SIKKIM MANIPAL UNIVERSITY

ASSIGNMENT

Name Dhananjay Kumar

Roll No. 510911381

Course MBA-Semester-3
Legal Aspects of
Subject
Business
Subject Code MB0035-Set-2

Centre Code 1799

1.What is the process for an enterprise to get incorporated as a company?

The term ‘company’ implies an association of a number of persons for some

common objective e.g. to carry on a business concern, to promote art, science or culture
in the society, to run a sport club etc. Every association, however, may not be a company
in the eyes of law as the legal import of the word ‘company’ is different from its common
parlance meaning. In legal terminology its use is restricted to imply an association of
persons, ‘registered as a company’ under the law of the land. The following are some of
the definitions of company given by legal luminaries and scholars of law:

“Company means a company formed and registered under this Act or an existing
company. Existing company means a company formed and registered under the previous
company laws.” – Companies Act, 1956 Sec. 3(i & ii)

An enterprise can be incorporated as a company if it has:

Focus: Good companies stay focused on what they know and can do well. When
companies search for new ideas, they often drift into unknown territory and get in
trouble. Good companies just keep growing and expanding into familiar territory.
Shutterfly is a wonderful example of a company that’s growing, but it grows by
expanding within the social expressions business, helping communities of people share
photographs in hundreds of ways. Niches can be very large markets.

Execution: Satisfying a customer requires relentless attention to execution. Building a

company’s capability to deliver makes the difference between turning a great idea into a
business or failure. But execution is not just about delivering a product. It’s also about
service. Over the years, I have observed that technology companies are particularly bad at
recognizing and responding to the service needs of their customers. Counter intuitively,
high-tech requires a lot of high-touch. Part search is a company that knows what it’s
doing with customer service, helping customers find what they need in an ocean of
millions of parts and accessories for consumer electronic products. Part search has tamed
chaos in its industry.

Inspiration: Smart companies engage all of their associates in building the business,
from idea creation though delivery. Ideas don’t just come tops-down; they also come
bottoms-up and from every other direction. Everyone in the company feels that they own
a piece of the action and are accountable for how the company performs. The inspiration
for a company starts at the top, but good leadership drives that inspiration deep into the
company by engaging people broadly in decision-making. People are more than
mechanical parts of the enterprise, and the more they are allowed to see customers, the
better their business sensibilities.

Above all, it should follow companies Act.

2.Discuss in detail the clauses in the memorandum of association:

A memorandum of association is a standard document that states the constitution

of the company. Memorandum is one of the very essential paper processes to incorporate
a limited company
Clauses in the Memorandum:

a. Name clause:

The name of the company is mentioned in the name clause. A public limited company
must end with the word 'Limited' and a private limited company must end with the words
'Private Limited'. The company cannot have a name, which in the opinion of the Central
Government, is undesirable. A name, which is identical with or nearly resembles the
name of another company in existence, will not be allowed. A company cannot use a
name, which is prohibited under the Names and Emblems (Prevention of Misuse Act,
1950 or use a name, suggestive of connection to government or State patronage.

The name of a company may be altered on obtaining prior approval of the Central
Government for the altered name, passing a special resolution at a general meeting of the
company to that effect and obtaining a new certificate of incorporation, signifying the
name change.

b. Domicile clause:

The state, in which the registered office of company is to be situated, is mentioned in this
clause. If it is not possible to state the exact location of the registered office, the company
must state it provide the exact address either on the day on which commences to carry on
its business or within 30 days from the date of incorporation of the company, whichever
is earlier. Notice in Form no 18 must be given to the Registrar of Companies within 30
days of the date of incorporation of the company.

Any change in the registered office must be intimated in Form No. 18 to the Registrar of
Companies within 30 days. The registered office of the company is the official address of
the company where the statutory books and records must be normally kept. Every
company must affix or paint its name and address of its registered office on the outside of
the every office or place at which its activities are carried on. The name must be written
in one of the local languages and in English.
 • Change of the registered office within the same city or village or town may be
done by a board resolution.
• Change of the registered office from one place to another place within the same
state may be done by special resolution and obtaining approval of the Regional
Director.
• Change of Registered Office from one place to another place in another state may
be done by special resolution and obtaining order of Company Law Board on
petition being made.

c. Objects clause:

This clause is the most important clause of the company. It specifies the activities which
a company can carry on and which activities it cannot carry on. The company cannot
carry on any activity, which is not authorized by its MA. This clause must specify:

Main objects of the company to be pursued by the company on its incorporation;

Objects incidental or ancillary to the attainment of the main objects;

Any other objects.

In case the companies, other than trading corporations whose objects are not confined to
one state, the states to whose territories the objects of the company extend must be
specified.

