Planing to form a company (proprietor, private limited or limited) or already in business, every entrepreneur is liable to follow these basic Indian government’s legal laws to function their business in the country. Usually, most of the startup businessmen and entrepreneurs approach a legal business consultant to understand documentation required for forming a legal business entity, granting PAN number, GST and opening a current account and other rules and guidelines to start functioning.
1. Company Formation Law
A legal business entity is necessary to start a business operation and invoicing. Depending on the nature of the business, business owners need to register a business name. Indian Companies Act 2013 states law for each type of company while starting up a business; you need to choose the type of company For eg:- Private, Public, Proprietorship, LLP or family business. Start registering your company with the Regional Registrar of Companies.
2. Industry Finance laws India
Even if entrepreneurs are using own savings, mortgaging, loan, investment, debt financing or getting fund from angel investor; with respect, the law business need to mention every record in the account books.
3. Tax and Accounting
For billing and taxation, every business owner required to be registered under the GST act . You need to hold books of bills for your enterprise. Each business that previously registered as service Tax, VAT now has to register them under GST act. According to GST ACT law, business and eCommerce services providers are exempted from registration if their total annual financial year turnover is below 20 Lacs.
As per 270A of the Income Tax Act 1961, misreporting of income there can be a penalty of 200 percent of the amount of tax payable on unpaid income.
4. Securities Law
If you want to list your company on the stock exchange (SEBI); you need to undergo several conditions plus you can have an initial public offering if you abide by all the rules. See the SEBI Act
5. Employment and Labour Laws
Every entrepreneur operating a business in India must follow employment and labour laws and should have employee agreements and abide those rules helping you stay away from legal hassles.
6. Intellectual Property law
If you are merchandising or creating a logo and designs for your company; you should get your copyright, patent or trademark as soon as possible for the same. This will provide you with an assured of no misuse by others and you can claim royalties if in case your designs are used by others for profits.
7. Information Technology Laws
The government of India has introduced the IT Act (cyber laws) in order to help protect online privacy and identity. It is best if you are using software and other technologies to improve business.
8. Dispute Resolution & Contract Law
This law can help your business to resolve disputes and run it smoothly. To know more about online dispute resolution.
9. Privacy law & Data Security Law
Business collects sensitive personal and confidential information from customers are responsible to follow Privacy law & Data Security Laws. Entrepreneurs must make sure all data are safe and should take confirmation from users before. Agreement or company policy should mention these laws online on website as well as offline.
Under section 43A of the (Indian) Information Technology Act 2000, wrongful disclosure, misuse and violation of personal data by the company may be held liable to pay damages to the person affected. There is no specified upper limit for the compensation.
Under section 72A of the same act, disclosure of information, knowingly and intentionally, without the consent of the will be punishable with imprisonment up to 3 years and fine extending to Rs 5,00,000.
[ Also Read: The Need for Data Protection in Every Business ]
Having fair knowledge of all the legal intricacies is essential plus having a business lawyer is important who can guide you with the updates and new rules regularly so that your business can function smoothly.