For Office Use:

Grade

Business Law
Individual Assignment

"Primary Survey of 10
Managers to determine the
Current Legal Challenges faced
by Companies"
Submitted to: Prof. Naresh Poturaju
Submitted by: Kevin Simon
(B-141228)

Institute of Management,
Nirma University
Date of Submission: 14/03/2016
Page 1 of 30

TABLE OF CONTENTS
2

Introduction..................................................................................................... 4
2.1

Present Legal Business Scenario...............................................................4

2.2 The Indian legal services sector has weathered changes and emerged as
a highly competitive sector:............................................................................... 4
3

History of Indian Business Law.......................................................................5

3.1

CORPORATE LAW DURING THE COLONIAL ERA (18501947).....................6

3.2

1. Developments in the Nineteenth Century.............................................6

3.3

2. Developments in the Twentieth Century...............................................7

3.4

3. The Impact of Corporate Lawmaking in the Colonial Era.......................8

Forms of Business Organization......................................................................9

4.1

Sole Proprietorship.................................................................................... 9

Choosing a form of business organization.....................................................14

Functions and duties of legal department...........................................................15

6

RESEARCH METHODOLOGY........................................................................... 16
6.1

OBJECTIVES............................................................................................. 16

6.2

SCOPE OF THE STUDY.............................................................................16

6.3

NEED OF THE STUDY...............................................................................16

6.4

SOURCES OF DATA.................................................................................. 17

6.5

SAMPLING METHOD................................................................................. 17

6.6

SAMPLING SIZE....................................................................................... 17

6.7

TOOLS USED........................................................................................... 17

6.8

LIMITATIONS............................................................................................ 17

Findings & Data Analysis...............................................................................18

7.1

Duration in the Organization:..................................................................18

7.2

Size of your Legal Team (In-House only):................................................18

7.3
Comparison between In-house and Outsourced Legal teams (Company
Sector):............................................................................................................. 19
7.4

Number of Cases or Litigation filed each year (Sector-Wise):..................19

7.5

Yearly Budgets:....................................................................................... 21

7.6

Diversity in Cases:.................................................................................. 21

7.7

Out-of-Court Settlements:.......................................................................21

7.8

Revision of Company's Legal terms:........................................................22

Suggestions................................................................................................... 24

Conclusion..................................................................................................... 24

10

Annexure 1................................................................................................. 25
Page 2 of 30

10.1 Questionnaire [Primary Data]..................................................................25

11

References:................................................................................................ 27

Page 3 of 30

1 INTRODUCTION
1.1 PRESENT LEGAL BUSINESS SCENARIO

1.2 THE INDIAN

LEGAL SERVICES SECTOR HAS WEATHERED CHANGES

AND EMERGED AS AHIGHLY COMPETITIVE SECTOR:

To practice a law in India an advocate needs an LLB from an Indian

university, followed training and enrolment with a State Bar Council
While the sector has spelled enough opportunities for the domestic
law firms, interest Indian market implies the latent growth potential
within the sector
While globalization of legal services is a latest term linked with this
sector, several fore treaded the lines of forming associations with
Indian firms
Since there is rising number of legal cases related to Copyright,
Patent, Employee retainment, poaching altogether this sector has
been flourishing lately
Starting from joining the organization to promotion to exit form an
organization there is a contractualclause which holds together which
is maintained by the legal department either in-house or outsourced

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2 HISTORY OF INDIAN BUSINESS LAW

The evolution of corporate law in India can be traced back to the colonial
era with several previous companies legislation being modeled on parallel
English legislation. The influence of colonial laws continued even after
decolonization in 1947 when the most significant piece of corporate
legislation, the Companies Act, 1956, was modeled on the English
Companies Act of 1948. Although the Companies Act, 1956 was the result
of a classic legal transplant, its evolution thereafter took on a different
trajectory. Constant amendments to the Act were necessitated due to
legislative requirements that arose due to local conditions and problems
that were unique to the Indian corporate setting. Moreover, Indian courts
too refused to accept English judgments without adjusting and adapting
the legal principles to suit the conditions of Indian society.
The divergence between Indian corporate law and its English counterpart
became clearer with Indias economic liberalization in 1991. With the
expansion of foreign investment and the development of Indias capital
markets, the focus of corporate law extended beyond the Companies Act,
1956 and into securities laws pertaining to or promulgated by the
securities regulator, the Securities and Exchange Board of India. In this
phase, while some influence of English laws did subsist, the
IndianParliament and regulators began to either look to other jurisdictions
such as the United States (U.S.) to draw inspiration for legal reforms or
indulged in soulsearching to mold customized solutions to Indias unique
problems.
The transition from legal transplant to autochthony culminated in the
recent enactment of the Companies Act, 2013 that is being brought into
effect in parts so as to replace the Companies Act, 1956. The 2013
legislation is not only the result of nearly two decades of debates and
discussions, but also a reaction to corporate law and governance problems
Page 5 of 30

