In this article, Sushant Singh Chauhan pursuing Diploma in Entrepreneurship Administration and Business Laws from NUJS, Kolkata, discusses how is a trust managed under Indian law.

INDIAN TRUSTS ACTS, 1882 is an act related to private trusts & trustees.

Definition – According to Indian Trust Act, trust means an obligation annexed to the ownership of property, & arising out of a confidence reposed in & accepted by the owner for the benefit of another or for another and owner.

• The person who declares the confidence is called the author of the trust.
• The person who accepts the confidence is called trustee.
• The subject matter of the trust is called trust property or trust monetary.
• The written document through which trust is created is called instrument of trust.
• The person whose benefit the confidence is accepted is called beneficiary.

Thus, a trust is an acceptance of an obligation by a person in against of some property or funds to use it or hold it for the benefit for the person whom the trust is created.

CREATION OF TRUST

The elements of valid trust are presented in section-6.

The act defines how the author could create the trust, assign trustees and give them his monetary assets to be controlled by the trust. It may be express or implied. It includes-

• Intention of the author to create the trust.
• Purpose of the trust.
• The monetary asset is assigned for the benefit of the trustee.
• Gives control or transfer the trust property to the trustee which includes intention of the author.
• Trustee can claim expenses & salary from the benefits from the trust of his work.

The requirement of the trust law is that the author should indicate by words or conduct with the reasonable intention to create a trust.

The effect of the provision is a valid trust requires four certainties-

• Certainty of author’s intention,
• Certainty of object,
• Certainty of beneficiary &
• Certainty of trust property.

For example: A property transfer within the same family no valid trust will arise because the beneficiary of the trust is not indicated with certainty similarly if the transferee distributed the property amongst the member of same family, as he should think most deserving, here there is also no valid trust because there should be no certainty about beneficiaries but where a person transfer is property and his assets to another person for payment of his creditor. This is not trust but a transfer on a condition mentioned under a trust law in India.

SECTION 8 – About the subject matter

Under this provision, the trust law requires that the subject matter must be property & are capable of being transferred to beneficiary.

SECTION 5 – Nature of the property

Under this provision, properties which are transferred to the trustee may be moveable or immoveable.

In case of immovable property, it may be valid if the author of the trust & the trustee being signed on the instrument & by the will of the author of the trust

The provision of trust law in India cannot be used for the purpose of committing fraud. (R/W Sec-4)

SECTION 4 – Purpose should be lawful

Under the provision, sec4 states that a trust must be created for lawful purpose.
Where the purpose of law of trust is unlawful, the trust becomes void.

But as if the trust property is located in foreign country, the law of that country shall apply.

Trust Law in India requires that the purpose should be lawful.

Unless it is not being-

• It is forbidden by the law,
• It is fraudulent,
• It is of such nature that, if permitted it would defeat the provision,
• The court regards it as immoral or opposed to public policy.

Suppose for example- trust for fraudulent of creditors,

SECTION 7– Competent to contract

According to sec-7 of the trust law in India says that a trust may be created by every person competent to contract. But where the trust is created on behalf of minor, permission from civil court jurisdiction should be obtained first.

SECTION 9 – Who may be beneficiary

Under the provision, every person capable of holding property may be a beneficiary. As if the proposed beneficiary may renounce his interest under the trust he can by disclaimer addressed to the trustee, by giving notice.

WHO MAY BE TRUSTEE UNDER THE TRUST LAWS

Section 10 says that every person who is competent to contract are capable of holding property as trustee.

However no person is bound to accept a trust. When a person is appointed as a trustee, he has the option to accept or reject the trust. He has to intend his acceptance by words, written, spoke or by conduct. The assigned trustee may disclaim it also, but he must do with in the reasonable time. His disclaimer will prevent the property to transfer to the trustee. But in case of more than one proposed trustee & one of the trustees disclaim, the property will vest to the other trustee & he will become the sole trustee vice versa. A proposed trustee who accepts becomes the trustee from the date of the creation of trust. Where a person by his will leaves certain property in trust for another & the proposed trustees prove his will that amounts to acceptance of the trust on their part.

Under English law, the property becomes to the subject of two kinds of ownership. The trustee becomes the legal owner & beneficiary regarded as beneficial owner.

Under Hindu law, provision clearly says that the trustee having possession of the property. The beneficiary has certain rights under the trust under Indian trust law. Beneficial ownership is also known as equitable ownership but it is not known in the trust law in India.

KINDS OF TRUST UNDER THE TRUST LAW

There are different kinds of trust which are discussed below-

Express trust– If the trust was created verbally, in written or in expressed term and a person is being nominated to be the trustee of the trust it would amount to express trust. If the property is moveable then firstly it should be registered & have to physically transferred to the trustee.

Implied trust– An implied trust is also created by an act of the parties. It appears from the conduct of the parties.
The conduct of the party creates presumption & also shows the intention of the parties.

Public & private trust– A public trust under the trust law in India is one which is created for the benefit of the public. In general Public doesn’t mean public as whole. The trust may be created for a part of public & it will be valid trust so long as every member of particular class is permitted to enjoy the benefit of the trust. Examples of general public purpose are- medical, health, social service, education, training etc.

Private trust is basically is made for a specified person so that no one left the one can draw the benefit. Such a trust is enforceable at the private action of intended beneficiary.

Secret Trust– Where neither the existence of trust nor its terms are disclosed, it is called secret trust. In case the existence of trust is disclosed but its terms are not disclosed it is a half secret. This is a misuse of concept trust.

REQUIREMENTS FOR STARTING PUBLIC TRUST UNDER THE TRUST LAW

The general rules emerge from judicial authorities is that the charitable trust must satisfy 3 requirements-

• The trust must be for the promotion of public benefit.
• The trust must be wholly & exclusively charitable
• The trust must be charitable of nature

LIABILITIES OF TRUSTEE UNDER TRUST LAW

Liabilities of trustee defined in Section 23 to Section 30 of the trust law. They are as follow-

• Liability for breach of trust

Where the trustee commit breach of trust, then he is liable to compensate the beneficiary or the trust property which loss sustained unless the beneficiary has by fraud induced the trustee to commit the breach.

A trustee committing a breach is not liable to pay in some following cases-

1. When he has actually received interest,
2. Where he may be fairly presumed to have received interest.
3. Where the trustee ought to have received interest.

• No set off against liability

Where a breach of trust in two distinct forms, one causing loss & the other brings profit, the trustee cannot say that his liability for the loss should be reduced by set off against it the gain in simple words if breach of trust cause loss the trustee has to bear. If it brings gains it will go the benefit of trust property.

• The position of co-trustees

The general rule is that a trustee is not liable for the breach of trust committed by any one of his co-trustees
EXCEPTIONS-

• Section 26 declares where the trustee is liable for the breach of his co-trustees.
• Where he has delivered the trust property of his co-trustee without seeing to its proper application
• Where he comes to know of a breach of trust committed by his co-trustee or intended to commit & trustee doesn’t take proper steps to protect the interest of the beneficiary.

RIGHTS & POWERS OF TRUSTEE UNDER TRUST LAW

• Right to title

A trustee is entitled to have in his possession the instrument of trust & all the documents of title relating to the trust property.

• Indemnity from Gainer of breach of trust

Where a breach of trust has occurred and a person other than a trustee has received benefit from the breach, he will be bound to indemnify the trustee. Such indemnity is not available to a trustee who has been guilty of fraud in breach of trust.

• Settlement of accounts

When the duties of a trustee have been completed, he is entitled to have the accounts of his administration of the trust property examined and settled.

• General Authority of trustees

A trustee has the right to do all such acts that are reasonable & proper for the realization, protection or benefit of the trust property & also for the protection of a beneficiary who is not competent to contract. This is known as general authority of trustee.

• Power to convey

The completion of sale may require certain formalities (formality of conveyance). Section 39 gives the power of conveyance to trustee. The section says that after the completion of sale the trustee shall have the power to convey to the person as may be necessary.

• Authority to deal with trust property under trust law

Where the authority to deal with trust property is given to several trustees and any of the trustees disclaim or dies the authority may be exercised by the continuing trustee. This will not be applied in those situations where the instrument of trust is specific on the point that the trust executed only some specific number of trustees.

• Power to sell

Where a trustee has the authority to sell the trust property he may sell the property subject to the charges or free of them. He may sell the whole property in one lot or in installments either by public auction or by the private at one time or at different times. But the trustee can perform such activity when it is mentioned in the trust deed.

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In this article, Uday Agnihotri pursuing Diploma in Entrepreneurship Administration and Business Laws from NUJS, Kolkata, discusses legal Structures commonly used by NGOs in India.

Non-Governmental Organization

Non-Governmental Organizations (NGOs) are organizations engaged in a plethora of activities aimed at protecting and promoting the varied interests of the people. As the name suggests, NGOs are state independent voluntary groups working towards various social causes – ‘charitable purposes’. Section 2(15) of the Income Tax Act, 1961 explains charitable purpose as those activities aimed at the relief of the poor, education, yoga, medical relief, preservation of environment (including watersheds, forests and wildlife) and preservation of monuments or places or objects of artistic or historic interest, and the advancement of any other object of general public utility[1]. These ‘Not-for-profit’ organizations differ from other businesses as the aim of such ventures is charity, not generating profits. Thus, NGOs are prohibited from distributing the income generated from their working among its members.

There is no single consolidated act dealing with the formation and registration of NGOs. This is because an NGO is an umbrella term for all charitable ventures. An NGO, in itself, can have various structures. These can be registered as societies, trusts and private limited, non-profit companies (commonly referred to as Section-8 Companies). Therefore, an NGO can be registered under any of the three acts i.e. Companies Act (2013), Societies Registration Act (1860) or Indian Trusts Act (1882).

