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Business Laws

 > Business Laws

Mergers: Tool to Survive the Second Wave of Covid19

The term ‘Merger’ is not defined clearly under any enactment. But can be defined as the voluntary amalgamation of two companies on broadly equal terms into one new legal entity. Mergers often lead to an increased value creation for the corporation. It is a way for the corporations to expand their reach, expand into new segments, or gain market share. How does a Merger Work?A merger is a voluntary combining of two companies legally into one legal entity. The companies should have similar sizes, values and customer bases to be a merger and not an acquisition. If both parties expect...

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Legality of Multi-Level Marketing (MLM) & Direct Selling Business in India: Lawyers Advice

With the growth of information technology, businesses also tend to follow the same trend up or down the business cycle. With more and more businesses moving online one area that has seen an exponential growth is Direct Selling. Direct Selling simply means selling of goods directly to the end consumers without the need of any intermediary or middleman. As per the reports of FICCI and KPMG in 2015, INR 75 Billion Market in India was of Direct Selling. There are two ways of Direct Selling: Single Level Marketing (SLM): In single level marketing direct sales are made in person to person...

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Three Important Steps before Outsourcing of IT Service & Work

A lot of IT related work is outsourced from the developed countries like US, UK, Australia etc to different developing countries and India ranks first in this. This entire outsourcing of IT work is done primarily for the two reasons i.e. easy availability of the skilled workforce in the developing countries and secondly due to the cost effectiveness. However, outsourcing of work sometimes creates more perils than benefits and thus both the parties i.e. the Service Provider and the Service Recipient should follow certain steps in order to enable smooth functioning of the entire process and reducing chances of friction. Thus,...

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Legal Challenges in Outsourcing of IT Services & Work

Outsourcing refers to the practice in business where a party is hired from outside the company to perform certain services and creation of goods which were performed in-house by the corporate’s employees and local staffs. It is a basically a measure undertaken by the corporate to cut the cost. Now, in the case of IT-services, we have witnessed an upsurge in the outsourcing process. However, there are some legal limitations and issues acting as an obstacle in outsourcing. It is very important to note that in case an organization or corporate is outsourcing to India, the same needs to be...

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Precautions to be taken before Outsourcing of IT Services & Work

Outsourcing refers to the practice in business where a party is hired from outside the company to perform certain services and creation of goods which were performed in-house by the corporate’s employees and local staffs. It is a basically a measure undertaken by the corporate to cut the cost. Now, in the case of IT-services, we have witnessed an upsurge in the outsourcing process. However, there are some legal limitations and issues acting as an obstacle in outsourcing. Precaution to deal with the Issue of TaxationIn the upcoming paragraphs, we shall discuss the precautions that may be taken to deal...

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Laws for Outsourcing of IT Service & Work

The business entities and firms are nowadays taking advantage of technology for models like offshoring so as to reduce their costs without a without a corresponding decline in quality. However, with the growth and development of technology the problem related to same is also growing by leaps and bounds. Most developed countries in the world, especially the USA are engaged in outsourcing majority of its industrial and trading contracts, offshore to developing countries like India to reap the benefits of cost effective and proficient work force. However, concerns like data confidentiality and security issues have emphasised the necessity for businesses...

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Personal Liabilities of a Director as per the Indian Companies Act of 2013

A company is a legal person that appoints directors as its agents to carry its business. Due to its separate legal entity characteristic, the company itself is responsible for liabilities arising from day to day activities being conducted. Personal liability of a director comes into picture when he/she breaches his/her duties while performing fiduciary activities. What do we man by the Fiduciary Duties of a DirectorDefining fiduciary: The term fiduciary revolves around trust. A person acting as a fiduciary puts the opposite party’s interests above his own and acts in good faith with a bona fide intention. Upon suggestions given...

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Laws on Mergers & Acquisitions (M & A) for Foreign Companies: Lawyers Advice

The term ‘mergers’ simply means merging of two entities to form one single entity. (A + B = AB). Whereas an acquisition is one entity completely acquiring the business/management of the other one (target). After the acquisition, the target’s business goes under the complete control of the acquirer. Cross-border Merger and AcquisitionDefining cross-border arrangement: When two businesses registered in two different countries come together to merge or one acquires the other, it is termed as a cross-border merger or acquisition. Here, the Indian company is a company registered under the Companies Act, 2013 and the foreign company is a company...

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