EquiCorp- Legal Compliance Services
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Transcript of EquiCorp- Legal Compliance Services
EquiCorp AssociatesAdvocates & Solicitors
www.equicorplegal.comwww.equicorplegal.com
Legal Risk - Prologue
Legal risk refers to risk from uncertainty due to legal actions or uncertainty inthe applicability or interpretation of contracts, laws or regulations.
Legal risk can be a particular problem for institutions who transact businessacross borders with exposure to uncertainty relating to the laws of multiplejurisdictions, but also ambiguity as to which jurisdiction will have authorityover any particular legal issue (as applicable).
Legal risk in a common-law system might arise out of almost any aspect ofinternational or national public, private or formal law. The source of the legalrisk could be any aspect of the law applicable to a institution.
Its the risk associated with the impact of a defect in the documentation on cashflow or debt service within financial services rendered.
Legal risk is a form of enterprise risk in which a organization is exposed to legalaction where the offence can be either civil i.e. compliance defaults, breach ofcontract etc or criminal i.e. cheating, breach of trust, deceit etc.
Legal risk refers to risk from uncertainty due to legal actions or uncertainty inthe applicability or interpretation of contracts, laws or regulations.
Legal risk can be a particular problem for institutions who transact businessacross borders with exposure to uncertainty relating to the laws of multiplejurisdictions, but also ambiguity as to which jurisdiction will have authorityover any particular legal issue (as applicable).
Legal risk in a common-law system might arise out of almost any aspect ofinternational or national public, private or formal law. The source of the legalrisk could be any aspect of the law applicable to a institution.
Its the risk associated with the impact of a defect in the documentation on cashflow or debt service within financial services rendered.
Legal risk is a form of enterprise risk in which a organization is exposed to legalaction where the offence can be either civil i.e. compliance defaults, breach ofcontract etc or criminal i.e. cheating, breach of trust, deceit etc.
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Understanding Legal Risks ~ Non Compliances - BusinessImpact
ComplianceAreas
Risks of Non-Compliance
Direct TaxCompliance
• Imposition of penalty• Prosecution of directors
Indirect TaxCompliance
• Cancellation of licenses• Withdrawal of tax benefits• Stoppage of operations
Labour lawCompliance
• Imposition of penalty• Prosecution of directors/occupier• Employee dissatisfaction
The sudden increasein the regulatoryenforcement in Indiahas catapultedcompliance risk ontop of the boardmanagement and theregulatory regime inIndia continues to becomplex requiring regularinteractions with multipleregulators.
Legal Risk Management Services Overview
Expertise of Indian lawsand Regulation
Legal Structuring &Advisory
Government Approvals &Liaisoning
Negotiation &Documentation
Labour lawCompliance
• Imposition of penalty• Prosecution of directors/occupier• Employee dissatisfaction
Environment, Health& Safety laws
• Stoppage of operations• Imposition of penalty
Corporate LawCompliance
• Imposition of penalty• Vacation /Prosecution of directors/seniormanagement
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The sudden increasein the regulatoryenforcement in Indiahas catapultedcompliance risk ontop of the boardmanagement and theregulatory regime inIndia continues to becomplex requiring regularinteractions with multipleregulators.
Legal Compliance AuditsObjectives
To identify the level of compliance of an organisation
Identify the compliance risk
Enable the management to take steps to make the organisation compliant with laws andregulations
NonCompliance
Audit Report
EquiCorp’s Legal and Compliance Audit
1. Identification of Regulatory scope and laws thatapply to Company
2. Location visit
3. Interviews and discussions with Management
4. Issue of Audit Report
5. Follow up and remediation
Company
Documents
NonCompliance
Audit Report
ACTIONSRemediation of non
compliance
EquiCorp’s Legal and Compliance Audit
1. Identification of Regulatory scope and laws thatapply to Company
2. Location visit
3. Interviews and discussions with Management
4. Issue of Audit Report
5. Follow up and remediation
www.equicorplegal.com
Legal Compliance Report Non-Compliance Summary - a list of all items where the unit is not compliant,
forming a primary report to client
Register List – a detailed listing of all registers / notices / abstracts to bemaintained / displayed, the status of each, to allow easy follow up.
Criticality is reported in the following terms:
Critical - Possibility of unit being shut down.
Serious - Heavy Penalty, criminal offence, imprisonment
Minor – Let of with warning and mild fines.
Technical - Wrong format / documentation easily corrected
Non-Compliance Summary - a list of all items where the unit is not compliant,forming a primary report to client
Register List – a detailed listing of all registers / notices / abstracts to bemaintained / displayed, the status of each, to allow easy follow up.
Criticality is reported in the following terms:
Critical - Possibility of unit being shut down.
Serious - Heavy Penalty, criminal offence, imprisonment
Minor – Let of with warning and mild fines.