that have plagued India more recently. The transition away from English
company law is nearly complete as the reforms are almost entirely
tailored to suit local needs.
A discussion of the historical trends in corporate law beginning with the
colonial period through Indias independence and during the postcolonial
era will illuminate ourunderstanding of the trajectory adopted. A
longitudinal study will help tease out the extent of colonial laws influence
during the postcolonial period. This analysis, while primarily dealing with
developments in the legal sphere, also takes into account economic and
social circumstances prevailing at the relevant time.
In this Part, greater emphasis is placed on analyzing the legislative
developments pertaining to corporate law in India, and to a lesser extent
on case law. Particularly during the colonial period, the diffusion of English
law to the colonies occurred through legislation. The relevance of English
case law arises only due to the interpretation of transplanted legislation
that has parallels with English legislation.
England
Companies Act, 1844

India
Act for Registration of Joint Stock
Companies, 1850

Limited Liability Act, 1855

Companies Act, 1857

Joint Stock Companies Act, 1856

Companies Act, 1860

Companies Act, 1862

Companies Act, 1866

Amendments to the Companies

Act, 1862

Companies Act, 1882

Companies (Consolidation) Act,

1908

Companies Act, 1913

Companies Act, 1929

Companies (Amendment) Act,

1936

2.1 CORPORATE LAW DURING THE COLONIAL ERA (18501947)

Business organizations are not an altogether recent phenomenon in India.
They existed in some form or the other in ancient India. Although they
were essentially guilds or groups of businesspersons or artisans engaged
in a similar activity, they displayed some of the features of a modern
corporation, at least in a rudimentary form. However, these business
Page 6 of 30

forms faded out during the series of invasions and other disturbances that
preceded the advent of European traders in India at the end of the
fifteenth century.
The emergence of the modern business corporation in India can be
attributed to the establishment of the English East India Company (EIC)
in 1600, which was granteda royal charter that effectively conferred upon
it a monopoly to trade in India. Since then, other English companies
received similar privileges and commenced activities in India. It appears
that for nearly twoandahalf centuries, companies were established and
carried on business in India without the existence of a specific body of law
regulating companies. The establishment of companies in India,
particularly banking companies, was nearly impossible given the
relentless opposition of the EIC to the grant of any charters for
companies in India.
2.2 DEVELOPMENTS IN THE NINETEENTH CENTURY
Specific company legislation made a debut in India only in the year 1850
when an Act for Registration of Joint Stock Companies was passed. This
legislation was passed along the lines of the Companies Act, 1844 in
England and marks the beginning of an era when legislative developments
in the corporate field in India merely kept up with developments in
England.In other words, Indian corporate law functioned as a continuum of
transplants from English law, which phenomenon continued for a period of
over a century, as I elaborate further. The oddity about the Act of 1850
was that registration was only optional as it conferred certain privileges.
Limited liability was not one such privilege, which is unsurprising given
that the concept was yet to make inroads in England as yet. Although the
Act of 1850 signifies an important milestone in Indian corporate law
history as the maiden legislation in the field as it enacted keylegislative
provisions for the management of joint stock companies for the first time,
it was rather ineffective given its optionality and the lack of protection for
shareholders through limited liability.
Limited liability was first introduced in England by way of the Joint Stock
Companies Act, 1856, although this protection was not available to banks
and insurance companies. This legislation underwent amendment in 1857.
In the same year, legislation was enacted in India conferring the limited
liability protection to companies other than banking and insurance
companies. Thereafter, following an English legislation of 1858, the
privilege of limited liability was extended to banking companies in India
through the Act of 1860, although the same privilege was not extended to
insurance companies.
The pattern of mimicking English legislation continued even shortly
thereafter. Following the enactment of the Companies Act of 1862 in
England, a new legislation was passed in India in 1866 for consolidating
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and amending the laws relating to incorporation, regulation and winding

