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Accounting, Secretarial Compliance, Start up Lessons

We all know startups, except for sole proprietorship firms and partnership firms, are considered separate legal entities, distinct and independent from the members who represent it. So, how can courts punish these startups which commit crimes? Common law has various theories which determine the liability of the corporations and the most prominent one would be the doctrine of vicarious liability which states that corporations can be held liable for the torts committed by its employees. But can corporations be charged with the crimes they have committed? Or more importantly, should they be held liable, especially since a company itself is not capable of thinking or of creating any intention of its own. In this blog, we will figure out answers.


Under the Indian Penal Code (IPC), corporations can be prosecuted for the crimes they have committed. Section 11of the Act defines that the ‘person’ would include “any Company or Association or body of persons, whether incorporated or not”. Incidentally, the IPC also protect companies. For instance, Section 499 (Explanation 2) makes defaming a company a criminal offense.


What does corporate crime involve?

According to R.C. Kramer, the corporate crime involves “criminal acts which are the result of deliberate decision making or culpable negligence by persons who occupy structural positions within the organization as corporate executives or managers. These decisions are organizational in that they are organizationally based – made in accordance with the operative goals (primarily corporate profit), standard operating procedures, and cultural norms of the organization – and are intended to benefit the corporation itself.”


What do theories say on Corporate criminal liability?


  1. Doctrine of Attribution

A corporation can be convicted of a criminal offense involving mens rea by applying the Doctrine of Attribution. According to the doctrine, criminal intention of the “alter ego” of the company, i.e., the person/ group of person in charge of the business/affairs of the company can be attributed to the corporation as well to make it liable. In other words, corporates can be held responsible for offenses committed by the persons in control of its affairs, if such are perpetrated in relation to the business of the corporation.


However, the question then arises whether the reverse will also hold true, i.e., whether the officials of the company can be held responsible for acts of the company? This question was recently answered by the Supreme Court of India in Sunil Bharti Mittal vs. Central Bureau of Investigation. The Apex Court, in no uncertain terms, held that the principle of attribution cannot be applied in the reverse scenario to make the directors liable for offenses committed by the company. However, the Court thereafter observed that in the following circumstances a director/person in charge of the affairs of the company can also be prosecuted, along with the company as an accused:


  • If there is sufficient evidence of his active role coupled with criminal intent;
  • Where the statute specifically imposes liability.



  1. Vicarious Liability


Originally developed in the context of tortious liability, the doctrine of vicarious liability holds a person liable to answer for the acts of another. For instance: In the case of companies, the company may be held liable for the acts of its employees, agents, or any person for whom it is responsible.


The concept of vicarious liability of corporate officials has evolved substantially in the recent times so much so that it has become a trend to implead the officials of the company along with the company to exert pressure on the company to settle. However, it is important to note that there is no vicarious liability unless the statute specifically provides for it. Therefore, when the company is the offender, vicarious liability of the directors cannot be imputed automatically in the absence of any statutory provision to that effect.


Essentials for the doctrine of vicarious liability, therefore, are as follows:

  • There must be a crime committed by the agent of the company.
  • He must commit it within the scope of his employment.
  • The act must be carried out with intent to benefit the company.


  1. Theory of identification


The theory of identification recognizes that the acts and state of mind of certain senior officials in a company are the directing minds of the corporation and thus deemed to be the acts and state of mind of the corporation. The corporation is considered to be directly liable, rather than vicariously liable under this theory. In other words, this theory contemplates an identity between the corporation and the persons who constitute its directing mind. The commission of an offense by such person constitutes an offense by the corporation as well. If a corporate employee is virtually the directing mind and will of the corporation, the employee’s action and intent are the action and intent of the company itself, provided the employee is acting within the scope of his/her authority, either express or implied. Under the doctrine of identification, the company is personally liable. It is not liable vicariously. It is deemed to have committed the offense by itself.