Steps to start an NGO

Prerequisites

Prior to the registration of an NGO and its functioning thereof, there are certain prerequisites that are to be followed (or kept in mind):

The first step is to decide the concerns and the issues that the NGO would be dealing with. An NGO can deal with social issues such as poverty, education, woman empowerment etc. The purpose of the NGO would be guided by section 2(15) of the Income Tax Act, 1961. This will give direction to your actions and would ensure that your actions are in consonance with the objectives (in mind). This would, thus, ensure the meeting of ‘theory’ and ‘practice’. Hence, to plan and give objective and vision to your charitable venture becomes the first and one of the most important steps.

The next important step is the formation of a ‘governing body’ that would be responsible for taking all the decisions regarding the establishment, working and functioning of the NGO. Therefore, such a body would deal with all important matters from planning, fund raising, human resource, IT etc.

The next step is the formulation of a Memorandum of Association (MOA). It is not merely a procedural formality, but a legal requirement. The MOA should include details such as the name of the NGO, its members, address of the office, addresses of the members, mission and objectives, rules and regulations of the NGO etc.

Registration

After the prerequisites have been met, the NGO can be registered as per the provisions of any three of the Acts i.e. (Companies Act (2013), Societies Registration Act (1860) or Indian Trusts Act (1882)).

1. NGO as a ‘Section-8 Company’: If the NGO is intended to be in the form of an organization ‘for promoting commerce, art, science, sports, education, research, social welfare, religion, charity, protection of environment or any such other object[2]’, the NGO can be registered as a ‘Section-8 Company’. Thereafter, it has to function as a not-for-profit organization and thus, all profits generated during the course of its functioning have to be applied for promoting the objectives of the organization i.e. no dividend can be paid to the members of the company.
2. NGO as a Society: An NGO with seven or more members can be registered as a society (under the provisions of Societies Registration Act). Even though the process of registration is more cumbersome and complex than other methods, a society gives more flexibility in its functioning and working.
3. NGO as a Trust: A charitable trust offers the simplest process of formation. It is not legally required to get a trust registered. However, registered charitable trusts enjoy certain benefits and exemptions such as income tax benefits. The subject-matter of a trust must be property transferable from one person to another.

Fund Raising

The next step after the registration process is complete is the raising of funds. Funds are necessary for the working of the NGO. And the required funds can be raised from two sources i.e. internal sources as well as external sources.

1. Internal sources: NGOs majorly depend on internal sources for funds. These funds are generated from within the organization. These types of sources include subscription, donation, membership fees, charges etc.
2. External sources: Funds generated from outside the organization are covered under external sources. Grant-in-aid from the governments, grants or loans from private individuals or institutions within the country or inflow of foreign funds are termed as external sources.

Network

No organization can work in isolation. Therefore, it is necessary for an NGO to develop its network with government agencies, other NGOs, media, institutions such as schools, hospitals etc. This would not only help generate more funds for the NGO or more participation in the NGO but would also be important for spreading awareness and the benefits of the activities undertaken by the NGO. Thus, helping the NGO achieve its objectives in a more efficient and seamless manner.

After understanding the steps for the formation of an NGO, it is imperative to look at the various procedures involved and the benefits provided by the three structures of the NGOs i.e. NGO as a Section-8 Company, Society or Trust. This would help choose the ideal form for the purpose of which the NGO has to be established. Therefore, there are certain factors upon which this decision rests. These factors include time constraints, aims and objectives of the NGO, required funds, fund raising ability, location of the NGO, amount of flexibility desired etc.

Section – 8 Companies Act, 2013

To register as a Section-8 company, the provisions regarding incorporation of a company as contained in the Companies Act, 2013 would be applicable. Thus, Section-8 companies would be governed by the same act throughout the country. In this sense, they are very similar to other limited companies. Only few differences exist such as a section-8 company does not have to add the word ‘limited’ at the end, the income generated through its working cannot be paid as dividend to the shareholders, it enjoys tax benefits which are enjoyed by the trusts etc. The incorporation and the registration of the section-8 companies are also similar to that of normal companies.

Thus, Memorandum of Association (MoA) and Articles of Association (AoA) form the cardinal documents of the Section-8 Companies too. Apart from the normal procedure, an application ‘Form INC-12’ has to be submitted to the Registrar to grant the permission to drop the word ‘limited’. A minimum of three trustees are required for the incorporation of such a company however, no upper limit has been provided for. It is important to note that such a company can be found only if the intention of such a company is ‘for promoting commerce, art, science, sports, education, research, social welfare, religion, charity, protection of environment or any such other object[3]’.

It usually takes around 3-6 months for completing the formalities and legal requirements. Even though it takes comparatively longer time to establish, it is preferred by many because it can generate lot of funds on one hand (by issuing new shares) and it also leads to democratization of the decision making power as every member gets voting rights proportionate to their shares. Thus, it ensures higher level of participation and involvement of the maximum people.

Society

An NGO can be established as a society under the Societies Registration Act, 1860. Section 20 of the Act lays down certain areas of working in which an NGO can be formulated as a society. These include Charitable societies, the 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, collections of natural history, mechanical and philosophical inventions, instruments, or designs.[4]

It is imperative to note that, unlike Section-8 companies that are governed by the provisions of the same act throughout the country, Societies are governed by the respective state acts (in the absence of which, they are governed by the Societies Registration Act).  Legally, minimum 7 members are required in the managing committee of a society. For registering as a society, certain documents such as the Memorandum of Association (MoA), Document enlisting the rules and regulations governing the society and other documents from the members such as affidavits, consent letters etc. The incorporation of a society takes around 1-2 months only. Moreover, a society is more democratic and provides more flexibility than other forms by providing powers and duties in the documents themselves.

Charitable Trust

An NGO can be established as a trust when there is a property involved. Thus, the subject-matter of a trust must be property transferable from one person (settlor) to another (trustee). The trustee must act according to the ‘trust deed’ and utilize the property for the benefit of the ‘beneficiary’. A public trust is governed by the laws passed by the respective states (in the absence of which, it will be governed by the Indian Trusts Act). With regards to immovable properties, a written trust deed is necessary which is to be registered with the Sub-Registrar whereas, with respect to movable properties, no written document is required by law. A trust deed includes the terms of the trust, number of trustees, objective of the trust etc. The trust deed, accompanied by an application form, has to be submitted for registration. The trust takes around 2 days to one week for its formation and hence, is the quickest one out of the three forms. Furthermore, trustees have a high level of control as more often than not all powers are vested with one person only. Thus, a trust facilitates quick decision making and centralization.

It is imperative to note that when an NGO adopts any form, only its structure varies. Along with the structure, there may be some rights or limitations associated. However, there is no difference in the status of the NGO. An NGO formed under any provision (Company, Society or Trust) is at par with other NGOs that may differ in structure. Thus, a person should analyze various advantages (or disadvantages) associated with a particular form and then decide accordingly whether to form a company, a society or a trust so as to facilitate the objectives of the NGO.

References

[1] Section 2(15) of the Income Tax Act, 1961.

[2]  Section 8 of the Companies Act, 2013.

[3]  Supra.

[4]  Section 20 of the Societies Registration Act, 1860.

In this article, Varsha Balasubramanian pursuing Diploma in Entrepreneurship Administration and Business Laws from NUJS, Kolkata, discusses how to close down a start-up legally.

What is a start-up?

A start-up company (or start-up) is an entrepreneurial venture which is typically a newly emerged, fast-growing business that aims to meet a marketplace need by developing or offering an innovative product, process or service. A start-up is usually a company such as a small business, a partnership or an organization designed to rapidly develop scalable business model. Often, start-up companies deploy technologies, such as Internet, e-commerce, computers, telecommunications, or robotics. These companies are generally involved in the design and implementation of the innovative processes of the development, validation and research for target markets. While start-ups do not all operate in technology realms, the term became internationally widespread during the dot-com bubble in the late 1990s, when a great number of Internet-based companies were founded.[1]

The exact definition of “start-up” is widely debated. However, at their core, most definitions of a start-up company are similar to this one “business that is typically technology oriented and has high growth potential”.[2] The reference to “growth potential” may mean growth in revenues, number of employees, or both or to the scaling up of a business to offer its goods or services to a wider or larger market. Another popular definition defines a start-up as an “organization formed to search for a repeatable and scalable business model.”[3] In this case “search” is intended to differentiate established late-stage start-ups from traditional small businesses, such as a restaurant opening up in a mature market. The latter implements a well-known existing business strategy whereas a start-up explores an unknown or innovative business model in order to disrupt existing markets, as in the case of the online merchant Amazon, the “app“-based ride service Uber or the search engine Google, each of which pioneered the development of their respective market categories. Blank and Dorf add that start-ups are not smaller versions of larger companies: a start-up is a temporary organization designed to search for a product/market fit and a business model, while in contrast, a large company is a permanent organization that has already achieved a product/market fit and is designed to execute a well-defined, fully validated, well-tested, proven, verified, stable, clear, unambiguous, repeatable and scalable business model. Blank and Dorf further say that a start-up essentially goes from failure to failure in an effort to learn from each failure and discover what does not work in the process of searching for a repeatable, high growth business model. Yet another view is that[4] “a start-up is a company designed to grow fast. Being newly founded does not in itself make a company a start-up. Nor is it necessary for a start-up to work on technology, or take venture funding, or have some sort of “exit“. The only essential thing is growth. Everything else we associate with start-ups follows from growth.” Graham added that an entrepreneur starting a start-up is committing to solve a harder type of problem than ordinary businesses do. “You’re committing to search for one of the rare ideas that generate rapid growth.”  The value of a start-up firm[5] “rests entirely on its future growth potential.” His definition emphasizes the stage of development rather than the structure of the company or its respective industry. Consequently, he attributes certain characteristics to a start-up which include, but are not limited to, its lack of history and past financial statements, its dependency on private equity, and its statistically small rate of survival.