up of Trading Companies and other Associations. This legislation also
made available the benefit of limited liability to insurance companies.This
consolidation exercise was meant to keep pace with the English Act.Yet
another consolidation effort was undertaken in India in the form of
theCompanies Act of 1882 in order to incorporate the amendments in the
English legislation since the early 1860s so as to make them applicable to
the Indian context.
2.3 DEVELOPMENTS IN THE TWENTIETH CENTURY
Following the Companies Act of 1882, five different sets of amendments
were made until the first decade of the twentieth century. Then, following
the English Companies (Consolidation) Act, 1908, a new legislation was
enacted in India in the form of the Companies Act, 1913. This was as
were previous Acts, a close reproduction of the English Act in its
comparable provisions, although it was recognized that in certain
particulars, the Indian Act differed from the English Act. Subsequently,
following the enactment of the English Companies Act of 1929, significant
amendments were made to Indian law by way of the Companies
(Amendment) Act, 1936. A unique aspect of this legislative effort is that
the Indian legislature decided to embark upon an amendment process
rather than a reenactment along the lines of the 1929 English legislation,
indicative for the first time of a hesitation in a wholesale transplant. The
Statement of Objects and reasons of the 1936 amendments suggests that
it was decided not to adopt the wholesale English legislation due to some
unfavorable criticism it attracted, and also because of the recognition that
problems peculiar to India had to be dealt with, especially those relating
to the managing agency system. This trend began emanating from the
judiciary as well. Although it was common during the colonial period for
courts to refer to English decisions, they now began recognizing the fact
that where there is a positive enactment of the Indian legislature, the
proper course is to examine the language of that statute and to ascertain
its proper meaning uninfluenced by anyconsiderations derived from the
previous state of the law or of the English law upon which it may have
been founded."
Since 1936 until Indian independence, the Indian Companies Act, 1913
underwent several further amendments principally to address certain
defects in the legislation and also on account of constitutional
developments such as the enactment of the Government of India Act,
1935. This position ensued until Indias independence that necessitated a
further round of reforms.
The following table tracks the chronology of legislative developments in
England and India, which clearly demonstrates that the Indian legislature
was simply following the lead from English law through an ongoing
transplantation process.
Page 8 of 30

2.4 3. THE IMPACT OF CORPORATE LAWMAKING IN THE COLONIAL ERA

A chronological analysis of legislative developments is by itself
unsatisfactory as it does not inform us of the motives for introducing the
legislation (primarily through continual legal transplants) and also the
prevailing context in India that takes into account the economic and social
factors. In this subpart, I seek to incorporate these factors and analyze
the impact that corporate legislation had on Indian businesses in the
colonial period, and also the motives behind the introduction of such
legislation.Two trends are quite evident in the colonial period. First, the
transplant of English corporate law into India was to serve British business
interests rather than to modernize Indian corporate law more generally.
Second, English company law as transplanted to India operated as an
instrument of market regulation, a sort of colonial laissez faire.

The motive behind transplanting English company law into India was to
facilitate better trade between England and India, which could be
accomplished if there was symmetry in the corporate legislation between
the two countries. In other words, the familiarity of the British businesses
with Indian corporate law was thought to minimise their risk in trading
with that colony.The motivation that the law in England and India should
be the same was quite explicit in that it occupied a place in the Statement
of Objects and Reasons of the Joint Stock Companies Act, 185655 and the
Companies Act, 1882.56 Rungta is unequivocal in his analysis:
If there is any underlying theme running through the company legislation
of a full half century in India, with the Act of 1850 somewhat excepted, it
is a steadfast adherence to the policy that what was good for Britain must
also be good for India. It was not that the legislators responsible for these
Acts were not able men, some of them were well qualified and
experienced in company affairs in India. What they seemed to lack the
most was the will, rather than the wisdom, to change.
The transplant of English law into India so as to favor British businesses
was accompanied by a consequential impact, in that it often ran counter
to local business interests. It paid scant regard to the needs of local
business forms such as the Hindu Undivided Family (HUF) and other
kinship based indigenous business structures.59 For example, it was
unclear whether the Companies Act, 1882 operated to ensnare these local
business forms when it required that all partnerships carrying on trading
with more than twenty persons was required to be registered as a
company under that Act. In that sense, not only did the transplanted
corporate legislation in India fail to take into account the needs of
vernacular business forms, but also it often acted counter to their
interests.