The concept of corporate criminal liability is still in its emerging stage in India. However, attempts have been made in the Companies Act, 2013 to control and reduce corporate crime, and at the same time improve corporate governance practices, making companies more responsible and answerable. With the advent of globalization, imposing criminal liability on corporations makes sense; because they are immensely powerful actors whose conduct often causes very significant harm both individuals and society as a whole. Clearly, a lot is still required to be done in this area but the steps taken so far should not be undermined. How effectively laws and regulations will be able to control corporate behavior, only time will tell.

Let us know if you need any help, we at Wazzeer would be glad that we could help you out -> Get Started!


Accounting, Start up Lessons, Startup Funding Paperworks

What does the CA say?

Maintain Chart of Accounts right from the early stage of the venture.


Is Chart of Accounts really important?

A company’s Chart of Accounts is a view of all Asset, Liability, Equity, Revenue, and Expense accounts included in the company’s General Ledger. The number of accounts included in the chart of accounts varies depending on the size of the company. Designing a COA is one of the first tasks that have to be performed when setting up a budgeting and its associated accounting and financial reporting systems.


The Chart of Accounts (COA) although appears to be just concerned with classifying and recording financial transactions, is critical for effective budget management, including tracking and reporting on budget execution.  A mistake in designing the Chart of Accounts could have a long-lasting impact on the ability of the system to provide required financial information for key decisions. Remember, COA is also the hub of any computerized accounting and reporting system.


How does maintaining Chart of Accounts benefit the firm?

  • The COA specifies how the financial transactions are recorded in a series of accounts that are required to be maintained to support the needs of various users/stakeholders.
  • The COA provides a coding structure for the classification and recording of relevant financial information within the financial management and reporting system.
  • The COA provides room for planning, controlling and reporting of budgetary allocations as well as internal management needs of budget units and/or cost centers.


How is Chart of Accounts designed?

COA can be designed by anyone who is aware of the nuances of accounting, but the difference that an experienced professional brings in is productivity and quality. It is a known fact that startups, most of them, lack the management bandwidth and expertise to carry out COA related works. 

The development and implementation of a COA should involve the following key steps:

  • The COA can only be properly configured after a comprehensive business needs analysis has been undertaken
  • The COA segments and the hierarchical levels within each segment should be defined.
  • The COA and its segments should use basic logic and account definition
  • Creating a global or a unified COA establishes a foundation for consistency in terminology and serves to eliminate redundant accounts
  • Define clear institutional, legal and procedural frameworks to prevent the COA structure from becoming fragmented.
  • For the COA to achieve its desired impact of facilitating improved budget management and financial reporting, all users should be adequately trained.
  • An effective change management strategy also needs to be developed to implement the new COA and associated reforms in the accounting and reporting system


Wazzeer Professional Network is built on qualified CAs, CSs, and Lawyers who work with startups in understanding and delivering various compliance works seamlessly. We would be happy to work with you getting this organized and compliant. Let’s connect -> “Get your Wazzeer”


Start up Lessons

Irrespective of the type of business type there are certain business laws that would be applicable to all business types. Here is the checklist of 7 Laws applicable to all business type in India:

  1. Companies 2013 Act – governs the incorporation management, restructuring, and dissolution of companies.
  2. Indian Contracts Act – governs the grounds on which contracts are valid, relating to the formation and enforceability of contracts, consideration, the various types of contracts including those of indemnity and guarantee, bailment and pledge, agency, and breach of a contract.
  3. FEMA – governs India’s foreign exchange and regulates the inflow and outflow of foreign exchange and investment into/from India.
  4. SEBI Act – governs India’s securities market regulator, public offers of securities, offers of securities by listed companies, the terms of mandatory and voluntary tender offers for shares of listed companies, and the process for delisting of a listed company);
  5. SCRA – governs listing and trading of securities on stock exchanges in India and the Listing Agreement with stock exchanges;
  6. Competition Act – governs the fair competition in the market.
  7. Income Tax Act – governs the tax treatment of dividend, capital gains, mergers, demergers and slump sales.

In addition to the top 7 laws there are sector-specific legislation (e.g. the Indian Telegraph Act, Drugs and Cosmetics Act, Press Council Act, the Banking Regulation Act, the Insurance Act, and various labor legislation (Industrial Disputes Act etc.) which are to be considered depending on the nature and type of the transaction.

