Corporate Law

10 Laws That All Women Entrepreneurs Should Know About

By 13/10/2020May 19th, 2022No Comments

10 Laws For Women Entrepreneurs

Equality is not merely limited to equality of rights but also equal opportunity to enjoy such rights and practice them. The societies of the world are trying hard to bridge the gap between gender and the differences in opportunities available to them but still, there are various steps yet to be taken.

When it comes to challenging the role of entrepreneurship which can also be called the building block of human economics and development, women are seen to be lagging behind their male counterparts. The reason could range from societal issues to tradition or economies but we need to understand the legal aspect of the problem.

Firstly we would know what are the laws that are present currently in India that a women entrepreneur should know about and the changes that we need? Take a look at laws for women in business.

1) Equal Pay For Equal Work

It has been the most basic of all the right that the government of any state would be trying to secure i.e. “equal pay for equal work.” With the advent of the industrial revolution women started working in the factories together with males but with a lower payment for the same amount of work owing to the dogma of them being less efficient or physical weak in terms of employment that requires physical labor despite clearly showing no difference in work carried on by both the sexes.

This ideology continues even till now and as a result, we see a gap in the earnings of the two genders however the legislation is already there in this regard known as the Equal Remuneration Act 1976 which clearly states under Section 4 that no discrimination in payment between men and women doing same nature of the job and it caused all establishment to raise the wages of women at par with men as a reduction in wages was prohibited. This law still holds well in modern times.

Apart from this specific legislation our Constitution too give the Fundamental Duty of the state to secure this equal payment for equal work vide Article 39. However, this practice is still to be followed in full fledge as in the non-organized sector we still see the exploitation of laborers and workers so there is no doubt that equal pay would be a farfetched reality for women working there.

Also, it’s not only about the non-organized sector even in the glamorous field of cinema and sports we see the huge difference in pay structure. Any Women entrepreneur therefore must keep in mind this law to secure the right of other women in the field and general development thereof.

2) Equal Opportunity Equal Pay

Same as equal pay for work the same Equal Remuneration act, of 1976 talks about giving equal opportunity to males and women for securing employment, and no discrimination in recruitment is to be made as per Section 5 of the very act.

The act was amended in 1987 to include “condition of service subsequent to recruitment such as promotions, training or transfer” thereby making the ambit wide enough to protect a women’s right not only at the time of appointment but at all subsequent stages so that it doesn’t lose the very essence for which it is drafted.

Indian Constitution again talks about a similar line of right in Article 16 that talks about equal opportunity in work in public offices which is an extended version of the Right to Equality but very well made out into another article to stress its importance. It is to be also made known to all women out there that non-compliance with these provisions would lead to penal consequences.

3) Sexual Harassment at work

In the year 1997 the Supreme Court through Vishakha v State of Rajasthan gave Vishakha Guidelines to be followed at the workplace to ensure the safety of women. These guidelines were removed from effect with the passing of the Sexual Harassment of women in the workplace (Prevention, Prohibition and Redressal) Act, 2013.

It provided the definition of sexual harassment for the first time together with a list of actions that will constitute an act of such harassment and prohibited such acts, especially by those in the workplace who exercise the power of authority over women which is common in organizational structure so as to save them from sexual exploitation whether it is public or private organization.

All working women should be aware of their rights in relation to such activity and therefore so does an entrepreneur.

4) Maternity benefits at work

The Maternity Benefit act of 1961 recently amended in 2017 provides for a period of 26 weeks of maternity paid leaves for women employees expecting their first two children. In comparison, it is very gracious from other nations where periods range from 8 to 17 weeks only.

An entrepreneur must know that this payment for 26 weeks in India is to be borne by the ‘employer only’ and not by the state or any other agency as in the case of France, Brazil, the USA, Canada, or Singapore. This could be a reason for the low selection of women in the first place, especially those who might expect their child in near future, seeing the cost to be borne by the organization for women employees with no work in return.

Government therefore should try to adopt a more balanced approach following the footstep of other country where insurance company and public fund also contribute for these payments borne.

5) Labour Laws

Labour laws are a must-know for all entrepreneurs and women must have a grasp over them too. These laws can be with relevance minimum wages, gratuity, PF payment, weekly holidays, maternity advantages, harassment, payment of bonus and so on. A start-up registered beneath the Start-up India program has the choice to finish self-declaration for nine labor laws within one year and acquire an exemption from the labor review.

