Companies Act 1956

Ministry of Corporate Affairs.

Objectives
The Companies Act was formed in 1956.
1. Management of the companies.
2. Control over companies.
3. Protection of Consumer's interest.
4. Inter-Corporate loans and investments.
5. Audit of Cost.
6. Investor's protection.
Application
Once registered company has its own separate existence independent of its members. It
means that a company can own property, enter into contracts and conduct any lawful
business in its own name. It can sue and can be sued by others in the court of law. The
shareholders are not the owners of the property owned by the company. Also, the
shareholders cannot be held responsible for the acts of the company.
The shareholders elect representatives from among themselves known as Directors to
manage the affairs of the company.
Private Limited Company : Private companies can be formed by at least two
individuals having minimum paidup capital of not less than Rupees one lakh. As per the
Companies Act, 1956 the total membership is restricted to 50. The shares allotted to its
members are also not freely transferable between them. These companies are not
allowed to raise money from the public through open invitation. They are required to
use Private Limited after their names.

Labour Laws
Ministry of Labour and Employment
Department of labour

Labour Acts
The Minimum Wages Act, 1948
The Payment Of Wages Act, 1936
The Payment Of Bonus Act, 1965
The Payment Of Gratuity Act, 1972
The Employees State Insurance Act, 1948
The Employee Provident Fund And Miscellaneous
Provision Act, 1952
Equal Remuneration Act, 1976
Contract Labour (Regulation And Abolition) Act, 1970
The Maternity Benefits Act, 1961

Factory Acts
Indian Factories Act, 1948
Workmen Compensation Act, 1923
Industrial Disputes Act, 1947
The Trade Union Act, 1926

Taxation Laws
Income Tax
The Income-Tax Act was formed in 1961; an enormously complex legislation running into
over 300 Sections with several subsections and it undergoes changes every year with
additions and deletions brought out through a Finance Act passed by the Parliament
Governing Body : Department of Revenue, Ministry of Finance.
Objective
The taxes are levied by the government form a pool of resources to be used of the
collective benefit of the public. As an exercise to finding collective solution for individual
Problems.
The government can mobilize resources by imposing taxes on the privileged ones. The
taxation structure of the country can play a very important role in the working of
our economy.
Application
Broadly, income has been divided into five categories:
I. Income from salary
II. Income from house property
III. Profits and gains of business or profession
IV. Capital gains
V. Income from other sources (including dividends, interest from securities, interest
income and income from winning of lotteries).

Central Excise
The levy of Central Excise duty is governed Central excise Act , 1944. Excise Duty is
an indirect tax levied on the manufacturer the moment the process of manufacture is
complete.
Objectives
1. To collect excise duty on manufactured goods more conveniently
2. To reduce collection costs
3. To control wasteful expenditures
4. To avoid tax evasion by appropriate control measures

5.
6.
7.

To promote industrial growth in backward areas

To support local industries
To collect high revenues

Governing Body: The Central Board of Excise & Customs (CBEC) , Ministry of Finance.
Application
Excise duty applies to the manufacture of dutiable goods. The liability arises upon
manufacture which may well include intermediary stages of production of final
product. However, for ease of collection, duty is payable at the time of removal of goods
from the factory.
In the year 2000 existing three rates of excise duty were converged into a
uniform rate of 16 percent. This rate is called Central Value Added Tax (CENVAT). On a
few items however, special excise duty is levied.
Although India does not have a typical value-added tax system, under the
MODVAT (modified value added tax), a manufacturer can obtain credit for excise duty
paid on capital goods and on notified inputs used in the manufacture of final products.
Credit is also available for Additional Customs Duty (Countervailing Duty) paid on
imported capital goods and inputs.

Customs Duty
Formed as The Customs Act, 1962 ,Customs Duty is a type of indirect tax levied on
goods imported into India as well as on goods exported from India. Taxable event is
import into or export from India. Custom duty besides raising revenue for the Central
Government also helps the government to prevent the illegal imports and illegal exports
of goods from India.
Governing Body: The Central Board of Excise & Customs (CBEC) , Ministry of Finance.
Objectives:
The customs duty is levied, primarily, for the following purpose:
1. Restricting Imports for conserving foreign exchange.
2. Protecting Indian Industry from undue competition.
3. Prohibiting imports and exports of goods for achieving the policy objectives of the
Government.
4. Regulating exports.
5. Prevent Smuggling.
6. Facilitate implementation of laws relating to Foreign Trade Act, Foreign Exchange
Regulation Act, Conservation of Foreign Exchange, Prevention of Smuggling Act,
etc.
Application:
Duties of customs are levied at the rate specified under the Customs Tariff Act, 1975.
The said Act inter alia specifies the various categories of import items in accordance
with the international scheme of classification of goods - Harmonised System of
Commodity Classification.
Customs duty is leviable on imports into India and is payable when the goods are
cleared. There are four slabs of
Basic customs duty ranging from 5 percent to 35 percent
Countervailing duty
Special additional customs duty

For the protection of domestic industries, the authorities are empowered to

levy protective and anti-dumping duties.