Start-up process entails complex procedures and many bureaucratic hurdles, entrepreneurs are better off using professional services. Hiring a virtual lawyer and virtual accountant can save time and help ensure that the process goes smoothly. For any Legal and Accounting support, Happy to help you, let us talk! 🙂




Start up Lessons

Startup India stand up India is rightly called the bag of incentives because it not just makes the compliance part easy, but has compartments for a huge funding opportunity and continued support. We at Wazzeer have helped some of our clients to crack this opportunity for great good. So, in this blog, we will walk through the quick list of incentives that ventures starting up in 2018 can try their chances for. 

  1. Self –certify compliance with nine labor laws and environmental laws.
  2. Startup India hub – to enable nurturing and entrepreneurial thinking
  3. E-Portals and App – For interacting with Government and regulatory bodies, and collaborating with various other startups signed up in the platform
  4. Legal support at lower cost
  5. Patent registration and Tracking at faster rate
  6. Relaxation on Public procurement eligibility criteria for Startups
  7. Faster Exit for startups
  8. Financial support through Fund of Funds
  9. Credit Guarantee Funds for Startups
  10. Tax Exemption on capital gains
  11. Company income exempted from Income Tax for 3 years
  12. Tax exemption on investments above Fair Market Value
  13. Industry-Academia Partnership and incubation facilities


The procedure to register a venture under Startup India Initiative:







Wazzeer has developed a simple to use system to quickly check your eligibility for Startup India Initiative, we strongly believe entrepreneurs like you should give it a shot, let’s connect  🙂


Business Registration, LLP, Partnership Firm, Start up Lessons, Trademark
Every business entity needs to be given some name and the functioning of the business is carried out in that name only. In the case of a company which enjoys the status of the separate legal entity, choosing business name in India is a must. Name approval from the Registrar of Companies is pre-requisite condition before incorporation of the company.

Procedure for Business Name approval in India

Application to concerned Registrar of Companies to ascertain the availability of name in eForm-INC1 need to be made. Maximum 6 suitable business or company names can be submitted in order of preference and name must indicate main objects of the company.

While choosing business name in India, make note of following:

  • The proposed business names must not be similar or resemble the name of any other already registered company, or
  • Proposed business name should not violate the provisions of emblems and names (Prevention of Improper Use Act, 1950), or
  • Proposed business or company name(s) should not constitute an offense under any law.
  • Last word Limited need to be used in the case of a public limited Company, or Private Limited, in the case of a private limited Company and LLP needs to be used for Limited liability Partnerships.
Along with government fee and complete form, the digital signature of the applicant proposing the company needs to be attached. For filling this form Digital Signature of one of the Promoters is mandatory.

The details need to be provided in eForm INC1 are:-
  • Authorized capital for the proposed company
  • Main objectives of the proposed company
  • State (location) of the proposed company
  • Personal details of all Promoter?s
  • Copy of trademark application/certificate (if applicable)
  • In case, there is a logo associated with trademark then image of logo
  • Balance sheet (if applicable) and Income tax returns for last 2 years

If the name is approved by Registrar of Companies, letter of acceptance is issued for the proposed name. If proposed name(s) are not available, fresh names can be applied through the same application.

We will be glad to help you in choosing a business name, let’s connect.


The Government on March 6, 2017 notified a new set of trademark rules which have replaced the old rules constituted way back in the year 2002. The main idea behind the change is to help expedite the approval process and increase filings, both of which have shown positive trends over the past few months. While the examination time for an application has been brought down from 13 months to just 1 month in January 2017, official figures suggest that filings have jumped 35 per cent in 2015-16 against the previous year. Listing the top 4 changes in the new rule that you should know:
  1. Ease of doing business: One of the most important things is that the total number of forms that an applicant had to fill out has been reduced from a monumental 74 to a quite reasonable 8.

