Whether Budget 2020 will be a game changer for indian economy. will it help to revive the economic slowdown, unemployment, and increase in GDP ?.

  

Budget 2020

Lets Start

Rising wholesale and consumer inflation and a general slowdown in consumer demand have affected India's GDP growth. However, one year down the line, we can foresee a consumption revival and revitalisation of the economy with concerted efforts from the government and industry alike. Some key areas and measures listed below can help create a long-term impact on restoring and building business confidence.

Getting the consumption cycle flowing  (Manufacturing to consumptions in our economy)

Curbing inflation, creating jobs

The RBI meeting its CPI (consumer price index) inflation target of 4-5 per cent plus or minus 1 per cent, will help improve consumer sentiment about rising cost of living

Economic outlook is related to the general growth environment which can be improved by resolving the twin balance sheet problem

Simplified labour laws will encourage global manufacturing companies to bring in FDI (foreign direct investment) and create jobs

Improving transportation and manufacturing infrastructure will also help create more jobs

Since high levels of unemployment impact consumption, which in turn affects tax collection, creating jobs will impact both the economy and consumer sentiment positively.

Creating a healthy credit flow-through   (Improvement in Financial segment of nation)

Credit growth, expediting GST refunds and simplifying input tax credit mechanism

To push credit growth, banks could be allowed to take pending GST (goods and service tax) input tax credit as collateral and provide loans to businesses, especially MSMEs (Micro, Small and Medium Enterprises) at appropriate interest rates.

Currently, GST refunds can take more than 60 days to be credited, which hampers cash flow and creates pressure on working capital management. The GST refund system can be remodelled to expedite the refund process.

Input tax credit mechanism, which is one of the salient features of the GST system, should be further improved. As of now, IGST liabilities can be settled off by using any type of input tax credit, be it IGST (integrated), CGST (central), or SGST (state). However, while setting off output tax liabilities for IGST, input tax credit on account of IGST must be completely exhausted mandatorily before using input tax credit from CGST and SGST. Also, IGST input tax credit can be used to set off all three kinds of GST liabilities. However, CGST input tax credit cannot be set off against SGST output liability and vice versa, which creates liquidity crunch in a short term for MSMEs operating intra-state. Therefore, allowing the MSMEs to set off their output tax liabilities across the three categories with an input tax credit from all without any restriction will be a welcome move.

Simplifying and improving the user interface so that it can be used even by business owners in tier 2 and 3 cities and rural areas is crucial. The last-minute collapse of the portal is unimaginable. Also, because there is a provision of penalty in the case of late filing, the GST portal could be made robust by increasing the server strength to ensure minimum downtime, especially on the last day of GST filing.

Frequent policy changes have also been difficult to assimilate for the businesses. Some changes like frequent GST Council circulars have also necessitated hiring Chartered Accountants, which adds to the cost of running a business. Enough time can be provided to businesses and GST filing tech platforms so that they can understand, update, and comply with changes. A better way to achieve this is to do a pilot testing before rolling out the changes at the national level and use batch releases by clubbing changes and releasing multiple changes together.

Ensuring strict contract enforcement

Fast track contract enforcement, settling cheque bounce cases and tech savvy legal system

The issue of cheque-bouncing is a major one in the Indian business and legal environment. In four high courts where enough data was available, 87 per cent of cheque bounce cases took 10-15 years to be disposed of, and only 5 per cent took less than 5 years. Looking at the high number of cheque bounce cases, there is an urgency to set up Fast Track courts to settle these cases.

The Government can also consider setting up an ‘Execution or Enforcement' agency to attach assets of the defaulter. This would go a long way in restoring business confidence as these cases bring down the morale of companies and the long judicial wait in holding the defaulting party accountable often leads to loss of confidence and trust in the business and legal environment. Reversal or waiver of GST paid on revenue of such pending cheque bounce cases can be considered.

The high backlog of pending cases can be solved by ramping up the pace of appointing judges as the shortage is the primary cause. Additionally, Indian legal processes could be made more technology-savvy. One way might be to digitalise paperwork and save legal time in sorting and searching.

