.php?id=sm7_officeUse)

Know More :- Employees’ Enrolment Campaign, 2017

 

Holding 100% Control over a company – Section 89 of the Companies Act, 2013

Companies Act, 2013, gives freedom to the Companies to do anything, which is legal and in the interest of stakeholders but with the approval of authority or by intimating authority in a manner as may be prescribed by the act.

In Companies Act, 2013, section 89 is the only section which gives a way to a person/company to hold 100% control over a company.Under section 89 we have 2 options to incorporate a company having full control over it by a single person:

1- OPC (One Person Company)
2- With the help of sec 89

In case of OPC only “PRIVATE COMPANY” can be registered by one person
But under Section 89 not only Private Company but also “PUBLIC COMPANY” can be registered by required number of members but ultimately controlled by single person.

The purpose of this section is as follow:-

1- To satisfy the requirement of minimum number of members (i.e. 2 in case of Pvt. Ltd. and 7 in case of Pub. Ltd. )
2- To make a wholly owned subsidiary company

Example for understanding to this section easily:

Mr. A wants to hold 100% shareholding in X Pvt. Ltd, but he can’t do so as he will have to take care the limit of minimum number of members, so in that case he will need at least one more person to fulfill minimum Requirement i.e. 2 (at least)
Now he can present a person say Mr. B, on his behalf whose name shall be presented on register of members but indirectly he will be the owner(beneficial owner) and will be controlling company.

In this case
Mr. B is Registered Owner
Mr. A is Beneficial Owner
X Pvt. Ltd. Is Company

Same example can also be taken for Public Company (where there must be at least 7 members).
In place of X Pvt. Ltd., any company can be there.

In this section responsibility arises on 3 persons namely:
1- Registered owner
2- Beneficial owner
3- Company

Intimation to Registrar:

Under this section Registered owner/ Beneficial owner/ Company is required to intimate to ROC after entering his name in register of members or change therein the declaration so filed.

1- Registered owner shall file with COMPANY, a declaration in form MGT-4 within 30 days of entering his name in register of members or change therein as the case may be.

2- Beneficial owner shall file with COMPANY, a declaration in form MGT-5 within 30 days of entering his name in register of members or change therein as the case may be.

3- Company Shall file with ROC, a return in form MGT-6 within 30 days of receiving such declaration.

Penalty as per Section 89(5) & Section 89(7):

1-Registered owner:
Fine may extend to Rs. 50,000 and if offence is continuing one with a further fine which may extend to Rs. 1,000 for every day. Here we can see that shareholder is also punishable under this section which doesn’t happen usually.

2-Beneficial owner:
Fine may extend to Rs. 50,000 and if offence is continuing one with a further fine which may extend to Rs. 1,000 for every day. We can see that shareholder is also punishable under this section which doesn’t happen generally.

3- Company and officers:
Fine not less than Rs. 5,00 but may extend to Rs. 1,000 and if offence is continuing one with a further fine which may extend to Rs. 1,000 for every day.

Note: Government companies are exempted from this section vide notification dated 5th June, 2015.

Disclaimer : This is an effort by Lexcomply.com to contribute towards improving compliance management regime. User is advised not to construe this service as legal opinion and is advisable to take a view of subject experts. 

The Real Estate Act is a game changer, 6 things you SHOULD know about it

trapped

FEELING TRAPPED?

6 ways in which the Real Estate Act will protect you.

The Real Estate Act comes into force in 2016 and makes several provisions for the protection of buyers :

  1. Mandatory to register with the Real Estate Regulatory Authority (RERA): All commercial and residential real estate projects with over 500 square meters or eight apartments shall register with the Real Estate Regulatory Authority (RERA) for launching a project, in order to provide greater transparency in project-marketing and execution. For on-going projects which have not received completion certificate on the date of commencement of the Act, will have to seek registration.
  2. Escrow Account: The Act prohibits unaccounted money from being pumped into the sector and the money has to be deposited in escrow bank accounts through cheques. There was a time when the money of project for which the payment was taken, was invested in other projects which ultimately resulted downfall of market. This is now being curbed in this bill.
  3. Clear Clauses: A major benefit for consumers included in the Act is that builders will have to quote prices based on carpet area and not super built-up area. The carpet area has been clearly defined in the Act to include usable spaces like kitchen and toilets.
  4. Real Estate Regulatory Authorities: Real Estate Regulatory Authorities (RERAs) shall regulate transactions related to both residential and commercial projects and ensure their timely completion and handover. Appellate Tribunal shall adjudicate cases in 60 days as against the earlier provision of 90 days and Regulatory Authorities to dispose off complaints in 60 days.
  5. Standard Agreement: Guidelines are being framed to have standard agreement by the builder with similar clauses so that the buyers are not cheated with clauses against them.
  6. Provision for damages for non-completion: The provision for jail term for a developer who violates the order of the appellate tribunal of the RERA is three years with or without a fine. However, even the consumer courts are taking strong action against builders where interest rate between 10.9% to 18% is answered against builder for his delay and other deficiencies.

With demonetization, the property prices are expected to fall up to 30% and the builders are facing the heat. Therefore, this Act will become a crucial tool to protect buyers.