Private Limited Company Compliance : A Practical Post-Incorporation Guide

CA RAMAKRISHNA SANJAY

7760252581

Congratulations! Incorporating your company is a huge milestone

"Incorporation is not the finish line—it is the starting point."

Once a company receives its Certificate of Incorporation (COI), it enters a regulated framework governed by the Companies Act, 2013.

Here is to-the-point guide on the mandatory post-incorporation steps for a Private Limited Company in India.

📅 Phase 1: Immediate Post-Incorporation (First 30 Days)

✔ Key Actions

• 🏦 Bank Account Opening
  Essential for operational readiness and capital infusion.

• 👥 First Board Meeting (Section 173)
  Must be conducted within 30 days
  Covers:

  • Appointment of auditor

  • Disclosure of interest

  • Adoption of initial resolutions

• 🧾 Appointment of First Auditor
  To be appointed by the Board within 30 days

• 📄 Issue of Share Certificates
  Must be issued within 60 days to subscribers

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🚨 Phase 2: Commencement of Business (Critical Compliance)

📌 INC-20A – Declaration of Commencement

This is a non-negotiable compliance checkpoint.

• Timeline: Within 180 days

• Pre-condition: Share capital must be deposited in company bank account

• Certification: Filed by a practicing professional

⚠ Risk Exposure

• Company penalty: up to ₹50,000

• Directors: ₹1,000 per day

• Potential strike-off by ROC

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🔁 Phase 3: Recurring Annual Compliances

Once operational, compliance becomes cyclical.

📊 1. DIR-3 KYC

• Applicable to all directors holding DIN

• Due Date: 30th September

• Impact of Delay: DIN deactivation + ₹5,000 fee

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📑 2. AOC-4 (Financial Statements)

• Filing of:

  • Balance Sheet

  • Profit & Loss Account

• Due Date: Within 30 days of AGM

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📘 3. MGT-7 / MGT-7A (Annual Return)

• Captures:

  • Shareholding pattern

  • Governance structure

• Due Date: Within 60 days of AGM

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💰 4. Income Tax Return (ITR-6)

• Due Date: Typically 31st October (audit cases)

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💡 Strategic Compliance Insights 

✔ GST Registration

✔ Statutory Registers

✔ Professional Tax (State-Specific)

📌 Conclusion

Compliance is not a regulatory burden.

A company that is compliant:

• Builds investor confidence

• Avoids legal disruption

• Scales sustainably

One Person Company (OPC): Smart Structure for Solo Entrepreneurs in India

CA RAMAKRISHNA SANJAY

7760252581

Starting a business alone doesn’t mean staying small. A One Person Company (OPC) bridges the gap between sole proprietorship simplicity and corporate credibility.

If you are a consultant, freelancer, exporter, or service provider — OPC is a strategic structure worth evaluating.

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💡 What is an OPC?

An OPC is a company incorporated under the Companies Act, 2013 with only one shareholder and one director.

👉 It provides:

• Limited liability protection

• Separate legal identity

• Corporate recognition

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🎯 Why OPC? (Key Advantages)

✅ 1. Limited Liability Protection

Your personal assets are safeguarded. Liability is restricted to capital invested.

✅ 2. Professional Credibility

OPC builds trust with clients, banks, and foreign parties — critical in export business.

✅ 3. Full Control

No dilution. You are the sole decision-maker.

✅ 4. Easy Fund Access

Better positioning for:

• Bank loans

• Government schemes

• Startup recognition

✅ 5. Perpetual Succession

Nominee ensures continuity even in unforeseen circumstances.

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⚠️ Post-Incorporation: What Needs Attention

After incorporation, most OPCs fail not in business — but in compliance discipline.

📌 1. Mandatory Board Resolutions

Even with one director:

• Record decisions

• Maintain minutes

📌 2. Statutory Registers

Maintain:

• Register of members

• Contracts (if any)

📌 3. Bank & Financial Discipline

• Separate business account

• No mixing personal & business funds

📌 4. Auditor Appointment

• Within 30 days of incorporation

📌 5. GST / Other Registrations

Based on:

• Turnover

• Nature of services (mandatory for exports)

---

📊 Annual Compliance Overview (OPC)

Keep this structured to avoid penalties:

🧾 Financial Compliance

• Preparation of Financial Statements

• Statutory Audit (mandatory)

📑 MCA Filings

• AOC-4 → Filing of financials

• MGT-7A → Annual return (simplified for OPC)

🧮 Income Tax

• ITR filing (ITR-6)

• Advance tax (if applicable)

🏦 Other Key Points

• No AGM required for OPC

• Board meeting relaxation (minimum compliance)

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🌍 OPC in Export Business – Special Insights

If your OPC is into exports (services or goods), compliance expands:

🌐 1. GST Compliance

• GST registration is mandatory (even below ₹20 lakhs)

• Export = Zero-rated supply

• File:

  • GSTR-1

  • GSTR-3B

👉 Option:

• Export with LUT (no GST payment)

• Or pay IGST and claim refund

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🔍 Who Should Consider OPC?

✔ Consultants 
✔ Freelancers working with foreign clients
✔ Export service providers
✔ Professionals wanting brand credibility

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🧠 Final Thought

“OPC gives you the power of a company with the simplicity of a single owner — but only if you respect compliance.”