Page 9 of 30

The essential thesis of this paper is that while Indian corporate law began
as a legal transplant from England, it has been progressively decoupled
from its source with subsequent amendments and reforms being focused
either on finding solutions to local problems or borrowing from other
jurisdictions such as the U.S. To that extent, decolonization has had a
significant effect of radically altering the course of Indian corporate law.
Although the shift was not evident in the period immediately following
decolonization, it began to take shape about a decade thereafter. Current
Indian corporate law not only represents a significant departure from its
colonial origins, but the divergence between Indian law and English law as
they have developed since independence has been increasing. In that
sense, decolonization can be metaphorically signified as a fork in the
road when the Indian Parliament, after initial hesitation, sought to move
away from the colonial origins and develop the law in a trajectory that is
substantially different from the developments in the United Kingdom
(U.K.).

Forms of Business Organization

A business organisation usually takes the following forms in India:
(1) Sole Proprietorship
(2) Partnership
(3) Joint Hindu Family
(4) Cooperative Society
(5) Company
Sole Proprietorship
The term 'sole' means single and 'proprietorship' means 'ownership'. So
only one person is the owner of the business organisation. This means,
that a form of business organisation in which a single individual owns and
manages the business, takes the profits and bears the loses, is known as
sole proprietorship form of business organisation.
Characteristics of Sole Proprietorship
Forms of Business Organisation
(a) Single Ownership
(b) No Separation of Ownership Management
(c) Less Legal Formalities
(d) No Separate Entity

Page 10 of 30

(e) No Sharing of Profit and Loss

(f) Unlimited Liability
(g) One-man Control

Partnership
'Partnership' is an association of two or more persons who pool their
financial and managerial resources and agree to carry on a business, and
share its profit. The persons who form a partnership are individually
known as partners and collectively a firm or partnership firm.
Characteristics of Partnership Form of Business Organisation
1. Two or more Persons
2. Contractual Relationship
3. Sharing Profits and Business
4. Existence of Lawful Business
5. Principal Agent Relationship
6. Unlimited Liability
7. Voluntary Registration

Types of Partners
1. Based on extent of participation
Active Partners
Sleeping Partners

2. Based on sharing of profit

Nominal Partners
Partners in Profits

3.Based on Liability
Limited Partners
Page 11 of 30

 General Partners

4. Based on Nature of Behaviors

Partners by Estoppels
Partners by Holding Out

Formation of Partnership Form of Business

The following steps are to be taken in order to form partnership firm:
(A) Minimum two members are required to form a partnership.
(B) Select the like-minded persons keeping in view the nature and
objective of the business
(C) There must be an agreement among the partners to carry on the
business and share the profits and losses.
This Agreement must preferably be in writing and duly signed by the all
the partners. The Agreement, i.e. Partnership Deed must contain the
following:
(i) Name of the firm
(ii) Name of the business
(iii) Names and Address of the Partners
(iv) Location of Business
(v) Duration of Partnership, if decided
(vi) Amount of Capital to be contributed by each partner
(vii) Profit and loss sharing ratio
(viii) Duties, powers and obligation of partners
(ix) Salaries and withdrawals of the partners
(x) Preparation of accounts and their auditing
(xi) Procedure for the dissolution of the firm
(xii) Procedure for settlement of disputes. It may be Arbitration.

(D) The Partners should get their firm registered with the Registrar of
Firms of the concerned State. Although registration is not compulsory, but
Page 12 of 30

to avoid the consequences of non-registration, it is advisable to get it

registered when it is setup or at any time during its existence. The
procedure for registration of a firm is as follows:
(i) The firm will have to apply to the Registrar of Firms of the concerned
State in the prescribed form.
(ii) The duly filled in form must be signed by all the partners.
(iii) The filled in form along with prescribed registration fee must be
deposited in the office of the Registrar of Firms.
(iv) The Registrar will scrutinise theapplication, and if he is satisfied that
all formalities relating to registration have been complied with, he will put
the name of the firm in the register and issue the Certificate of
Registration.

