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. 

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

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. 

500 & 1000 Rupee currency banned: An initiative for a glorious future

ban

With the announcement of the Hon’ble Prime Minister banning Indian Currency of Rs. 500 & Rs. 1000, the Voluntary Disclosure of Income Scheme, gold monetization scheme, opening of bank accounts, etc. everything seems to have fallen in place. This proves that it is not just an impromptu decision taken by the government, It was a move planned long back and all the steps taken till now were just a facilitator of this final step.

This step will prove to be a major blow to:

  • Black Marketers
  • Terrorists & Anti National Activities
  • Fake Currency Markets
  • Real Estate

How will this step benefit India and its nationals?

  1. Arms smuggling, undercover activities and terrorist related activities will be Paralyzed due to lack of funding. This is most important advantage to the country.
  2. It will help the government to fight Black money, corruption, terrorism and counterfeit currency with one single decision.
  3. Rupee will strengthen over-time as Inflation will go down which will benefit poor and middle class people.
  4. Investments in gold and jewelries will increase, eventually increasing investment in the government’s gold monetization scheme.
  5. Rise in plastic money like debit card, credit card, online transactions.
  6. All cash whether in a normal household, reported, un-reported will come on records.

Although this move will hamper normal day to day routine activities for a few days, creating havoc and panic in the nation, but very soon, it will prove to be a clear win-win situation for a common man, who was till now suffering the negatives impacts of the parallel economy. As a responsible citizen the need of the hour is to extend full support to this initiative and help achieve the benefits of this move and ultimately contribute towards India becoming a paperless economy.

GST- Tax rates, a welcome step

gst

GST Council has taken a step ahead towards making GST a reality. They have lifted veil from the most awaited part of GST i.e. the tax rates. They have introduced the following rates:

  1. 0% – Food grains of high public consumption and which contributes to almost 50% of the inflation index;
  2. 5%-12%-18% – other Goods and services
  3. 28%- white goods like AC, washing machine and the likes
  4. 40%& 65%- aerated drinks , Pan Masala , Tobacco products , high cars and other luxury items

GST will promote compliance through e-compliance tools for managing the compliances and promote tax governance.

LexComply, Compliance Management Software

logo12LexComply, an all inclusive Compliance Management Software has been launched by RSJ LexSys. The full suite of LexComply consists of intuitive compliance solutions for midsize to small size businesses as well as individually practicing professionals.

Speaking on the occasion, the CEO of LexComply, Gaurav Jain said, “Generally compliance is one of the most overlooked functions in an organization because the complexity surrounding it weighs down even the most inspirational teams. But LexComply writes off all the complications of compliance and makes it one of the most rewarding functions for the organization.” LexComply generates compliances on the principle of relevance along with the basic principle of internal control. The multiple lines of defense that is the built-in hierarchical structure makes it sure that all the compliance tasks are defined, allocated, monitored and reported automatically to all.

He further added, “LexComply acts as a centralized communication system – automated alerts and emails are generated and forwarded to all the concerned in the team. The accomplished and pending tasks are tracked, monitored and notified to each and every stakeholder.”

Adding to this, Pooja Aggarwal, Co-founder, LexComply, said, “LexComply is a godsend tool for the teams that are small or deficient in compliance knowledge, since there is a comprehensive in-built library and repository of laws, rules and statutes and the required associated forms and documents.” In addition to this the team of LexComply updates the newly introduced regulations and changes in the existing laws as soon as they are announced. All the latest updates and applicable laws are available on the dashboard for the whole team to see and include in the compliance plan.

Pooja Aggarwal further added, “LexComply is one of the most intelligent compliance tools on the block. This cloud based tool is real simple to use and has responsive UI. It’s safe and secure since we work on the SSL and all your data is encrypted.” The complete suite of LexComply includes LexComply-Corp (for corporate), LexComply-Pro (for professionals), LexComply-CompAct 2013, LexComply-TRAI, LexComply-FIRE, LexComply-FSSAI, LexComply-FDI, LexComply-ECB. All its solutions are fully scalable and customizable.

Note : LexComply is a cloud based Compliance Management Software with a simple 6 step process to integrate in an organization. Conceived and developed in 2015, LexComply is an offshoot of a 2 years old professional firm. Located in Delhi with in-house team of 19+professionals, LexComply is ready with than 200 Compliance Calendars and has clients (MNC’s and MSMEs) in Delhi, Punjab, Haryana and UP.