Legal Aspects of Business

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 Question 1: Company Law

1. Chronological procedure of incorporating a company

Step One: reservation of businesses’ name under spice or RUN

The initial step in the process of incorporating a business is to reserve the name of the

company. Run and spice are two fundamental ways to reserve a company's name. Applicants can

use RUN to check whether or not one's new company's name is already taken and then apply for

a desired name for the firm via an online form on the Ministry of Corporate Affairs website. All

naming convention rules must be adhered to by the applicant, who must give two names in

preferred order.

Once the MCA has approved a business's name, the applicant has twenty days to

complete the other formalities necessary to register the firm. The ministry of corporate affairs

offers access to the RUN online services. The MCA performs three checks before approving a

business's name. First, there should be no other business with the same name. Second, no one

should be offended by the name. Lastly, the company’s name should not infer any link with the

state’s administration or government (LegalRaasta, 2017).

Another way to finalize the name is by filling the spice-32 form, but the applicant can

redo the documentation process if rejected. The applicant is supposed to select the names of the

businesses’ directors. The names of more than two directors are required for a private limited

business.

Step two: obtaining a certificate of digital signature

 The next step is to procure a digital signature certificate for the applicant's private limited

business once the business name has been authorized by MCA and registered. Every piece of

vital data concerning the registered signatory, including name, phone number, email, and

address, is stored in a digital signature certificate (Toppr-guides, 2018).

Step three: Director Identification Number (DIN) application

A registered firm's directors are assigned a director identification number (DIN), which

serves as their sole means of identification. Form DIR-3 is then created once the Registry has

acknowledged the firm's DIN (Mancuso, 2021). It is vital to note that the business's name can be

accepted before the application of a DIN, which takes around seven to eight days to be activated

and accepted.

Step four: formulating a memorandum of association (MOA)

As a business's MOA is like a Constitution, it details all the firm's stakeholders and

directors and their connection to the firm. This document outlines the company's mission, its

assets and liabilities, and the environment in which it operates. In some cases, it is referred to as

a business charter. ROC Compliance in most nations like India requires the MOA to be filed as

well as articles like MGT-7 and AOC-4. The Ministry of Corporate Affairs (MCA) developed a

web-based filing for business registration in an effort to make incorporation of the company's

compliance easier (LegalRaasta, 2017). The Memorandum of Association is further divided into

five clauses

name, object, capital, liability, and registered office clause.

Step five: creating articles of association (AOA)

 In order for a company to exist, it needs to have a set of rules and a purpose in place, and

these regulations and purposes are outlined in the company's articles of association (AOA). AOA

it outlines the procedures for selecting directors and maintaining financial records for the

company. The members' obligations, rights, and responsibilities are discussed in detail in this

article. It applies to everyone in the firm, regardless of their position.

Step six: Power of Attorney

The applicant hires an attorney with the capacity to act on behalf of the firm to complete

the legal and complex documentation processes of incorporation. There will be no limit to what

the attorney can do when it comes to making changes to the records that have been presented to

the registrar.

Step seven: payment of registration charges

During the company’s incorporation procedure, a fee is paid to the Registrar of

Companies. Corporations also have a share capital, which is determined by their nominal capital.

Step eight: incorporation of company application

In accordance with Section 7 of the 2013 Companies Act, an application for the

incorporation of a company must be submitted to the register of companies in whose jurisdiction

the business address is located once all required documents have been prepared and finalized

(Khanuja, 2021 p. 327). The registrar of companies issues a certificate of incorporation once the

proper procedures have been followed and the company's legitimacy has been established.

Mariam should incorporate the company using the outlined manner.

2. Documents and information to be presented to the company house

 Form IN01 and the Memorandum and Articles of Association are the primary documents

an applicant must submit to Companies House. In addition, there should be an annual return and

a list of the organization's members and its owner. Finally, there should be annual accounts and

confirmation statements notifying the company's house of modifications of the private company.

3. Mariam's responsibilities as a director of the business

A limited corporation selects a director to supervise the firm's day-to-day finances and

operations, ensuring that all lawful filing necessities are met. A corporation director is expected

to act lawfully and fairly, and to reach decisions that are in the corporation's best interests. As a

director, Mariam should operate with a designated rule to promote the business's success. She

should make independent decisions on what to do, ensuring tasks are completed within the

specified time. Mariam should also avoid conflicts of interest and persistently practice diligence,

care, and reasonable skill. Furthermore, she is not supposed to accept benefits from third parties

since there is an expense.

