In this article, Rajesh Tandon pursuing a Diploma in Entrepreneurship Administration and Business Laws from NUJS, Kolkata, elaborates on Structuring ideas for starting a chain of retail shop in India.

Retail trade is a process through which the goods are transported to final consumers. In other words, retailing consist of the activities involved in selling directly to the ultimate consumer for personal, non-business use. The retailer is an intermediary in the market, in general, because he is both market and customer, who sells to the last man to consume.

Retailer is a specialist who maintains contact with the consumer and the producer. The producers can sell their products directly to the consumers but such method may be pretty expensive and time-consuming and that is how the manufacturers depend on the retailers to sell their products to the ultimate consumers. In retail, dining, and many service categories, chain businesses have come to dominate the market in many parts of the world.

Walmart has become the worlds largest corporation based on gross sales since 2004. Similarly, a chain of restaurants is yet another example of chain stores built on a standard format to provide a standard menu and services. Demographics show a continues spur in the retail growth. Retail is India’s largest industry, accounting for over 10 per cent of the country’s GDP and around eight per cent of the employment. Retail industry in India is at the crossroads. It has emerged as one of the most dynamic and fast paced industries with several players entering the market. Although the organized retailing in India is coming up in a big way, the competition from the conventional stores somehow cannot be ignored because of various factors like reach, extending credit facility and other intangible factors like the human touch which are provided only by the conventional stores.

What has happened today is the format has changed and malls are the trendsetters in the field of retailing. One can see the changing trend from Haat and Melas to the rural malls like Chaupal Sagar launched by ITC, DCM Shriram groups i.e one-stop shopping destination. What has changed is the needs and wants of the customers. There are a  number of reasons for a change for chain of retail shops/stores. Some of these are like growing number of nuclear families, working women, greater work pressure, changing values and lifestyle, increased commuting time and influence of Western way of life.

The concept of retail store

The retail sector employers 10% of the workforce in India and because of the small size, the Indian retailers have small bargaining power. The key element in the retail concept in India is the Kirana store since there is unwillingness on the part of the housewives in India to go for purchasing for their daily needs to long distances. Generally the convenience and merchandise are the two criteria for selecting a store by the customers, be it choice of groceries, fruit outlets, chemist and lifestyle items. In last decade or so there has been a spread of retail chains in some format like supermarkets, department store where there is amalgamation of display shopping and entertainment under one roof.

Major type of retail stores

The evolution has taken place from hawkers and peddlers who have got no permanent place to well organised, settle retail shops. Some of the formats of the retail stores are as under :-

• Departmental Stores.
• Discount houses.
• Chain stores
• Online Retailing
• Telemarketing
• Direct Marketing.

What services does a retailer provide

The services which a retailer provides can be something like what has been listed under this para:-

• Anticipating the requirements of the consumers and thereafter supplying the right kind of goods at the reasonable price.
• A retailer provides for a large variety of merchandise of following types:-
  • Suitable Size.
  • Design
  • Seasonal Items ranging from Domestic Utensils,    household requisites to specialty goods.
• Carrying out service of bulk breaking like dividing large quantities into small units, such as individual cans, bottles, boxes, wrappers, packages, appropriate for consumer use.
• A retailer adds to the convenience and ease of consumer purchasing by offering convenient shopping locations, market formations and other services such as free parking privileges.
• A retailer provides for revolving credit plans, long-term investment programs and instructions in the use of goods.
• The products are stored in off-season and goods are transported to the places where they can be readily available to the consumer. This kind of arrangement is provided by the retailer.

The chain stores

The concern basically comprises of four or more stores which carry out the same kind of merchandise and are centrally owned, managed and usually supplied from one or more central warehouses. In Europe, the system is called as multiple stores and the Americans call it as ‘chain stores’. The idea is to open a large number of shops in the same city at different places to approach the customers and not to draw the customers. The example of this kind of retail system in India can be seen in case of Bata shoes, Usha sewing machines. Some of the advantages and disadvantages noticed in this kind of system are as under:-

Advantages

• Lower Selling Prices. This is basically because of economy in buying.
• Flexibility in working.
• Economy and advertising. The modus operandi is common advertising covering all units whereby it reduces the advertising expenditure.
• The concept of spreading the risk. A unit which is sustaining losses is shifted to some other place or even dropped.

Disadvantages

• Standardised Products. Only standardized products and thereby there is an inflexibility in providing the wide varieties like what may be available in Kirana shop of cheaper rate.
• The consumer services such as credit facility, door delivery are absent like what may be available in the Kirana shop.

Structuring the ideas for starting chain of retail shops in India.

Some of the ideas which may be useful for starting the chain of retail shops are as under :-

The success of the chain store depends on

Availability of the space.

• Special consideration should be there for showroom displaying the stores merchandise.
• The area.
• The community to be served.
• The ability to attract customers.

The basis of income groups.

• The chain shop should cater for middle and higher income groups.
• It implies the shop appearance, both interior and exterior over its competitor.
• It includes the allocation of space to various product lines, floor plan of the display tables and racks.

Competitors Strategies.    

Carrying out a comparative analysis and study of the past and current strategies of the competitors to achieve their objectives including target selection of customers and core strategy i.e the differential advantage on which the rival is competing.

Suppliers. A chain shop should obtain various products from suppliers so that as and when customers come and ask the products, the chain shop is in a position to sell these in time. Supply shortages prevent fulfilling the delivery promises. That is why it is preferable to buy from multiple stores to avoid depending on any one supplier who might raise prices arbitrarily or limits apply.

The role of intermediaries

Intermediaries are firms that aid the retail shop in promoting, selling and distributing its goods to final buyers. The role of intermediaries can not be negated in the retailing business. Some of these can be as under:-

Physical Distribution Firms.

These assist the retailer in a stocking and moving goods from their original locations to their destinations. Example warehouse firms.

Marketing services agencies.

These are agencies like advertising agencies, media firms and marketing consulting firms which assist the retailer in targeting and promoting its products to the right markets.

Financial Intermediaries.

These include banks, credit companies, insurance companies and other firms that help finance firm and ensure risks associated with the business.

Incorporating of an external macro environment into the market plan of the retail shops.

It’s extremely important to incorporate the external macro environment into the market plan of the retail shops. The macro external environment generally comprises of :-

Demographic Environment

It is the population which makes up the markets and demographic environment is never the same. The behaviour of consumers has a direct impact on the business. Therefore as far as retailing is concerned, what must be considered by the chain of retail shops is as under:-

• Size of the population.
• Geographical Distribution.
• Density.
• Mobility Trends.
• Social and Ethnic Religious Structure.

Political/Legal Environment.

It comprises of laws, government agencies and pressure groups which has got its impact on the businesses. The aim of such laws is to prevent the unfair retail practices. Therefore it is very important to have the knowledge of the laws affecting the business.

Technological Environment.

When we talk of technological environment in context of retailing it implies the aspects like Billing

• Billing
• Use of technology in backing of the products
• Use of technology in backing of the products

Economic Environment In this connection what is important is the purchasing power of the people. The economic conditions have got an impact on the business. For example, in the event of

In this connection what is important is the purchasing power of the people. The economic conditions have got an impact on the business. For example, in the event of increase in prices, consumers curtail or postpone their expenses. Conversely, when the prices are low consumers buy luxury products. When we talk of purchasing power of the people it implies:-

• urrent Income.
• Prices.
• Savings.
• Credit Availability.

Developing/acquiring the skills required for chain of retail shops . Certain essential skills which are required for chain of retail shops are as under :-

• Skills required determining the following :-
  • stock levels.
  • The product mix.
  • Brand mix.

Analysing the sales potential – Carrying out a due appraisal of the sales is extremely important because that that determines:-

• The Kind of Inventory to be purchased.
• The number of employees that are required.
• The money that can be expended on expenses.

Arriving at the right type of shopping outlet for establishing the chain of shops.

It is important to be clear about the kind of shopping outlet we want to establish for which the chain of shops should follow. What needs to be ascertained is whether the target market of retailing shop matches the profile of the shopping centre. The International Council of shopping centres (ICSC) has defined eight principal types of shopping centres as under :-

Neighbourhood Centre.

These are meant for creating the day-to-day needs of the consumers in the immediate neighborhood as per their convenience. It has got following features :-

• Configured in a straight line strip.
• The Gross Leasable  Area (GLA). It ranges between 30,000 to 1, 50,000 Sq ft on our site of 3 to 15 acres.
• Consist of stores offering drugs, sundries, snacks and personal services.

Community Centre

This basically provides for a wide range of apparel and soft goods. It has got following features:-

• Configured in a straight line strip or ‘L’ or ‘U’ Shape.
• The Gross Leasable  Area (GLA). It ranges between 1lakh to 3,50000 sq ft.

Regional center.

The regional centre basically caters for large merchandise. It has got following features :-

• The Gross Leasable  Area (GLA). It ranges between three lakh to 10 lakh square feet.
• It provides for a variety of :-
  • Apparel Stores.
  • Shoe stores.
  • Household stores.
  • Furniture stores.
  • Drug stores.
  • Supermarkets.

Super Regional center.   

Similar to regional centre but has got larger mechanise. It has got following features :-

• The Gross Leasable  Area (GLA). It ranges between eight lakh to 10 lakh square feet.
• May consist of four or more departmental store in the 10 lakh square ft or more.

