Name : Shakeel Ahmad Shah

Roll No. 540910912

Program MBA 3rd. Sem (Project
Management)
Subject Legal Aspects of Business,
set-1
Code MB0035

Learning Riyadh, Saudi Arabia

Centre

1.What is the process for an enterprise to get incorporated as a

company?

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 The term ‘company’ implies an association of a number of persons for
some common objective e.g. to carry on a business concern, to promote art,
science or culture in the society, to run a sport club etc. Every association,
however, may not be a company in the eyes of law as the legal import of the
word ‘company’ is different from its common parlance meaning. In legal
terminology its use is restricted to imply an association of persons,
‘registered as a company’ under the law of the land. The following are some
of the definitions of company given by legal luminaries and scholars of law:
“Company means a company formed and registered under this Act or an
existing company. Existing company means a company formed and
registered under the previous company laws.” – Companies Act, 1956 Sec.
3(i & ii)
An enterprise can be incorporated as a company if it has:
Focus: Good companies stay focused on what they know and can do well.
When companies search for new ideas, they often drift into unknown territory
and get in trouble. Good companies just keep growing and expanding into
familiar territory. Shutterfly is a wonderful example of a company that’s
growing, but it grows by expanding within the social expressions business,
helping communities of people share photographs in hundreds of ways.
Niches can be very large markets.
Execution: Satisfying a customer requires relentless attention to execution.
Building a company’s capability to deliver makes the difference between
turning a great idea into a business or failure. But execution is not just about
delivering a product. It’s also about service. Over the years, I have observed
that technology companies are particularly bad at recognizing and responding
to the service needs of their customers. Counter intuitively, high-tech
requires a lot of high-touch. Part search is a company that knows what it’s
doing with customer service, helping customers find what they need in an
ocean of millions of parts and accessories for consumer electronic products.
Part search has tamed chaos in its industry.
Inspiration: Smart companies engage all of their associates in building the
business, from idea creation though delivery. Ideas don’t just come tops-
down; they also come bottoms-up and from every other direction. Everyone
in the company feels that they own a piece of the action and are accountable
for how the company performs. The inspiration for a company starts at the
top, but good leadership drives that inspiration deep into the company by
engaging people broadly in decision-making. People are more than
mechanical parts of the enterprise, and the more they are allowed to see
customers, the better their business sensibilities.
Above all, it should follow companies Act.

2.Discuss in detail the clauses in the memorandum of association:

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 A memorandum of association is a standard document that states the
constitution of the company. Memorandum is one of the very essential paper
processes to incorporate a limited company
Clauses in the Memorandum:
a. Name clause:
The name of the company is mentioned in the name clause. A public limited
company must end with the word 'Limited' and a private limited company
must end with the words 'Private Limited'. The company cannot have a
name, which in the opinion of the Central Government, is undesirable. A
name, which is identical with or nearly resembles the name of another
company in existence, will not be allowed. A company cannot use a name,
which is prohibited under the Names and Emblems (Prevention of Misuse Act,
1950 or use a name, suggestive of connection to government or State
patronage.
The name of a company may be altered on obtaining prior approval of the
Central Government for the altered name, passing a special resolution at a
general meeting of the company to that effect and obtaining a new certificate
of incorporation, signifying the name change.
b. Domicile clause:
The state, in which the registered office of company is to be situated, is
mentioned in this clause. If it is not possible to state the exact location of the
registered office, the company must state it provide the exact address either
on the day on which commences to carry on its business or within 30 days
from the date of incorporation of the company, whichever is earlier. Notice in
Form no 18 must be given to the Registrar of Companies within 30 days of
the date of incorporation of the company.
Any change in the registered office must be intimated in Form No. 18 to the
Registrar of Companies within 30 days. The registered office of the company
is the official address of the company where the statutory books and records
must be normally kept. Every company must affix or paint its name and
address of its registered office on the outside of the every office or place at
which its activities are carried on. The name must be written in one of the
local languages and in English.
 Change of the registered office within the same city or village or town
may be done by a board resolution.
 Change of the registered office from one place to another place within
the same state may be done by special resolution and obtaining
approval of the Regional Director.
 Change of Registered Office from one place to another place in another
state may be done by special resolution and obtaining order of
Company Law Board on petition being made.
c. Objects clause:
This clause is the most important clause of the company. It specifies the
activities which a company can carry on and which activities it cannot carry
on. The company cannot carry on any activity, which is not authorized by its
MA. This clause must specify:
Main objects of the company to be pursued by the company on its
incorporation;

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Objects incidental or ancillary to the attainment of the main objects;
Any other objects.
In case the companies, other than trading corporations whose objects are not
confined to one state, the states to whose territories the objects of the
company extend must be specified.
The objects clause may be amended by special resolution at a general
meeting of members of the company.
d. Liability clause:
A declaration that the liability of the members is limited in case of the
company, limited by the shares or guarantee, must be given. The
Memorandum of a company, limited by guarantee, must also state that each
member undertakes to contribute to the assets of the company such amount
not exceeding specified amounts as may be required in the event of the
liquidation of the company. A declaration that the liability of the members is
unlimited in case of the unlimited companies must be given.
e. Capital clause:
The amount of share capital with which the company is to be registered,
divided into shares must be specified, giving details of the number of shares
and types of shares. A company cannot issue share capital, greater than the
maximum amount of share capital, mentioned in this clause, without altering
the memorandum.
f. Association clause:
A declaration by the persons for subscribing to the Memorandum that they
desire to form into a company and an agreement to take the shares place
against their respective name must be given by the promoters.