Personal Opinion

Today, India stands among fast-growing large economies of the world. To continue this growth rate and improve business and consumer sentiment, there is a need to control inflation, resolve the long-standing twin balance sheet problem, create more infrastructure, simplify labour laws, streamline GST, and ensure strict enforcement of contracts. Together, all these small changes would go a long way in restoring and improving confidence in the Indian economy.

Posted by LawgicAL ARUSH

Source MC

In this quick marathon we will understand all possible cases where filling of MGT-14 is required.

In companies act 2013, there are number of cases mentioned where filling of MGT-14 is required. However few exemptions are given in certain cases where filling of MGT-14 is not nesseccary.

MGT 14

Let's start.

CATEGORIES OF RESOLUTION DIVIDED IN 3 PARTS AS PER THEIR NATURE

As per section 179(3) and rule 8 of Meeting of board and its power 2014, and section 117 of companies act 2013. These are following cases where filling of MGT-14 is required. However private companies are exempted to file MGT-14  for Annexure A matters which are passed in board meeting.

1. For Board Resolution (Annexure A)

2. For Special Resolution (Annexure B)

3. Ordinary Resolutions (Annexure C)

                         

                                                                    Annexure A

1. To issue securities, inclusive of debentures, either inside or outside the confines of India. It may be noted that in case of shares, issue of security denotes issue of Letter of Offer.

2. To borrow money from any sources, including a director.

3. To invest the funds of the company. (Also follow provisions of Section 186)

4. To issue loans or provide guarantee or security in respect of loans. (Also follow provisions of Section 186)

5. To endorse the financial statement and Board’s report.

6. To appoint internal auditors.

7. To appoint Secretarial Auditor.

8. To appoint or remove Key Managerial Personnel.

9. To make political contributions.

10. To take decisions on those shareholders relating to the money unpaid on their shares.

11. To sanction buy-back of securities under Section 68.

12. To expand the business of the company.

13. To endorse Amalgamation, Merger or Reconstruction.

14. Take over a company or acquire a controlling or considerable stake in the other company

Also read:  LOAN TO DIRECTOR AND LOAN FROM DIRECTOR

                     

                                                                            Annexure-B

1. For companies registered under Section 8 for converting itself into a company of another kind or alteration of its MOA or AOA.

2. Change of location of registered office in the same State, but outside the local limits of the city, town or village where it is currently situated.

3. Change of registered office from the jurisdiction of one registrar to another in the same sate.

4. Amendment of Articles of a private limited company for entrenchment of any provisions. This must be consented by all the members of a private company.

5. Amendment of Articles of a public company for entrenchment of any Provisions.

6. Modification in name of the company to be sanctioned by a special resolution.

7. If a company has raised funds from the public through issue of a prospectus, and the money so raised remains unutilized, the company is not entitled to change the object for which the money was raised, except by passing a special resolution.

8. A company is not authorized to modify the terms of a contract referred to in the prospectus or objects for which the prospectus was issued, except on the approval of the concerned authority.

9. A company is entitled to pass a special resolution in its general meeting, issue depository receipts in any foreign country in the specified manner, in compliance with the pertinent conditions.

10. If a shared capital of the company is classified into various classes of shares, the rights attached to the shares of any class may be modified with the written consent of the authorized shareholders; or through a special resolution passed at a meeting of the shareholders of the issued shares of that class.

11. Private offer of companies needs the consent of the company by a special resolution.

12. Issue of ‘Sweat Equity Shares”.

13. Reduction of share capital.

14. Special resolution for endorsing scheme for the purchase of fully-paid shares for the welfare of the employees.

15. Buy back of shares.

16.A company is authorized to issue debentures with an option of converting these debentures into shares, either wholly or partly during the stage of redemption; on the condition that the operation is sanctioned by a special resolution passed at the general meeting.

17. Maintain registers at any other Indian locality.

18. Re-appointment of Independent Director.

19. The members of a company are empowered to specify any lesser number of companies in which the directors of the company may act as directors. The specification can only be done after the process of approval through a special resolution.

20. To sell, lease or dispose the whole or the majority of the undertakings of the company.

21. To invest the compensations received by the company due to any merger or amalgamation in trust securities.

22. To borrow money, where the prospective borrow-able amount, as well as the money previously borrowed by the company exceeds the aggregate of its paid-up share capital and free reserves, barring the temporary loans obtained from the company’s bankers in the normal course of business.