Fashion/ specialty Centre.

The physical design of the Centre is very sophisticated, with the ditch décor and landscaping. This kind of fashion/specialty Centre is ideal for location with high income levels. Its characteristic features are :-

• Upscale Apparel Shops.
• Boutique Shops.
• Craft Shops.
• A Set of restaurants and entertainment.

Power Centre.

These are generally constructed as long strip centres with three fourths of the Gross leasable area devoted to three or more high volume discount oriented tenants.

Theme Festival Centre

The biggest appeal for this centre is for tourists. This kind of centre rather than having departmental stores and supermarkets comprises of the shops having a unifying theme in the architectural design and offers an unusual merchandise. It may cover an area of 5 to 20 acres.

Factory Outlet centre

Factory Outlet malls generally cater for middle and lower class social economic customers. It provides manufacturers to sell their products which were overproduced. The characteristic features of this kind of centre are :-

• Caters for :-
  • -specialty clothing.
  • -Sporting goods.
  • -Leather goods.
  • -Houseware items.
• Generally 30 to 40 miles away from the city.

Miscellaneous aspects

While creating the chain of shops, certain miscellaneous aspects which can be considered are

• Access Route to the shops. There has to be an easy access to the shop from the road, street and lane. This includes the pedestrian access, automobile and public transportation access
• Space and lightning for the signage.
• Space for Housing the business.
• Contiguous population that can connect with the shop and the merchandise.
• Attractive designs/display to enticing the location for a memorable shopping experience.
• Leasing and occupancy terms.
• Parking lot space.
• Visibility from the street.
• Shop design.
• Layout
• Advertising and Promotion.
• Theft prevention measures.

Breakdown of merchandise.

Following type of goods can be considered to be kept in these shopping outlets/chain of  shops

• Impulse Goods. The goods that the customers buying as unplanned measures such as
  • -candy sold at checkout counter.
  • -Videotape in the electronics section.
  • -Cork screw  kept in the wine section.
• Convenience Goods. Such goods will the minimum amount of thought is put in while purchasing like brand variety or whatever comes your way.
• Shopping goods.  These are those goods for which the customer is searching and ready to compare. These are those goods for which shopping may be for the best price or service.
• Speciality Goods. These are those goods for which the customers come all the way to purchase and will not accept a substitute for a particular specialty.
• Concept of complementary merchandise.

It would suffice to say that for locating the chain of shops it is important to take into consideration the type of population/customers which are available, the type of product, buying and sale potential, type of industry and associated market factors. The success of any retail operation depends upon selling the right goods at the right time and a right place to the consumers. What must not be forgotten in retailing is providing a value which is a combination of price and quality service and personalization.

Bibliography/ References.

https://www.vendhq.com/university/how-to-start-a-retail-business/decide-what-to-sell#content-top

https://www.entrepreneur.com/article/75912

https://www.quora.com/What-are-some-tips-for-starting-a-retail-chain-store-in-India

http://www.ehow.com/how_5654194_start-retail-chain.html

http://www.pondiuni.edu.in/storage/dde/downloads/markiii_rm.pdf

http://www.slideshare.net/sssatpathi/project-reportonoperationsretail

http://www.slideshare.net/hemanthcrpatna/a-project-report-on-retail-industry-in-india

http://www.slideshare.net/ranayogesh/rana-project-report-on-retail

In this article, Pratyusha Kar pursuing a Diploma in Entrepreneurship Administration and Business Laws from NUJS, Kolkata, elaborates on how to obtain Digital Signature.

Gone are the days when paper contracts were validated by putting handwritten signatures and then sent through couriers for approval, only to learn after a long interval that the entire contract was nullified for misplaced signature. Same is true for procurement of goods through tenders, trademark/patent filing, income tax filing and so many other applications. Presently digital signature solves these problems by getting legally valid signatures in an instant and virtually full proof manner by just few clicks from a desktop, laptop or even mobile phones.

What is Digital Signature?

Digital signature is a mathematical process which authenticates that the contents of a digital message or document have not altered in transit. Just like ink on paper signature attests a paper document, digital signature which is an electronic form of signature validates electronic documents. A digital signature scheme is based on three algorithms[1].

• A randomised key generation algorithm that generates a pair of public key and the matching private key from a set of possible secret keys.
• A signing algorithm returns a signature on the inputs of private key and a message. This pair of message and signature is now the validated version of the document.
• A verification algorithm verifies the authenticity of the signature based on the inputs of public key, message and the signature.

Thus digital signing of a document on the server causes encryption of the message, content using the public and private key pair. This generates a signature that can only be decrypted by the server’s public key and the client using the public key can validate the sender and the message. The messages may be e-mail, online order, watermark photograph, contract documents, online software etc. If the message arrives but the digital signature mismatch with the public key on the digital certificate, it may be concluded that the message has been altered.

The digital signature assures the authenticity (sender is confirmed as the signer), integrity (the digital information such as email messages, macros, or electronic documents are not changed or altered in transit since it is digitally signed), non-repudiation (singer cannot deny his association with the signed message) and notarization (digitally signed Microsoft office documents are having notarization validity when they are time stamped through a secured time-stamp server) of the digital information received.

To know more about Digital Signature please visit 

Digital Signature Certificate (DSC)

In order to generate digital signature, a signing certificate or digital signature certificate (DSC) is needed to prove the identity of the signer. DSC is the “electronic document that binds a public key using digital signature to an individual or a person, a computer or a network device”[2]. When a digitally signed message is sent, the DSC and the public key are also sent. In fact, the DSC contains the information like public key of the certificate owner, name, pin code, country & email address of the owner, validity dates, name of the certifying authority, certificate serial number, digital signature of the certifying authority, digital signature algorithm and any other custom information.

How DSCs are issued?

To build up trust in the electronic environment in India as per Information Technology (IT) Act 2000, Office of the Controller of Certifying Authorities (CCA) has been set up as the apex body of the Public Key Infrastructure (PKI). PKI, through aggregation of software, encryption technology and services, ensures security in network transactions and communications by attaching “digital signatures”. CCA is the Root Certifying Authority of India (RCAI) and under Section 21 of the IT Act is having the functions of licencing the Certifying Authorities (CA), monitoring and supervision of the activities of the CAs including issuance of digital certificates by the CAs for end use, issuance of Public Key Certificates (PKC) to the CAs, conflict resolution among CAs, Certification Practice Statement (CPS) approval, and auditing of the physical and technical infrastructure of the CAs[3]. Thus RCAI issues PKCs to the CAs and the CAs issue DSCs to the end users. However, CAs may create sub-CA to issue end certificate except code signing and time stamping certificate, which must be issued only by the CA. The DSCs are interoperable i.e. DSC issued by one CA can be used for different e-Governance applications.

Different Classes of DSCs

Based on the application and the assurance level needed, DSC may be of following three classes[4]:

Class 1 Certificate: Class 1 DSCs are issued to individuals or private subscribers mainly employed in banks and financial institutions. The employers while communicating with the employees can use DSC 1. It validates the user’s name and email address of the user from an explicit subject name within the certifying authority repository. During issuance of Class 1 Certificates a basic level of assurance applicable to electronic environment is maintained and it is considered that the users are not likely to be vicious while accessing private information.

Class 2 Certificate: Class 2 DSCs are issued to private individuals as well as business personnel where there are moderate risks and incidences of data compromise. DSC 2 can be used for e-filing of sales tax, income tax etc. The application with supporting documents is to be submitted both online and offline but no physical appearance before the registering authority is required to prove identity. These certificates validate applicant’s identity using well-accepted consumer databases.

Class 3 Certificate: Class 3 DSCs are issued to organizations, individuals and servers where high level of security is needed. It is a high assurance certificate and physical appearance of the subscriber before the certifying authority is needed to prove identity. It is issued where fraud risk, failure of security services and data threats are high. These certificates are mainly designed for e-commerce applications like e-tendering, e-auctions etc. As per application requirements the private key and the matching public key incorporated in the Class 3 certificate must be generated and preserved in a secured manner. For server certification registered domain name along with other documents need to be provided.

Types of DSCs

DSCs may be for individuals, servers and for encryption purposes. Individual DSCs are used to identify a person, Server DSCs are required to identify a server and the Encryption DScs are applicable to encrypt the message.

Procurement of DSCs

Six CAs in India are authorised by the CCA to issue DSCs[5]. Among them NIC (National Informatics Centre) issues certificates to the Government, PSUs and statutory bodies, IDRBT (Institute for Development of Research in Banking Technology) issues certificates to the banks and financial institutions and the other four namely Safescrypt, TCS, n(code) Solutions and eMudhra issue certificates to all other end users across all domains.

The DSC enrolment system requires four steps to follow[6].

1. Filling up of Application Form

First of all the applicant must have to fill up an application form available in the website of the CA for generating own key pair.

2. Submission

In the second step, the applicant will send the filled in form along with the required supporting documents and necessary fees to the Registering Authority (RA) to receive physically by the CA for verification. For Class 3 Certificates the applicant must physically appear before the RA during submission of application.

The application form is different for Indian individual, Indian organisation, bank, DGFT, Government, foreign individual and foreign organisation. The applicant must put the valid e-mail ID and its password must be remembered to retrieve the PIN.