  1. Slashing of cost: The new rules have hiked fee for Trademark application to Rs. 9,000 but application fee for individuals, start-ups and small enterprises has been kept to Rs. 4,500 only (Government fee)

  1. Clarity in the approval process: To make a business doing easier, the method to determinate well-known trademarks has been clarified for the very first time. Provisions relating to the expedited processing of an application for registration of trademark have been extended up to the registration stage. Until now, they were only till the examination stage.

  1. Quick disposal: Concept of video conferencing has been introduced in the new rule and the number of adjournments in opposition proceedings has been limited to two by each party, these measures are surely going to help in disposal of cases on time.

Wazzeer is vouched by Entrepreneurs as the most reliable Legal and Accounting Partner. We would be super excited to help you. Let’s Connect! 🙂

Contracts and Agreement, Contracts and Agreements, Contracts and Agreements, Start up Lessons
Basically, vendor is someone who provides you with a service or goods. For instance, a person providing house cleaning services is a vendor, a person supplying raw material for renovating your office is a vendor. The Vendor Agreement is therefore an agreement between you and a vendor that you have selected for the services that such vendor has to provide to you or goods that such vendor has to supply to you.

An SLA, i.e. service level agreement is a contract between a vendor and the end user that defines the standard level or quality of service expected from such a vendor. An SLA or Service Level Agreement will define the service levels that have to be achieved by a vendor and may also provide for remedies and penalties in the event of non-fulfilment of such service levels. Let me explain a bit more with a day to day example. For instance, an EduTech startup (say XYZ), that is outsourcing the textbooks production to a service provider, gets an vendor agreement with SLA included in it, then the SLA ( Service Level Agreement) related clauses would involve the following:
  • Delivery timelines
  • Minimum quantity of delivery within a mentioned duration of time
  • Critical delivery items (as in threshold meeting)
  • Meet the Standard of packaging
  • Monitoring and measurement of timelines and delivery thresholds.
  • Penalties and remedies for default items is mentioned
  • Termination right of XYZ for a continued breach/default of SLAs
With the above example, now you would be in a better position to decide whether or not you require SLAs (Service Level Agreement) to be included in your Vendor Agreement or Service Agreement.

Startup entails complex procedures and many bureaucratic hurdles, entrepreneurs are better off using professional services. Hiring a virtual lawyer and virtual accountant can save time and help ensure that the process goes smoothly.

For any Legal and Accounting support, Happy to help you, let us talk at Wazzeer.