Limited Liability Partnership

This method of organizing joint business has been introduced by the
Limited Liability Partnership Act, 2008.
Salient Features of LLP
LLP is a body corporate and, therefore a legal entity separate from its
partners.
A minimum of two persons can form it for any lawful business by signing
the incorporation document and getting it registered with the Registrar.
Its partners can define their mutual rights and obligations under their
own agreement or agreement with LLP. In the absence of any such
agreement, the provisions of the Act would apply.
The partnership firm would be liable to the full extent of its assets. The
partner would be liable to the extent of their agreed contributions. No
Partners would be liable for independent or unauthorised acts of other
partners or for their misconduct.
Every LLP has to have at least two individuals as designated partners. At
least one of them should be resident in India. Every such partner has to
obtain a Designated Partner Identification Number (DPIN) from the Central
Government.
The Financial year of an LLP is to be one from 1 April to 31 March.

Joint Hindu Family Business

Page 13 of 30

 The Joint Hindu Family Business refers to a business which is owned by

the members of a joint Hindu family. It is also known as Hindu Undivided
Family Business.
This form of organisation exists under Hindu law and is governed by the
Law of succession.
For purpose of running of joint Hindu family business, only male
members are entitled who are referred to as coparceners. The oldest
member is known as Karta.

Features of the Joint Hindu Family Business

i. Membership by birth
ii. Management - The Management vest in the Karta.
iii. Liability - The Karta has unlimited liability. Every other coparcener has a
limited liability up to his share in the HUF property.
iv. No maximum limit - There is no restriction on the number of
coparceners of the HUF business.
v. Minor members - A male child at the time of birth becomes a
coparcener. Thus, an HUF does not restrict the membership to minors.
vi. Unaffected by death - The HUF business continues even after the death
of a coparcener including a karta. The next senior most surviving male
member of the HUF becomes the Karta.

Co-operative Society
A Co-operative form of business organisation is different from other
forms of business organsiation. It is a voluntary association of persons for
mutual benefit and its aims are accomplished through self help and
collective effort.
A minimum of 10 persons are required to form a co-operative society. It
must be registered with the Registrar of Co-operative Societies under the
Co-operative Societies Act.

Page 14 of 30

 The capital of a co-operative society is raised from its members by way

of share capital.
Characteristics of Co-operative organisation
i. Voluntary association
ii. Equal voting rights
iii. Separate legal entity
iv. Service motive

Company
A company is defined as a voluntary association of persons having
separate legal existence, perpetual succession and a common seal.
The Capital of a company consists of transferable shares, and members
have limited liability.

Features of a Comapny
i. Registered Body
ii. Distinct legal entity
iii. Artificial person
iv. Perpetual succession
v. Common seal
vi. Limited Liability
vii. Transferability of shares

3 CHOOSING A FORM OF BUSINESS ORGANIZATION

Criteria

Most beneficial

Least beneficial

Cost of formation

Sole Proprietorship

Company

Ease of formation

Sole proprietorship

Company
Page 15 of 30

Transfer of Ownership

Public Ltd Company

Partnership

Continuity

Company

Sole
proprietorship

Regulations

Sole Proprietorship

Company

Flexibility

Sole proprietorship

Company

Availability of capital

Company

Sole
proprietorship

Liability

Company and LLP

Sole
proprietorship

FUNCTIONS AND DUTIES OF LEGAL DEPARTMENT

Rendering effective legal assistance in the preparation of legal opinions,
studies, reports and correspondence, as required from time to time by
various Heads of Departments.
Ensuring the providing of appropriate legal advice on a diverse range of
substantive and procedural questions of law arising in administrative
functioning of DDA including advice in arbitration matters, to firmly secure
the interest of DDA, as required by the operational departments.
Supervising and overseeing the review, negotiation and drafting of major
contracts, tender documents and other legal documents, as required by
the operational departments.