3. Discuss the need for development of cyber laws:

Cyber crime refers to all the activities done with criminal intent in
cyberspace or using the medium of Internet. These could be either the
criminal activities in the conventional sense or activities, newly evolved with
the growth of the new medium. Any activity, which basically offends human
sensibilities, can be included in the ambit of Cyber crimes.
Because of the anonymous nature of Internet, it is possible to engage in a
variety of criminal activities with impunity, and people with intelligence, have
been grossly misusing this aspect of the Internet to commit criminal activities
in cyberspace. The field of cyber crime is just emerging and new forms of
criminal activities in cyberspace are coming to the forefront each day. For
example, child pornography on Internet constitutes one serious cyber crime.
Similarly, online pedophiles, using Internet to induce minor children into sex,
are as much cyber crimes as any others.
Categories of cyber crimes:
Cyber crimes can be basically divided in to three major categories:
1. Cyber crimes against persons;
2. Cyber crimes against property; and
3. Cyber crimes against government.

IMPORTANCE OF IT ACT :

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The Information Technology Act:
 Enables Legal recognition to Electronic Transaction / Record
 Facilitates Electronic Communication by means of reliable electronic
record
 Provides for acceptance of contract expressed by electronic means
 Facilitates Electronic Commerce and Electronic Data interchange.
 Facilitates Electronic Governance.
 Facilitates electronic filing of documents.
 Enables retention of documents in electronic form.
 Where the law requires the signature, digital signature satisfies the
requirement.
 Ensures uniformity of rules, regulations and standards regarding the
authentication and integrity of electronic records or documents.
 Facilitates Publication of Official Gazette in the electronic form.
 Enables interception of any message transmitted in the electronic or
encrypted form.
 Prevents Computer Crime, forged electronic records, international
alteration of electronic records fraud, forgery or falsification in
Electronic Commerce and electronic transaction.

WHY THE NEED FOR CYBER LAW?

•  Flourishing of the Internet.
•  Greatest cultural, economic, political and social transformation in the
history of human society.
•  Complex legal issues arising leading to the development of cyber law.
•  Different approaches for controlling, regulating and facilitating electronic
communication and commerce

4.What do you mean by award with reference in arbitration:

Award means an arbitral award. It is a final decision or judgment of

the arbitral tribunal on all matters referred to it. An award in order to be
valid must be final, certain and must decide all the matters referred to. An
award by the arbitrator is as binding in its nature as the judgment of a court.
Arbitral award includes an interim award
There are two types of decisions to be made by the arbitral tribunal
i.e. decision on the merits of the dispute is to be made by the majority of
members of the arbitral tribunal but question of procedure can be decided by
the presiding arbitrator, if authorized by the parties or all members of the
arbitral tribunal. In the absence of such authorization by the parties or other
members of the tribunal, the decision on question of procedure is also to be
made by majority of members of the arbitral tribunal. In the absence of such
authorization by the parties or other members of the tribunal, the decision on
question of procedure is also to be made by majority of members of the
arbitral tribunal. The presiding arbitrator has not been given any special
power and be acts like any other arbitrator. All arbitrators have been given
equal power irrespective of mode of appointment.

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Essentials of an Arbitral Award
Section 31 deals with the form and contents of the arbitral award. The
provisions of Section 31 are discussed in the form of essentials which are as
under:
1. An arbitration agreement is required to be in writing. Similarly, a
reference to arbitration and award is also required to be made in
writing. The arbitral ward is required to be made on stamp paper of
prescribed value. An oral decision is not an award under the law.
2. The award is to be signed by the members of the arbitral tribunal.
However, the signatures of majority of all the members of all the
members of the tribunal are sufficient if the reason for any omitted
signature is stated.
3. Unless the agreement provides otherwise, the arbitrator must give
reasons for the award. Thus, the making of an award is a rational
process which is accentuated by recording the reasons. However,
there are two exceptions where award without reasons is valid i.e.
(a) Where the arbitration agreement expressly provides that no
reasons are to be given, or
(b) Where has been under section 30 of the new Act i.e. where the
parties settled the dispute and the arbitral tribunal has recorded
the settlement in the form of an arbitral award on agreed terms.
4. The award should be dated i.e. the date of the making of the award
should be mentioned in the award.
5. The arbitral tribunal shall state the place of arbitration in the
award.
6. The arbitral tribunal may include in the sum for which award is
made, interest up to the date of award and also a direction
regarding future interest. The rate of interest shall be eighteen per
cent.
7. The award may also include decisions and directions of the
arbitrator regarding the cost of the arbitration.
8. After the award in made, a signed copy should be delivered to each
party for appropriate action.
9. The arbitral tribune may, at any time during the arbitral
proceeding, make an interim arbitral award on m=any matter with
respect to which it may make a final arbitral award.

