Answer 1

INTRODUCTION

The Companies Act, 2013 was enacted to make conducting business in India easier. The Act
went into effect in India on September 12, 2013. This Act established new ideas such as a one-
person corporation, raised the number of shareholders in a private company, established a
company law tribunal, and made CSR essential. The major goal of the Companies Act, 2013,
is to offer business-friendly corporate regulation, corporate and e-governance, CSR,
management, tough law enforcement, and minority protection. The Companies Act of 2012
came before the Companies Act of 1956, which came before the Joint Stock Companies Act
of 1844. This legislation was adopted by the Indian Parliament on Indian companies, and it
superseded the Companies Act, 1956. The Companies Act of 2013 comprises 470 sections and
seven schedules, and it is organized into 29 chapters. This Act applies to any business formed
under this legislation, insurance companies, banks, companies engaged in the generation and
supply of energy, and any other firm controlled by any particular Act.

CONCEPT AND ANALYSIS

According to the Companies Act of 2013, a company is defined as one that was formed under
this act or any earlier company legislation. Private companies, public companies, and one-
person companies are the three fundamental types of companies incorporated under the
Companies Act of 2013. This Company Act has the following features: distinct legal entity,
limited liability, artificial person, and common seal. A company can raise money in three ways:
through net earnings from operations, borrowing cash, or issuing equity capital. Capital, in
general, refers to the amount of money invested in a firm. It covers the money invested at the
start of the firm as well as all subsequent investments. Capital is necessary for all company
concerns, regardless of their type, size, or structure, and no organization can thrive without it.
Many firms fail simply because they lack sufficient funding.

The types of instruments mentioned under Companies Act are Equity instruments, Debt
instruments and Hybrid Instruments.

 Equity Instruments: Share has been defined vide Section 2(84) under Companies
Act, 2013. Companies that issue shares can raise funds for their activities. Because the
shareholder owns the firm, they carry all of its risks. These stockholders get paid last
 when it comes to distributing income and assets. Some of the key advantages of
generating funds through the issuance of shares include: no fixed obligation, no charge
on assets, favored by risk-taking investors, promotes financial health, no liability
payback, and so on. The money raised by issuing common or preferred shares is
referred to as a company's share capital. The stated share capital of a firm comprises
only payments for purchases made directly from the company.

The types of share capital are as follows:

 Authorised capital – The Authorized Capital is the total amount of capital that a
company can raise by issuing shares to shareholders.
 Issued capital – The amount of issued capital is the nominal value of the shares held
by the shareholders. It represents the face value of the shares issued to shareholders.
 Subscribed capital - The subscribed share is the capital in which investors promise to
invest when the shares are issued.

Shares represent a company's equity stock, and there are two types of equity instruments-
Equity shares and preferred shares.

 Equity shares – An equity share is also known as a stock. When we acquire stock in a
corporation, we become shareholders and share in its earnings and losses. Each
shareholder is given voting rights, which allow him to vote on significant corporate
issues. The dividend rate on equity capital is determined by the availability of excess
capital. The equity share capital of the corporation is permanent. It is only repaid when
the business is shut down.

 Preference shares - Section 55 of the Companies Act, 2013, read along with Rule 9
of the Companies (Share Capital and Debentures) Rules, 2014, authorizes a
company to issue redeemable preference shares. Preference shares, often known as
preferred stocks, are shares that allow owners to receive business dividends before
equity stockholders. Capital is reimbursed to preference shareholders prior to the
repatriation of equity capital when the firm is wound up. Preference shares do not have
voting rights. There are two kinds of preference shares: cumulative and non-cumulative,
participating and non-participating, redeemable and irredeemable.
Debt instruments – Debentures are defined under Section 2(30) of Companies Act, 2013.
They are long-term debt instruments that governments or companies issue to pay their financial
commitments. Debentures are the most popular form of borrowing money for major
organizations. It has a set interest rate that is paid yearly or semi-annually. Debenture holders
do not have voting rights. The different kind of debt instruments are debentures, bonds etc.

Some of the features of debt instruments are –

 Fixed rate of interest - Debenture holders are creditors of the corporation who get a
fixed rate of interest.
 Maturity - Debentures reach maturity after a set amount of time.
 Asset claims - Debenture holders have first claim to the company's assets. They must
be paid before any payments to preference or equity owners are made.
 Call feature - The call feature helps the corporation at the expense of the debenture
holders; normally, the call price is greater than the issue price.
 Control - Because debenture holders are debtors rather than owners, they have no voice
in how the firm is handled.