The nine laws are as follows: the economic Disputes Act, 1947 The Trade Unit Act, 1926 Building and different Constructions Workers'(Regulation of Employment and Conditions of Service) Act, 1996 the economic Employment (Standing Orders) Act, 1946 The Inter-State Migrant Workmen (Regulation of Employment and Conditions of Service) Act, 1979 The Payment of Gratuity Act, 1972 The Contract Labour (Regulation and Abolition) Act, 1970 The Employees & Provident Funds and Miscellaneous Provisions Act, 1952 The Employees & State Insurance Act, 1948.

Thus to continue with the exemption, the start-up will file the self-declaration for the second and third year conjointly. Also, if a start-up options a well-defined worker policy, then it might give a footing over different start-ups. This policy may facilitate in talent acquisition and retention. Moreover, this may boost the employee’s morale and overall productivity.

6) Company Laws

Company Act in general must be known by all entrepreneurs. Company law is the key for establishment, setting up and closure of business. An entrepreneur would generally be the promoter of the company therefore must have a good hold of Company law so women entrepreneurs should also know this.

The new Company act, 2013 vide section 149(1) has made it compulsory for all listed companies to have at least 1 woman director in its board of director. This must be done within 6 months of date of incorporation of such companies and therefore is an essential piece of law that must be kept in mind by all the entrepreneur out there, especially women.

This was done in order to increase women participation at a higher level and boost the decision making capability of women. Although it has resulted in no significant development as corporations are simply appointing acquaintances as rubber stamps to comply with the provision which must be amended to that effect to include them as independent directors outside the company or relation.

7) Tax Laws

Till the year 2012 there was a difference in the tax slab over income between men and women but it was removed afterwards. However, we still have some concessions for women in other taxes whether it is property tax rebate, stamp duty concession, the lower interest rate on home loans, credit subsidy for houses, etc.

These will benefit women entrepreneurs and therefore must be known to them. A clear understanding of tax law both direct and indirect including the Goods and Services Tax should be known to a women entrepreneur.

8) Contract Laws

Contracts laws are effective to make positive use of the conventional functioning of any project or to supply recourse simply just in case of non-performance Indian Contract Act, 1872, Negotiable instrument act, Partnership Act, Sale of Goods Act etc. are a must-know for entrepreneurs.

NDAs or Non-Disclosure Agreement is another vital contract that a startup may notice helpful. Any startup discusses its ideas with sort of folks from the investors to the employees to customers and because of this, there's a large chance of leakage of the ideas that is wherever NDAs inherit play. This prevents the data from spreading not solely from the folks within however conjointly with the people outside the organization.

9) Intellectual Property Laws

If you have a secret sauce or an algorithmic program then it’s important that you just simply ought to take a note of this law. This law helps you secure your ideas from getting exploited commercially by any other player in the market. By getting a patent of your product or copyright over your work and thus securing Intellectual property right over your idea you simply protect yourself from any future consequences.

In line with this, you may want to patent a trademark than offers you right over commerce beneath a selected name. All this comes beneath property rights.

A Start-up will leverage the ‘Scheme for Start-ups property Protection’ (SIPP) beneath the ‘Start-up India program’. This theme was acknowledged to safeguard and commercialize your property. The facilitators of the theme are impanelled by the Controller General of Patents, logos and class. This panel of facilitators conjointly facilitate the start-up by providing consultative services, aiding in patent filing and disposal.

10) Winding up of Business

It’s not possible that always everything will work out as you planned. With less than 1 percent success rate of Startups, it is but natural that many companies would be forced to shut down its operation. But as a company or any business entity is a legal person it, therefore, follows a legal process even for its closure.

Company law deals with this part as well however a code of Insolvency and Bankruptcy is there for declaring a company bankrupt as per legal sanctions and moving forward with liquidation. The liability of individuals attach to it and the share they might get all depends on this law and therefore women entrepreneurs should also know this very piece of legislation for the long run and success.

Apart from the above-mentioned law, an entrepreneur is expected to have certain basic ideas of the Arbitration and Conciliation Act and Information Technology act. Moreover, a successful entrepreneur is one who knows how to derive maximum benefit from the dynamic societal changes and therefore should always be aware of what is happening around him and in the business environment in which he is working.

Since laws are the guiding principle behind the working of society whether it is a business organization or the economy as a whole, a basic idea of all such laws is a must for them. They need not be an expert in it but surely shouldn’t be absolutely ignorant about it.

Tags: labour laws, equal pay act, labour relations act, new labour law, female entrepreneurs, women entrepreneurs, function of women entrepreneurs, role of entrepreneurship, equal pay for equal work, sexual harassment at work

Sonam Chandwani

Sonam Chandwani

Sonam Chandwani is the Managing Partner at KS Legal & associates and heads the firm’s Corporate Litigation Practice.

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