Page 16 of 30

Supervising legal research and analysis, indentifying important issues

and apprising the operational departments of emerging legal trends from
court decision and tendering advice to avoid unnecessary litigation, etc.
Serving on various Standing Boards, Committees, ad-hoc working groups
and task force, as required, to take care of legal niceties in framing of
policies.
Monitoring the performance of the panel lawyers and rendering advice
on formation of new panels.
Assigning court cases to different panel lawyers keeping in view the
nature and importance of the cases.
Supervising and monitoring the contesting of the cases in various courts
of law and to have interaction with Panel Lawyers, Courts, ASG and other
Law Officers of Govt. for their assistance in DDA matters in Revisions,
Reviews, SLPs. Etc.
Advising in the matter of preferring of appeals in superior courts and in
the matter of taking recourse to other legal remedies.
Advising in vigilance matters as referred to Legal Branch.
Processing of various Fee Bills of advocates and settlements of fee etc.,
with other advocates.
Assisting the operational departments in preparing of reply to legal
notices received.
Any other duty/task assigned by Vice Chairman, DDA.

Page 17 of 30

4 RESEARCH METHODOLOGY
4.1 OBJECTIVES
1.
2.

To learn about the various legal issues a company faces while

operating in India.
To find out the possible solution for the various problems faced
by the companies.
a. To understand the strategies and steps undertaken by
multinationals and small businesses to deal with the issues
b. The challenges faced by multinationals and small businesses
while tackling legal issues in their organization.

4.2 SCOPE OF THE STUDY

The study covers:

Background of Business Law

Theoretical concept of the legal challenges faced by Companies in

India

Analysis of the challenges

Findings and suggestions.

In the end the researcher will be able to evaluate the legal challenges that
a company faces in a developing economy like India restricted to 10
respondents.

4.3 NEED OF THE STUDY

The need of this study is to understand the nature of legal challenges
faced by companies in

Page 18 of 30

India. The main objective of any business is to maximize shareholders

value and in order to do so, it is important to understand the various legal
challenges faced by companies in India.

4.4 SOURCES OF DATA

As far as any research work is concerned, the sources from which the data
has been collected is very important. If the data is accurate and reliable it
will definitely affect the research work.
In a research work data can be collected in two ways. They are:
i. Primary Data:
A structured questionnaire was built in correlation with objective of
research and hypotheses. Thus data using structured questionnaire was
collected from 10 managers across different industries.

ii. Secondary Data:

The information regarding the business laws and legal issues faced by
organisations and other literature were taken from the different reference
books and text books. Literature from Websites was reviewed.

4.5 SAMPLING METHOD

The sampling method used to conduct the research is CONVENIENCE
SAMPLING. A convenience sample is one of the main types of nonprobability sampling methods. A convenience sample is made up of
people who are easy to reach.

4.6 SAMPLING SIZE

The data has been collected from 10 individuals at various managerial
positions across the country.

4.7 TOOLS USED

Tools like SPSS, Graphs and MS Excel were used in order to summarize the
data and to draw some inferences from them.

4.8 LIMITATIONS
In this study quantitative factor which may generally influence the
conclusions derived are ignored.
The non-availability of certain data in the limited time is also one of the
major limitations of the study.
The sample size is quite small so the findings from them cannot be same
regarding the entire population.
Page 19 of 30

5 FINDINGS & DATA ANALYSIS

5.1 DURATION IN THE ORGANIZATION:

People who are at higher posts tend to remain in the organization for
longer duration of time.This disproves Peter's principle which states "In an
organizational structure, assessing an employee's potential for a
promotion is often based on their performance in the current job. This
eventually results in their being promoted to their highest level of
competence and potentially then to a role in which they are not
competent, referred to as their "level of incompetence". The employee
has no chance of further promotion, thus reaching their career's ceiling in
an organization." in Indian context.
Duration in the Organization:
1 Year
and
more
2 Years
but <=
to 5
< 1 year
2 Years
Years
5 Years+
Count
Your
Positio
n:

Count

Count

Count

Area manager
Assistant
Manager
Asst Manager Commercial

Attorney

Managing
Partner
Marketing
Engineer
MD

MT

Programmer
Analyst

Page 20 of 30

Teacher

5.2 SIZE

OF YOUR

LEGAL TEAM (IN-HOUSE

ONLY):

Information Technology and Consulting sectors have higher number of InHouse legal teams because of their structure and diversification. Since the
number of departments, cross-teams, Sections are much higher with
multitudes of employees working in it, the issues and cases also increases
exponentially. Unlike manufacturing sectors where cause of the trouble
can be traced back, it is highly unlikely to predict where the troubles may
come from and without any warning.

