Corporate Social Responsibility Laws in India

By Priyasha Sen Gupta

Introduction

India is one of the first countries in the world to promulgate a corporate social responsibility law. After the Companies Act, 2013 was revised in April 2014, the law became mandatory. Section 135 of the Companies Act, 2013 and the Companies (Corporate Social Responsibility) Rules, 2014 define corporate social responsibility as a company’s overall responsibility for the environment and society, in which the company is obliged to perform its business through environment-related activities such as environmental protection, social and educational activities, and more.

What is Corporate Social Responsibility?

Kotler and Lee are recognized experts in business and marketing. They define Corporate Social Responsibility as the obligation to enhance social well-being through business practice, diligence, and the contribution of company resources. The company fulfils its corporate social responsibility obligations in order to maintain social goals.

According to Section 2 (d) of the Companies (CSR Policy) Amendment Rules, 2021, "Corporate Social Responsibility (CSR)" refers to the activities carried out by the company in accordance with the legal obligations as per Section 135 of the Act, along with the provisions of the law, however, it does not include the following:

 • The activities that are carried out in accordance with the company's normal course of business. 
 • All activities outside of India, with the exception of the training of Indian sports personnel who constitute or represent a state or union territory at a national level or from India at an international level. 
 • Direct or indirect donations of any amount to a political party under section 182 of the Act. 
 • Activities for the benefit of the company's employees as defined in Section 2 clause (k) of the Code on Wages, 2019.
 • Activities that are to be supported by companies in the form of sponsorship in order to achieve marketing advantages for their products or services. 
 • Activities carried out to comply with other legal obligations under applicable law in India.

The History of CSR in India

In early and medieval India, kings, landlords, and businessmen accompanied the concept of social duty and additionally gave significance and value to social duty. Every person then believed withinside the term “The more you give, the more you receive”. The sustainability and boom of each person and the society as a whole can best be advanced and accomplished by the collective growth of the society.

Significance of CSR

 • CSR helps companies to strengthen relationships with stakeholders. 
 • Provides important assistance in the recruitment and retention of human resources and ensures a good environment among the existing employees. 
 • Reduces risk management and helps to do the right things within an organization. 
 • Build brand reputation through innovation and other CSR initiatives. 
 • Increases while maintaining brand value as the media presence casts a positive light on the company. 
 • It also helps with the growth of the value of the corporate brand by cultivating and strengthening social relationships with customers. 
 • Helps companies to develop and legitimize a larger market share.

Amendments in CSR Rules, 2021

On January 22, 2021, The Ministry of Corporate Affairs (MCA) amended the Companies (Corporate Social Responsibility Policy) Rules, 2014, now known as Companies (Corporate Social Responsibility Policy) Amendment Rules 2021. According to the Companies (Corporate Social Responsibility Policy) Rules 2014, these rules have been modified to be more transparent and accountable.

Administrative Overheads

After the amendment, “administrative overheads” will only refer to expenses incurred by the company for “general management and administrative management of the company's corporate social responsibility functions.” All other expenses directly incurred for the development, monitoring, implementation, and evaluations of specific CSR projects are not included in management expenses. 
Simply put, this means that administrative expenses do not include all direct expenses of a given CSR project or program.

Conclusion

India’s Corporate Social Responsibility is adopted in the hope that it will become an effective tool to unite the efforts of the business and social sectors to achieve sustainable growth and the development of overall social goals.

It is also believed that the community will benefit because the government has not succeeded a great deal in its efforts to help local people. Although well-intentioned, the law did not initially cover most of the reasons.

Therefore, the Companies (CSR Policy) Amendment Rules 2021 were introduced to create a strong regulatory framework for holding CSR events in India and overhaul India’s CSR system. Concepts such as CSR meanings, CSR policies, and CSR implementation have changed and are presented in a more detailed and structured manner which is a positive development.

Startup India: Objectives and Benefits of the Scheme

Priyasha Sen Gupta, Flywork.io Team, Flywork.io.

Startup India is a much-needed initiative launched by Prime Minister Narendra Modi in 2015. It’s a well known fact that India is a country full of talented people, but young people don't have many opportunities to achieve their dreams and ambitions. Thus, this campaign could be a great kick-start for the youth to accomplish their goals. Prime Minister Modi declared it on Independence Day and it was launched on 16th January.