After submission of the application form no changes in the form is entertained and the digital certificate user account must not be shared for security purposes as it permits to suspend, revoke, and to change password of the account.

After submission of the form the RA Administrator will verify all information from the supporting documents and then the DSC will be approved. Verification process may include verification of the attested documents submitted, verification of the identity credentials appearing on the Certificate, mobile verification etc.

3. Request Status

In the third step the request status can be viewed to know whether the certificate is generated, pending or rejected by the RA. If the status is pending then one has to wait until the RA process the request. In this case it is better to contact with the RA Administrator to confirm that all the documents have been received. If there is any lacking, it needs to be fulfilled.

4. Downloading of Digital Signature Certificate

The fourth step of downloading the Digital Certificate starts when the status shows ‘Certificate Generated’. It is to be kept in mind that for downloading the digital certificate in the computer, the same machine used to generate certificate request, the same browser (such as Netscape, Internet Explorer etc.), and the same computer account (such as Administrator, Guest etc.) are to be used.  To download, the Request Number hyperlink is to be clicked which in turn will display a new page showing Digital Certificate Information. On this page “Get Authentication PIN” button is to be clicked to enter the PIN available in the email. Now the Download button is to be clicked and the Certificate is to be installed. Once the Certificate is downloaded the following confirmation is displayed – ‘Certificate downloaded successfully’.

The Certificate is to be downloaded in the same machine (when USB token is not used) as cryptographic keys are generated and stored in the computer during enrolment which forms the technical basis for creation and use of digital certificate. If the computer is formatted and/or the reinstallation/up-gradation of the Internet Explorer (IE) occurs cryptographic keys and the DSCs are permanently lost.

This PIN is a unique code sent to the email ID at the time of Digital Certificate enrolment. If the email ID is not valid no PIN will be received. The email also gets the message that the certificate has been generated.

For downloading the certificate the following browser setting on the computer is needed to enable Active-X controls in the IE browser.

Open IE widow à go to Tools à Internet Options à Security à Custom Levelà Enable all five settings under ‘ActiveX controls and plug-ins’.

USB eToken

If option is given to procure USB eToken or Smart Card during enrolment of the Certificate, the DSC Enrolment Kit containing USB Token/Smart Cards and the Installation CD are to be collected from the RA for storing the private key. Hence, the device drivers need to be installed in the machine; for Smart Cards, a smartcard reader is to be installed and for crypto token, user computer is connected through USB interface.

If Smart Card or USB Token is used one can download the certificate in any computer where the USB Token is connected or the compatible smartcard reader is installed. The computer should have the following system requirements:

• Operating system should be windows 2000, XP or higher
• Browser should be Internet Explorer 5.5 or above

For installation of the eToken the following protocol should be adopted:

• Running of the Installation CD
• Install eToken driver after accepting License Agreement
• Insert USB token as soon as windows prompted
• Restart computer
• eToken properties can be seen from the start menu by clicking on ProgramsàeTokenàeToken Properties
• Now the eToken Password can be changed and the eToken can be renamed

Exporting and Importing of the Certificate

The Certificate may get deleted from the browser or from the token. Therefore, it is essential to keep its backup and for this DSC is exported from the IE Browser onto the Desktop or in a suitable storage as a ‘.pfx’ file using the following path:

ToolsàInternet OptionsàContentàCertificateàPersonal

The Certificate can then be imported from the backup file as and when necessary.

Conclusion

Digital signature is used to confirm the genuineness of a digital message and Digital Signature Certificate (DSC) uses digital signature to link public key with a specific individual or body. To generate digital signature we need DSC as it encrypts digital information and proves the identity of the user. Thus DSC is a tool to use digital signature authenticating digital information. Applicant for DSC generates key pair and sends the public key to the CCA licensed CA. CA signs on public key after checking applicant’s identification and issue certificate. Digital signatures are widely used to provide genuineness, integrity, and non-repudiation of digital communications and transactions.

References

[1] ^{Mihir Bellare & Phillip Rogaway, Introduction to Modern Cryptography, Chapter 12 Digital Signatures, p. 237 (Dec. 27, 2016), http://digidownload.libero.it/persiahp/crittografia/2005_Introduction_to_Modern_Cryptography.pdf.}

[2] ^{Certificate Tiger, Difference Between Digital Certificate And Digital Signature,  (Dec. 27, 2016), http://www.certificatetiger.com/News/difference-between-digital-certificate-and-digital-signature.htm.}

[3] ^{Department of Information Technology, Ministry of Communications and Information Technology, Government of India, Guidelines for Usage of Digital Signatures in e-Governance – v1.0,  (Dec. 27, 2016), www.daman.nic.in/downloads/2015/Guideline-for-digital-signature.pdf.}

[4] ^{Id, at 3.}

[5] ^{Government of India, Ministry of Electronics & Information Technology, Controller of Certifying Authorities, FAQ, (Dec. 27, 2016), www.cca.gov.in/cca.}

[6] ^{Procedure for issuance of Digital Signature Certificate – NSDL, (Dec. 27, 2016), https://nsdl.co.in/business/cirRec_18Mar08.doc.}

In this article, Pratiksha Gupta pursuing Diploma in Entrepreneurship Administration and Business Laws from NUJS, Kolkata, discusses how to start a religious ashram in India.

ORIGIN OF ASHRAM

The word ashram is derived from a Sanskrit word, “srama” which means “religious exertion”. Later in the twentieth century, English speakers expanded the expression “ashram” to include any kind of religious withdraw, paying little mind to category.

MEANING

According to Encyclopedia, Ashram is a place where a man or a gathering of individuals go to live independently from whatever remains of society and practice the Hindu religion.
In layman language, an ashram is a place where you get a shelter for yourself when you are not able to take care of yourself in the outside world. There are many types of ashrams overall and they serve different purposes, but their base remains the same, to provide inner peace.

Some of the already existing ashrams in India are Osho Ashram, The Art Of Living Ashram, Satya Sai Ashram, etc.

For starting an ashram in India, one needs to categorize under which Structure the ashram would fall. For eg-  Trust, Association, Society, NPO etc.

In my article, I’ll categorize the ashram as an NPO i.e. Non Profit Organization or also Non Governmental Organization and the procedure and steps required for starting and setting up the same in India.

WHAT IS AN NGO?

Non-Government Organizations also called as Non Profit Organizations are the associations not for profit. NGOs are the associations that work towards the promotion of certain causes or for the welfare of the society at large. These organizations have no interest in the profits they earn and focus only on the objectives which benefit the society and public at large.

Here is a brief step-by-step guide for starting your own NGO in India.

• The initial step is to take in the way of life of the general population you need to serve. The biggest explanation behind disappointment of any association is inability to impart adequately. This can be observed to be the wellspring of monetary issues, social issues, lawful issues and pretty much every other issue.
• Set out the issues that your NGO needs to address and recognize the mission, vision and point.
• Before enlisting the association, you need an administering body set up, that will be in charge of all activities and choices of the associations.
• Every NGO in India is required to document a trust deed/ Memorandum of Understanding/ ByLaws containing the information about the NGO, i.e. the name, registered address, goals and objectives, details of the members, procedures, rules and regulations governing the NGO.

NGO REGISTRATION PROCEDURE IN INDIA

In India, an NGO may be registered under the following Acts:

• Indian Trusts Act
• Societies Registration Act
• Section 25 of the Companies Act

Non-profit organizations in India

1. Exist independently of the state;
2. Are self-governed by a board of trustees or ‘managing committee’/ governing council, comprising individuals who generally serve in a fiduciary capacity;
3. Produce benefits for others, generally outside the membership of the organization; and
4. Are ‘non-profit-making’, in as much as they are prohibited from distributing a monetary residual to their own members.[1]

‘Charitable Purpose’  includes ‘relief of the poor, education, medical relief and the advancement of any other object of general public utility’.[2]
Thus, while doing any public charity, keep public welfare as the first priority and not the interests of an individual. Associations which do not have general society component –, for example, trusts for the advantage of labourers or workers of an organization – have not been held to be charitable.

TRUSTS REGISTRATION

Public Charitable trusts, as recognized from private trusts, are intended to profit individuals from an unverifiable and fluctuating class. In figuring out if a trust is public or private, the key question is whether the class to be profited constitutes a significant portion of people in general. There is no central law governing public charitable trusts, although most states have “Public Trusts Acts.”

A public charitable trust must register with the office of the Charity Commissioner having jurisdiction over the trust (generally the Charity Commissioner of the state in which the trustees register the trust) in order to be eligible to apply for tax-exemption).

In general, trusts may register for one or more of the following purposes:

• Relief of Poverty or Distress;
• Education Medical Relief;
• Provision for facilities for recreation or other leisure -time occupation (including assistance for such provision), if the facilities are provided in the interest of social welfare and public benefit; and
• The advancement of any other object of general public utility, excluding purposes which relate exclusively to religious teaching or worship.
  At least two trustees are required to register a public charitable trust.  In general, Indian citizens serve as trustees, although there is no prohibition against non-natural legal persons or foreigners serving in this capacity.[3]

MAIN TOOL

The main tool of any public charitable trust is the trust deed, where the aims and objects of the trust deed with the minimum and maximum number of trustees, and their appointment and removal procedures are to be mentioned. The trust deed should be signed by both the and trustees in the presence of two witnesses.