Size of your Legal team (In House only)

hvac Hospitality
Electrical Manufacturing

Information Technology

Consulting

5.3 COMPARISON BETWEEN IN-HOUSE AND OUTSOURCED

LEGAL TEAMS (COMPANY SECTOR):

In-House
Hospitality
Electrical Manufacturing
Consulting
Information Technology
Page 21 of 30

Consumer Electricals
Outsourced
Leather industry
Manufacturing
Industrial Hydraulics
Private
HVAC

5.4 NUMBER OF CASES OR LITIGATION FILED EACH YEAR (SECTOR-

WISE):
HVAC (Heavy Air Conditioning/Industrial Air Conditioning) sector has the
highest number of cases filed against them each year because of the
seasonal factors of the country. Sales are very high during summers and
Air conditioning is rarely used in winters. This sudden inactivity doesn't
suits air conditioners on the whole which starts malfunctioning again in
coming next summers. Most of the cases come through "Disgruntled
Customers".

Chart Title

Hospitality
Electrical Manufacturing
Leather industry
Consulting
Manufacturing
Industrial Hydraulics
Private
HVAC
Information Technology
Consumer Electricals

Page 22 of 30

Approximate yearly budget allocated to the legal team (In figures)

100000000
90000000
80000000
70000000
60000000
50000000
40000000
30000000
20000000
10000000
0

5.5 YEARLY BUDGETS:

Yearly Budgets are very high in three sectors Consulting, Information
Technology and HVAC which is expected since consulting and Information
Technology have high number of Legal team working for them and HVAC
has most number of litigations or cases per year.

5.6 DIVERSITY

IN

CASES:

Consulting and Manufacturing industries has highest variety in different

litigations. In case of Sexual Harassment and Discrimination
casesManufacturing industry has highest number since they have less
number of female employees compared to other industries. Also hierarchy
differences also plays in discrimination cases.

Organization
Sector:

Consulting
Electrical
Manufacturin
g
Hospitality

Disgruntled
Employees

Discriminatio
n/
Harassment
Cases

Copyrigh
t and
Patent
Issues

Dissatisfie
d
Customers

Immigratio
n Audits

Other
Legal
Issue
s

Count

Count

Count

Count

Count

Count

hvac

HVAC

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Industrial
Hydraulics
Information
Technology
Leather
industry
Manufacturin
g
Private

5.7 OUT-OF-COURT SETTLEMENTS:

Out-of-Court Settlements in Consulting ,Electrical Manufacturing, Hospitality, HVAC are
higher because it is easy to reach consensus as it is beneficial for both sets of the
organizations. Also since the amounts and costs involved are relatively high, out-of-court
settlement is always a viable option.
On the other hand, Industrial Hydraulics, Information Technology, Leather
industry&Manufacturingindustries tend to fight it out court since it is mostly related to
copyright and patent infringement. Basically these industries want sole proprietorship of the
products they produce.

Is Out-of Court
Settlement always
beneficial of the
organization?

Organization Sector:
Consulting
Electrical
Manufacturing
Hospitality

Sometimes

Yes

Count

Count
0

HVAC

Industrial Hydraulics

Information
Technology
Leather industry

Manufacturing

Private

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5.8 REVISION

OF

COMPANY'S LEGAL

TERMS:

This is where companies have unison in decision. Indian Industries never update or revise
their legal conditions once the case has been dismissed. This shows lackluster part from the
company, as there might be another case on the same lines, which can be prevented if these
steps are taken.
Does revision of Company's legal
terms takes place afterwards?
(Annually)
No
Count
Organization
Sector:

Yes

Count

Count

Consulting
Electrical
Manufacturing
Hospitality

HVAC

Industrial Hydraulics

Information
Technology
Leather industry

Manufacturing

Private

Settlement

Negotiation

Count
Organization
Sector:

Sometimes

Count

Consulting
Electrical
Manufacturing
Hospitality

HVAC

Industrial Hydraulics

Information
Technology
Leather industry

Manufacturing

Private

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6 SUGGESTIONS
1. I would suggest that in Industries where Product
Development, Research & Development are of prime
importance, they should have in-house legal team which
would be beneficial as it would cost them lower. Other sectors
can well thrive on outsourcing the legal matters.
2. It can also be advised for the smaller firms to adopt the online
portals launched by government to fulfil their legal
necessities at a minimum cost and time.
3. Government should take a strong stance against
Discrimination at Work and Sexual Harassment at work.
Sectors like Manufacturing, Automobiles should reinforce this
by hiring more labour workers who are females. Gender
diversity in these industries are generally skewed which
should be tilted. The Government should also take necessary
steps to promote business in the country. Although, the
recent initiatives like Make in India is doing its part in
putting India on the forefront, it also needs to see that the
regulations and policies are such which make the business
environment a favourable one.
4. As pointed out by the respondents that due to change in
government regulations there is more burden on the
documentation of the business procedures, the firms should
have a set procedure to go about it and putting this work in
the various department managers the in-house legal counsel
should be trained to do the required work instead.

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7 CONCLUSION
I would like to conclude that complying with legal laws are important for
the proper functioning of the organization. Small Business and Big MNC
have to be aware about the laws applicable to the organization and need
to follow to them. Non adherence can lead to legal issues which results in
overall more resource consuming in terms of money and time. The
organizations should comply with all the laws. Internal legal department
for the organization is always helpful as it helps in both keeping
compliances with the laws and also look into the matter whenever
possible and also help in applying legal policies and procedures in the
organization. Sexual Harassment & Discrimination are happening much in
Indian offices which should be controlled by the government and should
be punished and fined severely.

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8 ANNEXURE 1
8.1 QUESTIONNAIRE [PRIMARY DATA]
This is required to complete my survey for Business Law Course.

1. Your Name:_________________________
2. Name of the Organization: ___________________
3. Organization Sector: _______________________
4. Your Position: ____________________________
5. Duration in the Organization:_____________________
6. Does your Organization have In-House Legal team or have you outsourced it to another
firm? (Yes/No, with External firm's name) *
7. Size of your Legal team and Number of Cases or litigation you go through each year?
(Size, Number of litigations [Rough figure])
8. Approximate yearly budget allocated to the legal team (In figures) :
9. Key areas of legal concerns for your organization (Can Tick Multiple Choices)

Disgruntled Employees
Discrimination/Harassment Cases
Copyright and Patent Issues
Dissatisfied Customers
Immigration Audits
Other Legal Issues

10. Which is the preferred way employed by your company/organization to approach a

lawsuit? (Can Tick Multiple Choices)

Coercion
Settlement
Negotiation
Accepting Charges/Conviction
Counteraction
Collaborating

11. Is Out-of Court Settlement always beneficial of the organization?

Yes
No
Sometimes

12. Does revision of Company's legal terms takes place afterwards? (Annually)
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Yes
No
Sometimes

13. What are the measures that the organization has put into place to protect the legal rights
of its employees? *

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9 REFERENCES:

http://www.barcouncilofindia.org/about/about-the-legal-profession/legaleducation-in-the-united-kingdom/
http://forbesindia.com/blog/business-strategy/india-catching-up-on
international-trends-on-compliance/
https://www.google.co.in/url?
sa=t&rct=j&q=&esrc=s&source=web&cd=3&cad=rja&uact=8&ved=0ahU
KEwjBt66uprnLAhXWkY4KHZkEA4UQFggjMAI&url
http%3A%2F%2Fsupremecourtofindia.nic.in%2Fjudges
%2Fjudges.htm&usg=AFQjCNH3KYY7rFmyJNwJ9gwFzgMwyRZ9Q&sig2=xEcSytc18zJAsrIAE7pVDA
http://www.legalindia.com/evolution-of-law-%E2%80%9Ca-short-history-ofindian-legal-theory%E2%80%9D/
http://www.silf.org.in/16/indian-judicial-system.htm
http://www.nos.org/media/documents/VocInsServices/m1-3f.pdf
https://www.linkedin.com/pulse/indian-legal-scenario-diversity-its-truesense-pramita-sen
http://corporatecomplianceinsights.com/top-5-compliance-issues-fordoingbusiness-in-india/

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