23. To remit, or grant time for the repayment of any debt owed by the director.

24. To approve scheme for providing loans to MD or WTD.

25. Loan and investment by company which is above 60% of paid up share capital or 100% of free reserve,

26. Recruitment of a person as Managerial Personnel, given that his/her age is above 70 years.

27. Remuneration to managerial personnel on the event of insufficient profits.

28. Special resolution for closure of the company by Tribunal

29. Special resolution for closure of the company.

30. Conversion of a private limited company into a One Person Company.

       

                                                           Annexure-C 

In no case of ordinary resolution MGT-14 shall be filled.

                                                  Time Frame For MGT-14 

Before Amendment: within 30 days from the date of passing resolution. If not file within stipulated time in that case extension of 270 was allowed under section 403 of companies act 2013.

After Amendment: In companies  Amendment  Act 2017, only 30 days days are allowed for filling fhe same. However if failed to file within stipulated time it shall be punishable under the section.

CRUX: In any case company has only 30 days to file, if company pays thereafter it shall be penalize.

Posted by LAWgicAL Arush

In this post we will see all the provisions related to Loan to Director and Loan from Director

loan to director 

It has been a matter of discussion since very long time; different different professional has different interpretation on this topic that is why it is a one of the most hot and controversial topic in corporate world.

Let's go in the background of section 185 of Companies Act 2013

In earlier companies act there was no separate provisions for efficiently regulation of Director's loan related criteria. However to incorporate stringent director loan compliances the new act has brought up a separate section i.e. S. 185 of companies act 2013 dealing with directors loan.

To bring this section into existence there was a reason because directors of the company take the loan from company by using undue advantage of their position for using their own purposes, which affects the financial position of company simultaneously affect the interest of stakeholders.

Loan to Director as per section 185 of companies act 2013

Giving Loan, including representing in book debts, or giving gurantee/security in connection with loan taken by director is prohibited to directors and some specified Persons (any other person where director is interested), either directly or indirectly.

INTERPRETATION BY AUTHOR

Under whole companies act the word loan is nowhere defined, so we take the meaning of loan from Oxford dictionary which simply defines “Lending of any sum of money with promise to pay"

INTERPRETATION BY AUTHOR

Representing in book debts what does it means, it means No company  can convert loan given to its director into DEBTORS

However credit sales made by company to its director is completely allowed if it is in normal course then their is no question arise for representing in book debts. Because earlier section 295 of old act does not explicitly include the phrase  “any loan represent by book debts "  hence any kind of credit facility extended by company will not cover under the Loan to Director.

INTERPRETATION BY AUTHOR

Meaning of indirectly is same as decided in case of " Fredie Ardeshir Mehta v. Union of India " it can not be read as converting what is not a loan into loan if we explicit it further we can understand word indirectly means providing loan through agencies or any other medium  but does not qualify to be loan or loan represented by book debt or security  or guarantee  into loan , any loan represented by book debts or guarantee  or security.

Meaning of specified  person ( any person where director is interested)

1. Director of lending company

2. Director of ifs holding company

3. Any partner of any such director

4. Any relative of any such director

5. Any firm in which any such director is partner

6. Any firm in which any relative of such director is partner

7. Any private company of which any such director is director or member

8. Any body corporate in which any such director holds at least 25% of total voting        power

9. Any body corporate who’s BOD, manager, managing director, whereof is accustomed to act on the directions of director of lending company.

INTERPRETATION BY AUTHOR

In the point no.9 director of only lending  company  has been considered,  however for rest of the points  director of lending company and director of holding company  both has been considered.  In simple if BOD, manager or managing director of any body corporate is accustom to act on directions of director  of holding company it is not cover under section 185.

There is one important  thing to be notice that partner of relative of any director is not cover in above cases here law is completely silent it means loan can be given to him.

Reference Of Companies Amendment Act 2017.

Under this amendment still restrictions has been imposed by law maker for granting of loan to director. However loan can be granted in below specified cases by passing  special resolution in general meeting.

