The document discusses various legal aspects related to the business of Asian Paints Limited, an Indian paint company. It covers the company's formation laws when it was established as a partnership in 1942 and later incorporated as a private limited company. It also summarizes key taxation laws, environmental laws, health and safety laws, labour laws, and CSR requirements that Asian Paints must comply with as a business in India.

1. LEGAL ASPECT
OF
BUSINESS
Submitted to: Prof. Navin Shrivastava
Submitted by:
16DM046 - Ashish Pandey

2. INTRODUCTION
• Incorporated in the year 1942 in India
• Headquartered in Mumbai
• Turnover of 158.5 Billion₹
• Largest paint company in India
• Third largest paint company in Asia
• Operating in 19 countries across the world
• 26 paint manufacturing facilities
• Servicing consumers in over 65 countries

3. FORMATION LAWS
• Started as a Partnership Firm
• There were 4 Partners at the time of registration
• Incorporated as a Private Limited Company under the
name ‘Asian Oil and Paint Company Pvt. Ltd.’,
registered under The Companies Act 1913
• Certificate of Incorporation No. 4598 of 1945-1946
• Went public in 1973 as ‘Asian Paints Limited’

4. Formation Procedure
• Selection of type of the company.
• Selection of name for the proposed company.
• Apply for Directors Identification Number and Digital
Signatures, if does not have
• Drafting of MOA and AOA.
• Signing and filing of documents with the ROC.
• Payment of Fees.
• Obtaining Certificate of Incorporation.
• Preparation and filing of Prospectus/Statement in lieu
of Prospectus and e-Form 19/20 (in case of public
companies) for obtaining the certificate of
commencement of business.
• Obtaining Certificate of Commencement of business
(in case of public limited companies).

5. Documents required
• Memorandum of Association
• Articles of Association
• Copy of the agreement, if any, relating to
appointment of its managing or whole-time director
• Declaration in e-Form 1 ensuring compliance to all
requirements of the Companies Act, 1956 (by
advocate/ CS/ CA engaged in practice or by a person
named as a director or secretary of the company)
• Power of Attorney, if any
• E-Form 18, relating to the digital signatures
• E-Form 32, filing particulars of directors
(certified by the CS or CA or ICWA in practice)

6. Memorandum of Association
MOA provides the following information:
•Name of the company
•Name of its members (shareholders)
•No. of shares held by them
•Location of its registered office
•Objectives of the company
•Amount of authorized share capital
•Whether liability of its members is limited by shares
or by guaranty
•Type of contracts the company is allowed to enter
into

7. After amendment, the liability of the members
became limited for Asian Paints Limited.
Authorised Share Capital: Rs.1,00,00,00,000 (Rupees
One Hundred Crores only)
•99, 50, 00,000 (Ninety Nine Crores Fifty Lacs only)
Equity Shares of Rs.1 (Rupee One) each
•50,000 (Fifty Thousand) 11% Redeemable
Cumulative Preference Shares of Rs.100 (Rupees
Hundred only) each.
w.e.f. 1-11-2006, no company shall appoint or re-
appoint any individual as director of the company
unless he has been allotted a Director Identification
Number (DIN)

8. FORMATION LAW
Companies Act 2013 Companies Act 1956
No. of
Shareholders
Private: Min 2, Max 200
Public: Min 7, Max No Limit
Private: Min 2, Max 50
Public: Min 7, Max No Limit
Min. No. of
Directors
Private 2
Public 3
Private 2
Public 3
Maximum No. of
Directors
15 12
Appointment of
Auditor
An Auditor will be appointed
for a period of 5 years
No such provision existed
Article of
Association
Table F applies where
Companies Limited by
shares does not adopt their
own Articles of Association.
Table A applied where
Companies did not adopt their
own Articles of Association.
One Person
Company (OPC)
Company which has only
one person (natural person)
as its member
No such provision existed

9. TAXATION LAWS
Following are the Tax on Income of an PLC:
• Tax rate of 30% on the total income and surcharge of 5%
if the income exceeds 10 Million plus 3% Education cess
& Secondary and Higher Education cess on the total of
income tax and surcharge.
• In India, Taxability of a company’s income depends on its
and are taxable on their worldwide income.
• Rate of dividend distribution tax is 15 per cent on
dividends distributed by Asian Paints Ltd.
• Capital Gains arising from the sale of any asset by the
partnership firm are taxable under Section 112.
• Remuneration and Interest received by the partners
shall be taxed in their hands as income under head PGBP
• In case the partnership firm is unable to pay the tax
dues, the partners can be held liable for recovery of the
tax dues.