Why close down start-ups?

As seen from the above, start-up entities are essentially working on a radically new concept, idea or business model, which can have a huge growth potential as an upside or might end up completely unfit to the market.

Thus, it is only expected that there is a significant possibility for the start up to also fail and have no future. This would require that the legal entity of the start up needs to be shut down to complete the formalities.

Steps involved in closure of a start-up

Step 1 – Decide whether the start up really needs closure or not.

A clear evaluation is required to determine whether the start-up idea has really no future and hence the entity requires to be closed. The decision may also require internal discussion amongst the co-founders (such as partners or shareholders).

It would also be pertinent to ensure that the decision is documented in a legal form as may be required such as by way of a resolution of the partners in case of LLP or by way of a resolution of the members in case of a Company. In case of a sole proprietorship, this may not be a legal requirement. However, in other forms of business, this would be necessary from a legal documentation perspective also.

Step 2 – Tax clearances to be obtained

It is also a legal requirement to ensure that the income tax clearances are obtained for the assessment years that have gone by and also ensure that payment of indirect taxes, as well as the various returns to be filed, have been completed and assessments for the years the business has been in operation are completed or will not lead to non compliances. Where required, the entity may obtain appropriate expert advice also. Where refunds are to be received or there are unutilised credits, evaluate these and take professional advice ahere required to determine the course of action before closure of the entity.

Step 3 – Surrender or cancel licences, approvals etc.,

The startup may have obtained various licences, approvals etc., for operating the business. All these need to be evalauted on a case to case basis to determine if any of these require specific intimation/declaration to the authorities concerned that such licences / apporvals are being surrenderred or are to be cancelled in view of the closure of business. It would be in good order to intimate all the authorities from whom such licences/approvals were obtained irrespective of whether there is a specific provision in the related regulation. It would also become important in cases such as registration with RBI for foreign investment, Import Export Code etc., also with regard to registration with ESIC, PF authorities. In case of company having unfinished export obligations related to its imports, these may have to be dealt with and settled with the department/authority concerned before closure of the business. Further, many such authorities also require that compliances are completed for the period of operations, such as for instance, filing of utilisation of advance licenses and clearances obtained from DGFT.

Step 4 – Settle employees and complete labour law compliances

Closure of business would require that the employees be settled for their pay and also benefits which may have to be paid in view of the closure of business. End of service benefits such as leave encashment and gratuity may become payable. Further, it is also possible that there may be a legal requirement to pay retrenchment compensation to the employees if so applicable under the relevant regulations. Returns which are to be filed under various labour regulations should be completed before the closure of the business.

Step 5 – Settle dues to creditors and lenders

All dues to creditors and lenders to be identified negotiated and settled. Where the entity does not have adequate resources to settle the creditors and lenders in full, it may be necessary to go through the Insolvency and Bankruptcy Code where applicable. Where private arrangements are made with the creditors and lenders, then there must be clear waivers from the parties concerned to accept amounts which are lower than the amounts owed actually. Any tax implication arising therefrom needs to be also considered and addressed.

Step 6 – Accounts to be closed

The company should then proceed to close the accounts and if it has surplus, take steps to distribute the same amongst the co-founders with appropriate resolutins for the same being recorded. The company should also take steps to close the bank account it has, after having dealt with all the payments and receipts.

A closure balance sheet / statement of affairs may also be required to be drawn up, which may reflect only accumulated profits / losses and dues to co-founders including capital contributions, if the regulation under which the entity was formed so requires.

Step 7 – File for closure of the legal entity such as LLP / Company

Thereafter, the entity will have to take steps with the authority under which it was registered to get its name deactivated or struck off. For this purpose, in case of LLP or a company, the required processes with the Registrar of Companies are to be undertaken.

In case of the entity being an LLP, voluntary winding up would require:

• Resolutions being passed for winding up by the partners
• Obtain approval of the lenders (secured or unsecured) if any
• Affidavits from the partners for winding up of the LLP
• Appointment of an LLP liquidator for settlement of the assets and liabilities. He will perform or direct many of the actions mentioned in the earlier steps.
• LLP Liquidator to file a report of liquidation, which needs to be approved by the partners
• Filing for dissolution of the LLP

In case of a Company

• Voluntary winding up process is available which is by and large similar to the process detailed for the LLP
• Alternatively, there is an option to under section 248 (2) for the company to approach for having its name struck off from the register of companies. The steps involved for the same are:
  • The company must extingusih all its liabilities
  • Prepare a statement of affairs (Balance Sheet) of the company after such settlement of liabilites
  • Obtain approval of the members (by special resolution with 3/4ths majority) for closure of the company
  • File with Registrar of Companies for removal of name enclosing various documents
  • Provide NOC from appropriate authority which regulates the business in which the company was operating
  • Once the submission is accepted, publish in the newspaper (one english and one vernacular paper)
  • The ROC will intimate the various authorities (such as income tax, central excise etc.,) to seek any objections within 30 days
  • Once the ROC is satisifed that there are no objections received to the move, will approve and process the removal of name from the register of comapnies

Step 8 – Retain records as may be required

Though the entity is closed in this process, the co-founders should make a conscious plan to retain critical and relevant records of the entity and its closure in a manner which is retrievable for use in case of any future query/requirement in this regard.

References

[1]https://en.wikipedia.org/wiki/Startup_company

[2] U.S. Small Business Administration

[3]Entrepreneur-mentor Steve Blank and Bob Dorf

[4] Paul Graham

[5] Aswath Damodaran

In this article, Salma Jennath does a case study on National Legal Services Authority v. Union of India. [(2014) 5 SCC 438]

Coram: K.S. Radhakrishnan, A.K. Sikri, JJ.

Procedural Background

The judgment was delivered in pursuance of a Public Interest Litigation filed by the National Legal Services Authority (NALSA) seeking to address the grievance of the Transgender Community, for short TG community, and praying for a legal declaration of their gender identity other than the binary gender, i.e., male or female. A similar writ petition was also filed by Poojaya Mata Nasib Kaur Ji Women Welfare Society seeking similar reliefs for the Kinnar community.

The community coming within the umbrella term ‘transgender’ suffers tremendous trauma and abuse from the society, as they do not fall under neither of the “socially-accepted genders”. The non-recognition and non-acceptance from the society, which shuns the TG community, causes this community to be side-lined and makes them untouchables.

The non-recognition of their sexual and gender identity is a violation of their various Fundamental and Human Rights, which are protected by the Constitution of India and other international Human Rights documents.

Facts of the Case

Looking back into the history of the country, it can be seen that the Transgender Community was accorded a special and important status. The Hindu mythology, Vedic and Puranic literatures recognised them as the third gender and bestowed them great respect. They played an important role in the royal courts and were considered to have the power to give blessings. This status of the TG community changed after the advent of the British rule in India and the Colonialists treated them in an inhuman manner.

As a direct consequence of the Criminal Tribes Act, 1871, there was an attrition of the status of the TG community as the legislation deemed the entire community as innately criminal. Though there has been marginal improvement in the condition of the TGs, especially after the repeal of the said ‘notorious’ Act, their condition is not far from dismal. There is a need for affirmative action for the upliftment of the community and for the improvement of their social status.

The atrocities faced by TG community, from the citizens as well as the state authorities, in turn, is a violation of their many fundamental rights including those under Articles 14 and 21 of the Constitution.

Reasoning

The main issue in the writ petition was the recognition of gender identities as perceived by the Transgender Community. The judges took into consideration the international legal scenario and the recognition of the rights of the transgender community by international human rights documents as well as human rights courts.

The right to equality and equal treatment of persons is a right recognised by Article 14 of the Constitution. It specifically provides that no ‘person’ shall be discriminated on the basis of sex/gender. Article 14 does not restrict the word ‘person’ and its application only to male or female. The TGs fall within the word ‘person’ and are entitled to equal protection of all laws.

Article 15 provides for affirmative action for the advancement of minority and backward communities. The TGs have been for long denied their rights under Article 15(2). They are shunned from many public places including educational institutions, health care institutes, etc. These rights are not subject to any disability, liability, restriction or condition. Moreover, under Article 15(4) they must be accorded a status of socially and educationally backward class. Additionally, they are also entitled to reservation in the matter of appointment in public and state offices.

One of the most important fundamental rights that is denied to the TG community is their right under Article 19 (1)(a). Article 19 (1)(a) guarantees to citizens the freedom of speech and expression. This right includes the right to expression of one’s self-identified gender. This expression may be done through dress, words, action or behaviour or any other manner.

Article 21 is one of the most extensive fundamental rights provided by the Constitution. More and more rights have been read into the said right to life and personal liberty. Article 21 has within its ambit all those aspects of life, which gives meaning to a person’s life. Life does not mean mere animal existence. It is the right to live with human dignity. It also includes one’s personal autonomy. Expression of oneself according to his self-recognised gender is an aspect of personal autonomy protected under Article 21.

Moreover, recognition of one’s gender identity lies at the heart of the right to dignity. It is a positive right of persons to make decisions about their life, to express themselves in the way they choose and also to do what activities that they choose to do. The judges laid down the Psychological Test as against the Biological Test to identify the gender of a person.