1)  Any private company of which any such director is director or member

2) Any body corporate  in which any such director holds at least 25% of total voting power

3)  Any body corporate who’s BOD manager, managing director, whereof is accustomed         to act on the directions of director of lending company

Who all are eligile to take loan from company.

* Managing director or manger in ordinary course of business by passing special resolution as per their terms of employment.

* A wholly owned subsidiary company is allowed to take loan, securities, guarantee from its holding company.

* A holding company can provide securities, or guarantee to its subsidiary company in connection with loan taken from bank or financial institutions.

Non Applicability Of This Section On Certain Cases.

* If advance salary is given to employee who is relative of director (because advance is not loan)

* If loan given to a trust where director is trustee

* If any flat or any accommodations given by company to any director under central government housing scheme

* Loan given to any public company or listed company where director of lending company is director or member of such company (restriction is only on private company)

* Any investment made for residential house for director.

* Any loan is made to registered  co-opeative society.

* A private company if following condition satisfied,

1) In whose share capital no other body corporate as invested any money;

2) If the borrowings of such a company form banks or financial institutions or any body corporate is less than twice of its paid-up share capital or fifty crore rupees, whichever is lower; and

3) Such a company has no default in repayment of such borrowings subsisting at the time of making transactions under this section.

All these conditions need to be fulfilled at the time of advancing of any loan or providing guarantee or security

Applicability Of Provisions In Relation With Loan Taken From Director

It is a misconception in the mind of various people that if loan is taken from director it will be treated as related party transaction as people use the logic that director is cover under the definition of related party.

However it is completely wrong because section 188 only applies where that 7 transactions mentioned in the section take place.

So here the secrets reveal.

If loan taken from director by the company first check whether such loan is given by director from its owned funds or it was borrowed one. if such funds are borrowed in that case applicability of  deposit sections (73 -76) will come to the picture.

However if not borrowed funds in that case company has to follow section 179(3).

Posted by LAWgicAL ARUSH

 

The government  of India  has come  forward with a recent Amendment  in citizenship amendment act 2019. Which has amended old Citizenship Act 1955. In this post I will provided you in-depth analysis why this Act is creating controversy  in the nation. Let's have a look.

 

 

 

 

 

 

 

Citizenship

1. BARE ACT LANGUAGE OF CITIZENSHIP ACT 1955. 

Ø  Section 2(1)(b) of said Act citizen" in relation to a country specified in Schedule I, means a person who, under the citizenship or nationality law for the time being in force in that country, is a citizen or national of that country

v Following countries had specified in Schedule 1

1. United Kingdom

2. Canada

3. Commonwealth of Australia

4. New Zealand

5. Union of South Africa

6. Pakistan

7. Ceylon

8. Federation of Rhodesia and Nyasaland

9. Ghana

10. Federation of Malaya

11. Singapore

B. The Republic of Ireland

                                                           

INTERPRETATION BY AUTHOR

Any Person (Person herein after referred as the Natural person, however person includes Artificial person itself) of Any Above mentioned countries shall be the citizen of that country as per law of that country.

2. BARE ACT LANGUAGE OF CITIZENSHIP AMENDMENT ACT 2019

In the section 2(1)(b) of the said Act a new proviso has been inserted through amendment.

Provided that any person belonging to Hindu, Sikh, Buddhist, Jain, Parsi or Christian community from Afghanistan, Bangladesh or Pakistan, who entered into India on or before the 31st day of December, 2014 and who has been exempted by the Central Government by or under clause (c) of sub-section (2) of section 3 of the Passport (Entry into India) Act, 1920 or from the application of the provisions of the Foreigners Act, 1946 or any rule or order made there under, shall not be treated as illegal migrant for the purposes of this Act.

ITERPRETATION BY AUTHOR                                                                   

Ø  Specific Community Included in the Amendment

. Hindu

. Sikh

. Buddhist

. Jain

. Parsi

. Christian

Only Community has been excluded from the Amendment is MUSLIM 

·        Reason why Government has excluded Muslims in the Amendment.

According To Parliamentary discussion the government has given the reason that only above mentioned categories are suffering  in the Islamic countries, there is no reason to believe that  Mohammadan can be suffered in Islamic countries.