Technical - Wrong format / documentation easily corrected
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UnderstandingLegal Landscape
Diagnostic ofexisting
compliancemanagement
system
MappingCompliance
Responsibility®ular updationof compliances
Compliance Management Services
Diagnostic ofexisting
compliancemanagement
system
Assistance insetting up of
statutorycomplianceframework
Detailedcompliance
reviewsincluding review
for sectorspecific laws
MappingCompliance
Responsibility®ular updationof compliances
Legal Risk Advisory Services
Completion:
Board & Shareholder ResolutionsStatutory filings
Monitoring Regulatory Compliance
Structuring:Determine the tax efficient & legal compliant structure for
grants and fundsMarket Entry Strategy
Instruments for the implementation of the agreed terms
Due Diligence:Investor’s Perspective
Risk AssessmentLegal& commercial affairs of the company
Documentation:Term SheetAgreements
Legal Advisory and Opinion
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Acts covered (examples)
Factories Act, 1948 Shop & Establishment Act (state acts)
Payment of Wages Act, 1936 Maternity Benefits Act, 1961
Minimum Wages Act, 1948 Gratuity Act, 1972
Equal Remuneration Act, 1976 ESI Act, 1948
Payment of Bonus Act, 1965 Apprentices Act, 1961
Provident Fund & Misc Provisions Act,1952
Employment Exchanges (CompulsoryNotification of Vacancies Act), 1959
Hum
an R
esou
rces
(HR
)
Provident Fund & Misc Provisions Act,1952
Employment Exchanges (CompulsoryNotification of Vacancies Act), 1959
Contract Labour (Regulation & Abolition) act,1970 Trade Unions Act, 1926
Workmen Compensation Act, 1923Private Security Agencies RegulationAct, 2005
Prevention of Sexual Harassment(Guidelines)
Industrial Disputes Act, 1947
Labour Welfare Act (state acts)
Hum
an R
esou
rces
(HR
)
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Acts covered (examples)Electricity Act, 2003 Environment Protection Act, 1986
Petroleum Act, 1934 Water (Prevention and Control of Pollution) Act, 1981
Explosives Act, 1884 Air (Prevention and Control of Pollution) Act, 1981
Boilers Act, 1923 Water Cess Rules, 1977
Legal Meteorology Act, 2011 Hazardous Waste Handling & Management Rules,1989
Essential Commodity Act, 1945
BU
SIN
ESS
Micro, Small & Medium Enterprises Devel. Act,2006 Central Excise Act, 1944
Central Sales Tax Act, 1956 State VAT Acts
Customs Act, 1962 (export and importdocumentation) Service Tax Act, 1955
Income Tax Act (payment of Tax, TDS) Foreign Exchange Management Act
Negotiable Instruments Act, 1881Industries (Development & Regulation)Act, 1951
Information Technology Act, 2000 Motor Vehicles Act, 1988
Competition Act, 2002
TA
XE
S &
MIS
C
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Benefits and Obstacles to Legal /Compliance Audits
Benefits
In-house legal team is costly to maintain.
High attrition rate leaves gaps in In-house team and creates problems in audit.
In-house team, where present, is generally busy with the urgent legal matters.
A external audit team is given preference in terms of time and attention then the in-house team.
A external audit team will give independent and fair report.
Benefits
In-house legal team is costly to maintain.
High attrition rate leaves gaps in In-house team and creates problems in audit.
In-house team, where present, is generally busy with the urgent legal matters.
A external audit team is given preference in terms of time and attention then the in-house team.
A external audit team will give independent and fair report.
Possible Challenges Fear of audit resulting in Non-Cooperative attitude of units.
Manipulation of records & Concealment of facts.
Fear on confidentiality of data.
Controlling and preventing mistakes / non-compliances between audit periods.
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Do you operate in regulatedsectors and/or face multipleregulators?Do you know the extent of
legal compliance across youroperations?Do you deal in large and
complex contracts?Do you have compliance
management system that canstand regulatory scrutiny?Is your legal and compliance
framework cost-effective?
www.equicorplegal.com
Do you operate in regulatedsectors and/or face multipleregulators?Do you know the extent of
legal compliance across youroperations?Do you deal in large and
complex contracts?Do you have compliance
management system that canstand regulatory scrutiny?Is your legal and compliance
framework cost-effective?
Consult the Experts-ECA
Legal Compliance Audits & Legal Risk Managementservices.Legal Compliance Report including non-compliancesummary including review for sector specific laws.Complete Diagnostic of existing compliancemanagement system.Establishment of compliance strategy, compliance riskand governance framework. Regular updation of compliance management system.For further details contact us at
[email protected]/ +91 9958709189
Legal Compliance Audits & Legal Risk Managementservices.Legal Compliance Report including non-compliancesummary including review for sector specific laws.Complete Diagnostic of existing compliancemanagement system.Establishment of compliance strategy, compliance riskand governance framework. Regular updation of compliance management system.For further details contact us at
[email protected]/ +91 9958709189
www.equicorplegal.com
www.equicorplegal.com
www.equicorplegal.com