Legal and Compliance Issues in India
Discuss about the Integrated Business Experience for Legal and Compliance Issues of Business.
MAYRAH has been an Australian Ready-To-Wear style brand representing ghostly grace with an artisan pressure. It was established by Julie Shaw years ago, and now its fashion career has expanded over the years to different areas of the country (Mayrah, 2016).
After flourishing and capturing the market of the country now, the corporation has made an initiative to develop the market to the countries overseas. But an organization while expanding a trade in a country would not face any main difficulties which it would face while it expands overseas. So, it has to do a research about the environment which prevails in the country in which it wants its business to flourish.
There have been some lawful and compliance issues which overseas countries would face when it enlarges its business in Mumbai, India (Australian Consulate General India, 2016). It has followed various legislative provisions which Mayrah being a foreign corporation have to follow before entering the host country i.e. India. The regulations include (Antani, 2011):
COMPANIES ACT, 2013- As per section 380 of the Act, every foreign corporation have to provide some papers to the Registrar for registration within 30 days of the institution of its trade in India such as:
Licensed copy of Charter, statutes or MOA of the corporation;
Full address of the registered or principal office of the corporation;
List of Directors and CS under Rule 3;
Full address of office in India; Other documents as may be prescribed (Kapoor, 2015).
Rule 3(3) of the Companies (registration of Foreign Companies) Rules 2014 require application in Form FC-1 and FC-2 to be supported with an attested copy of approval from the RBI under FEMA.
FDI- The access of the Foreign Direct Investment by the non-citizens into India was keeping pace by way of two routes such as Automatic way and approval way. The Automatic way was intended for those sectors and levels of speculations that were less constrained. On the other hand, in the matter of approval way, government organizations standardize and inspect the foreign investment while appreciating it (Jose, 2016).
FEMA- The Foreign Exchange Management Act, 1999 was an Act of the Parliament of India to strengthen and modify the law concerning to foreign exchange with the purpose of assisting external trade and payments and for encouraging the systematic growth and maintenance of foreign exchange market in India (Reserve Bank of India, 2016).It has been obligatory as it scrutinize the actions such as expenses which were made to any person outside India or receipts which India obtain from them;
Environmental Issues in Mumbai, India
Deals in foreign exchange under the present account by authorized persons could be limited by the Central Government based on Public Interest normally;
It facilitate that citizens of India would be allowed to carry out dealings on foreign exchange.
ENVIRONMENT-While investing in the overseas country the environmental issues were of a chief concern to the flourishing enterprise of a project. At the same time, the growing concern in Mumbai, India about the state of the environment points to a chance for the Australian trades to market green technologies. Some of the projects were followed, as a part of the follow up program to the New Horizons promotion which takes care of the Indian environmental issues.
There would be a variety of apprehensions of the host country and the local society regarding Mayrah’s operations there in Mumbai, India which includes:
Fluctuation of the Worth of Rupee-With the development in economy and appreciation in the value of the rupee, there was a diverse story to disclose. With an appreciation in value of rupee, Mayrah would now require more introspection to decrease the extent to the drive. An export contract, which has been conducted in dollars, faced the most stringent blows (Herxeca and Hogan, 2013).
PLAN: Mayrah plans to keep the price of the products of clothes as per the requirement and the need of the consumers it would deal with as to survive the price and the volume combination have to be adjudicated properly (Marketing MO, 2016). Price would have been levied as per the market understanding as what were sold at a higher rate in Australia would not be acceptable in Mumbai as it offers a elevated price. But Mumbai has been a developing country so some fluctuations in the price could be made if the consumers need were dealt by Mayrah.
Unemployment- A study was carried out and it was found that with the approval of Rupee and the expansion rate in the fashion industry like Mayrah had the effect as per which the exports have reduced from 16.6 % to 9.2 % and thus has already decreased service from the fashion industry export trade about lacs, and could further lead to an general loss of over six lac services, unless strict counteractive actions were assumed to avert the crisis. Though India enjoys the benefit of a host of low costs in the fashion industry, manufacturing and supply of cheap labor presently faces threat from its neighboring competitors.