It is noteworthy here that there are eligibility criteria for a company to come under this scheme such as those concerning establishment and turnover. If the criteria are satisfied and once registration is done, a startup will be able to reap the benefits of the scheme. The aforesaid registration process is simple and can be done online by submitting the required documents.

Objectives of Startup India

It is a famed fact that youth is a very energetic and capable lot. However, this energy and enthusiasm of theirs do not usually get channelised in the proper direction. This campaign will aim to try and do precisely that. This will make sure that the youth get the required facilities from the government.

Furthermore, it is a commendable initiative that enables the youth to touch newer heights. This will provide them with the resources which will allow them to fulfill their dreams of turning into a businessman or entrepreneur. These need a start-up network that this campaign will provide. Basically, it implies that banks will provide finances to those youth for making higher employment opportunities within the country.

In other words, young people should be made to work so that the problem of unemployment can be eliminated in India. This initiative will help many startups succeed and they will finally be able to properly align their innovation and creativity making this a sign of great relief for the youth. 

The banks have been urged to support at least one Dalit and one entrepreneur, in order to maintain inclusivity as well. This is a huge improvement and will provide a career advantage for newcomers in the industry. In addition, it will also boost the national economy.

Benefits of Startup India Scheme 

Ease of Work 
The government has started the Startup India hubs wherever the incorporation, registration, grievance, handling etc., are simply handled. On the web portal, the government has set up a hassle-free registration system, so one will be able to register from any place and at any time. As per the financial condition and Bankruptcy Bill of 2015, it facilitates the quick winding-up method for startups and a new startup can take place within ninety days of the corporation.

Finance Support 
To motivate startups, the government provides financial support that includes a collection of Rs. 10,000 crores for 4 years (Rs. 2,500 per year). The state uses these funds to invest in new startups. The income tax exemption applies for the first 3 years after founding a startup. If a start-up company receives units that exceed the market value of the units, this excess is taxable for the recipient as income from other sources, under the Income Tax Act.

Government Support 
Everyone wants a government tender when it comes to high payouts and large projects. Getting government support is not easy, but under the Startup India Scheme, startups are a priority to get government support easily. The good news is that it does not require any prior knowledge.

Networking Opportunities 
Networking opportunities allow people to meet the various startup stakeholders in a specific place and at a specific time. The government does this by running two start-up tests annually, both nationally and internationally. In addition, the Startup India program also offers intellectual property awareness and awareness workshops.

Conclusion

Startup India is a great opportunity for companies that want to be successful in the market. This arrangement brings them many advantages and also saves their taxes. It is a well-known fact that startups play a crucial role in the economic prosperity of a country. Therefore, by encouraging such companies, the government has undoubtedly taken a positive step towards India's economic development.

Let the qualified curated professionals at Flywork.io assist you to resolve any legal and allied issues. For more details visit us at Flywork.io.

 

Legal Issues faced by a Startup in India

Priyasha Sen Gupta, Flywork.io Team, Flywork.io.

Law has a huge impact on stable companies and startups. Even with a basic understanding of law, there are unforeseen pitfalls and problems that new and young businesses cannot foresee. These problems can become more compelling and pose serious threats in startups, which could lead to the failure of a good company. Some of the common issues faced by startups and the reasons for the same are as follows

Absence of Founder’s Agreement

A founder’s agreement is an agreement that describes the position of the founders and the conditions they must comply with, and defines the role, responsibilities and duties of each founder of the company. A founding agreement is a basis for how the co-founding relationships will work in the future, how a company is structured and what each owner brings to the company that is not included in the company's operating agreements. The absence of this agreement leads to mismanagement within the founders.

Absence of Employment Documentation

In many startups, the employment documentation is considered a very trivial formality and is ignored by the company, this leads to various unforeseen and unanticipated problems. The employment documentation is established as a relationship between the employer and the employee. The documentation is made available to the employer and employees of their rights and obligations in the company and binds both parties to the company's laws. Employment documentation includes:
 • Employee Stock Option Plan Documents 
 • At-Will Job Offer Letter 
 • Employment Contract 
 • Confidentiality Agreements

By-Laws

In order for startups to run smoothly and easily, founders need to plan strong by-laws from the beginning. The By-Laws must stipulate the company's internal rules, such as dispute resolution, shareholder rights and powers, and management choices.