The judges also took into consideration the various human rights provided under the Universal Declaration of Human Rights, the International Covenant of Civil and Political Rights, the Yogyakarta Principles, etc. in determining the extent of transgender rights. Moreover, the plethora of judgments and legislations in foreign countries recognising the right of the TG community and the acceptance of a special social status in the world convinced the judges that it was high time that India also comes up with progressive measure for the protection of this vulnerable community.

Judgments and Dispositions

The judgment relied upon many foreign decisions laid down by many courts including the English courts, courts of New Zealand, Australia, Pakistan, Malaysia, etc. The judgment provides a timeline of cases and the evolution of the recognition of persons according to the psyche. Initially, the test for determination of a person’s gender, as laid down by Corbett v. Corbett[1]was his/her biological characteristics at birth.

The courts of Australia and New Zealand was in opposition to the Corbett principle and had more liberal principles for gender determination. Later, the test was to see whether the person has undergone surgical and medical procedures that have given the person the physical appearance and features of a person of a specified sex. The New Zealand court in Secretary, Department of Social Security v. “SRA”[2] as of the opinion that gender determination is a purely psychological question, one of self-perception and partly a social question, how society perceives the individual.

The court recognised that gender identity is one of the most fundamental aspects of life which refers to a person’s intrinsic sense of being male, female or transgender or transsexual person. They opined that guarantee to equality and non-discrimination on the ground of gender identity is increasing and gaining acceptance worldwide and that it can also be applied in India.

Transgender people are oppressed and are faced with discrimination in the field of health care, employment, education, etc. The court referred to Part 21 of the United Nations Convention against Torture and Other Cruel Inhuman and Degrading Treatment or Punishment, wherein it is stated that States are obliged to protect all persons regardless of sexual orientation or transgender identity. The court acknowledged the absence of legislation in the country and the necessity to follow the International Conventions.

The Court held that TGs are entitled to affirmative action as guaranteed under Article 15(4) and also to reservation in the matter of appointment. State is bound to take affirmative action to give them due representation in public services.

The court further emphasised on the need for legal recognition of third or transgender identity and concluded that they belong to a distinct socio-religious and cultural group and must be considered as a “third gender”, apart from male and female.

Justice K.S. Radhakrishnan, speaking on behalf of the Court, concluded the judgement by holding that discrimination on the basis of sexual orientation or gender identity includes any discrimination, exclusion, restriction or preference, which has the effect of nullifying or transposing equality by the law or the equal protection of laws guaranteed under our Constitution. In light of the aforementioned, it made various declarations and directions to the Centre and State Governments:

• Hijras, Eunuchs are to be treated as “third gender”.
• TGs have the right to decide their self-identified gender.
• Take steps to treat TG as socially and educationally backward classes of citizens in cases of admission in educational institutions and for public appointments.
• Governments to operate separate HIV Zero-Surveillance Centres.
• Governments to seriously address the problems faced by TGs.
• Provision for separate public toilets and appropriate medical care in hospitals.
• Governments to frame various social welfare schemes for the betterment of TG.
• Governments to create public awareness so that TGs will not be treated as untouchables.
• Take measures to regain the respect and place of TG in the society which they once enjoyed.

Critical Analysis

The judgment delivered by Radhakrishnan, J, made a detailed analysis of the transgender status, not only in the international sphere but also in the Indian legal and cultural history. On the one hand, the judgment addresses various issues and problems faced by the community but on the other, certain obvious and important issues were superficially addressed.

The concurring opinion delivered by Sikri, J is almost as elaborate as the main judgment and defines the rights of the TG community in a jurisprudential light. The learned judge made a detailed analysis of Kantian criterion of justice, Aristotle’s equalitarian theory and Locke’s conception of individual liberties. Giving due respect to these theories, the learned judge dismissed them as irrelevant in the present scenario. He has rightly done so, as all the theories are biased opinions of their thinkers, belonging to a different society and at a different time.

While agreeing to the reasoning put forth by his learned brother, Justice Sikri took into consideration the Directive Principles of State Policy to recognize the duty of the State in taking affirmative action for the upliftment of the community.

The learned judge recognised the intricate web of rights associated with the recognition of persons according to self-recognised gender. The TG community, along with their right to self-recognition is deprived of educational facilities, medical facilities, the right to vote, the right to own property, the right to marry, the right to a formal identity, etc. The individuals of the TG community are deprived of these basic human rights that are recognised everywhere in the world.

The judgment does not provide a long term and extensive solution the problems faced by trans genders. It merely gives a cursory glance at these problems. The judges provide no descriptive or comprehensive guidelines.

The TG community being a sensitive and vulnerable community should be given special treatment that are meted out to the women in India. Special provisions of counselling and interrogation should also be provided to the ‘third gender’ and not merely individuals who recognise themselves as females. While the issue of separate public toilets was addressed by the judgment, the need for separate detention facilities were not taken into consideration. One of the biggest problems faced by the TG community is atrocity and cruelty meted against them by the police force of the country; adequate measures to address this major problem must be taken up by the wings of government.

Moreover, the issue of sexual intercourse though given a perfunctory glance was not looked deep into. Though it was not a direct issue in the writ petition, this is an issue that is inextricably linked with the rights of the TG community. The Yogyakarta Principles, which were relied upon by the judges, was not accepted in its true letter and spirit. Paragraph 22 of the judgment is a detailed reproduction of these principles. These principles clearly call for an amendment of criminal law of the country so that their sexual and reproductive rights are not affected. However, since this issue was already decided by the Supreme Court in the case of Suresh Kumar Koushal v. Naz Foundation and Ors.[3], upholding S. 377 of the Indian Penal Code, an opinion should have been made by the learned judges highlighting the importance of sexual relations for persons in enjoying a dignified and meaningful life.

An appreciable factor of the judgment was its recognition of the TG community as a socially and educationally backward community. Such classification, which acts as a positive discrimination, is a much-needed action for the upliftment of the community.

Another significant aspect is the special medical attention that is sought to be given to this community. Also, the measures to provide them a sense of belonging in the society by educating the society as well as the community is a laudable solution put forth by the judgment.

This judgment was a long awaited one not only by the transgender community but also by human rights workers. The TG community became the new ‘untouchables’ and the cruelties sustained by them one too many. This was a first step to the amelioration of a community, marginalised and abused, and for too long a time.

[1] (1970) 2 All ER 33

[2] (1993) 43 FCR 299

[3] (2014) 1 SCC 1

In this article, Varun Anand pursuing Diploma in Entrepreneurship Administration and Business Laws from NUJS, Kolkata, discusses Liability of directors in case of sexual harassment non-compliances.

INTRODUCTION

According to a study, a woman endures an incident of sexual harassment in India every 42 minutes, this sums up to about 34 incidents in a day or 240 incidents in a week or 1028 incidents in a month. This is an alarming number to deal with and most of these incidents go unreported due to a deficiency in the legal structure of the country.

Post the landmark judgement in a Public Interest Litigation[1] filed by a women’s activist group in the Supreme Court of India the Hon’ble Court promulgated a set of guidelines, namely the Vishakha Guidelines. These guidelines were in force till the time the legislature came up with a more comprehensive and robust set of laws to cover the sexual harassment complaints of women at the workplace. In 2013 the Legislature came up with a new set of laws, Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act 2013. These laws come with their own set of guidelines that any workplace or industry is supposed to comply with.

Before getting into the nitty-gritties of the new Act it is more important to understand what constitutes sexual harassment.

WHAT IS SEXUAL HARASSMENT?

A quick type into google throws up the following search result, “harassment (typically of a woman) in a workplace, or other professional or social situation, involving the making of unwanted sexual advances or obscene remarks.”[2]

A perusal of the ‘Law Dictionary’ give us the following definition, “Harassment in the workplace or discrimination where unwelcome and unwanted advances are made to a person by one or more other employees. The comments are of a personal nature and often sexual in style and manner”[3].

The Equal Employment Opportunity Commission (EEOC)[4] of the United States of America defines sexual harassment as-

Unwelcome sexual advances, requests for sexual favours, and other verbal or physical conduct of a sexual nature when:

• Submission to such conduct is made either explicitly or implicitly a term or condition of an individual’s employment, or
• Submission to or rejection of such conduct by an individual is used as a basis for employment decisions affecting such individual, or
• Such conduct has the purpose or effect of unreasonably interfering with an individual’s work performance or creating an intimidating, hostile, or offensive working environment.

VISHAKHA GUIDELINES

The Supreme Court of India in the case of Vishakha versus State of Rajasthan in 1997 had perceived the lack of any proviso in the IPC and gave a historic judgement whereby it gave certain rules which were to be followed by both public and private division associations to insure against and provide a proper forum for redressal of complaints to female workers from lewd behaviour or any such sexual harassment as they may face in their work place.

• The said rules made it compulsory for employers to shield their female employees from sexual harassment;
• if a legitimate complaint was bought forth by an employee alleging sexual harassment, then it was made mandatory for the employer to follow up on it;
• it was made compulsory that each organization must have a Complaint Committee headed by a lady to help manage such wrongdoings promptly;
• rules denying inappropriate behaviour ought to be told and broadcasted;
• Punishments are to be forced if there should be an occurrence of infringement of said standards.