Business Registration, Healthcare Startup, Licenses, Start up Lessons
Economists can just turn the table, don’t they? When reports about Healthcare sector expecting to touch $158.2 billion by 2017 came up, entrepreneurs that always wanted to do something big in this sector felt unstoppable. Yes, you got the point! This blog is for all you fans that has been requesting me to write on the e-healthcare sector. So, let’s get on with the basics of starting healthcare business in India.
  1. Business Registration:
This is a must for startups in this sector and probably the first step for starting healthcare business in India. Since there are multiple players involved, raising funds is another major thing to be concerned about, therefore registering it as a PVT. LTD. Company makes sense for most entrepreneurs.
  1. Rules under the IT Act:
  • Data Protection: The patient must be informed that the data is being collected, purpose behind the same and whether it would be transferred to any third parties, along with the contact details of the agency collecting the information.
  • Follow the international standard IS/ISO/IEC 27001 on Information Technology
  • Appoint a ‘Grievance Officer’, whose contact details are to be published on the website.
  1. Privacy Policy:
It is mandatory for startups ( healthcare business in India ) to have a privacy policy in place and published on its website. Although a ‘privacy policy’ is technically a legal document, great effort should be made to craft a document that is both accurate and easy to understand.  
  1. Not to miss OSP Regulations:
If you are planning on starting healthcare business in India that will have Application based Services which includes telemedicine services, you will be required to be registered as an ‘Other Service Provider’  (OSP) with the Department of Telecommunications.  
  1. Abide by the rules of The Drugs and Cosmetics Act (this one is for e-pharmacies)
  • All drugs must be sold under a license. The Rules under this act clearly lay down which drugs can be sold only on the production of a prescription issued by a registered doctor.
  • Drugs which can be sold only on prescription are stated in Schedules H, H1, and X.
  1. The Drugs and Magic Remedies Act, 1954:
If you are going to send Advertisements (promoting anything) to registered medical practitioners and chemists after starting healthcare business in India, you can do only if your documents bear the words ‘For the use only of registered medical practitioners or a hospital or a laboratory’ at the top of the document.  
  1. Unsolicited Commercial Communications Regulations, 2007 and Telecom Commercial Communication Customer Preference Regulations, 2010:
Sending unsolicited commercial communications over voice or SMS are prohibited. However, there is no legal bar over sending transaction messages after starting healthcare business in India.
  1. The Clinical Establishments Act, 2010 (this one is for startups that have clinics as well): Registration with the relevant authority and conform to the minimum standards as prescribed under the act.
  1. Patent:
  • A computer program ‘per se’ is excluded from patentability under Section 3(k) of the Patent Act, 1970., provided it meets the other requirements of CRI.
  • Patents for software programs have been issued in the past where it involves a hardware component as well. If the technology/software fulfils these requirements, you could file for a patent and receive protection if the same is granted. 
  1. Copyright:
  • Software can be protected as a literary work under copyright law.
  • The idea would have to be expressed in some form of medium before it can be protected.
  • Clinical guidelines and data could be protected under the Copyright Act, only if it is expressed in some form of medium.
A2Z of starting a Healthcare Startup  
  1. Design:
Design protection would be the Graphical User Interface (GUI) of applications and the design of the devices and this can be protected under the Designs Act.  
  1. Trademark:
The ‘mark ‘ an e-Health application or device could be registered as a trade mark under the Trademark Act. 
  1. Trade secrets: You can protect the trade secret by signing a Non-Disclosure Agreements with employees to avoid information going out of your roof.
  1. Indirect Taxes:
  • Service tax is 14% payable by the service provider.
  • Value Added Tax (VAT) is levied on the sale of goods within a state and rates vary widely anywhere from 0%-1% to 4%-12.5%.
  • Central Sales Tax is imposed on the sale of goods during interstate trade or commerce.
  1. Corporate Tax
  • Indian residents are taxed on their worldwide income
  • Non-residents are only taxed on income arising from sources in India. 
  1. Follow the standards of NeHa:
NeHA is a promotional, regulatory and standards setting organization to guide and support India’s journey in e-Health. 
  1. Terms of service:
You are required to have the Terms of services document in place, that has all the required information about services like Age verification and other rules.  
  1. Payment Gateway Compliance:
It is mandatory for every ecommerce startup, on a similar line e-healthcare startups should consider doing the same.  
  1. Abiding International jurisdiction:
Every country has its own set of compliance that businesses outside the country should follow.  
  1. Cofounders Agreement:
Importance of having this conversation (or more likely, conversations) early on, explain why a founders? agreement is a valuable tool to maintain a healthy co-founder relationship. It is like defining your marriage with the fellow co-founder.  
  1. License Agreement:
Licensing agreements cover a wide range of well-known situations. For example, a retailer might reach agreement with a professional sports team to develop, produce, and sell merchandise bearing the sports team’s logo. On a similar note, when you provide license to doctors to use your app, it is important that you have a license agreement to support the same.  
  1. Contracts and Agreements:
To protect your relationship with partners or doctors on a long run. The doctors should be able to present the necessary credentials and certification and all these action items included in the contract or agreement would assure quality.  
Startup entails complex procedures and many bureaucratic hurdles, entrepreneurs are better off using professional services. Hiring a virtual lawyer and virtual accountant can save time and help ensure that the process goes smoothly.

For any Legal and Accounting support, Happy to help you, let us talk at Wazzeer.