Lack of legal protection for intellectual property

Inaccurate and inadequate protection of intellectual property rights can have serious financial implications. Ideas, products or company logos and brands must be protected to prevent them from being misused by competitors. Trademark rights must be related to logos or trademarks; similarly, copyright should be used to obtain rights to the original work.

Improper licensing

Any commercial transaction of any particular product or service needs to obtain the licenses and compulsory licenses of various departments in order to make the enterprise operate normally. Many startups fail to comply with these rules due to a lack of legal awareness, resulting in financial and major losses including hefty penalties. 

Insufficient due diligence before fundraising

A start-up goes through several fundraising steps, self-financing, start-up capital, etc. so a proper due diligence exercise should be conducted at the time of those procedures for the presence of ample funds within the business.
 
Lack of confidentiality agreement

Whenever a startup company discusses an important topic or reaches an agreement with other companies or people outside the business or non-employees, the interlocutor must sign a confidentiality agreement. This agreement is used to maintain the confidentiality of the information of both parties. A lack of the said agreement could lead to a plethora of problems.
 
Conclusion

It is a famed and indisputable fact that startups work on tight budgets and have even tighter financial limits to spare on the various compliances needed by the law. However, it's crucial for such business models to know the importance of guaranteeing correct legal compliances before venturing into growth. A one-time investment within the space of legal compliance and due diligence shall save them from being closed up in the future once the company grows. Further, drafting a legitimate and watertight employment contract shall save the corporate from various litigations concerning employment and labour problems. It is henceforward necessary that the startups analyse and stay alert to all the mandatory due diligence processes and compliance needs at the time of incorporation as a preventive measure against any future legal problems.

The Indian government has been very attentive and accommodating to the startup culture, especially in the area of ​​tax formalities, and has therefore implemented many reforms to provide less strict and complicated guidelines for easy onboarding and rapid growth for such companies. Hence, it is a smart business move for startups to benefit from such friendly policies in our country and protect themselves from future losses, closings, litigation or other unexpected issues that may arise due to non-compliance.

Let the qualified curated professionals at Flywork.io assist you to resolve any legal and allied issues. For more details visit us at Flywork.io.

 

Startup India: Eligibility Criteria and Procedure for Registration

Since Indian Prime Minister Narendra Modi launched the Startup India program, the number of start-ups has grown incredibly. More and more people are starting their own businesses with tax breaks, social benefits and government aid. Fascinatingly, most start-ups have young founders and owners, which says a lot about the amazing creative minds India has. These founders had no government support before and had to do everything by themselves and there were still a few people who participated wholeheartedly. But since the start of the project, people now bravely know that the government will support them. 

Continue reading

India’s New E-Commerce Rules: Why it could fail

Over the course of the last few weeks, draft amendments to the Consumer Protection (E-Commerce) Rules, 2020 (hereinafter referred to as ‘E-Commerce Rules’) have been creating quite a stir among companies. The changes that the rules bring in are wide-ranging and require companies to comply with a plethora of norms. Some of these have not been received well by e-commerce companies who have made their disappointment known.

Continue reading

SEBI’s New Norms for Independent Directors and their Implications

Nevin Clinton, Flywork.io TeamFlywork.io.

Who are independent directors?
    Independent directors are directors of a company who neither have a material relationship with the company nor are they a part of the executive team. They are not involved in the day-to-day activities of a company as well. However, they play an important role in corporate governance. This is because they offer advice from the perspective of a third party since they themselves don’t have a material relationship with the company. Further, their opinions and activities will be completely free of bias more often than not due to their non-involvement with the personnel who are involved in the day-to-day activities of the company.

SEBI’s norms on appointment of independent directors and composition of committees
    The Securities Exchange Board of India (SEBI) which regulates the securities and commodity market in India approved amendments relating to new norms and regulations on independent directors of companies on 29 June, 2021. These norms were brought in after a board meeting in early June and they will come into effect from January, 2022. 

    The first and most important change in norms regarding independent directors is that two-thirds of the members of two committees in every listed company – the Nomination and Remuneration Committee (NRC) and the Audit Committee (AC) must be independent directors. The rules before the new norms were brought in stated that a majority in these two committees must be independent directors. So from a majority of 51% being the requirement, SEBI has increased it to 67%.

