A company is a legal entity, and that entity is having its separate existence from its directors. A company feeds on documents, and documents assertions its assets and liability.
As a director you have two responsibilities (i) firstly, to keep your company protected from any liability and (ii) Secondly, to keep you out of any liability.
Lifting of a corporate veil is becoming more common, and you have to be clear in facts, documents and also the law.
Every company has a good CA, who handles your company related aspects, but, honestly, for legal issues we search google and work accordingly. Developing technologies, we may ask Alexa for the same, “Alexa, show me a list of labor laws”, and Alexa will show you the same. Hence, a legal issue tackled.
Let’s do a fact check, we all have copied offer letters from one company or another, can we really know which law governs it.
If the answer is some labor law, you have a hole in your boat. Why? Shop and establishment contain all your terms of an offer letter, when you twisting these terms are not allowed. As offer letter is the first line of defense against any labor dispute.
Another Fact check, we all became very sensitive about sexual harassment at the workplace. Do you have a committee for the same? If no, congrats you have another hole in your boat.
Not having a sexual harassment policy will cost you INR 50,000/- fine and de-registration on the second time.
There are several other laws that apply to a corporate but we don’t pay attention and let google decide our companies fate.
As an example it is not out of the box to mention, searching google for a common cold will make you worried about nasal cancer.
Your offer letters are the first line of defense, against any labor-related issue. Company policies will further enhance your control over your employees and under legally umbrella.
Commercial contract, a good old piece of paper, with 15-20 clauses, available in bulk on various websites. Commercial contracts will be the first document that will help you in a case.
Adding holes in your boat will sooner or later tend to sink your company. Sail with confidence and support and not with holes.