APPLICATION FOR REGISTRATION

The application for enrollment ought to be made to the authority having control over the locality in which the trust is tried to be enlisted.

After the details are being provided in the form about the trust which is being formed, the candidate needs to fasten a court charge to the shape and pay an enlistment expense which may run in an unexpected way, contingent upon the area and estimation of the trust office and trust property.

SOCIETIES REGISTRATION

The following societies can be registered under the Societies Registration Act:
‘charitable societies, military orphan funds or societies established at the several presidencies of India, societies established for the promotion of science, literature, or the fine arts, for instruction, the diffusion of useful knowledge, the diffusion of political education, the foundation or maintenance of libraries or reading rooms for general use among the members or open to the public, or public museums and galleries of paintings and other works of art, collection of natural history, mechanical and philosophical inventions, instruments or designs.’[4]

MAIN TOOL

The main tool of societies working as a Non Profit Association is the Memorandum Of Association which should contain the aims, objectives, rules and regulations, procedures in which the society is to be governed.
A society should have a minimum of seven managing committee members.

APPLICATION FOR REGISTRATION

The application for the registration of a society can be done either at the state level or at the district level.
The procedure for the registration of a society of a state is different with that of another state. But, generally, the registration application is submitted with the following  –

• Memorandum of Association
• Rules and regulations
• Managing committee members consent letters
• Duly signed authority letter by the managing committee members.
• An affidavit by the president of the society on non-judicial stamp paper, together with a court fee stamp.
• A declaration by the members of the managing committee about the usage of the funds only for the purpose of the aims and objects of the society.

All the previously mentioned documents which are required for the application for enrollment ought to be submitted in copy, together with the required registration fee.

SECTION 8 COMPANY – (OLD SECTION 25)

A section 8 company can be established ‘for promoting commerce, art, science, religion, charity or any other useful object’, provided the profits, if any, or other income is applied for promoting only the objects of the company and no dividend is paid to its members.[5]

MAIN TOOL

The main tool for Section 8 Company is the Memorandum of Association and the Article of Association.

APPLICATION FOR REGISTRATION

1. An application must be made for accessibility of name to the recorder of organizations, which must be made in the form no. 1A, together with a mentioned fee.
2. Once the accessibility of name is affirmed, an application ought to be made in keeping in touch with the regional director of the organization law board. The application ought to be joined by the accompanying reports:

Three printed or typewritten duplicates of the update and articles of relationship of the proposed organization, properly marked by every one of the promoters with full name, address and occupation.

1. An advocate or a charted accountant’s declaration that the memorandum of association and the articles of associations have been drawn up according to the provisions of the Act and no rules and regulations contravene any of the provisions of the Act.
2. A statement showing the detailed information about the assets and liabilities of the company as on the date of application, or within seven days of said application.
3. A declaration of the person who is making the aforesaid application that he is of sound mind, not an undischarged insolvent and not convicted in any of the court for any kind of offence under section 203 of the Companies Act, 1956 for appointment as a director.
4. The candidates must also submit a copy of the application and all the other relevant document required for the registration of the company which was filed before the regional director of the company law board to the Registrar of Companies.
5. The candidates must publish the notice atleast once in the newspaper which is in the language of the district where the registered office of the company is situated and atleast once in the English newspaper formulating in that district where the registered office is located.
6. The regional director may, after considering the objections which is received within 30 days from the date of publication of the notice in the newspapers, and after consulting any authority, department or ministry, in his discretion, decide, determine whether the licence should or should not be granted.
7. The regional director may also instruct and direct the company to insert conditions in the memorandum and articles of the associations as he may deem think fit.

REFERENCES

• http://www.ngosindia.com/resources/ngo_registration.php
• http://kindheartz.com/articles/ngo-legal-registration-services/68-ngo-registration-procedure-in-india

[1]  http://kindheartz.com/articles/ngo-legal-registration-services/68-ngo-registration-procedure-in-india

[2]  Section 2(15) Income Tax Act

[3]  http://kindheartz.com/articles/ngo-legal-registration-services/68-ngo-registration-procedure-in-india.

[4]  Section 20, Societies Registration Act, 1860

[5] Section-8 of Indian Companies Act, 1956 (Old section 25(1)(a) and (b) of the Indian Companies Act, 1956, a section-25)

VERUS, India, presents the Inaugural Edition of the REEMA RAY PRIZE IN INTERNATIONAL BUSINESS LAW 2017.

The prize is instituted in memory of Reema Ray (1982-2013), who was a brilliant young corporate lawyer in one of the leading law firms in India. Her friends, family and colleagues remember her as a rare person with exceptional qualities of heart and mind. She passed away on 6 September 2013, aged 31 yrs. The song has ended, but the melody lingers on.

Prize

The best essay will be awarded a prize of INR 100,000.

Eligibility

An international essay competition open to all undergraduate law students, scholars (completed bachelors in law & pursuing academia) and young practitioners/ in-house counsels (under 35 yrs of age) from around the world.

Topic

“INDIA’S NEW INSOLVENCY & BANKRUPTCY CODE – LESSONS AND INSIGHTS FROM FOREIGN JURISDICTIONS.”

Deadline

15 November 2017

Requirements

Original, unpublished work, written in English, not exceeding 5000 words.

Submissions (or enquiries) to be emailed to Mr. Krishnayan Sen, Partner, VERUS at [email protected] as an attached MS Word file on or before 15 November 2017 with a statement affirming the author’s eligibility for the competition and confirmation that the work is original and unpublished.

The essay is instituted by Verus, several of whose partners were close friends of Reema and continue to cherish fond memories of her.

In this article, Gupta Shubham pursuing Diploma in Entrepreneurship Administration and Business Laws from NUJS, Kolkata, discusses Compliance Requirements for Public Charitable Trust in Mumbai.

The Constitution of India in Article 19 grants “Protection of certain rights regarding freedom of speech etc”. Wherein Article 19(1) (c) gives “right to form associations and unions” with some prohibitions attached thereto in this regard. Also, seventh schedule of The Constitution of India finds mention of trusts and trustees in entry 10 and charities, charitable institutions, charitable and religious endowments, religious institution finds mention in entry 28 in the concurrent list making both Centre and state competent to legislate and regulate charitable organizations. So it becomes a constitutional right of the citizens to form associations. Generally, Public Charitable Trusts are governed by Indian Trusts Act, 1882 and the Income tax Act, 1961 in absence of a state enactment in this regard. Section 2(15) of Income Tax Act, 1961, includes relief to poor, education, medical relief and the advancement of any other object of general public utility in “Charitable purposes”.

Finance Act, 2008, limited the definition of “charitable purposes” by stating that if advancement of any other object of general public utility involves undertaking any trade, commerce or business activities or rendering any service for a fee, it will not be considered charitable purpose. Finance Act, 2010, provided relief by exempting the aggregate value of receipts up to one million rupees. Section 3 of the Indian Trusts Act defines a trust as “an obligation annexed to the ownership of property and arising out of a confidence reposed in and accepted by him for the benefit of another”.

Requirements for Public Trusts as per the Bombay Trusts Act, 1950

In Mumbai, Public Trusts are governed by the state law known as the Bombay Trusts Act,1950. As per Section 2(13) BPT Act, 1950 Trust means an express or constructive trust for either a public religious or charitable purpose or both and includes a temple, math, a wakf, church, synagogue, agiary or other place of public religious worship, a dharmada or any other religious or charitable endowment and a society formed either for a religious or charitable purpose or for both and registered under the Society Registration Act, 1860.

The Definition of Charitable purposes under Bombay Trusts Act includes operations for,

1. Relief of poverty or distress,
2. Education,
3. Medical relief ,
4. The advancement of any other object of general public utility, but does not include a purpose which relates exclusively to religious teachings or worship.

Also Section 9(2) lays down that facilities will be considered to be provided in public interest if:

1. They are provided with object of improving the condition of life of persons concerned,
2. Those concerned persons either need such facilities or the facilities are needed by persons at large.

Public Charitable Trusts in Mumbai have to comply with various Acts and Enactments namely:

• Indian Trusts Act, 1882

• Bombay Public Trusts Act, 1950
• Income Tax Act, 1961
• Foreign Contribution Regulation Act, 2010

The Bombay Public Trusts Act lay down procedures for application in schedule II wherein the proposed name of trust, name of trustees and their addresses, mode of succession to trusteeship, objects of trust, documents creating the trust, details of properties, sources of income of trusts, average gross annual income and expenditure, communication address of trustee, consent letter of trustees have to be made to Regional Deputy or Assistant Charity Commissioner within three months of creation of trust. Memorandum containing details of immovable properties to be filed with the Jurisdictional sub registrar under Indian registration act.

Details about any changes shall be informed to the charity commissioner within 90 days of such change in schedule IIIA where it relates to change in immovable property and in schedule III in all other cases.

The Public Charitable Trusts in Mumbai are required to see prior permissions of Charity Commissioner in case of:

• Further investment in immovable property,
• Sale, exchange, lease, gift for a period exceeding 3 years in case of non-agricultural land and 10 years for agricultural land.
• Lending money to any trustee.