    There were also changes brought in to the appointment of an independent director. The said appointment must now be approved within three months by shareholders or through an Annual General Meeting (AGM) depending on whichever comes first. At least 75% of the shareholders must approve the appointment. Further, for appointment, there must be disclosure of the skills of candidates along with why he/she is the right person (or not the right person) for the job by the shareholders. Details on the process used for searching and shortlisting candidates must also be revealed. 

     With regard to the resignation of an independent director, the company must make available the contents of the letter of resignation which was submitted. Any transaction that is pending related to the director must be taken up by the fellow independent directors in the Audit Committee.

Meaning of ‘independent director’ clarified
    The meaning of ‘independent director’ is given in the Companies Act, 2013 wherein Section 149(6) provides for various characteristics of an independent director. Now, in the new norms, SEBI has clarified the definition and stated that an independent director is one who adds some value to the company and is not a promoter or relative of a promoter of the company. Further, there should have been no relationship with the company for the director regarding finances in the preceding two financial years. 

    SEBI has also brought in a cooling off period of one year for independent directors becoming full-time directors in the same company or its associates. Further, this cooling off period has been set at three years if managerial personnel or their relatives are to become an independent director.

    Finally, SEBI has also announced through a release that there would be ‘greater flexibility to companies while deciding the remuneration for independent directors which may include profit-linked commissions, sitting fees, ESOPs, etc, within the overall prescribed limit specified under Companies Act, 2013’. A reference to the Ministry of Corporate Affairs has been made in this regard and it is expected that the same will be approved soon.

Implications
    The new norms proposed by SEBI seem sound on paper and if the same are implemented well, this could be a positive change. Independent directors are an integral part of any company as they play a crucial advisory role. By streamlining their appointment and making the process stricter, SEBI has ensured that independent directors will well and truly stay ‘independent’. By also providing for more transparency in the appointment process and the requirement to make information available for scrutiny, a sense of heightened confidence is bound to be directed at the appointed independent directors. By extending similar requirements in case of resignations, there is once again more transparency, confidence and lesser room for unfairness. 

Let the qualified curated professionals at Flywork.io assist you to resolve any legal and allied issues. For more details visit us at Flywork.io.

 

How to register your company on your own?

By Nevin Clinton, Flywork.io TeamFlywork.io. 

    Whenever one starts a company, it is mandatory to get it registered. Forms of business like sole proprietorship and partnership can be unregistered, but if one wants his/her company to have a legal existence of its own, registration is a necessity. The process of registration is a bit time-consuming but the benefits outweigh the burden. This is because registration ensures that there is protection for the company in case of crisis, lawsuits, or bankruptcy. Further, it ensures that money can be raised more easily through private equity. And most importantly, registration ensures that the company will go on irrespective of whether a founder, director, or member quits. So very clearly, registration is a process that is of paramount importance and hence, it is essential to understand how to do it.

Steps to register a company

  • DIN and DSC: To register a company, first and foremost, it is essential to apply for and obtain the Director Identification Number (DIN) and Digital Signature Certificate (DSC). The former is a unique identification number given to the director who is applying for registration while the latter is a digital key that has details about the director and the company. This can be done on the official website of the Ministry of Corporate Affairs (https://www.mca.gov.in/content/mca/global/en/home.html) where these options can be found under ‘MCA Services’. Various details will be required such as identity proof, residence, contact details, passport, and so on. 
  • Name of the Company: After obtaining the DIN and DSC, one must get the name of the company approved. For the same, eForm 1A which can be found on the website must be filled. There are a total of six names that can be selected in order of preference. These names must be chosen carefully and it must be ensured that there is no overlapping with an already registered company. The provisions of the Prevention of Improper Use Act, 1950, and its directions on names must also be adhered to. Rs. 500 must be paid as a fee here and a digital signature must be attached.
  • MOA, AOA, and Certificate of Incorporation: After getting the name approved from the Registrar of Companies, one must fill in Forms 1, 18, and 32 within 60 days to obtain the certificate of incorporation. The Memorandum and Articles of Association must be drafted in this period and they must be printed and stamped. They must also be signed by at least two subscribers. These must be sent as a physical copy to the concerned Registrar of Companies. Once every detail is verified, the Certificate of Incorporation will be provided by the RoC.
  • Commencement: After registration, Form 19 has to be filled and the prospectus must be attached. There is an alternative in this regard which is to file Form 20 and provide a statement instead of the prospectus. Applications for GST number, Permanent Account Number, and Tax Deduction Account Number can then be made. A certificate of commencement will finally be issued following which the company can begin functioning. 