10. TAXATION LAWS
• Excise Duty on Asian Paints:
Duty charged under section 3 of the Central Excises and Salt Act,1944 on all excisable goods
(Basic Excise Duty)+Special excise Duty on all excisable goods on which there is a levy of
Basic excise Duty under the Central Excises and Salt.
• Custom Duty of 10 %
• Sales Tax
• Value Added Tax (VAT)
In (Rs. Million) March, 12 March, 13 March, 14 March, 15 March, 16
Profit before tax 13,576 15,620 17,902 20,444 25,759
Tax 4,355 4,957 5,715 6,495 8,491
Profit after tax 9,887 11,139 12,188 13,952 17,262

11. TAXATION LAWS (CSR)
• Section 135 of the Companies Act provides the threshold
limit for applicability of the CSR to a Company
net worth of the company to be Rs. 500 crore or
more
turnover of the company to be Rs.1000 crore or
more
net profit of the company to be Rs.5 crore or
more
• Every qualifying company requires spending of at least 2% of
its average net profit for the immediately preceding 3
financial years on CSR activities.
• Asian Paints Ltd. has spent Rs.34.44 crores for FY2015-16
(Rs.18 crores in vocational training, Rs.4.18 crore in health &
hygiene, Rs.5.80 crores in education, Rs.6.46 crores in water
recharge).

12. ENVIRONMENTAL LAWS
According to Section 2(a) of the Environmental
Protection Act, 1986, ‘Environment’ includes
a) Water, air and land
b) The inter-relationship which exists among and
between,
• Water, air, land, and
• Human beings, other living creatures, plants,
microorganisms and property

13. Asian Paints is committed to protecting the
environment by:
• Leveraging the 3R (reduction, recycle,
reuse) Principle and move towards Zero
Industrial Effluent Generation, Zero
Hazardous Solid Waste
• Generation and Zero Virgin Paper
Consumption
• Becoming Water Neutral by pursuing
strategies of Rain Water Harvesting, Water
Conservation and Water Recharge.
• Reducing Energy-Intensity and Carbon-
Intensity
• Increasing contribution of Energy from
Renewable Sources

14. HEALTH AND SAFETY LAWS
According to Factories Act 1948, an occupier of an
establishment has to ensure the health, safety and welfare of
all the workers while they are at work in the factory.
• The establishment should be monitored to check the
quality of the premises, cleanliness, disposal of
wastes, ventilation and temperature, overcrowding,
lighting, clean drinking water, latrines and urinals,
and spittoons.
• Safety of the worker must be ensured by installing
and maintaining the machinery and mechanisms
• The employer is obliged to take care to protect the
worker’s health and safety

15. Asian Paints shall use principles of inherent safe design,
proactively control risks in operations and improve the
safety culture to achieve:
• Zero Accidents
• Zero Occupational Illnesses
• Zero Incidents of Property Damage

16. LABOUR LAWS
Objective is to regulate the employment of contract
labour in certain establishments and to provide for its
abolition in certain circumstances and for matters
connected therewith.
Applicability:
• Every establishment in which 20 or more
workmen are employed or were employed on
any day of the preceding 12 months as contract
labour.
• Every contractor who employs or who
employed on any day of the preceding twelve
months 20 or more workmen.

17. Labour Laws includes Registration of Establishment,
Licensing of Contractor, Welfare measures to be taken
by the Contractor, Liability of Principal Employer.
Asian Paints Limited is compliance of many
employment related laws such as
•Employee PF & Misc. Provision Act, 1952
•Payment of Bonus Act, 1965
•Payment of Gratuity Act, 1972
•Payment of Wages Act, 1936
•Maternity Benefit Act, 1961
•Minimum Wages Act, 1948
•Employees Compensation Act, 1923
•Contract Labour Act, 1970 etc.

18. • EMPLOYEE PF & MISC. PROVISION ACT, 1952
Employers are required to contribute a minimum of
12% of an employee’s basic salary towards PF
• PAYMENT OF BONUS ACT, 1965
The minimum bonus of 8.33%. The maximum bonus
shall not exceed 20% of the salary/wage of an
employee.
• MATERNITY BENEFIT ACT, 1961
Leave with average pay for 6 weeks before and 6
weeks after the delivery along with Medical bonus
of at least Rs. 1000 extending to Rs. 20000.

19. Thank You