Question 2: Employment Law

1. Employment contract information

An employer and its employees or labor union agreements are known as employment

contracts. It outlines the obligations and roles of both the employer and the worker. It enables

both parties to comprehend their responsibilities and employment terms clearly and concisely.

When they sign their contract, workers can feel confident that they are working for an

established business with clearly defined obligations and terms of employment (Mokhinur, 2020

p. 78). It gives the employer peace of mind knowing that the employee is completely aware of

one's responsibilities and has promised to follow through with them.

 Attempts to safeguard business clients and intellectual property may also be included in

the contract for the employer. An area where an employee cannot work for a certain period is

known as a "radius restriction." It will be considered too restrictive if the restriction on the radius

is too wide or too long in duration. Misuse or theft of intellectual property is a risk associated

with employment contracts, which is why they safeguard customer information such as service

records and personal contact information. In addition, the contract stipulates a period during

which a person cannot advertise while employed. During this time, they are prohibited from

attempting to solicit clients and employees from their current employer.

As a result of Mariam's recent incorporation of a business, she has just been employed for

a short time. The following information must be included in her employment contract in order

for her business to run properly and without issues. To begin, Mariyam should provide some

details about the job information. The basic components of the job information are the job

designation or title, job description, and skill and educational qualifications.

When it comes to salary and benefits, Mariyam should discuss them as well. There must

be a statement of the overall annual compensation, as well as the hourly rate, health benefits,

incentives, and bonuses. Staff is given a certain number of days off per year; therefore, Mariyam

should mention that as well. Vacation time, sick time, and total leaves must be included in the

job contract. Additionally, Mariyam should mention the work timetable. The working hours. It's

also a good idea to include the length of time staff has worked for the company and any policies

about worker retirement.

Mariam needs to explain the duties of the workers, including information security and

privacy. The policy for terminating employment and any other relevant legal data should also be

included in the employment contract. Moreover, the length of time a worker commits to work for
a business is stated in an employment agreement. In other circumstances, it may be a contract for

a specific period of time. Sometimes a minimum time frame is established, with the option to

extend that time frame.

A noncompete agreement or noncompete clause may be included in a contract at some.

This agreement states that after leaving the company, the employee will not work in positions

that put them in rivalry with the company, per this agreement. A noncompete clause is frequently

required of employees to sign, but it can also be a part of the employment contract. With the

information provided, Mariam will be able to create an excellent employment contract.

2. Unfair dismissal and Ashley's dismissal

Ashley's job can be terminated legitimately, and the provision includes being unable to

accomplish work adequately; for instance, a new computer system may not be able to get along

with coworkers because of the employee's lack of familiarity with it. The owner should pursue

disciplinary measures, such as warning employees that their performance is inadequate.

Employers should also provide employees with opportunities to improve through training.

There is no justifiable cause for firing someone. Disciplinary or firing procedures are not

followed in this case (or the statutory minimum dismissal procedure in Northern Ireland).

Mariam can give Ashley a notice period to ensure that he fulfills his responsibilities under the

terms of his employment contract, or she can dismiss him on fair grounds if he fails to do so.
 References

Khanuja, A.S., 2021. Understanding the Doctrine of Ultra Vires under the Companies Act, 2013.

Supremo Amicus, 24, p.327.

LegalRaasta (2017). Memorandum of Association (MOA) In India. [online] LegalRaasta.

Available at: https://www.legalraasta.com/memorandum-of-

association/#:~:text=What%20is%20the%20Memorandum%20of [Accessed 21 Jun.

2022].

Mancuso, A., 2021. Incorporate Your Business: A Step-by-Step Guide to Forming a Corporation

in Any State. Nolo.

Mokhinur, B., 2020. A THOROUGH REVIEW OF THE COMMON LAW CONCEPT OF"

ARBITRARY TERMINATION" AND" UNFAIR DISMISSAL"(including

DIFC&ADGM. Review of law sciences, (November Еxclusive issue), pp.77-89.

Toppr-guides. (2018). Incorporation of a Company: Steps Involved Under the Companies Act.

[online] Available at: https://www.toppr.com/guides/business-laws-cs/elements-of-

company-law/steps-in-incorporation-of-a-company/.

Vettori, S., 2016. The employment contract and the changed world of work. Routledge.