These rules were the main arrangements or safeguards that were in place with regard to sexual harassment incidents at workplaces for almost 16 years and just in the year 2013, the Parliament of India established a particular Act to manage this sort of provocation of female employees by promulgating the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION, AND REDRESSAL) ACT, 2013

This act was passed on the 9th of December, 2013 in the light of the horrific Nirbhaya Case. The basic motive of this act is to strengthen the law of the country to protect the interest of a female employee at the work place. The act embodies almost all the directives as laid down in the ‘Vishakha guidelines’ by the Hon’ble Supreme Court of India. The Complaint Committees that are to be constituted under this Act are given the powers of a Civil Court in as far as collection of evidence is concerned. If an organisation is found to be in contravention of guidelines as under the new Act, then the employers are liable-

1. for a fine which can go up to 50,000 INR
2. for cancellation of business license if found to be a repeat offender

The directors and promoter of a company can also be prosecuted and either imprisoned or fined or both in case there is a gross negligence on their part to carry out the work a laid down in the Act.

Maids working in households, daily wage labourers at construction sites or hired labour also come under the purview of this Act.

If you are an employer or an HR you can learn more about sexual harassment prevention and policies and save yourself from any future conflict by taking up this course by National University of Juridical Sciences or just get to know more about the how to implement the POSH laws by taking up this course.

Though the act aims to bring all cases of sexual harassment under its ambit, it still lacks in the area of filing cases against the alleged accused. As per the Act all incidents of sexual harassment will be considered a civil wrong rather than categorizing them as criminal acts. A criminal proceeding can be initiated only when the person who has been wronged is willing to take criminal action. This flaw could lead to undue pressure being put on the victim by the employer so as to save the company from embarrassment and any police intervention.

LIABILITIES OF A DIRECTOR UNDER THE ACT

A director is the mind behind the company. A company is a legal person but it is still run by a specific individual or a set of individuals. The guidelines as laid down under this act are supposed to be implemented in every workplace down to the letter. If any director is found in contravention to this act then he is liable for prosecution and subsequent term of imprisonment or levy of fine or both.

Even after such implementation the companies weren’t complying with law. Following several complaints, the Ministry of Women and Child Development took appropriate steps and roped in the Ministry of Corporate Affairs to implement such rules which made it mandatory for every company to disclose details of Complaint Committees, which meant that all companies or rather the directors of the companies under section 134 of the Companies Act, 2013 were supposed to disclose all details of these committees including their composition and the work that they were doing in the Directors Report. Any non-compliance with in matters of section 134 attracts strict penalties and other consequences.

Also under Section 134 the directors are required to make sure that their company is in compliance with all the provisions of law that are currently in force in the country. For this the directors have to make sure that their company is running taking into account all these laws that are in force.

The Companies Act, 2013 has specific provisions in place for when directors are in contravention of its provisions. Any non-compliance in this behalf attracts a financial penalty of nearly fifty thousand rupees which can go up to twenty five lakhs or imprisonment or both. The term for imprisonment can be as long as three years. This penalty is in place to deter directors from behaving irresponsibly or in a manner detrimental to the company’s employees. The Companies Act also provides that if a director is imprisoned for a period of more than 9 months then he/she can’t stand for directorship for a period of 5 years. This is one safeguard in place that makes sure that the directors are in compliance. In light of these provisions the directors have also taken up the responsibility to properly constitute the Complaint Committees and playing their part in making sure that the female employees of the company have a safe environment to work in, an environment which is free of any sexual harassment.

CONCLUSION

Employers are required to organize workshops and awareness programmers at regular intervals for sensitizing the employees about the provision of this legislation and display notices regarding the constitution of Internal Committee and penal consequences of sexual harassment etc.

It is upon the of the Government (Central Government, State Government or Union Territory Administration) to monitor the implementation and smooth functioning of the Act and to maintain facts and figures on the number of cases filed and dismissed in respect of all cases of sexual harassment that are reported by an aggrieved female employee at the workplace.

It is the obligation of each employer to ensure that the work place of a female employee is free of sexual harassment for all and has a conducive working environment for better productivity. Each one of us has to work towards empowering female employees at the work place by making them aware of their basic rights about sexual harassment at their place of work in an organisation.

With an increase in the awareness amongst people about their rights against sexual harassment and people exercising this right, makes it of utmost importance the fact that the employer and to a certain extent, the employees understand the real meaning of sexual harassment. The employers and employees should be aware of the legal liabilities of the company, the directors and in some cases even the employees and they should take appropriate measures to prevent cases of sexual harassment. The employer should work towards creating an environment that is free of any gender discrimination and encourages employees, whether male or female, equally. The environment should be such that employees treat each other with utmost respect, professionalism and have a certain level of understanding towards everyone’s strengths and weaknesses. This would lead to a better and more conducive working environment which would allow employees to work with ease, increase productivity and above everything else ease the fear that a female employee faces of sexual harassment at the workplace.

[1]Vishakha and Ors. Vs State of Rajasthan

[2] ‘Sexual Harassment- Google’

[3] The Law Dictionary

[4] EEOC

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

Everything you do as a lawyer, and everything your stuff does for you and your clients, go on to shape your brand. It goes without saying that doing things well is key to building a brand. However, it is important to understand just doing your job well doesn’t build a brand.

A strong brand in today’s time is something that is worth talking about. Remarkable is the key to building noticeable, powerful, and in today’s social media communication world, viral.

Strongly negative brands are also built in this way. Unlike in the 90s, a lawyer can go from well respected to a villain, thanks to a single social media post about something remarkable he did or did not do, and either create or destroy his brand, and as a smaller subset of the brand, the reputation he as a lawyer may have taken years to build.

Apart from the positive and negative tides that comes with every work a lawyer does, and every case a law firm handles, what are the things that you can do to build a powerful brand?

Here are the 9 things to do and measure to create a powerful brand.

#1 Thought Leadership

You may have great expertise in an area of law, but nobody really knows. Maybe the few colleagues who worked with you in the case, maybe the opposing counsel and your boss. Yes, it is possible for word of mouth to take on from there and spread, but it’s a remote possibility in most cases.

Thought leadership is the cornerstone of brand building for lawyers. Law is an intellectual pursuit. If you are known as an expert, as an original thinker, as someone pushing the boundaries of law, it increases your credibility by leaps and bounds, within the legal profession as well as among outsiders. What people say about you is your brand. If people say that you are at the forefront of a movement or a cause, that is probably the best thing that can happen to your practice.

You don’t become a thought leader by knowing all the law that is there, but by saying something new and disrupting. You do it by taking sides, picking up a cause, making a point, or maybe by arguing for an underdog who deserves your defence. If you are a thought leader, you will have to stand out and speak up. You are unlikely to make everyone happy – quite the contrary in fact. You will likely disturb some interests and make some people very unhappy. However, there will be people in your corner too, people who identify with you and support you.

If you are a thought leader, you are championing ideas whose time has come. Or maybe the time hasn’t come yet, but people like you are ready to stand behind it, vocally, visibly, even if it puts you at some risk.

Lawyers are naturally positioned to be thought leaders, because it is their job to defend the weak and the vulnerable in the society, to stand up for rights of citizens and to represent those who need it the most.

I am tempted to use the example of Apar Gupta here, who is now a very well known lawyer in Delhi, especially the Supreme Court. Apar has always spearheaded legal activism with respect to civil rights – and played a role in a number of major cases, from striking down Section 66A of the IT Act, misuse of criminal defamation provisions in IPC to right to privacy debate. He has devoted a lot of his time and effort to causes that doesn’t really pay him as other clients may, but he is always fighting one or the other such battle.

This has not only led to his visibility in the legal fraternity and before the bench, but a lot of media attention. He was frequently approached for his quotes by journalists as he is a regular commentator on upcoming legal issues in his blog. He was also mentioned in the Forbes 30 under 30 most influential Indians list a few years back.

That is a great example of how a lawyer can emerge as a thought leader.

#2 Sharpen your public profiles

Building a brand is an endeavour in the public domain. It very much depends on your touch points with the public. Where do they find you? Where do people interact with you? Where do they get information about you? Mediums like Twitter and Linkedin are definitely very important in the post-digitization world. So is what people see when they google your name.

It is a good idea to have a personal website, in your own name if you are a solo lawyer, or a law firm website. It should be a hub of legal knowledge and source of legal insights. This was done very successfully and exclusively by young and bright lawyers for a while, but the benefits of doing this is so obvious that almost all large law firms have started to pay attention to their blogs. Take a look at the Nisith Desai website for example. It is a law firm with an amazing website that is full of insightful articles. When you google on something you are researching on, or looking for something that is important to you and you land up on an article published by a Nisith Desai Associates lawyer and get swayed by the arguments presented, it definitely impacts how you perceive that brand of the law firm.

Please audit your personal brand on LinkedIn, your potential clients are all checking you out over there.

Remember, your blog is your profile too. It shows off your best ideas and expressions. The comments on those posts show that people care and they bother to respond to what you have to say. It goes a long way in brand building. It is a really good idea to have your blog, podcast or youtube channel for this reason.

How do you get tons of followers? It is very easy. Don’t bother with anything else. Just keep posting high quality content on your page and it will happen. Don’t waste time with anything else. You don’t need to do “social media marketing”. It is never going to work for 95% people. It works like fire if you only keep publishing fabulous content on your profile.

Remember that it takes time to build amazing profiles. Someone who has been building a youtube channel or a blog for the last 10 years is likely to have traction that you cannot build in next two years. However, if you keep posting amazing content over the next 5 years, who knows what is possible?

#3 Write a newsletter

How do you keep in touch with your professional contacts, admirers, former clients and potential leads, and even your peers? How do you ensure that people who matter actually hear about what you have to say when it matters? If you want to build a brand, creating your own newsletter is a very powerful step which is very rarely used in the legal industry.

