The Legal One

Digital lending has changed how we borrow money. Need cash? Open an app, enter some details, and within minutes, the money is in your account. No need to visit a bank, no need for piles of paperwork. But this convenience came with risks—hidden fees, high interest rates, and even harassment from loan recovery agents. To know more, read our latest newsletter. 👇

CSR: Not Just a Legal Obligation, But a Business Superpower! 💡 Imagine this: A company donates laptops to underprivileged students. Those students later become top professionals. Years down the line, one of them becomes a key decision-maker—and remembers the company that changed their life. That’s CSR done right! Corporate Social Responsibility (CSR) isn’t just about compliance. It’s about impact. Businesses with a Net worth of ₹500 Cr+, Turnover of ₹1000 Cr+, or Net profit of ₹5 Cr+ must contribute 2% of their net profits to CSR under Section 135 of the Companies Act, 2013. But let’s be honest—CSR is more than a rulebook. It’s a chance to: ✅ Build a brand that people trust and love ❤️ ✅ Stand out from competitors 🏆 ✅ Get media attention for good reasons 📢 ✅ Create a lasting positive impact 🌍 📌 The Board of Directors must ensure CSR funds are used wisely. If not spent, the unspent amount must be transferred to specific government-designated funds. 💡 The best CSR projects? The ones that align with your brand’s values and vision. Think tech firms supporting digital literacy, fashion brands empowering artisans, or food companies tackling hunger. 👉 Businesses that give back win more than just goodwill—they future-proof their success. Would love to hear—what’s the best CSR initiative you’ve seen? Drop a comment! 👇

Liquidating Business Assets in India? Here’s the Tax Angle You Can’t Ignore Selling off business assets? Brace yourself—because capital gains tax doesn’t just disappear during liquidation. But here’s the catch: under India’s insolvency law, tax dues don’t get first dibs on the liquidation proceeds. 📌 Capital Gains & Liquidation: Who Gets Paid First? Under the Income Tax Act, 1961, capital gains tax is payable on profits from asset sales. However, the Insolvency and Bankruptcy Code, 2016 (IBC) prioritizes payments in a structured order (Section 53), placing government dues—including tax—below secured creditors, workmen’s dues, and liquidation costs. The judiciary has been clear on this: 🔹 The Supreme Court (Monnet Ispat case, 2018) held that IBC overrides tax laws in insolvency matters. 🔹 The NCLAT (Om Prakash Agrawal case, 2021) confirmed that capital gains tax cannot disrupt the waterfall mechanism of IBC. 🚨 But what about TDS on Liquidation Sales? A tricky issue. Buyers are required to deduct 1% TDS (Section 194-IA, IT Act) when purchasing immovable property. But when liquidation is governed by IBC, TDS collection contradicts the Code’s hierarchy of payments. Courts have ruled that such deductions shouldn’t interfere with secured creditors' claims. 💡 So, what’s the bottom line? ✔️ Capital gains tax applies to liquidated assets, but it’s treated as an operational debt, not a priority payment. ✔️ Liquidators must follow IBC’s waterfall structure, ensuring tax dues don’t leapfrog secured creditors. ✔️ TDS rules must align with insolvency proceedings, preventing unnecessary deductions. For business owners, investors, and professionals handling insolvency, understanding this interplay is critical. Because in liquidation, who gets paid (and when) can make or break financial recoveries. What’s your take? Should tax dues rank higher in liquidation payouts? Let’s discuss. ⬇️

Fraud doesn’t knock—it sneaks in. And when it does, it can shake the very foundation of a business. Corporate fraud in India is more than just an operational risk; it’s a legal minefield. Financial misconduct, vendor collusion, accounting manipulations, and even fraud by business directors—each can lead to severe regulatory consequences, contractual disputes, and litigation. How Can Businesses Protect Themselves? 📌 Strong Internal Controls – Implement checks and balances to prevent financial mismanagement. 📌 Vendor & Employee Due Diligence – Conduct background verification before onboarding. 📌 Legal Compliance & Reporting – Ensure timely audits and legal compliance under laws like the Companies Act, 2013, and SEBI regulations. 📌 Whistleblower Mechanisms – Encourage internal reporting with anonymity and protection under the Companies (Auditor’s Report) Order, 2020. 📌 Third-Party Forensic Investigations – Engage professional agencies to conduct unbiased investigations and gather admissible evidence. Corporate fraud isn’t just an internal issue—it’s a legal liability. Stay vigilant, stay compliant. 🔍 Have you faced corporate fraud challenges in your business? How did you tackle them? Let’s discuss in the comments. #Knowyourlaws #corporatelaws #thelegalone #lawyersforbusiness #businesslaws #corporatefraud

Changing your brand’s name isn’t just about marketing; it’s a legal transformation. Every business must navigate regulatory hurdles, compliance requirements, and industry-specific laws to ensure a smooth transition. Here’s what you need to consider:

When Your Supplier Breaches a Contract: What Happens Next? Imagine this: You strike a verbal deal with a supplier to deliver materials by a set date. The day arrives—no delivery, no update, nothing. Now what? Even if the agreement was oral, a breach is a breach. But enforcing it? That’s where it gets tricky. 🔹 Consequences for the Supplier: ✅ Damages – They may have to compensate you for losses. ✅ Legal Action – Courts can enforce oral contracts if key elements (offer, acceptance, consideration) are clear. ✅ Reputation Risk – A supplier known for breaking deals loses credibility fast. 🔹 What You Can Do: 📌 Proof is Power – Emails, texts, invoices, or witnesses help prove the contract existed. 📌 Mitigate Your Losses – Find another supplier fast. 📌 Negotiate or Litigate – Some breaches can be settled, but legal options exist. 💡 Lesson? Always get it in writing. A solid contract beats verbal agreements any day. Have you ever faced a supplier breach? How did you handle it? Drop your thoughts in the comments! 👇 #ContractLaw #BusinessRisks #LegalTips #TheLegalOne

Missed the TDS Deadline? Here’s What It’ll Cost You! 🚨 Think filing TDS late is just a minor slip? Think again! The consequences can be severe, costing businesses more than just a penalty. Here’s what’s at stake if you delay: 🔹 Interest on Late Payment – 1% per month if TDS isn’t deducted on time, 1.5% per month if deducted but not deposited. This interest keeps adding up! 🔹 Hefty Late Filing Fees – ₹200 per day until the fee equals your TDS amount. A simple delay can burn a hole in your pocket. 🔹 Expense Disallowance – If TDS isn’t deducted/deposited, 30% of the expense (for domestic payments) won’t be allowed as a deduction while calculating taxable income. 🔹 Penalties Up to ₹1 Lakh – Filing incorrect or delayed returns can attract penalties between ₹10,000 and ₹1,00,000 under Section 271H. 🔹 Risk of Prosecution – In extreme cases, non-remittance of TDS can result in imprisonment for up to 7 years! 💡 Stay Compliant, Avoid the Headache! TDS isn’t just a tax formality—it’s a legal obligation that can make or break your financial standing. Ensure timely deductions, accurate filings, and avoid unnecessary penalties. Tag a business owner who needs to see this! #TDS #TaxCompliance #BusinessFinance #IndiaTaxation #TheLegalOne

Imagine this: Ananya, a talented marketing executive, dreads coming to work. Not because of deadlines or presentations, but because of Ravi, her senior colleague, who constantly makes inappropriate remarks and brushes against her “accidentally.” She’s uncomfortable, but she doesn’t know who to talk to. She fears backlash, losing her job, or worse—being labeled “too sensitive.” Now, what if this was happening in your workplace? Would your team feel safe speaking up? Would they even know where to go for help? Read our latest newsletter to know more.

Related-Party Transactions: A Necessity or a Risk? Companies often conduct business with their affiliates—holding companies, subsidiaries, key management personnel, or shareholder groups. These Related-Party Transactions (RPTs) are legally permitted but also pose governance risks if not handled transparently. 🔍 Why the Concern? RPTs can sometimes conflict with the interests of minority shareholders. Example? A subsidiary paying a royalty fee to its parent company that isn’t justified by actual benefits. 📜 Regulatory Oversight Companies Act, 2013 (Section 188) SEBI (LODR) Regulations, 2015 Income Tax & GST Laws (for taxation aspects) These laws mandate disclosures, approvals, and arm’s length pricing to ensure fairness. Yet, gaps in governance, documentation, and enforcement persist, making transparency a challenge. ✅ Best Practices for RPT Compliance ✔️ Strong approval mechanisms ✔️ Clear, well-documented transactions ✔️ Use of technology for tracking & reporting ✔️ Setting the right culture at the top With SEBI’s stricter RPT norms (effective April 2022), companies must rethink governance and compliance. Those that prioritize fairness and transparency will be the ones that thrive. 💡 How is your company managing RPT compliance? Share your thoughts! ⬇️ #Knowyourlaw #Knowyourrights #TheLegalOne #RelatedPartyTransactions #Corporategovernance

“I just read a terrible review about your company. Is it true?” That one message can shake your business. In the age of social media, a single defamatory post can spread like wildfire, damaging your reputation and years of hard work. But did you know that businesses in India CAN take legal action against false and defamatory statements? Here’s how you can protect yourself: 🔹 Fact-Check & Respond Smartly – Before reacting, verify if the claim is false. A calm, professional response goes a long way. 🔹 Monitor Your Online Presence – Regularly check what’s being said about your business. 🔹 Know Your Legal Rights – Under Sections 499 & 500 of IPC, defamation (false and harmful statements) can be punished. 🔹 Take Action When Needed – If someone spreads false claims, legal recourse is an option. You can send a legal notice or file a case. 🔹 Strengthen Privacy & Reviews – Encourage satisfied customers to share genuine reviews and use privacy settings on social media wisely. 🚀 Reputation takes years to build—don’t let one false statement ruin it. Stay aware, stay protected! Have you ever faced defamation in business? How did you handle it? Let’s discuss in the comments! 👇 #TheLegalOne #KnowYourRights