The objects clause may be amended by special resolution at a general meeting of

members of the company.

d. Liability clause:

A declaration that the liability of the members is limited in case of the company, limited
by the shares or guarantee, must be given. The Memorandum of a company, limited by
guarantee, must also state that each member undertakes to contribute to the assets of the
company such amount not exceeding specified amounts as may be required in the event
of the liquidation of the company. A declaration that the liability of the members is
unlimited in case of the unlimited companies must be given.

e. Capital clause:

The amount of share capital with which the company is to be registered, divided into
shares must be specified, giving details of the number of shares and types of shares. A
company cannot issue share capital, greater than the maximum amount of share capital,
mentioned in this clause, without altering the memorandum.

f. Association clause:

A declaration by the persons for subscribing to the Memorandum that they desire to form
into a company and an agreement to take the shares place against their respective name
must be given by the promoters.

3. Discuss the need for development of cyber laws:

Cyber crime refers to all the activities done with criminal intent in cyberspace or
using the medium of Internet. These could be either the criminal activities in the
conventional sense or activities, newly evolved with the growth of the new medium. Any
activity, which basically offends human sensibilities, can be included in the ambit of
Cyber crimes.

Because of the anonymous nature of Internet, it is possible to engage in a variety of

criminal activities with impunity, and people with intelligence, have been grossly
misusing this aspect of the Internet to commit criminal activities in cyberspace. The field
of cyber crime is just emerging and new forms of criminal activities in cyberspace are
coming to the forefront each day. For example, child pornography on Internet constitutes
one serious cyber crime. Similarly, online pedophiles, using Internet to induce minor
children into sex, are as much cyber crimes as any others.
Categories of cyber crimes:

Cyber crimes can be basically divided in to three major categories:

1. Cyber crimes against persons;

2. Cyber crimes against property; and
3. Cyber crimes against government.

IMPORTANCE OF IT ACT :

The Information Technology Act:

• Enables Legal recognition to Electronic Transaction / Record

• Facilitates Electronic Communication by means of reliable electronic record
• Provides for acceptance of contract expressed by electronic means
• Facilitates Electronic Commerce and Electronic Data interchange.
• Facilitates Electronic Governance.
• Facilitates electronic filing of documents.
• Enables retention of documents in electronic form.
• Where the law requires the signature, digital signature satisfies the requirement.
• Ensures uniformity of rules, regulations and standards regarding the
authentication and integrity of electronic records or documents.
• Facilitates Publication of Official Gazette in the electronic form.
• Enables interception of any message transmitted in the electronic or encrypted
form.
• Prevents Computer Crime, forged electronic records, international alteration of
electronic records fraud, forgery or falsification in Electronic Commerce and
electronic transaction.
WHY THE NEED FOR CYBER LAW?

• Flourishing of the Internet.

• Greatest cultural, economic, political and social transformation in the history of human
society.
• Complex legal issues arising leading to the development of cyber law.
• Different approaches for controlling, regulating and facilitating electronic
communication and commerce

4.What do you mean by award with reference in arbitration:

Award means an arbitral award. It is a final decision or judgment of the arbitral

tribunal on all matters referred to it. An award in order to be valid must be final, certain
and must decide all the matters referred to. An award by the arbitrator is as binding in its
nature as the judgment of a court.
Arbitral award includes an interim award
There are two types of decisions to be made by the arbitral tribunal i.e. decision
on the merits of the dispute is to be made by the majority of members of the arbitral
tribunal but question of procedure can be decided by the presiding arbitrator, if
authorized by the parties or all members of the arbitral tribunal. In the absence of such
authorization by the parties or other members of the tribunal, the decision on question of
procedure is also to be made by majority of members of the arbitral tribunal. In the
absence of such authorization by the parties or other members of the tribunal, the
decision on question of procedure is also to be made by majority of members of the
arbitral tribunal. The presiding arbitrator has not been given any special power and be
acts like any other arbitrator. All arbitrators have been given equal power irrespective of
mode of appointment.

Essentials of an Arbitral Award

Section 31 deals with the form and contents of the arbitral award. The provisions of
Section 31 are discussed in the form of essentials which are as under:
1. An arbitration agreement is required to be in writing. Similarly, a reference to
arbitration and award is also required to be made in writing. The arbitral ward
is required to be made on stamp paper of prescribed value. An oral decision is
not an award under the law.

2. The award is to be signed by the members of the arbitral tribunal. However,

the signatures of majority of all the members of all the members of the
tribunal are sufficient if the reason for any omitted signature is stated.

3. Unless the agreement provides otherwise, the arbitrator must give reasons for
the award. Thus, the making of an award is a rational process which is
accentuated by recording the reasons. However, there are two exceptions
where award without reasons is valid i.e.

(a) Where the arbitration agreement expressly provides that no reasons are to be
given, or

(b) Where has been under section 30 of the new Act i.e. where the parties settled
the dispute and the arbitral tribunal has recorded the settlement in the form of
an arbitral award on agreed terms.