Trusts are required to pay contribution under sec.32 at the rate 2% of gross annual income after deductions to public trust administration fund. Under the BPT Act, public trust having gross annual income of Rs. 25000 or less, those working exclusively for advancement/propagation of secular education/medical relief /veterinary treatment, recognized public libraries, trusts exclusively working towards relief of distress caused by natural calamity are exempted from making contribution to public trust administration fund. They are required to prepare budgets in case annual income exceeds 10,000, in schedule VIIA and submit them to the charity commissioner one month before the commencement of the accounting year.

Accounts are required to be maintained in schedule VII, income and expenditure account in schedule IX. It is mandatory for trusts to get their accounts audited within 6 months of close of accounting year and submit the same with charity commissioner within a fortnight of the audit if their annual income exceeds rupees 15,000. Trusts exempt from audit are required to file details of income in schedule IX-A and details of expenditure in schedule IX-B within three months of close of accounting year.

Requirements for Public Charitable Trusts as per the Income Tax Act, 1961

Under the income tax act 1961, Application under section 12A in form 10 to be made to the principal commissioner or commissioner along with original certified copy of trust deed, two copies of accounts of trust (max. 3 years immediately preceding the year in which application is made) if it has been in existence during any year prior to year of making the application, who shall pass the order within 6 months from end of month in which application is made.

An application in triplicate for registration in 80G to be made in form 10G along with copy of registration granted under 12A, note on activities of trust, copy of accounts during last three years to be made to commissioner who shall within 6 months accept and grant a certificate or reject after an giving an opportunity to be heard.

Points to be considered when making an application:

• There should be legally existent entity, which can be registered.
• Written instrument of its creation it mandatory.
• Objects should be charitable in nature.
• All its properties, income and assets should be utilized towards the object only.
• Members, directors, founders are not authorized to claim any part of its income.
• All the net assets should be used to meet all his liabilities and would not be utilized to by its founders, in case of dissolution.

Trusts and Institutions formed for promotion of scientific research, education, sports, certain profession, khadi and village industries or hospitals or notified charitable institution are entitled for exemption from tax under Section 10 of Income Tax Act, 1961.

Section 11 of ITA, 1961, also lays down that income or gains from property held under trust shall not be included in total income.

Section 11 and 12 of the Income Tax Act, 1961

It lays down certain conditions according to which exemption is to be given, they are:

1. Trusts created wholly for charitable or religious purposes and applying their income to such purposes.
2. Trusts created before 1.4.1962 in part only for charitable or religious purposes and applying income to such purposes.
3. Those created before 1.4.1962 authorized by general or special order of the board.
4. Trusts created on or after 1.4.1952 for charitable purposes of promoting international welfare in which India is interested, authorized by a general or special order of the board.
5. Charitable trusts created for the benefit of scheduled castes, tribes, backward classes or women or children.

Requirements for Public Charitable Trusts as per the Foreign Contribution Regulation Act, 2010

Application in Form FC-3 to be filed to foreigners division of ministry of home affairs online and in hard copy within 30 days with copy of registration, copy of PAN, copies of audited statements, details of activities for last three years and the prescribed fees. The requirements lay down that incomplete applications will be rejected. The registration certificate is granted within 90 days from date of receipt of application if all the specified conditions are met.

Specified conditions under FCRA Act

1. The Applicant should not be,

(a) Fictitious or Benami,

(b) Found guilty of misutilization of funds,

(c) Prosecuted or convicted for conversion of people belonging to one religion to another, creating communal tension,

(d) Engaged in propagation of sedition,

(e) Likely to use Foreign Contribution for Personal benefits,

(f) If found in contravention of FCRA.

2. The applicant is required to take reasonable work and preparations for benefit of the society.
3. Any office bearers should not have been convicted under any law under any law for the time being in force or any prosecution should not be pending against him/her in any court of law.

4. Acceptance of FC should not be to affect prejudicially-

• The sovereignty and integrity of India,
• Security, strategic, scientific or economic interest of India,
• Public Interest,
• Freedom of fairness of any election,
• Friendly relation with any foreign state,
• Harmony between various castes or communities.

5. Acceptance of FC should not lead to incitement of an offence or endanger the life or physical safety of any person.

If the certificate or permission is not granted it has to be communicated to the applicant. Application for prior permission should be seeked for receiving a specific amount, specific purpose and from a specific donor. The application is required to be made online in Form FC-4, Duly signed hard copy with certified copy of trust deed, commitment letter from foreign donor specifying the amount of contribution, copy of PAN, copy of project report for which FC is granted and prescribed fees of Rs.1,000. The registration stands valid for 5 years and has to be renewed by making application in Form FC-5.

Certain Requirements regarding receipt of funds as FC like,

• Only to be deposited only in designated FC bank account.
• Records of all FC to be maintained with name of donors, locations and purposes.
• FC received can only be treated as corpus donation only if supported by written consent of donor.

Requirements regarding utilization of Funds

• Utilized for the purpose it has been received.
• Not more than 50% of received amount be utilized for administrative expense, except for the prior approval of central government.
• All assets purchased should be in the name of association.
• FC received cannot be invested in speculative business.
• Interest earned on FC should also be used towards its objective.

FCRA lays down restrictions on fund transfer

• FC received cannot be transferred to any person with no registration or prior permission.
• Only 10% of total FC can be transferred to any person who has not obtained registration only after prior approval of central government. Such approval is not required if payment is made to self-help groups or if FC received for providing financial assistance as charity.

Associations are required to maintain separate books of accounts for the FC received and utilized, all such statements shall be preserved at least for a period of 6 years. Registers of investments are mandatorily required to be maintained and audited. Accounts should be such that it becomes easy to differentiate between local funds and FC. Associations receiving FC in excess of Rs. One Crore in a financial year is required to place a summary data in public domain.

Public charitable trusts should submit annual report in Form FC-6 along with audited statement of accounts and solvency, duly certified by a chartered accountant, accompanied with duly certified statement of FC account from bank. Filing of this report is must. Public Charitable Trusts in Mumbai have to comply with The Bombay Trusts Act, 1950, Income Tax Act, 1961, Foreign Contribution Regulation Act, 2010 as discussed above.

This article is written by Ramanuj Mukherjee, Co-Founder, and CEO at iPleaders.

A lot of people ask us, what is the last date for enrollment?

What sort of people ask for the last date? The sort of people who are playing catch up. People who just survive rather than thrive. I know because I used to be one of them. I will leave things for later, till the deadline. This cost me many great opportunities.

Say, for example, the opportunity for working in a foreign law firm. When I was in college, most of us considered getting through to a London law firm as the pinnacle of success. Partners from these firms visited annually to select a few from our campus. Some of the brightest people from the few top law schools in India got through to these law firms every year.

It’s not that the toppers or the smartest people got through. In reality, the people who got through are the people who were best prepared. People who took out the time to discover what is needed of them and to go about it systematically to build the right profile, right skills and competitiveness in the tasks that one must accomplish to get through.

Years later, I tried to see what does it take to get through to such an opportunity. I interviewed several of the people who got through to these law firms. It turns out, almost always, people who got through were the people who started preparing long ahead, and relentlessly worked on it over a long period. The smart and the bright people who tried to do it last moment hardly ever made the cut.

I was smart and bright too. I was incredibly hard working. However, I kept things for last minute. Many things I used to pull of in the last moment as well. However, the invitation to apply to foreign firms took me by surprise! I didn’t think of it until that point though I always wanted to work in a London firm. Who wouldn’t? When it came, I was struggling with many assignments and could not dedicate more than a few hours to fill up the very long form that wanted me to think deeply about many aspects of my life.

On the other hand, there were people who prepared for it over the year. They took foreign language classes so that they could impress the interviewers. They went and got help from seniors who have already cracked these interviews in the past. They found and bought books on how to get a vacation scheme from a magic circle law firm, they read up on how these firms work and what they want in their associates.

Simply put, before these people who were prepared for a world war, people like me had no chance. It was an embarrassment to even try.

Isn’t that the case with everything else too?

India lost to China in the 1961 war because we were not prepared for a war. We didn’t think it will happen so we didn’t prepare for it. This mistake, since then, was never repeated by the Indian army. You prepare for war when you don’t need to prepare. That’s how you win wars.

I had friends who knew they will join Amarchand Mangaldas (now split into CAM and SAM) even before they joined law school. And guess what? They kept working towards it. They planned for it, prepared for it, figured out what would get them through the door. And they executed that over 5 years. So did I, and I received multiple offers from several law firms.

Of course, there were people who woke up in their 5th year and wanted to get a top job. Mostly, they didn’t succeed. They had to be happy with what they got instead.

It’s quite the same about starting up a company. I was learning things that I would have to do when I started my company right from my 2nd year. I was in business under my own benner by the time I was finishing 4th year. That’s why when I decided to quit the law firm job and start iPleaders, we hit the ground running. We already had years of preparation. If I decided to start this company a week before we quit with no prior preparation, I don’t know what would have happened.

Passion does not compensate for lack of preparation. Hard work and commitment doesn’t compensate for lack of preparation. People who prepare win. They win negotiations. They win cases. They win in life.

If you want to be a winner, quit doing things last moment. Do it when the last date is not even in sight.

We have trained thousands and thousands of students, and hundreds of them now work in top law firms. The very best took our courses while they were still in their 1st or 2nd year of college. There are those who took it in their 5th year and got a job also, but with limited time there are limited things you can do.

