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Can a government employee do business on their own name ?
14-Jun-2024 (In Civil Law)
Hello All, I am having a doubt related to Government Sector in India.It was told by people to me that law does not allow government employees to have their own business. I am just eager to know that is there any Law for the same.if I am a Government Employee working under the central government then would I able to start my own business..?? Many time people in my contact came across excellent business ideas but they do not proceed due to the certain rumors(I am not sure is it a rumor or law ) that an employee working under government is not allowed by Govt of India to start their own business. One of my friends is still confused with this.he has an excellent idea of a startup but it was told by people that you cannot proceed because the law does not allow us. One has to resign from government sector to startup their business. can government employee do business on their name ?
Government employees in India are subject to strict Conduct Rules that regulate private business activities to prevent conflicts of interest, corruption, and misuse of official position. Here's a detailed breakdown:
1. Rules for Government Employees
A. Central Civil Services (Conduct) Rules, 1964
B. State Government Employees
C. Consequences of Violation
1. Rules for Government Employees
A. Central Civil Services (Conduct) Rules, 1964
- Rule 15: Prohibits government servants from engaging in any trade, business, or employment without prior government permission.
- Direct involvement (running a business, partnership, or directorship) is banned.
- Indirect involvement (managing through family members) must be declared and should not conflict with official duties.
- Rule 16: Bars employees from speculative investments (e.g., stock trading in a way that suggests insider knowledge).
B. State Government Employees
- Most states have similar Conduct Rules (e.g., UP Government Servants Conduct Rules, 1956).
- Some states allow agriculture, handicrafts, or teaching as exceptions.
C. Consequences of Violation
- Disciplinary action (suspension, termination).
- Criminal charges if corruption/misuse of power is involved (Prevention of Corruption Act).
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Adv. Chikirsha Mohanty
Delhi | 200+ Answers
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According to service rules, any government employee can not open or run any business in his/her name. But if you want to run a business, for extra income, you can start the same by the name of any member of your family, i.e., wife, son, daughter, mother, father, or brother.
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Adv. Abhishek Audichya
Adv. Abhishek Audichya
Lucknow | 25+ Answers
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Hi, legally, a government servant is not allowed to do business in India. But they can do business in their spouse's name and children's name or any family member's name and supervise the business.
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Adv. Sanju Lata
Adv. Sanju Lata
Allahabad | 100+ Answers
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No, a government employee is not allowed to run a private business, nor is he allowed to work anywhere else as a part-time or full-time employee. This is against government rule, and hence a person who is found can be charged for breaking the law.
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Adv. Mohit Dhingra
Adv. Mohit Dhingra
Lucknow | 25+ Answers
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A government employee is supposed to devote his/her time to full employment in the government. He /she cannot engage in any part-time or other employment or business while at the job. If they will be doing this will invite disciplinary action, and in some cases, they are terminated too. However, that doesn't stop them from doing one. They can start a business in their spouse's name or their children's name and supervise the business. I know many people who do that. Just the business will be in the name of others legally, but the entire business will be run on their credibility. But in any legal papers, the name of the Government employee does not reflect!
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Adv. Pradipta Nath
Adv. Pradipta Nath
Durgapur | 200+ Answers
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Sir, a central government employee cannot do any business as per the Rules of Service. You cannot do business in your own name. No family pensioner can do any business in his/her name. If any business is to be done in such cases, permission is required from the appropriate authority. Thanks.
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Adv. Shiddhartha Banerjee
Adv. Shiddhartha Banerjee
Kolkata | 100+ Answers
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You can start a business, but it is better to start it in the name of your spouse or another family member for tax benefits, same as in the case of a family pensioner, because if you have both pension income and business income, your tax liability will be higher. Thanks.
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Adv. Suvajit Ghosh Dastidar
Adv. Suvajit Ghosh Dastidar
Kolkata | 200+ Answers
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A government employee is not allowed to run a business. However, they can start a business in the name of their spouse or children and supervise it. Also, there is no provision that prevents a family pensioner from starting her own business.
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Adv. SK Shahrukh Raja
Adv. SK Shahrukh Raja
Kolkata | 25+ Answers
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