Legal, Start up Lessons
Setting up your startup involves a lot of work and effort. Many things need attention, including developing a proof of concept, finding product/market fit, and hiring the first set of employees. With these many things to be handled, slips are bound to happen. One of the most common areas where most startups make a wrong choice is establishing a solid legal foundation. Some of the most common legal mistakes made by startups:
  1. Wrong legal entity: Choosing the right legal entity right at the outset is important. Some structures to choose from include a Registered Company (Public/Private Limited), LLP, proprietorship, and partnership. The more widely accepted one is a registered company, especially for any deals with foreign clients.
  2. Not tracking expenses: Many try and gather all receipts only when tax returns have to be filed! What is not documented is not deducted, and therefore, it is like leaving money in the open.
  3. Lack of documentation: Each and every interaction, be it meeting minutes or anything else, must be on the record. It is important to have all documents in order at all times. Legal due diligence can make or break an investment deal.
  4. Missing founders agreement: The founders agreement should contain all essential clauses such as ownership, vesting rights, and the roles and responsibilities of each founder, including salaries and terms of employment.
  5. Mixing capital and revenue expenses: What expenses are considered assets /capital expenditure and which ones are called revenue expenses deductible in the P&L A/c. Higher-value items that will last significantly longer than one year are called Capital Expenditure/Assets/Equipment. Things that are consumed over the course of a year come under revenue expenditure. If the equipment or capital items are by accident deducted as revenue expense, the tax department can determine that the expense has been improperly characterized and a deduction does not apply. Hence, be careful in accounting all such expenses.
  6. Mixing personal and business expenses: This can be a source of confusion when taxes are being filed, and in some cases, can lead to deductions being disallowed on an ad-hoc basis by the revenue authorities and higher tax outgo as a result. The company should therefore have a financial account at the onset and separate records as well.
  7. Not protecting intellectual property: Intellectual property (IP) is a startup’s most valuable asset. Trademarks, patents, and copyrights are the three essential components of IP. It is essential to not let anyone claim a right to your IP. Non-disclosure agreements are a way of ensuring this. Startups often neglect the protection of IP and suffer later.
  8. Non-compliance with securities laws: Startup founders commonly issue stocks to angel investors, family, and friends. However, stocks issued without complying with specific disclosure and filing requirements under securities law can lead to serious legal issues at a later stage.
  9. Missing regular tax payments: Businesses, be it sole proprietors or otherwise, are required to pay taxes in advance. This means they need to determine their taxes for the year in advance and pay as prescribed installments.
  10. Not ensuring professional help for tax-related issues: A startup must appoint a tax consultant to ensure all regulations are being followed. This will also give you more time to focus on building your company, forming strategic relationships, and other things.
    It is a summarization of an article from YourStory. For more information, visit

Wazzeer is vouched by Entrepreneurs as the most reliable Legal and Accounting Partner. We would be super excited to help you. Let’s Connect! 🙂

Start up Lessons
Ride hailing service Ola, is going to add a new service to its kitty. Now you can rent Ola cab on an hourly basis, in a marked contrast to its core business of point-to-point travel.

Need a car on a standby to take you around? Now rent a cab on an hourly package with the all new Rentals. Available for local travel in select cities, said an update on Ola’s Google Play page.

Ola, a home-grown unicorn valued at $5 billion, has a strong competition with Uber, the worlds’s most valuable start-up at $68 billion. Recently, Ola had also started piloting an outstation service in Delhi and then expanding to other cities like Mumbai and Bangalore.

The move is expected to boost Ola’s bouquet of offerings and help the company evolve into a one-stop service provider for road transport solutions. The company has been entering categories that are yet to be explored by Uber to gain market share. Presently Ola and Uber offer on-demand service taxi booking.

However, Ola is also providing their customers the privilege of advance booking unlike Uber. Earlier in March, Ola introduced its cheapest offering Micro at Rs.6 per km to take on Uber’s cheapest service UberGo at Rs.7 per km, a move that has helped the company turn the tide in its favour. In response to Micro, Uber has also slashed fares for UberGo to match Micro in Delhi, one of the top three markets along with Mumbai and Bangalore.

  It is a summarization of an article in Live Mint. For more information, visit

Wazzeer is vouched by Entrepreneurs as the most reliable Legal and Accounting Partner. We would be super excited to help you. Let’s Connect! 🙂