The process might vary depending on the nature of the enterprise

     It is noteworthy that the procedure discussed above is for a private company and the documents to be submitted and the various compliance mechanisms vary depending on the nature of the enterprise. For example, entities covered under Part IX of the Companies Act, 2013 must file two extra forms for registration – eForm 37 and 39. Meanwhile, for smaller entities like micro, small and medium enterprises (MSMEs), just furnishing details of PAN and Aadhaar Card is sufficient to register. In the case of a sole proprietorship, there is no need for registration and it is the same with partnerships. 

MCA21 V3 provides for ease of registration

      For ease of use, the MCA has planned to revamp its website (MCA21 V3) to ensure that it is user-friendly and all the forms required for the registration of a company are easily available and accessible. A tutorial document has been released in this regard (https://www.mca.gov.in/bin/dms/getdocument?mds=mSnkNJBMIaj3qhkshCvlhA%253D%253D&type=open) and the changes are expected to be made very soon.

Let the qualified curated professionals at Flywork.io assist you to resolve any legal and allied issues. For more details visit us at Flywork.io.

 

What is the significance of ‘force majeure’ during Covid crisis ?

 By Simran KaurFlywork.io TeamFlywork.io. 

 Force Majeure is a term used in contracts that essentially frees both parties from certain obligations and duties when an event that is not under the control of both parties occurs unexpectedly. We never know what may happen tomorrow and to provide parties to a contract with remedy/relief for events that were not in their control, the Force Majeure clause is used.
An example could be the present COVID-19 crisis, which has resulted in lockdowns or restricted movements in countries. Parties who suffered losses or any other grievances due to the pandemic can use the Force Majeure for remedy or relief.

Even though the term ‘Force Majeure’ has neither been defined nor specifically dealt with in Indian statutes, its references are to be found in Section 32 of the Indian Contract Act which contemplates if a contract is contingent on the happening of an event and if the event becomes impossible, the contract becomes void. In simple terms, this clause provides reprieve to a party from performing its obligations under a contract upon the occurrence of a Force Majeure event.

The essential ingredients of Force Majeure clauses are as follows:

  • Occurrence of an unexpected event
  • Parties to the agreement assumed that such an event will not occur
  • Such an event has made the performance of the obligations under the contract impossible.
  • The parties have taken all such measures to perform the obligations under the agreement.
  • The affected party by force majeure asking for relief will have the burden of proof that the force majeure event has affected such party's performance in the contract.

This Force Majeure clause is also widely found in certain business agreements such as purchase, supply, and manufacturing contracts as it relieves the parties from performing their respective obligations which are to be undertaken under the contract and consequential liabilities, during the period that force majeure events continue.

Force Majeure has been brought to light way more than before, due to the present pandemic of COVID-19 that has been incurred upon us. Companies who are unable to provide services or products promised to other parties due to the pandemic are using this clause to get relief from these obligations. They can use the clause to protect their business interests and the contract. With legal help, they can also retain the contract and obtain temporary relief from performing their obligations. If one has entered into long-term contracts, one can consider the terms of the contract for the impacted period of maybe, 6 months. This can help protect one’s contract and business. And, in contracts/agreements where supply or distribution is involved, one can increase the supply of goods (or services) later on, as demand picks up and makes up for any non-performance.

Thus, in cases such as the COVID-19 crisis, war, etc, FORCE MAJEURE has been a lifesaver for the people, and for the common good – providing protection from obligations that couldn’t be fulfilled due to unforeseen and unexpected consequences.

Let the qualified curated professionals at Flywork.io assist you to resolve any legal and allied issues. For more details visit us at Flywork.io.

INCORPORATION OF A COMPANY

INCORPORATION OF A COMPANY
By: Simran Kaur

The incorporation of a company is a process used to form the corporate entity or the company. A company comes into existence after being incorporated. It becomes a separate legal entity of its own, recognized by law, and can be identified with terms like “Inc” or “Limited “ in their names once it gets incorporated. Incorporation essentially means giving birth to a company.
Getting a company incorporated not only brings a company into existence but also provides some benefits. Read on to know how incorporation benefits a company and also the Procedure to get a company incorporated. 

