COMPANIES ACT – A BOON OR A BANE

August 05, 2013

Will the new Companies Law be a boon or a bane for the stakeholders ? the businesses, shareholders, investors, creditors and the law enforcers among others?

Companies in India have been and are governed by a number of legislations and regulations. The Companies Act, 1956 has been governing the incorporation and functioning of companies in India for almost 60 years now. The Companies Act 2013 incorporates a number of new concepts, makes changes in others and removes some archaic concepts as well.

It is clear that there has been a huge amount of hard work, discipline, clarity in goals, ambition and guts. But is that enough to get into the billion-dollar club? There exists no single answer for this. A right effort, on the right time, with the right opportunity will only result into wonders.

The business environment is affected by internal and external factors. An entrepreneur cannot control the external factors affecting the business to a great extent but the command of internal factors is in his very hands. Human Resource is one of the most important among the internal factors in turning a business story into its success story.

Employees are the stepping stones which need to be nurtured in order to build a strong foundation that leads to growth. Contrary to this, people generally fail to pose trust into new ventures, which is even correct, as a startup is neither in a position to pay attractive packages nor it can assure a sure-shot success / profits out of its endeavors.

But this is not the end of the story. Early stage companies are high-risk investments and many fail. In order to attract employees, startups need to be able to offer something different, such as the prospect of a share in the upside should the company go on to be successful. Entrepreneurs need to chalk out strategies which enable them to create a win-win situation. The best and most trending incentive for employees is to make them partner in the growth of the business by making them co-owner.