A good newsletter is sent out on regular intervals, with news, insights and useful information that people do not want to miss out on. Starting a newsletter is simple and almost free until you get thousands of people subscribing to it.

Remember, that a newsletter is not spam, not should you use it to spam people. Give them what they want and value through it, not sales pitch. You can put in a line of sales pitch here and there, but what you send out must be very valuable as a whole.

At iPleaders, we can get an idea out to over 50,000 people through our newsletters, followers on social media and our communities at any given time. This is an amazing power that you must cultivate over the years if you want to build a powerful brand.

Where will people subscribe to your newsletter? You must make it easy for them. Insert subscription forms in your website, and your blog definitely. You can also have a separate newsletter for clients or add them to your general newsletter.

What you write on your newsletter should be delivered by email. However, reuse the content and share them on your social media pages, and also post the content on your blog.

#4 Contribute to discussions and debates

It is not enough to be seen on your own profile. A very big part of brand building is to contribute to others. Write for influential blogs and websites. Contribute to books other authors are writing. Engage with influencers and other thought leaders. Contribute your two penny to raging online debates. Participate in volunteer driven projects, do pro bono work, help someone to organize a conference or find the right speaker. Give a talk for no charges. Teach in the local law college. Take in some interns and contribute to their growth. Mentors young lawyers who can benefit from your experience.

The idea is that if you engage and contribute where you have nothing to gain, and do so consistently over the years with a lot of people, they talk about you in a certain way. It is a very powerful way to build a long term, sustainable brand.

#5 Pay attention to customer service

How are your customers treated when they show up with an unreasonable request you cannot honour? How long do they have to wait before their mail is answered? Do they feel that they are valued and that you appreciate the opportunity to do business with them? Do they feel lucky to land you as their law firm/lawyer? How does your secretary greet when people call? Do you show up on time for meetings? Where do they wait while they wait to be shown into your office?

Apart from the quality of the legal representation they receive, and whether you win the day for them or not, these small things go a long way in how people perceive you. Paying attention to these will determine what sort of brand you end up having.

How customers will be treated once they contact you is something that needs to be designed. This was how McDonald’s, which pioneered the revolutionary idea of fastfood was born. A movie called “The Founders” shows this process at it’s best in this scene. When McDonald’s was born, the founders took all the workers to a tennis court, where they drew up the restaurant kitchen with chalks and kept rehearsing each part of the cooking process and how all the people will work together and how they will move around in the kitchen, just like a symphony. They Kept doing this till they could make a burger within 30 seconds.

If you are building a brand for your law firm, or solo practice and have some staff (no well oiled solo practice is really solo, there are people working for you even if they are not lawyers), you can take a leaf out of the book of McDonald’s and rehearse each part of how customers are addressed and treated.

You can do the same for the services your offer. What are your top services? How do you get the work done? How long does it take? How many people plays any role, however insignificant in it? What are the moving parts? Where is the uncertainty? Plan it and rehearse it like McDonald’s.

After all, for a lawyer, the service itself is the biggest part of customer service. However, you can’t afford to ignore the smaller details even when you are delivering the big results. That’s what a brand is.

#6 Creating a network of influencers

It is very important to know the right people, and it is even more important that they know you and have good things to say about you. This is a cornerstone of brand building. In today’s marketing parlance, this is called influencer marketing. If you have small and big influencers in your industry associating with you and saying positive things about you, your brand will go through the roof.

Given the advancement of social media, it has become easier than ever to connect with influencers. However, the ancient alternative of meeting people over coffee is also an excellent idea.

The first step is to provide value to them. You cannot start by asking for favours or expect an influencer to promote you. However, you should be on the lookout – how can YOU contribute to them? Is there a way you can help out? If yes, do it. Don’t worry about the returns. ALso, don’t focus on too few people. Do it for a number of influencers.

Here is one example. Tim Ferriss, known as the master of self promotion, one of the most sought after influencers in the world and author of multiple NYT bestseller books, started creating his network by offering to help with organizing conferences. It gave him an opportunity to meet many influencers and an opening to interact with them one-on-one. Also, the organizers owed him. You can never have too many favours in the bank.

One excellent way to add value is to connect one influencer with another that he needs to connect with, at the time when he needs it.

#7 Acquire high quality affiliations

Why do doctors have so many degrees and certificates mentioned under their name on the door? It works. Your credibility goes up when you have the right affiliations. That is why people attend famous universities, have short stints with big law firms or celebrity lawyers. This is why lawyers take up standing counsel positions for the government or join ministry panels that may pay them much lesser than their standard fee.

You should keep an eye on how you can acquire high quality affiliations. Is there a way you can represent a well known organization even do pro bono work? Can you join nonprofit boards? Why don’t you keep acquiring new academic qualifications once in a few years, even though you don’t really need them, but just as a signal to the world that you care about keeping yourself up-to-date? It has become extremely easy with advent of online education, and you should take full advantage of this. Check out these courses offered by one of India’s best known law schools.

See if you can cobble together the stuff you have written over the years and get it published by a respectable publisher. Even if the book doesn’t sell, buy it with your own money and gift it to your best clients and those that you want to be your best clients. Gift it to the best law libraries in town! That is how affiliation works.

When you get high profile clients, and deliver them what they wanted, make sure you don’t forget to request them for a positive review – on your website, or maybe your facebook page, or LinkedIn, whatever may be appropriate.

Finally, whatever you do, don’t forget to measure. How do you measure? Keep a tally. Keep it regular. Keep checking how many people read your newsletter, how many visitors come to your blog, how many customers left behind a positive feedback. Whatever gets measured, gets managed.

As per the Consolidated FDI Policy, 2017 startups have now been allowed to raise 100 percent funding from overseas investors via issuance of convertible notes. A convertible note is an optionally convertible instrument giving investors the option (on maturity i.e. when the startup raises next round of funding) to convert their investment into equity at a pre-determined discount on the amount paid by the investor in the next round of funding. If the startup’s valuation does not increase as per the expectations of the investors, they can choose not to convert and instead redeem the note at an interest rate subject to the terms & conditions contained therein. This reduces the risk for the investor, while at the same time allows the possibility of conversion into equity if the startup performs well.

Convertible notes are extremely popular investment instrument in advanced startup ecosystems such as Silicon Valley.

Until now, only equity and equity like instruments (such as CCDs and CCPSs) were recognized as foreign direct investment. Optionally convertible instruments were subject to the RBI’s guidelines on External Commercial Borrowings (ECBs), which are:

1. That the investor must have a minimum 25 per cent direct equity holding in the Indian borrower (or an indirect holding of 51 percent) – This requirement would commercially defeat the purpose of the seed stage investment as the majority of investors intend to wait and watch how the startup performs, without taking immediate equity exposure.
2. That there will be caps on the amount of interest paid, which makes it unviable for the kind of commercial returns expected by a venture capital investor – The guidelines lay down All-in-Cost requirements which cap the amount of interest that can be paid out on the loan (over a standard, called the London Interbank Offered Rate or LIBOR). Note that globally, interest rates are much lower than the domestic interest rates in India so this amount will come up to around 5-8 percent or so, which is much lower than the kind of return that an investor expects. Usually, an investor is a fund which has taken on contributions from other investors, to whom it has promised a high rate of return. Usually, in the investment documents, investors attempt to specify that they will make a 25 percent return over their investment which indicates the commercial intention behind such an investment, and the same would be impossible to achieve owing to the above mentioned limitations in the ECB requirements.

The exact all-in-cost requirements are

1. ECB with minimum average maturity period of 3 to 5 years – 300 basis points per annum over 6 month LIBOR or applicable benchmark for the respective currency.
2. ECB with average maturity period of more than 5 years – 450 basis points per annum over 6 month LIBOR or applicable benchmark for the respective currency.

Hence, before the new policy, the above situation made it difficult for startups to raise funds from foreign investors, who are habituated to investing in startups through a convertible note issuance. In the domestic market too, such notes were not allowed to be issued because they would be considered as ‘deposits’ under the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014.

The above rule was first inserted through the RBI’s notification dated 10th January, 2017 amending the Foreign Exchange Management (Transfer or issue of Security by a Person Resident outside India) Regulations 2000. RBI further clarified that its pricing guidelines will be applicable (on the conversion into equity), but no interest rate ceilings have been specified in case it is redeemed. The caps in the ECB guidelines will not be applicable here.

Another important issue that arises is whether amounts invested towards issuance of convertible notes will be treated as deposits under Companies Act. One of the challenges involved in raising corporate finance or investment is the risk that the amount raised may be considered a deposit, in which case the company raising funds must comply with other requirements governing deposits, making the exercise very cumbersome. Further, if it is a private company, it may not be able to raise deposits as private companies are not permitted to raise any money through deposits. You can find out whether the amount qualifies as a deposit or not by referring to the Companies (Acceptance of Deposits) Rules, 2014. Other than the definition of ‘deposit’ look at the list of exceptions to see if the method by which you are raising finance is specifically excluded or not.

In this case, there already is a specific exclusion. As per Rule 2 (1) (c) (xvii) of the Companies (Acceptance of Deposits) Rules, an investment of an amount of twenty-five lakh rupees or more received by a startup, by way of a convertible note (convertible into equity shares or repayable within a period not exceeding five years from the date of issue) in a single tranche, from a person will not qualify as a deposit. This exception was made in 2016 and the Companies (Acceptance of Deposits) Rules do not limit this exception, so it is applicable both to convertible note issuances to domestic and foreign investors.