ADVANTAGES OF INCORPORATION

 

  • It protects the owner’s assets from the liabilities of the company.
  • Transfer of ownership becomes easy.
  • Sales of stock raise capital, which is essential for the expansion of a company.
  • Creates a protective bubble of limited liability called the ‘corporate veil’ on the company’s shareholders and directors.
  • Helps enhance the image of the company.

PROCEDURE FOR INCORPORATION OF A COMPANY

There are several steps to get a company incorporated. They are:

  • Application for approval of name

The first step of getting a company incorporated includes getting the approval of name from the Registrar of Companies.  Companies can adopt names that are not prohibited, not identical nor resembles the name of any registered company. A panel of three names can be given to avoid any delay. The application gets accepted within 14 days and the proposed name should be registered within 3 months from the date of intimidation by the registrar. If the applicant fails to do so they will have to apply all over again.

  • Preparation of Memorandum of Association 

The next step is to prepare for the Memorandum of Association. It is the constitution of a company. It describes its objects, goals, and relationships with the outside world. In the case of a Private Limited Company, it has to be signed by at least 7 people while 2 in the case of a one-person company. It should be properly stamped.

  • Preparation of Articles of Association 

A document containing rules and regulations governing the internal system of the company known as Articles of Association has to be prepared. In the case of Public Limited Company, they are to adopt rules and regulations given under Table A,  Schedule 1 of the Act.  The rest of the kind can make their own.

  • Preparation of other documents 
  1. Consent of the directors is acquired and then filed with the Registrar of Companies.
  2. Power of Attorney in favor of anyone member or an Advocate who is to carry out all the required formalities.
  3. Preliminary agreements, memorandum, Articles of Association to be prepared and filed at the time of registration.
  4. A registered office with its information to be filed to the Registrar within 30 days of its registration or from the date of commencement of business. 
  5. The particulars of first directors (if the company names them in its Articles), are to be submitted to the Registrar within 30 days of its registration or appointment of such directors. 
  6. A statutory declaration stating that all legal requirements for registration have been complied with and filed with the Registrar at the time of registration. It can be signed either by an advocate of the Supreme Court or the High Court,  attorney or pleader of the High Court, or a practicing Chartered Accountant.
  • Payment of fees

The prescribed registration fees and the filing fee for each document filed for registration are to be paid at the Registrar’s office. The required fee to be paid depends upon the amount of nominal capital for companies with share capital and according to the number of members for companies without share capital.

  • Incorporation Certificate

   Once all the required documents are filed with the Registrar along with the requisite fees, an inquiry takes place. If all documents are found in order, the Registrar enters the name of the company in the Register of Companies and issues a Certificate of Incorporation. Eventually, the date mentioned in the certificate becomes the date of incorporation of the company.

  • EFFECTS OF INCORPORATION 

After incorporation, the company becomes a separate legal entity in perpetuity. A certificate of incorporation is tangible proof of the company's existence. Once a certificate of incorporation has been issued, the company is in place from the date mentioned. Any shortcomings or weaknesses found in the company's input over time will not affect the company's existence and inclusion, it will remain valid.

  • COMMENCEMENT OF BUSINESS

According to Section 149 of the Companies Act, 2013, a private company can commence its business when it gets incorporated, however, in the case of a public company, a certificate for the commencement of business has to be obtained. For a company that has issued a prospectus inviting the public to subscribe for its shares, it becomes necessary. It will be entitled to the certificate subject to the following conditions according to Section 149(1):

  • Cash payable shares should be allocated up to a minimum subscription amount;
  • The directors must pay in cash the application and the amount allocated in respect of the shares agreed to be taken by them in cash;
  • No money is liable to become refundable to the applicants because of failure to apply for or to obtain permission for shares or debentures to be dealt in on any recognized stock exchange.
  • No public company may start any business or exercise any borrowing power without obtaining this certificate. No contract can be entered into before the date on which the company is entitled to start the business. A certificate is an absolute proof that a company has such a right.

CONCLUSION

The incorporation of a company, therefore, has a lot of challenges. It is highly dependent on the needs of the business, the intention of the members, and how they want to take the business forward.