Think about it. Most of the best jobs are given away before people join their 5th year classes. It happens in day 0 interviews that usually happens in the end of 4th year in top law schools, or through pre placement offers in the internships right before that. So the batch that is studying in the 5th year now, in 2017, for them the best jobs are already gone before they joined their 5th year class. Those who got those jobs will join the law firms in 2018 July/August. Now these law firms will not be hiring from that batch anymore. Their fresher slots are all filled.

Who got those jobs? People who did really well in their 4th year internship. Most of them were called back for a 2nd internship, when they were given special tasks and observed and then confirmed for a PPO. This means that they did a really good job in their first internship and stood out of the crowd. When did they do that internship? That has to be the summer after their 3rd year got over, or the winter semester of 3rd year.

This means, the people who got through started getting hang of how to do well in their internships by the middle of their third year. They have probably done good internships in their 2nd and 3rd year as well.

However, most of the corporate law subjects are not taught in law school till end of 3rd and 4th year. This should tell you that the most successful people didn’t wait till college taught them what they needed to know.

They started preparing. They didn’t wait for the last day. They started getting good at being a lawyer the first time they got the opportunity.

That’s why, if you ask us if you should do a course like this in your first year of law school, the answer is you should enroll as soon as you get your 12th results, and decide to become a business lawyer, you should enroll. Well, if you didn’t do it then, do it now.

The best day to prepare for what you really really want in life was yesterday. The next best day is today. If you didn’t start yesterday, start NOW.

Are you the kind of person who keeps things for last moment? I did. I suffered. I had to change because I always wanted to win. Winning cannot be done last moment. Winners and people who do things on last date (people just trying to manage, just trying to survive) are different breed. I hope you know the difference. I hope you also know that no matter what you have done till now, you can change that right now by doing things now rather than keeping them for later.

A lot of you ask us the last date for enrolling in the course. Let me ask you something. Why are you doing this course? Is it because you want to become an extraordinary lawyer? Is it because you want great professional success? Is it because you want to land an amazing job? Then please don’t wait for the last date.

If you enroll, we will also not wait for the official commencement date. We will give you access to the course immediately so you can start your work and take an important step towards improving your legal skills, practical knowledge and strategic acumen. The assignments and exams will of course start from the official commencement date.

The last date for the next batch of Diploma in Entrepreneurship Administration and Business Laws is 26th October. However, don’t wait for it unless you have a serious money problem. There are others out there who want the same things that you want, and many of them are not waiting. They are working hard at their dream. Can you afford to wait?

Don’t be the guy who does things on the last day. Try to implement this everywhere in your life and let me know how it goes.

This article is written by Team iPleaders.

The economic landscape has gone through a significant transformation with the spread of digital economy and globalisation. A company manufactures its products in Bangladesh, packages it in Myanmar and ultimately sells it in the market of India.

MNCs are engaging in cross border transactions more than ever and their profit is coming under the scanner of authorities for taxation. Enterprises located across the border are carrying out huge amount of transactions with their facilities in India and all of it falls under transfer pricing regulations.

The Implementation of Transfer Pricing

The controlled transactions carried out between two entities belonging to the same enterprise have come under the control of Indian transfer pricing laws. Introduced in 2001, transfer pricing has now become the main worry of CEOs and entrepreneurs causing huge number of litigations each year.

In a PwC study, 65% CEOs and MDs agreed that transfer pricing was one of the considerations while making strategic business decisions.

Transfer pricing is also going to be interlinked with SEBI Guidelines, the Companies Act 2013 and the Excise and Customs Regulations. The implementation of GST is further going to make it a major concern for businesses with cross country transactions.

Apart from MNEs, small startups are also operating on a global scale and their transactions also come under transfer pricing.

The Rising need of Transfer Pricing Experts

Global head of transfer pricing services of KPMG, Sean Foley, believes that organizations need to disclose a lot more on transfer pricing than they did before. He advocates for the Organisation of Economic Cooperation and Development (OECD) action plan, which can ensure that only the profits are taxed in places of the economic activity – avoiding double taxation.

However, it isn’t as simple as it sounds. A 2012 report by Ernst & Young, named Global Transfer Pricing Tax Authority Survey, highlighted how more jurisdictions were introducing transfer pricing requirements, which while ensured that there is a major transformation in tax laws, made things more complicated.

The complication of the transfer pricing laws and the exhaustive process of taxation, reporting, documentation has left many companies in the water. With the growth of companies and increase in legislation, understanding the nuances becomes a challenge.

91% companies say that they had been a victim of transfer pricing adjustments resulting in legal proceedings.

70% organizations counter transfer pricing adjustments and go to court against authorities.

It doesn’t need to be stressed that transfer pricing is a big worry to businesses nowadays!

Career Opportunities for Lawyers in Transfer Pricing

Transfer pricing experts, in India, need to look at any new regulations and policies by RBI and ensure proper compliance.  But that is not the only area you can go to as a transfer pricing expert.

Finance professionals, accountants, lawyers, compliance advisors specializing in international taxation and transfer pricing are in high demand in India. Not just big companies, but the small ones are also going international and need a comprehensive international tax planning to tackle the transfer pricing issues.

National University of Juridical Sciences, Kolkata (NUJS) offers a unique course in Transfer Pricing which equips you with the skills and understanding required to comprehend business practices.

Lawyers have a wide range of career opportunities in the transfer pricing sector in various industries. The inaccurate implementation of the transfer pricing policies is a big concern for companies and also the Indian government.

So developing a comprehensive and strategic approach to transfer pricing on a global scale is really important. Even the Indian government had expressed its support for the cause. 

Transfer pricing lawyers have already found employment in the Big 4 Indian companies who have their own transfer pricing team like KPMG, Ernst & Young and PwC.

Other business also are creating their own in-house team or taking help of transfer pricing consultants.

Now let’s see where lawyers can excel with their expertise in transfer pricing and international taxation.

Excellent Transfer Pricing Occupations for Lawyers

As a transfer pricing expert, you can expect to see a lot more of work in near future. With the Modi government allowing foreign law firms to open offices in India by 2019, there seems to be more opportunities than ever for you.

I bring to you some of the more common transfer pricing career options that you might want to try out.

1. Accounting Practices

If you’re looking to get into transfer pricing, you might want to join one of the Big 4 Firms if you’re lucky – or more specifically, Ernst & Young, KPMG, PwC or Deloitte.

All the Big 4 companies and increasing number of accounting firms have their own transfer pricing department. They offer consulting services to other companies all over the world.

Working with them, you can broaden your knowledge and experience in association with senior executives from various industries. Your technical knowledge of transfer pricing and the current trends will be always up to date as it is the prerequisite in this industry.

You will also get a chance to work alongside experts from other areas like Customs and Excise, International tax planning, corporate tax compliance, VAT and many more. This will lead to strong exposure and you will be able to develop insight into each of these processes.

If you aren’t as lucky to get through them, don’t worry. There are other transfer pricing career options too.

2. Industry and Commerce

In India, 83% companies have undergone transfer pricing audit.

The increasing number of transfer pricing litigations has prompted many businesses to set up an in-house transfer pricing team.

The main industries to open their doors to transfer pricing lawyers include the financial sector and the gas and oil industries. But the other sectors are also in the queue and looking for skilled professionals.

Working with a single company you can get up and close with the intricacies of the business. It will be possible understand the drivers of business and other nuances which will enable you to progress to a wider commercial role.

If you have a background in finance and corporate tax you can go on to become the head of the tax department.  You could even get a job as an analyst at an office in India.

Transfer pricing also has a global scope and companies will go on expanding their capabilities in this domain. This gives you an excellent chance to become the international head of transfer pricing and lead the whole team.

3. Law Firms

An increasing number of law firms are also building up transfer pricing teams to meet the demand of businesses. You can join a law firm and render consulting services to companies from legal and tax perspectives.

You can scale the ladder of progression and reach the level of partnership like in case of law practice. The experience in working in a law firm can also help you in opening your own consultancy service.

4. Business Advisors

New entrepreneurs and even seasoned businessmen hire business advisors for guiding them on the right track.

Though the role of business advisor may not be available to a transfer pricing graduate right on the beginning, you can work your way up there. Years of working in the industry with significant knowledge and exposure along with expertise in transfer pricing can expand your career opportunities.

You can become the key business advisor of an organization and get rewarded with increased pay and benefits. The success rate will be much higher if you can tie up with some international company.

5. Financial Advisors

Many financial experts and professional like Chartered Accountants get the responsibility of handling tax issues. But when it comes to international taxation and transfer pricing, they may not be able to carry out their role successfully.

The financial courses are not designed to make someone expert in the nuances of transfer pricing. Only a course in transfer pricing could do that.

If you are in the finance industry, expanding your knowledge and skill in transfer pricing can broaden your role and responsibilities. You can become a financial advisor and ask for a raise or other incentives.

6. Special Consultancies

Very few consultancies cater to the specific needs of transfer pricing. It is a new area and most of the current specialised consultancies are in their period of growth.

You can find employment in such consultancies as a transfer pricing lawyer. The firms generally offer a combination of analysis and economics approach working with other professionals for tax consultation.