To be eligible to issue a convertible note within the purview of this clarification, the issuer (or investee) must qualify as a ‘startup’ within the meaning of Start Up India Action Plan. It must, therefore, satisfy the following criteria (as amended on 25 May 2017):

1. The corporate entity must be incorporated or registered in India not prior to seven years (for startups in the biotechnology sector, the period is ten years), with an annual turnover not exceeding Rs.25 crores in any preceding financial year, working towards innovation, development, deployment or commercialization of new products, processes or services driven by technology or intellectual property; and
2. Such entity should not be formed by splitting up, or reconstruction, of a business already in existence.

There is still no clarity on whether issuance of convertible notes has commenced pending issuance of RBI’s clarification. Some advantages of convertible note issuance from the perspective of venture capital investment are:

• Investors and startups do not need to undertake an expensive valuation exercise at an early stage can wait to see the performance of the startup
• There can be a huge saving on legal and documentation costs, as convertible note templates do not involve complex shareholder rights. See the document provided separately. Any protective rights as shareholders are included only once a subsequent round of investment is raised and the investor has chosen to convert the investment into equity.  This saves a huge volume of documentation work, negotiation costs and legal fees. In comparison, a CCD issuance has comprehensive shareholder protection which makes the exercise more exhaustive.

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

Labour law was one of the subjects that really intrigued me when I was in law school. There so many new issues around labour and employment law, but why do they teach us a bunch of mostly irrelevant and extremely outdated things in name of labour law in law school? Sure, we need to know the basic concepts, and they taught that in law school, but highly important and relevant issues of our times were left out.

I was going through a few syllabuses of some of the top law schools last year. Things have not changed.

The result is that labour law has a pretty bad image with budding (and even most of the grown up) lawyers. It is right next to CPC in being boring and maybe just above human rights law in terms of low potential for making money. At least that’s the perception that most lawyers and law students have.

I will tell you my experience. We began to offer a labour law course in 2016. It became popular quickly with HR managers, IR professionals, company secretaries and other compliance professionals. The percentage of lawyers who take the course is under 20%. All other law courses boasts of at least 50% of students from legal background.

However, it is a myth that labour law is boring or that you can’t make money as a labour lawyer. There is a huge amount of labour law work that is up for grabs, for several reason, and the biggest reason an upcoming lawyer should consider becoming an expert of labour laws is that there is very low competition for it. Let the rest of the world think that labour law is not sexy and miss out the opportunities, if you are looking for a break and willing to go for a relatively uncommon area of law, keep reading.

Labour law is changing

One of the biggest complaint of India Inc has been that labour laws are complex in India. On the other hand, a large part of the Indians employed in jobs do not have protections of labour law as it is old and focuses on the manufacturing sector more and leaves out the service sector, which employ a large number of people. That is slowly but decisively changing.

The Modi government has an agenda of simplifying the labour laws. While no sweeping reforms has been made, some of the recent amendments have changed the nature of the game. Take the Payment of Wages Act, for instance. The ceiling of salary, with respect to which employees it apply to, has been raised recently to INR 24,000, bringing a large number of employees under its umbrella and companies for whom it has suddenly become very relevant. Similarly, a very interesting situation has presented itself after the recent amendments of the Maternity Benefits Act as women how have to be given 6 months of paid holiday when they get pregnant while they are employed. Given that churn of employees leaving is high in the private sector, and employees often leave within 1 or 2 years of joining a job, it has very cumbersome for employers who don’t expect employees to stay beyond a year or two, to hire married women. Legal claims of maternity benefits being denied as well as companies looking to defend themselves against such claims is suddenly on the rise.

For a long time, labour law was not a very viable career unless you wanted to work for factories and labourers. That is not the case any more. With every amendment and reforms, now you can expect more and more labour law/employment disputes involving white collar employees, where stakes are higher and volume is unprecedented.

And what is unfortunate, is that there are very few lawyers in the market to tap into these opportunities with any credible skills or knowledge of labour law.

Money Recovery Claims by employees are on the rise

There is over 64,000 crore rupees unclaimed provident fund dues lying with the government. The people to whom that money is owed do not know how to do the necessary paperwork. Ask any decent civil lawyer, they would be often approached by people who could not get their PF money. It could be because an employer fraudulently did not deposit with the government though they were required to, or because they have lost some important paper.

It is a similar thing with gratuity, accident benefits, compensation under different statutes. We have an article on gratuity related laws in India on iPleaders blog, which is read by over 1000 people a day. Many of them leave queries about which lawyer can help them. See the comments if you don’t believe me. It is extremely difficult to find lawyers who are willing to or have the experience and skills to recover these amounts.

A similar case can be made about unpaid salary. We are swamped by requests from employees who have not been paid by employers or fired without due compensation to find them proper legal representation.

Do a simple math. If someone has INR 3 lakhs of unpaid salary, or PF dues, will they be willing to pay you INR 30,000 to recover it on their behalf? Do a little research right now for yourself and see if you had such a case, how easy or difficult will it be to find a credible lawyer who could do it at that price for you?

If you want to establish your own law practice, instead of chasing wild geese, money recovery for these people can be a golden practice. There is certainly no reason why a lawyer could not very rich helping out these rather helpless people if they would focus on the same and had the know-how to get it done.

In the New Economy, Employers desperately need help with labour and employment matters

For every new age company that relies on knowledge economy and highly skilled employees, there are dozens of cases of employees every year of not respecting non-compete or non-solicit obligations, or engaging in data theft, or simply running away with company property (such as laptop, mobile phones, client lists, sim cards, equipment provided to them) when they quit.

There are many more complex situations. Should a company have a dating policy? What about a conflict of interest policy? Do they need to change their agreement if they send an employee on secondment?

It is a major challenge for startups and SMEs, and for big companies. The big companies mostly rely on in-house lawyers to handle such things. SMEs have really few options. Lawyers who can help them to deal with such situations, write the correct policies, help them to fight false allegations from employees are really in demand. It’s easy to land retainership contracts with these companies for handling such situations.

In-house counsels need to be good with labour and employment laws

If you want to be an in-house counsel, at the entry level, there is no way to get around labour law. Unless you are a hotshot M&A lawyer hired at a senior level to run acquisitions for the group, expect about half of your work to involve employment and labour law work. There is a reason HR managers and IR professionals are taking up labour law courses in large numbers. You better stay ahead of the game if you want to work as a young lawyer as in-house counsel.

Every major manufacturing company needs labour lawyers

Want to work in the compliance department of a manufacturing company? You better be good with your labour laws. Good news is that manufacturing is seeing a comeback in India, with major investments being made over the last decade, and especially Make in India campaign. It is at focus of government policy, and while it is going through some tough times at the moment, it is bound to go up in the long run. If you want to work as a corporate lawyer in a large manufacturing company, you better sharpen you labour law skills. And you will definitely need a lot more than the 3 year labour law text book.

This article is written by Rashika Narain, a 4^th year law student at the West Bengal National University of Juridical Sciences. She is a coordinator for Indian Mediation Week.

As a run up to the Indian Mediation Week 2017 (IMW ’17), we have conducted over 70 awareness drives[1] across the country. The two primary questions we faced were

1. “Why should we mediate?”
2. “Will the settlement resolve our dispute once and for all?”

Now the response to the first question is fairly simple. Mediation is cheaper, faster and an inherently party-centric process. With mediation there is no judgement involved, but a mutually agreed upon solution. The focus is not on who is right or wrong but on how the problem can be solved while maintaining the relationship.

The second question is slightly tricky to answer. You want to say yes. After all, the drive is to promote mediation and you want the audience to believe that it will solve all their woes, but at the same time being a law student one is aware, that currently mediation settlements in India are not bullet-proof. Unlike arbitration awards and conciliation settlements, mediation settlements unless court-referred do not enjoy finality from legislative sanction. In fact private mediation agreements are only enforceable in a court as a contract and do not enjoy any other status. While data from other jurisdictions indicate that parties are far more likely to comply with a mediation settlement than a decree from a court, a situation may arise when one party does not follow through on his end of the bargain. Thus, can a settlement resolve a dispute finally? Most probably, although in case one party chooses to prolong the matter after arriving at a solution, the other party will have to go to court and enforce the settlement as a contract, thereby bringing with it the whole host of problems that parties sought to avoid while opting for mediation over traditional forms of dispute resolution mechanisms like litigation.

Therefore, the correct answer to the question is no. Mediation may not resolve all your disputes finally. You may have to go to Court. This leads us to the third common types of questions we are asked.

3. “Does the Government support this? How can we settle disputes on our own? If mediation is as good as you say it is, why then is the Government not doing something with it?”

This I must say is a very good question. Yes, the government does support mediation. In fact, the Ministry of Law & Justice identified ODRways (a primary collaborator of IMW ’17) as one of the 12 ADR centers to help reduce government disputes. ODRways is exclusively a mediation platform, thus the government’s support for ODRways indicates their faith in mediation as well. Further, the Ministry of Law and Justice is the name partner for IMW ’17 and encourages Team IMW with their endeavors every step of the way. However, the reason this question arises is due to the fact that trust in the system is a pre-requisite for a dispute resolution mechanism to become popular.

These questions lead me to the primary argument I am trying to make, in order to make mediation a popular dispute resolution mechanism, we need legislation- a framework to regulate the uncertainty. There exists a need to create a framework for enforcement of settlements and we need some degree of trust and certainty to the process that will come with passing a law. Scholars and even several mediators have often argued that a legislation regulating mediation will defeat the purpose of mediation itself. Mediation is an informal process and as soon as we pass a law we give a license to judges to interpret the law as they seem fit and a couple of years down the line, jurisprudence on the subject may evolve in an unclear and convoluted manner. This will take us away from mediation proceeding and back to litigation. The second argument raised by skeptics is that the informal nature associated with mediation will vanish as soon as a law regulating the process is passed. Every mediation meeting is different, mediators need to creatively step around the parties emotions and sentiments to help them arrive at a solution. Individuals fear that this creativity is threatened by a law, as once procedure is laid out, it may hamper the freedom that mediators possess.

