Get to know the legal requirement for starting a Businessadmin
Starting a business can be challenging and intimidating for new investors and heads. Ensuring that all mechanisms are in place by the time work gets underway is an essential task that upper management must take care of. In order to ensure that a business runs smoothly, statutory compliance and other tasks must be fulfilled.
Structuring a company
Structuring a company is the first and foremost task that must be attended to. Structuring involves how the organization’s hierarchy will be structured and the kind of company the organization will be. Organizations can be structured as one-person companies (OPCs), private limited companies (PLCs) and limited liability partnerships (LLPs). These must be registered under the Companies Act (2013). Aside from this, the organization’s internal hierarchy must be sorted out and an effective workflow system and an effective upper-level management must be in place before business commences.
Insurances and Liabilities
Having the right insurance provider is necessary for both employees and the organization to protect against potential shortcomings. Another important aspect here that must be implemented is the EPFO (Employee Provident Fund Organization), 1952 The EPFO is an initiative taken to safeguard the interests of an employee where employee and employer will deposit a certain percentage of the employee’s salary. The entire amount will then be handed to the employee at the time of retirement.
Trademarking and Licensing
Certain organizations need to take note of whether they need to trademark specific products or whether they need to procure special licenses to operate a business. Some of the basic licenses and registrations required for an organization in India include:
- Company or LLP Registration
- GST Registration
- Udyog Aadhar Registration
- FSSAI License or Registration
- Import Export Code
- Shop and Establishment Act License
- Other Licenses and permits dependent on sectors and partnerships
The practice of adhering to a set of rules and regulations that pertain to the safety and well-being of an organization’s employees and workers is called labour law compliance. As far as the Indian context is concerned, there are labour laws that exist specifically for organization’s sectors. Some of the major laws that organizations are supposed to adhere to with respect to the interests and well-being of employees include:
- The Trade Union Act, 1926
- The Industrial Employment (Standing Orders) Act, 1946
- The Industrial Disputes Act, 1947
- The Employees’ State Insurance Act, 1948.
- The Employees’ Provident Funds and Miscellaneous Provisions Act, 1952
- The Contract Labour (Regulation and Abolition) Act, 1970
- The Inter-State Migrant Workmen (Regulation of Employment and Conditions of Service) Act, 1979 The Payment of Gratuity Act, 1972
- Building and Other Constructions Workers’ (Regulation of Employment and Conditions of Service) Act, 1996
Organizations must ensure that taxes levied upon the organization are duly paid. They must also stay updated about changes to these taxes and regulations as they are subject to change. One instance is when organizations have to pay payroll taxes, taxes deducted from an employee’s salary by an employer. These amounts are used to cover insurance and pension schemes for the benefit of the employee. The amounts that are deducted fall into categories depending on the employee’s salary, which is subject to change due to government policies. The employee state insurance act and the employee provident fund act both fall under labour compliances as well as an essential part of taxation.
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