Advocate Prerna Oberoi

Questions Answered by Advocate Prerna Oberoi

Q: Procedure in case Employee is not adhering to terms of company

Dear Sir, My firm (Pvt Ltd) had hired one of the employee and given him some terms & condition like misconduct during work, non adherence of order of management, etc before joining. He signed and stamped all terms, but after 15 days he suddenly left the job in between and rudely asking for salary of 15 days. In our contract it is clearly mentioned that if employee doesn't give prior notice/ misconduct during work we will not pay salary. Pls advice what we can do in this case as the employee is approaching police and police is harassing us.

Advocate Prerna Oberoi answered
Hi in order to provide legal advise regarding your query I need to go through the hiring docket provided by your company to the employee at the time of hiring. Thereby a proper solution regarding the same can be suggested.

Q: Enquiry regarding play school for kids how to open business

I wanted to ask opening a small business at home as like XX for 2&3 year old kids and day care for kids... required a permission? What is  the procedure?

Advocate Prerna Oberoi answered
The permission of a co-operative housing society or apartment association would be required in order to start a play school from a place of residence. In addition, if the residential area is acquired on rent/lease, the purpose of using the residential area for running a play school should be clearly specified in the lease agreement. There is no specific procedure, certification, and legislation for establishing a kids day care in India.Although,“Private School Education Acts” have been enacted by certain State Governments which regulate the operations of a school. Therefore, before the formation of the children day care, it is crucial for the Promoters to get well versed with the State Education Act in order to acquire the relevant registrations and licenses(If any) for setting up of a kids day care.

Q: Penalty of non compliance under maternity benefit act

what is the penalty provided if there is non compliance of the creche facility in the factory specifically under the maternity benefit act, 2017? what does the law say about this?

Advocate Prerna Oberoi answered
The amendments of 2017 to the Maternity Benefit Act, 1961, does not specifically state of or about any penalties, for non-compliance of the “creche facility”. However, as per section 21 sub-clause (2), the Act does provide for penalties, if any employer contravenes to the provisions or the rules of the Act, either with imprisonment which may extend to one year, or with a fine which may extend to five thousand rupees, or with both.

Q: What are the procedures involved for incorporation of Start-up

Dear Team, I am starting a new business which will be run by my wife which will involve Various kind of classes /training : 1. Personality Development 2. Foreign Language 3. Preparation for GEE, TOFEL , IELTS ext. 4.Coaching classes 5. Student Library etc. These classes will be run at centres across Lucknow and may be down the line to other centres. Also, we would be selling it's franchisee to others schools and parents as well. Would need clarification on following: 1. Shall I start with a Properietorship concern or Pvt Ltd. Company concern ? And reasoning for it. 2. What if initially we start with a Properietorship and after few months or years convert it to Pvt LTD? 3. Also, since i am a salaried class person and this business will be run by my wife in her name only. Can I transfer my funds to her individual account and then she can use it for her business. Also In this case , am I liable to pay additional tax as I will no where be associated with her business ? Please advise

Advocate Prerna Oberoi answered
Pursuant to your query I would suggest a private limited formation for your business. For your information, sole proprietorship formation is more suitable for small businesses which shall not be suitable as per your future plans of expanding and franchising. Certain benefits that you get in private limited formation: company becomes a separate legal entity, ease of getting funding (if required in future to expand) from angel investors etc., introduction of new directors as and when required etc. As per your second query I would like to inform that section 56 of the Income tax Act, provides that money received by an individual from any person without consideration, the aggregate value of which exceeds INR 50,000, is taxable under the head “income from other sources”. An exemption, however, is available if the money is received from a relative which includes among others, the spouse of an individual. Therefore, you will only have to pay the income tax on your salary and neither you nor your wife thereafter shall be accountable to pay any additional tax on such transferred fund. Should you have any further question please contact me as I specialize in incorporation of start up businesses.

Q: Procedure and requirement of registration of company to sell software

What are the legal formalities or paperwork to sell a software in India in the name of my unregistered company . Also , do I need to register before making the sale?

Advocate Prerna Oberoi answered
There is no specific legislation to sell softwares in India. Thereby an individual/ proprietor/unregistered company can sell softwares in India . However the sale of software like any other transaction, is governed by the common law principles embodied in the Indian Contract Act. In order to have a valid contract it is required that both the parties should be legal entities. Hence, it is advisable to have a registered company (instead of a contract on the name of unregistered company) in order to get into a valid contract with any other entity. Contracts can be in nature of sale or assignment/license but due to the unique nature of software, they are generally licensed where the owner has extensive rights. Also, for your information softwares are protectable under copyright law as computer programmes hence alongwith company registration it is advisable to seek Intellectual property protection under the relevant laws.