Hybrid Instruments: A recent breakthrough in equity financing has evolved to balance the
interests of startup entrepreneurs and investors. Subscribing to Convertible Instruments such
as Compulsory Convertible Preference Shares (CCPS) and Compulsory Convertible
Debentures (CCD) provides financing (CCD). These hybrid solutions are advantageous since
equity shareholding does not provide a guaranteed return on investment and does not provide
any unique rights or benefits. Furthermore, by issuing convertible securities, the founders retain
influence over the venture's management and decision making.

 Compulsory Convertible Debentures: A corporation may issue a CCD under Section

71(1) of the Companies Act of 2013. Given the nature of these hybrid instruments, the
Supreme Court of India concluded in Narendra Kumar Maheshwari v. Union of India1
that "any instrument that is compulsorily convertible into shares is ultimately viewed
as equity and not as a loan or debt." However, according to the RBI Guidelines, they
are considered as equity for all financial statements and records but not as Company
Share Capital. Thus, it can be argued that, while they give protection to investors in the
form of debentures, they are ultimately converted into shares.
 Compulsory Convertible Preference Shares: The key advantage of these shares is
that their conversion is tied to the company's performance. This allows private equity
 investors to balance any variance in the venture's valuation expectations, as the standard
valuation approach is inefficient in the case of start-ups due to the lack of a profit and
loss account to present.

CONCLUSION

The Companies Act, 2013, has made a significant contribution to the establishment of excellent
corporate governance in India. Transparency, accountability, and independence have been
developed in the company's activities since the passage of this act. Shareholders and debenture
holders both contribute to a company's success. When it comes to payment, debenture holders
have precedence, yet a corporation never fails to earn income for its shareholders as well. Both
shareholders and Debenture holders are clearly corporate investors. The power to vote is a
benefit provided to shareholders since they will profit the most from it. Shares and debentures
are both vital for a company's success; shares provide owners voting rights, whilst debentures
receive payment priority.
Answer 2

INTRODUCTION

An employee is somebody who is directly or indirectly involved with the work. The Natural
Disputes Act of 1947, the Trade Unions Act of 1926, and the Industrial Employment Act of
1946 were all enacted to control labor-management interactions. Indian labour laws are
designed to protect the rights of workers. According to Indian labour regulations, every
employee, regardless of gender, has the right to equal remuneration for the work they
accomplish. The Factories Act of 1948 established safety standards and promoted the health
and wellbeing of factory workers.

Workers' basic rights, such as workplace safety and the right to know about working dangers,
are protected, and employees have access to essential health and safety information. Some of
the basic expectations of an employee working in an organisation include being treated with
decency and respect, being paid the agreed pay on the agreed day and time, having the resources
to complete the job, and having safe working conditions. Employee welfare is equally vital for
both individuals and organisations since it guarantees a stress-free work environment for
employees and a favourable work environment for the company's success.

CONCEPT AND ANALYSIS

The major goal of labour laws is to promote the welfare of employees, provide them with better
medical facilities, defend their interests, and improve their social life. In India, labour laws are
classified into three types: those framed and administered by the Central Government, those
framed but administered by the State Government, and those framed but administered by both
the Central and State Governments.

The laws that are designed to promote the welfare of the workers and to provide various
benefits to the employees are as follows -

 Payment of Bonus Act, 1965 – Every industry and establishment is required by this
Act to pay a minimum bonus of 8.33 percent and a maximum bonus of not more than
20 percent of the wage.

 Payment of Gratuity Act, 1972 – This law applies to railways, ports, factories,
oilfields, plantations, mines, and retail establishments. Certain enterprises are required
 by Indian law to give a one-time gratuity to retiring personnel. The amount is
determined by the latest salary and is computed using the formula. Basic wage
multiplied by number of years of service completed.

 Maternity Benefit Act, 1961 – This Act mandates maternity leave for pregnant women
who work full-time. Maternity leave will be offered to female employees for a
maximum of 12 weeks.

 Code on labour laws – The four labour codes are the Code on Wages, the Code on
Industrial Relations, the Code on Social Security, and the Code on Safety, Health, and
Working Conditions. The Wage Code focuses on streamlining the payment of wages,
overtime, bonuses, and minimum wages. The purpose of the Industrial Relations Code
is to preserve workers' rights to form unions, to keep the workplace peaceful, and to
handle industrial disputes.

 Factories Act, 1948 – The Factory Act was created to ensure the safety, health, and
welfare of workers in the workplace. The fundamental goal of this Act is to control
factory working conditions, as well as the health, safety, and welfare of young people,
women, and children who work in factories.