·        Reasons of Controversy In India on Citizenship Amendment Act 2019

. In one of the Parliamentary discussion Our Home Minister Amit Shah delivered a speech   that Govt. is going to Associates National register of citizen with national population   register.

. If this happens then illegal Immigrants may be detained in detention centre

.In one of the speech our prime minister had said that we are not making any Detention Centre in India, However it has started in some states like Assam where GOVT is planning to make 10  Detention Centres

. In one of the public announcement and Interview with media channel our prime minister and home minister said that we are not linking NPR with NRC on 24/12/2019 (National population register), How ever in so many speeches and Annual Report of Home Ministry provides that NPR is first step to NRC.

. There is a rumor in the public of nation that if NRC link NPR and CAA 2019, We have to show our various documents to prove our Citizenship Such as, Birth Certificate, Proof of grand parents Nationality. if somebody not possess such documents then he shall be excluded from Indian citizenship or may be treated as Illegal Immigrants. 

. Another Reason of mislead ed public intentions might be that In one interview with media channel  our Home Minister had said that any person holding documents such  as Aadhaar Card, Passport, Voter Id Card, Pan Card shall not be counted for the purpose of Indian citizenship.

. Few out of the Crowd In the protest are alleging that Our resources will be over exploited to the extend  as Indian Government is not capable to full the need of exiting citizens along with it will affect other areas such as employment condition of the country. 

. And rest doesn’t know why they are protesting.

POSITIVE SIDE OF  CITIZENSHIP AMENDMENT ACT 2019

- Those immigrants who are suffering in various country will get easily Indian Citizenship under new Act

-The Criteria for Citizenship has been reduced to 5 years from 10 years.

- Govt. can easily recognize those who are living in India unlawfully.

OPINION OF AUTHOR

- While amending Citizenship Act government should have been mentioned Prosecuted minorities instead of mentioning specific communities for giving citizenship in India.

Rest you decide whether Citizenship Amendment Act 2019 and NRC is good or bad.

By LAWgicAL ARUSH

  

 

 

Basic Legal Rights that every body must know

There are many laws in india that everybody dont know. Our constitution has given so many right which are very common and can help you to be a smart citizen in year 2020

1. As per section 46 of civil procedure code 1973 and chapter 5. No women can be arrested before 6 A.M and After 6 P.M in the evening.However for arresting in menawhile time only a lady officer is required unless until a serious offence has been occured in that case male police officer can arrest only with the warrant issued by magistrate

2. As per section 166A of indian penal code 1860, if any police officer in charge refused to lodge a FIR in that case heor she could be jailed from 6 months to 1 year.

3.As per Indian serius act 1887 No Hotel whether 2 star or 5 star can prohibit to anybody for drinking any portable water (water supplied in glass) or using washrooms.

4.As per domestic violance act 2005. If any major boy and a girl living in 'live in relationship' and they got any baby that is completely legal and the born baby shall have right to claim the assets of their parents

5.As per matrinity benefits act 1961. No company can fire any pregnant women, if any one do so in that case it may be punishable maximum upto 3 years of imprisonment

6. As per income tax act 1961.In case of tax violations the tax collection officer has right to arrest the assesse, however prior notice is required to be served to assesse, if no notice served generally can not be arrested and only the tax commissioner has right to decide how long assesse will be in custody.

7.As per Citizen  charter ( Indian oil corporation website). if any blast caused in domestic gas cylinder while cooking, in that case that particulare gas agency has to pay 50 lakh rupees claim to victim or his family. However for getting claim victim or any heirs has to lodge a FIR to police and that FIR has to be submited to gas agency

8.As per Maximum Retails price Act 2014. No shopkeeper can charge more than maximum retail price printed on that product. However customer has right to bargain below to MRP (maximum  refails price)from shopkeeper.

9.As per section 294 of Indian penal code 1860. If any person found doing obscene activity in public place such person can be imprisoned for 3 month. However as per one of the landing Supreme court judgement doing kiss and hugs at public place is not material obscene activity.

10.As per section 14 of Delhi Rent Control  Act 1958. In case of delhi no landlord can force fully vacates the house from tenant. Before vacating the property a prior notice to tenant is required.

Thanx for your patience. Stay tuned.

LAWgicAL ARUSH.