Your experience and skill will develop working in close relation with other experts and you will be able to lead your own consulting or team in the future.

7. Personal Consultancy

This career opportunity is perfect for the professionals who already have a background in finance, accounting, tax or corporate law. After getting a course in transfer pricing, you can expand your role and act as a consultant to businesses.

You may also open your own consultancy after working in a law or accounting firm and using the exposure and insight gained in the process. The scope of transfer pricing is ever expanding, and you can find more opportunities as businesses grow and scale.

To offer complete solutions to your clients you may need to hire or work with experts from other areas.

8. Banking Lawyers

Banks and various financial institutions need lawyers more than anyone. When things are going good, they will need lawyers. When it is facing problems, they will need more lawyers. Maintaining compliance, determining the feasibility of new products and services, handling litigations, providing advice and consultation- the role of a bank lawyer is expansive.

Banks also increasingly engage in cross border transactions with different clients. The knowledge of international taxation and other nuances are necessary for the banks or financial institutes to operate optimally.

You can find employment in both Indian and foreign banks like ICICI, HDFC, Standard Chartered, SBI, Barclays, Goldman Sachs, JP Morgan. The foreign banks are perfect for the transfer pricing lawyers where they can develop their expertise with a good exposure to international transactions.

Financial institutions like LIC Housing Finance Ltd., Aditya Birla Finance Ltd., can also be good employers. You can start your career as a legal executive and then progress to Legal Counsel, Head Legal and then to Director Legal. The CTC of a Director Legal is a minimum of around 80 lakhs per annum with other additional benefits.

The various tech driven digital currency companies like Paytm, Paypal and PayU also hire lawyers related to financial services.

The Road to Career Success for Professionals

Getting a specialization in transfer pricing is not just profitable to students. Even professionals can take up the course to reach a new height in their career. It is useful to various stakeholders of business and can leverage your potential in a significant way!

• Entrepreneurs can get a complete understanding of the transfer pricing regulations enabling them to run their businesses effectively.
• Accountants and Chartered Accountants will be able to work on projects which require understanding of transfer pricing and international taxation. This will expand their role and can lead to promotions.
• The tax implications of global transactions will be clear to tax lawyers and they can effectively sign up with international clients.
• It is also an ingredient of success for intellectual property or corporate lawyers who can get increased remuneration for their new skill.

What Can You Expect to Be Paid?

If you are just starting out, expect to be paid anything from 5 to 12 lakh per annum. An experience of around 10 years could have your CTC rising up to 26 LPA.

Apart from the base salary, you would get allowances for your car and other rentals, as well as a bonus – which really varies according to the terms you’ve been set.

Many are given stock options as well, especially if you have been working for a few years, and healthcare for you and your family.

The various job portals like Naukri, Shine and Timesjob have hundreds of jobs listed under the transfer pricing category. You can join as international tax head, senior managers, financial executives, Senior coordinators and in other roles in well known companies.

It is the reason so many people are choosing a specialisation in transfer pricing. Surely it is going to be one of the main employers in the near future.

Data Source: PwC Study on Transfer Pricing

Here is what we are offering

We have a Certificate Course on offer covering all the avenues raised above. It is specifically designed for young law students, CA, CS, lawyers, management consultants, businessmen, entrepreneurs, and professionals from all other domains.

The certificate is awarded by NUJS, Kolkata, a leading National Law School, and it will have the course name as “Certification in Transfer Pricing Laws”.

You may also schedule a consultation call with a Legal Education Counsellor. To do that, please call: 011-3313-8901

What will you learn in this course?

• How to apply advance tax planning strategies to a unique cross-border structured financial product.
• How tax haven countries can help you mitigate your tax liability
• How to interpret tax-treaties.
• How you can resolve disputes effectively in the field of international taxation.
• How to identify and resolve tax controversy issues at the time of structuring a transaction.
• How you can claim benefits under DTAA.

How can you use this skillset?

Understanding of international taxation and transfer pricing can be useful in the following ways in one’s professional/academic career.

Create strategies on the structuring of cross-border transactions to reduce your overall tax bill. Expand your practice in International Taxation domain. Advise businesses on how related-party entities should carry business in accordance with the transfer pricing rules. Learn how to negotiate and draft advance pricing agreements.

Other features of the course

• Learn anytime and from any location – 24 x 7 access available on mobile and tablet devices (Android) and on web.
• Faculty includes experts from the most reputed corporate law firms. Get doubts cleared in 24 hours.
• Learning materials comprise of video discussions with experts, animation, study materials, checklists. Access sample agreements and approval applications.
• Get doubts cleared within 24 hours over a discussion forum.
• Those who complete the course successfully will receive certification from NUJS, Kolkata – certification will be based on performance in an online test.

This article is written by Ramanuj Mukherjee, Co-Founder, and CEO at iPleaders.

Environmental law is often romanticized, but rarely understood. In every law school, in every class, there are a few people who want to be great environmental warriors and heroes, saving species and forests from destruction from human greed. However, hardly any of them turn out to be environmental lawyer in reality.

Modern management has developed a highly evolved system of environmental compliances and safeguarding. However, most lawyers are taught preciously little about this. While they may study some basic case laws and a few statutory provisions, these are mere alphabets and do not even begin to train you in the basics of environmental law. Environmental law is a technical area of legal work that requires practical knowledge and understanding of more than just law. You need to grasp concepts of management, science, engineering, sociology and some anthropology to be an effective environmental lawyer.

There is a great need of good lawyers to come to this area of practice. It is disheartening that it is very difficult to find good environmental lawyers in our country. Very often, even large corporations which are ready to pay good money have a tough time to find an environmental law expert. On the other hand, there are exclusive boutique law firms that have done very well by simply practicing environmental law.

Even large law firms as well a corporations engaged in industries like manufacturing, mining and infrastructure projects are increasingly needing environmental lawyers. As all these sectors are seeing major push under the Modi government, with a clear agenda to invest and grow these sectors as fast as possible, the demand can only be expected to rise fast in the years to come.

Keeping the ground realities in mind, iPleaders has invited a very successful environmental lawyer who argues cases before environmental tribunals frequently and advises the industry on environmental compliances to organize a 2 day workshop (8 hours) in Kolkata.

The location for the workshop is Sector V, Salt Lake.

Date: 22-23 September

Time: 5-9 pm

Workshop fees: INR 500 (This is very low, we normally charge 4,500-25,000 for our other workshops. This is kept very low so that we can encourage young lawyers to practice environmental law and emerge as environmental leaders.)

Seats available: 30

Course objective

• Training young lawyers to effectively argue before green bench
• Enabling lawyers to include the right clauses in the contract with respect to environmental issues
• Understanding the big picture related to environmental governance and international as well as national legislations
• Underlying concepts from engineering, environmental science, sociology and anthropology that enables lawyers to prepare and deliver winning arguments
• How lawyers can play a critical role in preserving and safeguarding the environment
• Understanding environment audit and other obligatory environmental compliances
• Understanding the role of legal department as facilitator for environmental compliances

What would be covered in the workshop:

• Career opportunities in Environmental Law
• What is the job of an environmental lawyer
• How young lawyers can become environmental leaders
• Situation in India – practice of environmental law and related challenges
• Important environment related clauses for superior contract drafting
• An overview of construction contracts (EPC/ENC) – statutory obligations and international standards
• Basic understanding of project principles – along with an exercise
• International conventions, important global incidents and discourse leading to environmental legislations
• How organizations protect environment and natural resources and what are the legal requirements
• Environmental management and role of lawyers and legal departments in organizations
• How to conduct an Environmental Audit and what roles lawyers play in it
• Legal compliances related to environment
• Checklist for legal departments related to environment
• Environmental tribunals/ green bench – jurisdiction, functioning, how to approach
• Drafting exercises

To learn more about it, please call right now: 011-3313-8901

Please visit this link if you wish to enroll for the workshop:  https://courses.lawsikho.com/courses/2-day-environmental-law-workshop/

In this article, Sagnik Chakraborty pursuing Diploma in Entrepreneurship Administration and Business Laws from NUJS, Kolkata, discusses Hybrid structuring in India for social entrepreneurship.

Introduction

Social Entrepreneurship juxtaposes two seemingly incompatible concepts. ‘Entrepreneurship’ carries with it the image of a completely profit-driven enterprise, using the latest technology, attracting investors with prospects of quick returns and large gains for shareholders. A Social venture on the other hand is associated largely with NGO’s or government organisations, providing support and relief for the underprivileged, with no motivation of financial gain at all. There seems to be a clear divide between the two sets of organisations, one makes money and the other gives it away. However, the field of social entrepreneurship seeks to establish that it is possible to have an integrated approach, bringing to bear the strengths and characteristics of the business world on areas of need, in order to achieve lasting social outcomes.

Although social entrepreneurship in some form or the other is not new, it became established as a field of graduate study in the early 2000s, and gathered impetus as the work of some eminent social entrepreneurs gained visibility. The conferring of the Nobel Peace Prize to Muhammad Yunus and the Grameen bank in 2006 is one such example. There are many public sector organisations that provide support to such ventures including the Ashoka, Schwab and Skoll foundations as well as a whole range of impact investors.