 Industrial Disputes Act, 1947 – This statute provides that a worker must be provided
valid reasons for dismissal before being fired. A worker who has been hired for more
than a year can only be fired if the government or the relevant authorities grants
authorization.

 Minimum Wages Act, 1948 – Workers are guaranteed a minimum wage under this
Act. Wages are determined by the type of labour, and both the state and federal
governments have the authority to do so. The minimum wage varies by state and by the
federal government.

 Employees Compensation Act, 1923 – This law offers compensation to employees or

their dependents in the event of a personal harm caused by an accident or an illness
contracted while working. Compensation is received by the employee or dependents in
the event of the employee's disability or death.
  Employees provident fund and miscellaneous Provisions Act, 1952 - Employees
Provident Fund and Other Provisions Act of 1952 - According to this Act, every
employee contributes to the provident fund at the amount of 12% of their basic pay. It
is a law that requires organisations to give provident funds or pension plans to their
employees.

Real life instances where Indian employee related laws have ensured protection of welfare
of employees are:

 Dr. Rachna Chaurasiya vs. State of U.P. and others WRIT - A No. - 37049 of 2010:
In the matter of Dr. Rachna Chaurasia, the Division Bench of this Court instructed the
State Government to offer maternity leave to all females with full salary for 180 days,
regardless of the kind of work. The Maternity Benefit Act of 1961 is the name given to
this Act. It extends over the whole nation of India. All establishments with 10 or more
employees are subject to the Act. The state respondent was also ordered to offer 730
days of Child Care Leave to all appointed female workers with small children.

 Irel (India) Limited vs P. N. Raghava Panicker on WP(C). No.2254 OF 2020(F)

The Court determined that a trainee is not excluded from the definition of 'employee'
under the Gratuity Act, but only a 'apprentice' is. Only apprentices are excluded from
the definition of "employee" under Section 2(e) of the Payment of Gratuity Act, 1972.
The Act defines employee as "any individual." The Gratuity Payment Act of 1972 only
applies to apprentices, not trainees. The Kerala High Court has ruled that an employer
cannot deny his employee the benefit of gratuity under the Payment of Gratuity Act,
1972. The Court determined that the Gratuity Act is undeniably a welfare regulation
since it only forbids an apprentice from obtaining gratuity payments during his or her
training period. The opposing party's position that the Applicant is not entitled to a
training period gratuity is rejected.

CONCLUSION

Employees' rights and labour laws are strengthened to safeguard the interests of those who
work for the company. Employees are safeguarded, and this will be the case in the future.
Several rules have been enacted to ensure that employees preserve serenity and happiness in
order to live a stress-free existence. Employees have access to a variety of benefits, including
medical, workplace flexibility, life insurance, and retirement benefits, and they are highly
valued. Labor laws were enacted to safeguard and defend the rights and interests of employees
and to prohibit them from being exploited in any way. Minimum wage, workplace
environment, pension and provident fund, maternity leave, and compensation in the event of
an accident or death are all key aspects of labour legislation. The word "labour code" is equally
relevant. It is used to protect the employees and employers, from unfair means and exploitation.
Answer 3 (a)

A partnership is a commercial connection or agreement between two or more persons who have
agreed to divide the profits. A business partnership is analogous to a corporation. It doesn't
have any legal standing. The partners must come to an agreement in order to carry on the
partnership firm's business. A written or oral partnership agreement is possible. A partnership
deed is a written agreement that contains the following information: the name and address of
the firm and business, as well as the names and addresses of its associates. Capital, profit and
loss distribution, capital interest rates, loans, and withdrawals are only a few examples.

The partnership agreement must declare that the business will be conducted jointly by them all
or by some of them acting on their behalf. According to Section 13 of the Partnership Act of
1932, the partners have mutual agency. In a partnership, each partner acts as a principal and an
agent for the other partners. All other partners' activities are bound by the acts of one partner.
One of the oldest sorts of corporate connections is the partnership, which is also a type of
contract created as a consequence of an agreement. All partners' combined efforts result in the
effective accomplishment of assignments that are also easily affordable.

It is a commercial entity made up of two or more persons who have decided to collaborate in
order to run a business for profit. Professionals, small trade and commercial businesses still
favour partnerships, which have risen dramatically in recent decades and are now recognised a
legitimate business.

Rights of Partners under Indian Partnership Act are as follows:

 Right to share profits - It is also the obligation of all partners to share earnings and
losses. And these will be distributed according to the contract's percentages.

 Right to retire – A partner has the right to retire from a partnership. A partner may
retire with the consent of all partners or as agreed upon by the partners.