4. The award should be dated i.e. the date of the making of the award should be
mentioned in the award.

5. The arbitral tribunal shall state the place of arbitration in the award.

6. The arbitral tribunal may include in the sum for which award is made, interest
up to the date of award and also a direction regarding future interest. The rate
of interest shall be eighteen per cent.

7. The award may also include decisions and directions of the arbitrator
regarding the cost of the arbitration.

8. After the award in made, a signed copy should be delivered to each party for
appropriate action.
 9. The arbitral tribune may, at any time during the arbitral proceeding, make an
interim arbitral award on m=any matter with respect to which it may make a
final arbitral award.

Finality of Arbitral Awards (Section 35)

An arbitral award shall be final and binding on the parties and persons claiming under
them respectively. Now, under the new Act, by virtue of section 35 and the Act, the
award made by the Arbitrator shall be fine and binding on the parties itself and shall be
decree without being made decree by the court.

5.How is consumer defined in the consumer protection act? Discuss

Consumer protection laws are designed to ensure fair competition and the free
flow of truthful information in the marketplace. The laws are designed to prevent
businesses that engage in fraud or specified unfair practices from gaining an advantage
over competitors and may provide additional protection for the weak and those unable to
take care of themselves. Consumer Protection laws are a form of government regulation
which protects the interests of consumers. For example, a government may require
businesses to disclose detailed information about products—particularly in areas where
safety or public health is an issue, such as food. Consumer protection is linked to the idea
of "consumer rights" (that consumers have various rights as consumers), and to the
formation of consumer organizations which help consumers make better choices in the
marketplace.

Consumer is defined as someone who acquires goods or services for direct use or
ownership rather than for resale or use in production and manufacturing.

Consumer interests can also be protected by promoting competition in the markets

which directly and indirectly serve consumers, consistent with economic efficiency, but
this topic is treated in Competition law.
 Consumer protection can also be asserted via non-government organizations and
individuals as consumer activism.

Consumer is a broad label for any individuals or households that use goods and
services generated within the economy. The concept of a consumer occurs in different
contexts, so that the usage and significance of the term may vary.

In economics and marketing

Typically when business people and economists talk of consumers they are
talking about person as consumer, an aggregated commodity item with little individuality
other than that expressed in the buy/not-buy decision. However there is a trend in
marketing to individualize the concept. Instead of generating broad demographic profiles
and psycho-graphic profiles of market segments, marketers have started to engage in
personalized marketing, permission marketing, and mass customization.

There is increasing backlash from the public over use of the label "consumer"
rather than "customer", with many finding it offensive and derogatory.

In law and politics

The law primarily uses the notion of "consumer" in relation to consumer

protection laws, and the definition of consumer is often restricted to living persons (i.e.
not corporations or businesses) and excludes commercial users. A typical legal rationale
for protecting the consumer is based on the notion of policing market failures and
inefficiencies, such as inequalities of bargaining power between a consumer and a
business. As of all potential voters are also consumers, consumer protection takes on a
clear political significance.

Concern over the interests of consumers has also spawned much activism, as well
as incorporation of consumer education into school curricula. There are also various non-
profit publications, such as Consumer Reports and Choice Magazine, dedicated to assist
in consumer education and decision making, and Consumer Direct in the UK.
 In India, the Consumer Protection Act 1986 clearly differentiates a consumer as
consuming a commodity or service either for his personal domestic use or to earn his
livelihood. Only consumers are protected as per this act and any person, entity or
organization purchasing a commodity for commercial reasons are exempted from any
benefits of this act. Furthermore, Indian case law has quite a few references on how to
distinguish a consumer from a customer.

In intelligence studies

Within intelligence studies, the concept of "consumer" refers to the political staff
consuming and requesting intelligence.

6. Undertake a survey of 20 shops and write a report on the provisions being

maintained in these shops as per the Shops and Establishment Act:

On making a survey on 20 different shops coming under shops and establishments

acts, the important findings are summarized:

-To provide statutory obligation and rights to employees and employers in the un
organised sector of employment, i.e., shops and establishments.
Scope And Coverage
- A state legislation; each state has framed its own rules for the Act.

- Applicable to all persons employed in an establishments with or without wages, except

the members of the employer's family.

- State government can exempt, either permanently or for a specified period, any
establishments from all or any provisions of this Act.

Main Provisions
- Compulsory registration of shop/establishment within thirty days of commencement of
work.
- Communications of closure of the establishment within 15 days from the closing of the
establishment.

- Lays down the hours of work per day and week.

- Lays down guidelines for spread-over, rest interval, opening and closing hours, closed
days, national and religious holidays, overtime work.

- Rules for employment of children, young persons and women

- Rules for annual leave, maternity leave, sickness and casual leave, etc.

- Rules for employment and termination of service.

- Maintenance of registers and records and display of notices.

- Obligations of employers.

- Obligations of employees.

When To Consult And Refer

- At the time of start of an enterprise.

- When framing personnel policies and rules