Plan to Tackle Issues
PLAN: Mayrah would engage more and more people for Mumbai so that the problem of unemployment would not take place. As it has been observed that the foreign countries get their own people so that the cost would be low as they would not have to invest money to hire others from outside. But Mayrah would employ people from India also so that the problem of or issue of unemployment would be contributed by it in some manner.
Lagging in Cost and Technology Spheres- For certain period of time, it may be measured to be fine but simply growing the efficiency was not a resolution rather improving it and cost competence ought to be the long term objective. More investment has been done in existing technology rather than in new techniques (Pani and Sharma, 2012).
PLAN: Mayrah would not utilize old technologies rather it would use new technologies as it has to offer best output for the consumers and attract them to buy and visit the store which it has established in India. Mayrah believes that a initial investment has to be done so that long-term benefits would be obtained so it would install new technologies so that it do not fails to provide its services and reduce its brand name.
CSR- The CSR Rules describe that in issue of a foreign organization that has a project office in India, then the CSR sections would be pertinent to such offices. It also describes that the balance sheet and profit and loss account of a foreign institutions would be organized in as per Section 381(1)(a) and net profit to be calculates according to Section 198 of the Companies Act. Expenditure sustained by foreign Holding Corporation for CSR activities in India would qualify as CSR spend of the Indian subsidiary if, the CSR expenses were routed through Indian subsidiaries and if the Indian subsidiary was obligatory to do so as per section 135 of the Companies Act (Nishith Desai, 2016).
PLAN: Mayrah plans that it would comply with all the CSR provisions which have been mentioned under the Act. And would include such provisions by which it would work in relations to the protection of the community as a whole by avoiding the acts like insider trading or any other unlawful act which would harm the community and people within it.
Antani, M. (2011) Top 5 Compliance Issues For Doing Business In India. [Online] Corporate Compliance Insights. Available from: https://corporatecomplianceinsights.com/top-5-compliance-issues-for-doing-business-in-india/ [Accessed on 14/11/16]
Australian Consulate General Mumbai, India. (2016) Doing business with Australia. [Online] Australian Consulate General Mumbai, India. Available from: https://mumbai.consulate.gov.au/mbai/trade.html [Accessed on 14/11/16]
Bhardwaj, V. and Fairhurst, A. (2010) Fast fashion: response to changes in the fashion industry. The International Review of Retail, Distribution and Consumer Research. Vol. 20, No. 1, pp-165–173.
Herxeca, L. and Hogan, H.(2013) Fashion Law and Business: Brands & Retailers. [Online] IPwatchdog. Available from: https://www.ipwatchdog.com/2013/09/27/fashion-law-and-business-brands-retailers/id=45373/ [Accessed on 14/11/16]
Marketing MO. (2016) Pricing Strategy. [Online] Marketing MO. Available from: https://www.marketingmo.com/strategic-planning/how-to-develop-a-pricing-strategy/ [Accessed on 14/11/16]
Mayrah. (2016) About us.[Online] Mayrah. Available from: https://shop.mayrah.com.au/pages/about-us [Accessed on 14/11/16]
Pani, A. and Sharma, M. (2012) Emerging Trends in Fashion Marketing: A Case Study of Apparel Retailing in India. International Journal of Business and Management Tomorrow.Vol. 2, No. 10, pp- 1-8.
Kapoor, V.(2015) All about Foreign Companies under Companies Act, 2013. [Online] tax Guru. Available from: https://taxguru.in/company-law/foreign-companies-companies-act-2013.html [Accessed on 14/11/16]
Jose,T. (2016) What is Automatic route and Approval route in FDI?. [Online] Indian Economy. Available from: https://www.indianeconomy.net/splclassroom/182/what-is-automatic-route-and-approval-route-in-fdi/ [Accessed on 14/11/16]
Reserve Bank of India. (2016) Foreign Exchange Management Act Notification.[Online] Reserve Bank of India. Available from: https://rbi.org.in/scripts/BS_FemaNotifications.aspx?Id=10289 [Accessed on 14/11/16]
Nishith Desai. (2016) Corporate Social Responsibility & Social Business Models in India. [Online] Nishith Desai. Available from: https://www.nishithdesai.com/fileadmin/user_upload/pdfs/Research%20Papers/Corporate_Social_Responsibility___Social_Business_Models_in_India.pdf [Accessed on 14/11/16]
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