REFERENCE 

  • https://www.toppr.com/ask/question/a-company-comes-into-existence-only-after-its/ 
  • https://arthacs.in/incorporation-of-a-company-procedures-as-per-companies-act-2013/ 
  • http://www.globaljurix.com/blog/procedure-for-incorporation-of-company-in-india.php 
  • https://taxguru.in/company-law/company-incorporation-procedure.html 

Sexual Harassment at workplace

 By Bhanita Das, Flywork.io TeamFlywork.io. 

 

“Is this what growing into an adult woman is—having to predict and accordingly arrange for the avoidance of sexual harassment?”
                                                                                                     ― CandiceCarty-Williams, Queenie

Introduction:
Sexual harassment involves offensive, humiliative, or intimidating behavior which can be in a written, oral, physical, or even in digital form. In this 21st century, where both men and women work together in an organization, it has been found that women have to face some kinds of unusual behavior inside the workplace from their colleagues. This would be considered a violation of women’s right to equality, life, and liberty. Women have to face an insecure and hostile environment that discourages women’s participation and work, and it demotivates them. This has become a common problem in the world irrespective of any profession.

India, being a democratic country, all citizens have the inherent right to live with dignity provided under Article 21 of the Indian Constitution. With the increasing amount of industrialization, many employers started employing women. However, the absence of a law on sexual harassment at workplaces and the increasing cases of such cases lead the legislature to formulate legislation based on sexual harassment resulting in the birth of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act 2013. In Vishaka v. State of Rajasthan[(1997) 6 SCC 241], it was observed for the first time that India needs legislation for sexual harassment.    

Sexual harassment may include:

  • Asking for sex or sexual favors.
  • Questioning about your sex life.
  • Trying to touch or grab without consent.
  • Making comments which have sexual meaning.
  • Leering and staring at or suggestive body movements towards 
  • Showing pornography.
  • Sexually colored remarks. 
  • Making inappropriate sexual gestures. 

The Supreme Court incorporated basic principles of human rights enshrined in the Constitution of India under Article 14, 15, 19(1)(g) and 21, and provisions of the Convention on Elimination of All Forms of Discrimination against Women (CEDAW), in the guidelines to prevent and discourage sexual harassment at workplaces. The guidelines which had been laid down by the Supreme Court were to be treated as law declared under Article 141 for the Constitution. 

What shall one do if one is sexually harassed?

  • A woman who is a victim of sexual harassment can file a written complaint to ICC ( Internal Complaints Committee) within three months from the date of the incident. Up to three months of delay of filing the complaint is acceptable by the committee and if there is any physical or mental incapability in the aggrieved, then legal heirs or any such other person as provided in Rule 6 of The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Rules, 2013 ("the Rules") may make a complaint. 
  • When a complaint is received, the committee, before initiating an inquiry, may try to settle the matter between her and the respondent through conciliation, and when a settlement has arrived, no further inquiry is conducted. If the conciliation fails or any term of the settlement arrived at has not been complied with by the respondent, the committee shall proceed further with the inquiry.
  • After completion of the inquiry within 10 days, the report of its finding shall be provided to the employer/District officer and the concerned parties. In case of any false filling or false evidence, the committee may recommend taking action as per the provision of the rule as prescribed in Rule 10.
  • Within 90 days of the recommendation before the court or tribunal, an appeal can be filed against the recommendations of the committee. 

It is also the duty of the Employer and the District Officer under Section 19 and 20 of the Act to do acts such as creating awareness on sexual harassment in the workplace, sensitizing the employees, assisting the complaint committee in conducting an inquiry, timely submission of reports to the committee, etc.
Non-compliance to these may result in a fine which may extend to fifty thousand rupees and can also lead to cancellation of license, renewable or withdrawal or cancellation of the registration as the case may be. It is also to be noted that during a job interview employers should not be asking about status, age, disabilities, race, caste, country of origin, sexual preference. Such behavior would also fall under Sexual harassment.

Conclusion:

In India, sexual harassment at the workplace is highly prevalent and there is a need for gender sensitization and letting an employee know the basic rules of workplace behavior. It is unlawful to harass a person because of a person’s sex. Both the party  can be either a woman or a man,, and the victim and harasser can be of the same sex. It has become a global problem in both developed and undeveloped countries in the world and should be looked upon seriously by both,employer and employees.

 Let the qualified curated professionals at Flywork.io assist you to resolve any legal and allied issues. For more details visit us at Flywork.io.