The response to these objections are simply that while it is true that judges in different high courts may interpret the law differently for different occasions and in fact that is not a situation we are unused to in India, this harm cannot outweigh the gains involved by regulating mediation. Inconsistencies may exist on all matters before different courts, the question we need to ask ourselves in not whether judges may interpret the law differently, but whether the law will help the mediation process even without judicial interpretation. The answer is yes. Not solely because it will help consumers trust the process, but because once we regulate enforcement, half the battle is already won. Parties that are assured that their settlement will be legally binding will want to solve their disputes through mediation because now, not only are they are assured of the cost and time efficiency of the process, their fear regarding finality will also be assuaged.

The second argument is a theoretical one, it is true that mediation is not a one size fits all solution, creativity is imperative to the process. Thus, this law legislating mediation cannot be one that is rule based, or procedure based but must be modeled along a principle based regulation. The law must not guide or control the manner in which proceedings are conducted but must acknowledge and codify principles (such as confidentiality and enforcement) that are essential for mediation to be successful. We must only legislate away the uncertainty without taking away from the creativity involved.

[1] Please Hyperlink the first post here. To explain what a mediation awareness drive is.

In this article, Faraz Eliyas Salat pursuing Diploma in Entrepreneurship Administration and Business Laws from NUJS, Kolkata, discusses laws that apply to a charitable trust in UAE.

Dubai melts vivid culture. It’s the crown of turbulent the Middle East. Uneasy lies the head that wear the crown. The UAE proudly displays its plurality. An atmosphere that encourages participation at a global scale by nourishing the multiple tenors of its social fabric, Dubai maintains its openness towards diversity. Cultures prosper only when there is surplus nourishment. Emiratis are a minority yet the balance of governance is undisturbed. The UAE is a peaceful country and like every other civilization, peace is an attainment through successive years of logical and thoughtfully conceived administration.

English dramatist Henry Fielding says, “A rich man without charity is a rogue; and perhaps it would be no difficult matter to prove that he is also a fool.” Charity is a necessity for civilization to elevate the downtrodden. The UAE doesn’t discourage charity but has laws in place only to organize the activity for the betterment of both the giver and the receiver.

Decree No. 9 of 2005, issued in the Emirate of Dubai, prohibits the act of collecting donations or advertisements to raise funds. These activities must necessarily obtain prior external approval from the relevant authority, which is the Islamic Affairs and Charitable Activities Department (IACAD). The Federal Ministry of Social Affairs (MoSA) regulates charitable activities and fund raising in the UAE. The relevant Emirates counterparts in each of the seven Emirates overviews charity and provide regulations in conformity with the federal laws. I’ll principally discuss the position in Dubai; however charity in other Emirates may slightly vary.

Key legislation on charitable trust in UAE

Emirate of Dubai has the below few legislations to regulate charitable activities –

• Federal Resolution No 8 of 1974 concerning Conditions for Licensing Societiesn for Public Benefits in Collecting Money (Federal Fund Raising Law)
• Federal Cabinet Resolution No 1 of 1977 concerning the Regulation of Work andn Social Affairs (Federal Social Affairs Law)
• Federal Law No 2 of 2008 concerning Public Welfare Associations andn Organisations (Federal Charity Law)
• Dubai Law No 2 of 2011 on the Department of Islamic Affairs and Charitablen Activities (IACAD Law)
• Dubai Law No 13 of 2011 on Organising Economic Activities in the Emirate ofn Dubai (Dubai Economic Activities Law)
• Dubai Executive Resolution No 26 of 2013 concerning Charities, Qurann Memorisation Centres and Islamic Foundations in the Emirate of Dubai (Dubai Charity Law)
• Decree No 9 of 2015 on the Organisation of Fund-raising in the Emirate of Dubai (Dubai Fund-raising Law)

Raising funds from natural or legal persons within or outside the UAE without a license is illegal under the provisions of the Federal Fund Raising Law. The following are the key things to be kept in hindsight to obtain a license –

• An association needs to register itself
• The term of the license cannot be more than three months

If the association extends its charitable activities in the Emirate of Dubai, particularly to collect donations, it needs to necessarily obtain a prior approval from IACAD. As such activities are strictly prohibited without a license from IACAD, and any person, group, or organization are prohibited from engaging in charitable activities without a license from IACAD in Dubai. The law has clearly set exemptions and penalties for the breach of law. The penalties can be either financial or criminal liability or both. The requirements to comply with IACAD are elaborate, and fund raising activities are to be necessarily conducted through a licensed charitable organization only. The IACAD website lists 19 such charitable organizations in Dubai.

How does the law define Charity?

Dubai Charity Law provides that charity is, ‘any sole proprietorship or a group of an organization entitled to continue for a definite or indefinite period, comprising of natural or legal persons, is concerned with religious or charitable affairs and engages its activity within the Emirate, including religious or charitable foundations and associations established or to be established by law or decree’.

The Federal Charity Law gives a more inclusive definition for ‘public welfare associations’ which are ‘any organized group… for the purpose of achieving social, religious, cultural, scientific, educational, professional, feminist, creative or artistic activity, providing humanitarian services, achieving benevolent aim or achieving its activities without attaining material benefits’.

Licensing requirement

Article 6 of the Dubai Economic Activities Law provides that any natural or legal person who intends to engage in any economic activity in Dubai include trade, services, commerce must obtain a license from Department of Economic Development (DED). There are several activities which need external approval, for instance you may need an external approval from Ministry of Sports if you want to set up a gym in Dubai. The grant of external approval is a prerequisite to obtain a license from DED. IACAD is the relevant body to grant an external approval to associations should they wish to raise funds from donations.

What are charitable activities?

There is no precise clarity on what constitutes a charitable act. However, IACAD provides that the following acts will be overseen by them –

• religious and charitable activities
• the collection of donations, in cash and in kind, and dispose of the same for human aid, orphan sponsorship, building mosques and any other type of aid
• relief campaigns and charitable events
• programs and projects launched by the charitable organizations either inside or outside the UAE

Understanding donation

Dubai Fund-raising Law provides that donation is ‘money given by the donator as a voluntary act, for the purpose of assistance and charitable activity, including Zakat and alms’. Article 3 of the same law clarifies further by prohibition of fund raising without written approval from the authority. The Dubai Fund raising law does not expressly prohibit individual or corporate donations to charities. It may interest us to observe the law only prohibits welfare associations from fund raising and donations. The IACAD views donations to include both money and other items such as clothes.

So what are the exceptions?

The Dubai Fund-raising Law provides that certain entities are allowed to receive donations without a prior approval. Article 3 (b) of the Law provides that members of the Federal and Dubai Government and government entities are exempt from the prohibition. This also includes ‘donations launched by the initiatives of His Highness the President of the State, his Deputy, members of the Federal Supreme Council and their Crown Princes and Deputies’.

Let us take a brief tour of the license application process

The application is elaborate and approval process is unclear, however the following is what the IACAD will review as per Article 6 of the Dubai Fund-raising Law –

• purpose of fund-raising
• names of person(s) authorised for fund-raising
• location(s) of fund-raising
• method of fund-raising
• suggested period of fund-raising
• the entity to which the donations will be sent
• specification of the amount to be collected
• any other data determined by the Department [IACAD]

The IACAD should under usual circumstances revert to you in 15 days, however they have not, it’s highly likely that the application is rejected.

Doing business in Dubai is divided between Mainland and Freezone. What are the provisions in Freezone?

Article 2 of the Dubai Fund raising Law goes further to include all special development zones and other free zones. This also includes the Dubai International Financial Centre, which has its own courts and laws.

Dubai Fund raising law doesn’t prohibit charity

The private act of donating to charity is not prohibited completely. Individuals are allowed to donate in their own right to any licensed charity or associations so long as these persons don’t solicit donations from other persons. Also, corporations can make donations too, however they are prohibited to raise fund from their employees, for instance writing emails to the employees.

Few of the leading charitable organizations registered in Dubai are

• Mohamed bin Rashid Charitable Humanitarian Foundation
• Al Maktoum Foundation
• Dar Al Ber Society
• Dubai Charity Association
• Beit Al Khair Society
• Al Shifa Charity Establishment
• DIB Foundation
• Dubai Foundation for Woman andn Children
• Emaar Foundation
• Red Crescent (Dubai)
• Al Barakah Charitable Society
• Easa Saleh Al Gurg Charity Foundation
• Mohammad Omar Bin Haider Charity Establishment
• Noor Dubai Foundation
• Dubai Care
• Emirates Airline Foundation
• Trahim Foundation
• Majid Al Futtaim Charity Foundation
• Khalaf Ahmad Al Habtoor Foundation

Comparing the UAE charity laws with that of other GCC countries

The laws on charities and fund raising in other Gulf Cooperation Council countries are similar to regulations in the UAE. Let us take Saudi Arabia, charity is an activity governed by the Fund raising for Charitable Purposes Regulations 1976. Ministry of Social Affairs of Saudi Arabia is tasked to regulate the activities and provide all persons who intend to engage in charitable fund-raising activity approval. These persons must obtain permission from the said ministry, which will oversee fund raising activities. There are other policies and procedures, which govern the books of charitable organizations. These laws are consistent with anti money laundering and combating terrorist financing laws.