Prominent Social Entrepreneurs in India

Some of the prominent social entrepreneurs in India include Dr. G. Venkataswamy of Aravind Eye Hospital, Dr. Verghese Kurien of Amul, Dr. Devi Shetty of Narayana Hrudayalaya, Ela Bhatt of SEWA, Jeroo Billimoria of Childline, Harish Hande of SELCO, Hanumappa Sudarshan of Karuna Trust, Akanksha Hazari of m.Paani, Bunker Roy of Barefoot College, Chetna Vijay Sinha of the Mann Deshi Mahila Sahakari Bank and many more. As social entrepreneurship attracts attention in the media as well as from impact investors, it becomes imperative to understand more precisely what comprises social entrepreneurship and to distinguish it from other ventures in a similar space. Social workers and activists, not-for-profit organisations, for-profit companies with a social motive, companies that are socially responsible – the question is whether all efforts that lead to social benefit can be included in this category or if there are some clearly distinguishing features.

“A good way to begin to define the concept is by defining each of the terms ‘entrepreneur’ and ‘social’. An enterprise must necessarily fit both of these criteria in order to qualify.”

Defining ‘Entrepreneurship’

The word entrepreneur is derived from the French and literally means ‘one who undertakes’ and referred to a person who found new and better ways of doing things resulting in economic progress.

French economist, Jean Baptiste Say[1], in the early 19th Century stated “The entrepreneur shifts economic resources out of an area of lower and into an area of higher productivity and greater yield.” Joseph Schumpeter[2], a 20th Century economist also wrote extensively about entrepreneurship, emphasizing the aspect of ‘exploiting an invention’, where the entrepreneur uses a hitherto untried technology to produce a new commodity or produce an old one in a new way, moving the economy forward. He believed that a truly entrepreneurial venture would set off a chain reaction, encouraging other entrepreneurs to further develop and promote the innovation until all earlier products, services and business models become obsolete.

Contemporary business and management experts expand on the same concept. In the opinion of Peter Drucker, entrepreneurs need not directly cause change but could exploit the opportunities caused by change in technology, preferences, social norms and so on. In his words ‘the entrepreneur always searches for change, responds to it, and exploits it as an opportunity’[3]. When an entrepreneur sees change, he is neither threatened by it nor sees it as a problem, but rather as a challenge and thinks of the possibilities created by it.Howard Stevenson[4]added to this the idea of resourcefulness. Entrepreneurs are not constrained by lack of resources, but look beyond the current situation, and are willing to reach for things that are beyond their grasp. They are able to mobilise the resources required to meet their objectives.

Suboptimal Equilibrium

Martin and Osberg[5]believe that entrepreneurship comprises a combination of a specific context, a set of characteristics and an outcome. The entrepreneurial context is a ‘suboptimal equilibrium’. There is a need,which is only being partially met, but consumers have learnt to accept the less than ideal situation. For example they may want to have access to convenient affordable public transport but learn to manage with buses despite their inconvenience or taxis, which are expensive. The entrepreneur sees in this unsatisfactory equilibrium, an opportunity to provide a new solution. In order to be able to do this, the entrepreneur must have certain characteristics – inspiration, creativity, initiative to take direct action, courage and fortitude to persist despite obstacles. The outcome is a new equilibrium, one that provides a higher level of satisfaction and one that is widely adopted. In the above example, the use of cab aggregators, results in taxis that are much more affordable and easily and quickly accessible, and several companies have now adopted the concept, creating a ‘new normal’ form of transport.

Defining ‘Social’

Social entrepreneurship then is a subset of entrepreneurship. So what sets it apart from any other form of business entrepreneurship? On the other hand how would one distinguish Social Entrepreneurship from other forms of social activities?

Not all experts and practitioners in the field are fully agreed on what qualifies a social enterprise as ‘social’. There is however broad agreement that social entrepreneurs and their ventures are driven by social goals, they have the desire to benefit society in some way, to increase social value and to contribute to the welfare of society. Outcomes could be in different areas – economic, political, cultural, or environmental. The Schwab Foundation [6] defines it as “market-based approaches to solving social and environmental challenges, with an emphasis on low-income or underserved populations.”

Disagreement arises in the relative importance given to social goals in the overall purpose of the organization. At one extreme are the proponents of the theory that a social enterprise must pursue purely social goals with no commercial activity at all and a purely not-for-profit status. A survey of the use of the term social entrepreneurship in the press over a 15 year period showed that 83% referred to examples from the not-for-profit sector. (Taylor, Hobbs, Nilsson, O’Halloran, Preisser)[7]Further along the continuum are those who accept some commercial activity, provided that any profits are directed back into the venture. Others accept that profit-making could be a goal, but subordinate to the social goals. According to Dees[8], “the social mission is explicit and central…mission-related impact becomes the central criterion, not wealth creation. Wealth is just a means to an end”.Yet others see profit-making as a legitimate goal, but subordinate to the social goal. In some, profitability ranks closely if not equal to social goals. The Northland Institute[9] refers to the ‘double bottom line’ where financial and social returns on investment are simultaneously pursued. At the other extreme, social benefits may even be the means to profitability, when they are engaged in as much for their marketing value as for their own merit, and would perhaps no longer be pursued if they lowered profits.

Distinction from other Social Activities

It is also important to our understanding of social entrepreneurship to be able to distinguish it from other forms of social activities, without in any way undermining the value of those activities. Social service initiatives which are locally focused, serve an immediate need, remain dependent on resources that they are able to muster and do not attempt to achieve a larger scale, would not be considered entrepreneurial. Social activists may also operate in the same space, and they too may be motivated by the same unsatisfactory equilibrium. However activists attempt at influencing others, NGOs, Governments, the public – rather than taking direct action.

Keeping all these concepts in mind, we could conclude that a social entrepreneur identifies an unjust equilibrium that results in neglect, suffering or lack of well being in a population that is unable to achieve a change on its own. The entrepreneur recognizes this as an opportunity and makes use of unique talents, drive, initiative, innovation, persistence and organizational abilities, mobilizes resources, and works to bring about a large-scale transformation in the targeted group and even to society at large.

Why Social Entrepreneurship

If social entrepreneurship is something undertaken only to create a feel good factor, it will not have a lasting impact. Social entrepreneurship is certainly not for everyone, but for those who are inclined to undertake such a venture, it is important to look at the long-term benefits. There is a tremendous need around the world, and very specifically in India, with large numbers of people experiencing economic need, poor physical and mental health, illiteracy, lack of basic necessities, environmental issues and so on. The well-being of the entire nation and for that matter the world cannot be independent of the well-being of large segments of the population. Good social outcomes benefit the society as a whole. Consider the impact if these large-scale issues are tackled with the same enterprise, innovation and determination that business entrepreneurs normally devote to wealth creation.

The other benefit is the satisfaction that is obtained from achieving sustained social outcomes. Increasingly, people wish to achieve both meaning and financial gain through work. Over 50% of millennial surveyed by Deloitte (2011) [10] considered the primary purpose of business to be innovation and societal development, and similar results were replicated in the following years. The desire to achieve meaning is by no means restricted to the younger generation. Psychologist Erik Erikson theorised that the developmental task of middle age is achieving generativity, which means making one’s mark by contributing to the family and community and accomplishing things that make the world a better place. Failure to achieve this results in a sense of stagnation and of being unproductive.Many of the world’s most successful business people have turned to philanthropy following in the footsteps of Bill and Melinda Gates, Warren Buffet, and Jeff Skoll, Ratan Tata, and others.

Social entrepreneurship is not for everyone. It requires a special combination of personal characteristics and motivation. To those who choose to take this path, it can deliver financial returns, personal satisfaction and lasting social outcomes with the power to transform society.

Endnotes

[1]Jean-Baptiste Say, quoted in J. Gregory Dees, The Meaning of ‘Social Entrepreneurship,’ reformatted and revised, May 30, 2001. http://www.fuqua.duke.edu/centers/case/documents/Dees_SEdef.pdf.

[2]Joseph A. Schumpeter, quoted in Roger Martin, Sally Osberg, Social Entrepreneurship: The Case for Definition, Stanford Social Innovation Review, https://ssir.org/articles/entry/social_entrepreneurship_the_case_for_definition

[3]Peter F. Drucker, quoted in Dees, The Meaning of ‘Social Entrepreneurship,’

[4]Howard Stevenson, quoted in Dees, The Meaning of ‘Social Entrepreneurship,’

[5]Roger Martin, Sally Osberg, Social Entrepreneurship: The Case for Definition

[6]Schwab Foundation for Social Entrepreneurship Annual Report 2014-2015http://www3.weforum.org/docs/WEF_Schwab_Foundation_Annual_Report_2015.pdf

[7]Taylor, Hobbs, Nilsson, O’Halloran, Preisser (2004) quoted in Ana Maria Peredo, Murdith McLean, Social entrepreneurship: A critical review of the concept, Journal of World Business 41 (2006) 56-65. http://s3.amazonaws.com/academia.edu.documents/33892808/articulo_ing_1.pdf

[8]J. Gregory Dees, The Meaning of ‘Social Entrepreneurship,

[9]Northland Institute (2001) quoted in Peredo, McLean, Social entrepreneurship: A critical review of the concept

[10]Deloitte (2014 Jan) quoted in Cathy Clark, Jed Emerson, Ben Thornley, (2015) The Impact Investor; John Wiley & Sons Inc