Finality of Arbitral Awards (Section 35)

An arbitral award shall be final and binding on the parties and persons
claiming under them respectively. Now, under the new Act, by virtue of
section 35 and the Act, the award made by the Arbitrator shall be fine and
binding on the parties itself and shall be decree without being made decree
by the court.

5.How is consumer defined in the consumer protection act? Discuss

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 Consumer protection laws are designed to ensure fair competition and
the free flow of truthful information in the marketplace. The laws are
designed to prevent businesses that engage in fraud or specified unfair
practices from gaining an advantage over competitors and may provide
additional protection for the weak and those unable to take care of
themselves. Consumer Protection laws are a form of government regulation
which protects the interests of consumers. For example, a government may
require businesses to disclose detailed information about products—
particularly in areas where safety or public health is an issue, such as food.
Consumer protection is linked to the idea of "consumer rights" (that
consumers have various rights as consumers), and to the formation of
consumer organizations which help consumers make better choices in the
marketplace.
Consumer is defined as someone who acquires goods or services for
direct use or ownership rather than for resale or use in production and
manufacturing.
Consumer interests can also be protected by promoting competition in
the markets which directly and indirectly serve consumers, consistent with
economic efficiency, but this topic is treated in Competition law.
Consumer protection can also be asserted via non-government
organizations and individuals as consumer activism.
Consumer is a broad label for any individuals or households that use
goods and services generated within the economy. The concept of a
consumer occurs in different contexts, so that the usage and significance of
the term may vary.
In economics and marketing
Typically when business people and economists talk of consumers they
are talking about person as consumer, an aggregated commodity item with
little individuality other than that expressed in the buy/not-buy decision.
However there is a trend in marketing to individualize the concept. Instead of
generating broad demographic profiles and psycho-graphic profiles of market
segments, marketers have started to engage in personalized marketing,
permission marketing, and mass customization.
There is increasing backlash from the public over use of the label
"consumer" rather than "customer", with many finding it offensive and
derogatory.
In law and politics
The law primarily uses the notion of "consumer" in relation to
consumer protection laws, and the definition of consumer is often restricted
to living persons (i.e. not corporations or businesses) and excludes
commercial users. A typical legal rationale for protecting the consumer is
based on the notion of policing market failures and inefficiencies, such as
inequalities of bargaining power between a consumer and a business. As of
all potential voters are also consumers, consumer protection takes on a clear
political significance.
Concern over the interests of consumers has also spawned much
activism, as well as incorporation of consumer education into school

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curricula. There are also various non-profit publications, such as Consumer
Reports and Choice Magazine, dedicated to assist in consumer education and
decision making, and Consumer Direct in the UK.
In India, the Consumer Protection Act 1986 clearly differentiates a
consumer as consuming a commodity or service either for his personal
domestic use or to earn his livelihood. Only consumers are protected as per
this act and any person, entity or organization purchasing a commodity for
commercial reasons are exempted from any benefits of this act.
Furthermore, Indian case law has quite a few references on how to
distinguish a consumer from a customer.
In intelligence studies
Within intelligence studies, the concept of "consumer" refers to the political
staff consuming and requesting intelligence.

6. Undertake a survey of 20 shops and write a report on the

provisions being maintained in these shops as per the Shops and
Establishment Act:
On making a survey on 20 different shops coming under shops and
establishments acts, the important findings are summarized:
-To provide statutory obligation and rights to employees and employers in
the un organized sector of employment, i.e., shops and establishments.

Scope And Coverage

- A state legislation; each state has framed its own rules for the Act.
- Applicable to all persons employed in an establishments with or without
wages, except the members of the employer's family.
- State government can exempt, either permanently or for a specified period,
any establishments from all or any provisions of this Act.

Main Provisions
- Compulsory registration of shop/establishment within thirty days of
commencement of work.
- Communications of closure of the establishment within 15 days from the
closing of the establishment.
- Lays down the hours of work per day and week.
- Lays down guidelines for spread-over, rest interval, opening and closing
hours, closed days, national and religious holidays, overtime work.
- Rules for employment of children, young persons and women
- Rules for annual leave, maternity leave, sickness and casual leave, etc.
- Rules for employment and termination of service.
- Maintenance of registers and records and display of notices.
- Obligations of employers.
- Obligations of employees.
When To Consult And Refer
- At the time of start of an enterprise.
- When framing personnel policies and rules

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