Central Sales Tax

Governing body : Department of Revenue , Ministry of Finance
Objectives :

Formulate principles for determining when a sale or purchase of goods

takes place in the course of interstate trade or commerce.
Provide for the levy of collection and distribution Of taxes on sales of
goods.
To Declare certain goods to be of special importance.
Authority to settle disputes in course of interstate trade
To Specify Restriction imposed by the State Govts.
Application:

He/she should carry on any business.

He/she should made a sale of any goods ( declared or undeclared)
He/she should made a sale to any buyer ( registered dealer or unregistered
dealer)
The sale should not take place in the course of import into or export from
India.
There should be a Dealer and such dealer must be registered under the
CST Act. CST no.
The sale should be made in the course of interstate trade or commerce
( i.e. the sale should not be a sale inside a state.
It is levied on Turnover, which in turn is computed on the basis of the sale
price.
It is payable by the dealer who makes the sale in the course of interstate
trade or commerce.
It is payable in respect of sale of goods effected by him during the year.
It is so payable to appropriate state in which the dealer has a place of
business.

State Laws
Karnataka Sales Tax or VAT
Karnataka Value Added Tax 2005

Every dealer whose

Total turnover exceeds or who reasonably expects his total turnover to
exceed two lakh rupees
As computed under the provisions of the Karnataka Sales Tax Act 1957 (Karnataka Act
25 of 1957), in the year ending shall be liable to be registered and report such liability
as may be notified by the State Government. This is known as TIN registration, issued
with a TIN No.

The tax shall also be levied on the turnover, and to be paid by every registered dealer
or a dealer liable to be registered, on the sale of taxable goods to him, for use in the
course of his business even with a person who is not registered under this Act.
Objectives :

Protect the revenue in a fair manner;

Ensure fair computation of tax payable and claim for set-off / refunds by dealer
Assist registered dealers in compliance of VAT law
Prevent evasion / avoidance of taxes

Governing Body: Department of Commercial tax, Govt of Karnataka

Application
In accordance with the provisions of this Act.

There should be sale of goods within the State; and such sale should be effected
either by the registered /required to be registered dealer.
Transfer of property in goods in the execution of works contract.
Transfer of property in goods while granting a right to use goods for any purpose.
Transfer of property in goods by the way of hire purchase, etc.

Environmental Laws
Environmental Protection Act 1986
They relate to the protection and improvement of the human environment and the
prevention of hazards.
Water, air and land
b) The inter-relationship which exists among and between,
i) water, air, land, and
ii) human beings, other living creatures, plants, microorganisms and property

The Atomic Energy Act, 1962

The Atomic Energy Regulatory Board (AERB), constituted under the Atomic Energy Act,
1962 by the Government of India, is entrusted with the responsibility of developing and
implementing appropriate regulatory measures aimed at ensuring radiation safety in all
applications involving ionizing radiation.
"Safety Code for Medical Diagnostic X-ray Equipment and Installations, AERB/SC/MED-2"
was issued by AERB in December 1986. This Code has been revised by a task group
(Task Group II) constituted by AERB.
Code refers to

Location
Installation Requirements
Hazard and Risk Management

Of any machinery or manufacturing plant involving ionizing radiation.

Special laws
Drugs and Cosmetics Act, 1940
Ministry of human welface
Originally this act covered only Drugs and Cosmetics manufacturers and Distributed ,
was amended to cover medical devices including implants. CDSCO regulates
manufacturing standards, testing , pre -market and pre-release approvals and licensing
of invasive high precision Licensed Medical Device and implant Manufacturing units in
Various State of India.

The Trade and Merchandise Marks Act, 1958

Ministry of Commerce and Industry
Statutory protection of trademark is administered by the Controller General of Patents,
Designs and Trade Marks, The law of trademark deals with the mechanism of
registration, protection of trademark and prevention of fraudulent trademark.[2] The
law also provides for the rights acquired by registration of trademark, infringements and
penalties.

THE DESIGNS ACT, 2000

Ministry of Commerce and Industry
This act provides to protect new or original designs so created to be applied or
applicable to particular article to be manufactured by Industrial Process or means.
Sometimes purchase of articles for use is influenced not only by their practical efficiency
but also by their appearance. The important purpose of design Registration is to see
that the artisan, creator, originator of a design having aesthetic look is not deprived of
his bonafide reward by others applying it to their goods.

What is meant by Intellectual Property ?

Ans. Intellectual Property is the Property, which has been created by exercise of Intellectual Faculty. It is the
result of persons Intellectual Activities. Thus Intellectual Property refers to creation of mind such as inventions,
designs for industrial articles, literary, artistic work, symbols which are ultimately used in commerce. Intellectual
Property rights allow the creators or owners to have the benefits from their works when these are exploited
commercially. These rights are statutory rights governed in accordance with the provisions of corresponding
legislations. Intellectual Property rights reward creativity & human endeavor which fuel the progress of
humankind. The intellectual property is classified into seven categories i.e . (1) Patent (2) Industrial Design (3)

Trade Marks (4) Copyright (5) Geographical Indications (6) Lay out designs of integrated circuits (7) Protection
of undisclosed information/Trade Secret according to TRIPs agreements.