 Right to be indemnified - As a result of their business actions, partners may make

payments and incur obligations. They have the legal right to sue each other for damages
as a result of their actions.
 Right to get interest on advances – The capital that partners contribute does not earn
interest. Any additional advances to the firm will be subject to a 6% annual interest
rate.

 Right to use the partnership property – Each partner is presumed to have an equal share
of the partnership's property and is entitled to have it held and used solely for business
purposes. Partners should not treat it as their own.

 Right to get interest on capital – A partner may charge interest on capital if an

agreement or trade custom allows it. In this case, too, interest shall be paid solely from
profits.

 Right to participate in the firm's business – Corporate partners have the right to
participate in business operations and organisational decisions. Each partner has the
right to share his or her viewpoint before a decision is made.

 Right to be consulted - Each partner has the right to express himself or herself in front
of the other partners. If a disagreement emerges among the partners, a majority of the
partners may be able to resolve it.

 Right to books access - Each partner has the ability to inspect and copy the company's
books of accounts. This right applies to both active and dormant partners.

 Right not to be expelled – Unless the partnership agreement contains a language

allowing the majority of the partners the ability to dismiss him in good faith, every
partner has the right not to be expelled from the business.

 No new partner to be introduced - Without the permission of all individual partners,

new partners may not be brought into a partnership. They have the right to oppose to
such admittance unless there is an express contract enabling it.
 Alternative Dispute Resolution can resolve the differences without approaching
conventional court of laws.

Alternative Dispute Resolution (ADR) is a valuable tool because it allows for the
peaceful resolution of problems with a result that is acceptable to both parties. It offers
a number of advantages, including the fact that it resolves conflicts faster than courts.
It is a cost-effective way, and informal conflict settlement techniques are employed.
People can speak their minds without fear of legal retribution. They have the ability to
tell the truth without having to reveal it to a court. It avoids additional dispute and
preserves the goodwill between the parties.

Alternative Dispute Resolution (ADR) is a method of settling conflicts and

disagreements between parties by negotiating and discussing a mutually agreeable
solution. It is an attempt to create an alternative to the established means of resolving
disputes. The ADR mechanism aims to make it easier to resolve commercial disputes
and other situations when starting a dialogue or reaching a mutually acceptable solution
has proven difficult. Alternative Dispute Resolution procedures include arbitration,
conciliation, mediation, judicial settlements, and negotiations. Alternative Dispute
Resolution (ADR) is a valuable tool because it allows for the peaceful resolution of
problems with a result that is acceptable to both parties.

Answer 3(b)

Alternatives to the judicial system exist for settling conflicts. Alternative dispute resolution
(ADR) refers to a number of approaches for assisting disputing parties in reaching an
agreement without having to go to court or litigate the subject. Despite a few exceptions, the
majority of legal issues are resolved through alternative dispute resolution (ADR). Despite the
fact that the number of ongoing civil cases continues to climb, alternative dispute resolution
(ADR) has managed to lower the number of cases that wind up in court by more than 60%
since the 1980s. For both sides, ADR saves time and money. It keeps the court staff from being
overworked. In the absence of a major economic or societal upheaval, ADR's popularity is
expected to rise.

These strategies often entail the assistance of a third party in resolving disagreements. With
judicial approval, ADR procedures are routinely utilised in conjunction with the litigation
process. Using alternative dispute resolution in civil law has various advantages. ADR may be
used to resolve practically any disagreement, including those involving neighbours, business
partners, labour unions, and family law difficulties. ADR can assist in the resolution of issues
such as contract violation, salary negotiations, property disputes, and libel or slander.
Alternative dispute resolution is a sort of agreement. It includes a number of conflict resolution
strategies, such as alternate means of aiding individuals in settling legal matters without going
to court.

ADR provides numerous benefits to the parties in any civil dispute. The advantages of
resolving the differences without approaching conventional court of laws are as follows –

 Time spent in argument is decreased since reaching a final judgement takes less time.
 Lower expenses for conflict resolution- It costs less money.
 Parties may also be able to choose the persons or organisations who will decide the
disagreement.
 Flexibility-Parties have more leeway in selecting which rules will govern the
disagreement.
 An ADR system can also be used to control risk.
 • ADR is more suited to multi-party conflicts since all parties may present their views
in the same location and at the same time, as opposed to travelling to court repeatedly.
 • Confidentiality – ADR procedures are kept private. As a consequence, the parties can
reach an agreement to keep the acts confidential.
 • Maintains connections by encouraging individuals to collaborate instead than
establishing a winner and a loser.