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FOIR Explained: The Hidden Formula Behind Your Loan Approval

 

If you’ve ever applied for a loan and the bank asked for your income details, they’re not just checking your earnings — they’re calculating your FOIR.

Understanding FOIR can make or break your loan approval.

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🔍 What is FOIR?

FOIR (Fixed Obligation to Income Ratio) is a key metric used by banks to assess your repayment capacity.

👉 In simple terms:
FOIR = % of your income already committed towards EMIs & fixed obligations

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📊 FOIR Formula

📌 What Counts as “Obligations”?

Banks consider:

• Existing loan EMIs (home, car, personal loans)

• Credit card dues (minimum payments)

• Any fixed monthly financial commitments

❌ Not included:

• Groceries, lifestyle expenses, rent (in most cases)

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🧮 FOIR Calculation – Example

Let’s break it down:

• Monthly Income: ₹1,00,000

• Existing EMIs: ₹20,000

👉 FOIR = 20,000 ÷ 1,00,000 = 20%

Now, suppose new home loan EMI = ₹40,000

👉 New FOIR = (20,000 + 40,000) ÷ 1,00,000 = 60%

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🚦 Ideal FOIR Levels (Bank Perspective)

FOIR Range	Decision
✅ Up to 40%	Safe – High approval chances
⚠️ 40%–50%	Moderate – Depends on profile
❌ Above 50%	Risky – Likely rejection

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🏠 How FOIR Impacts Your Loan Eligibility

Banks don’t just look at income — they ask:

👉 “Can you comfortably repay?”

Example:

Scenario	Income	EMI Capacity (40% FOIR)
Person A	₹50,000	₹20,000
Person B	₹1,00,000	₹40,000

💡 Higher income = Higher eligible EMI = Higher loan eligibility

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🔑 Key Insight

👉 Loan eligibility is EMI-driven, not property-driven

Even if:

• Property value = ₹1 Crore

• But FOIR is high

❌ Loan may still get rejected

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⚙️ How Banks Use FOIR Practically

Banks typically:

• Fix FOIR limit (40–50%)

• Deduct existing obligations

• Calculate maximum permissible EMI

• Derive eligible loan amount

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📉 How to Improve FOIR (Increase Loan Eligibility)

✅ Smart Strategies:

✔️ Close small loans before applying
✔️ Avoid unnecessary credit card dues
✔️ Add co-applicant income (spouse)
✔️ Increase declared income (proper tax planning)
✔️ Opt for longer tenure (reduces EMI)

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Accounting & Bookkeeping Services for Businesses

CA RAMAKRISHNA SANJAY

7760252581

Running a business without structured accounting is a risk. With professional accounting and bookkeeping services, you gain clarity, control, and compliance—essential for sustainable growth.

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📊 Why Accounting & Bookkeeping is Critical for Your Business

🔹 Accurate Financial Records – Track income, expenses, and profitability in real-time
🔹 GST & Income Tax Compliance – Avoid penalties with proper books and timely filings
🔹 Better Financial Decisions – Make informed choices backed by reliable data
🔹 Business Growth Insights – Identify cost leakages and improve margins

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📘 Our Accounting & Bookkeeping Services Include

✔️ Daily bookkeeping and transaction recording
✔️ GST-compliant accounting and reconciliations
✔️ Bank, vendor & customer reconciliations
✔️ Monthly financial statements (P&L, Balance Sheet)
✔️ Payroll accounting and expense tracking
✔️ Year-end finalization and audit support

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🚀 Benefits of Outsourcing Accounting & Bookkeeping

📈 Improved financial accuracy and transparency
📉 Reduced risk of tax notices and non-compliance
⏱️ Saves time to focus on business growth
🔍 Real-time financial visibility and reporting

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💡 Why Choose Professional Accounting Services?

✨ Experienced Chartered Accountants
✨ Technology-driven bookkeeping systems
✨ Customized solutions for startups, SMEs & professionals
✨ Reliable, secure, and scalable processes

---

🔎 Looking for Accounting & Bookkeeping Services in India?

🤝 Get Your Books Managed Professionally

Accurate accounting is not just compliance—it’s a growth tool.

📩 Connect today to streamline your accounting, stay compliant, and take better financial decisions.

Appointment of Auditor Under Companies Act, 2013

CA RAMAKRISHNA SANJAY

7760252581

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🚨 Starting a Company? Don’t Miss This Compliance

One of the first legal responsibilities after incorporating a company is appointing an auditor.

Missing this step can lead to penalties and compliance risks.

Let’s break it down in the simplest way.

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🧾 Who is an Auditor?

An auditor is a Chartered Accountant who verifies:

• Financial statements

• Compliance with laws

• Accuracy of accounts

---

⏳ Step 1: First Auditor Appointment

👉 Must be appointed within 30 days of incorporation

✔ How to do it:

• Select a qualified CA / CA firm

• Obtain:

  • Written consent

  • Eligibility certificate

• Conduct a Board Meeting

• Pass resolution & fix remuneration

👉 If Board fails → Shareholders must appoint within 90 days

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🧾 Step 2: Auditor at First AGM

At the first Annual General Meeting (AGM):

👉 Appoint auditor for 5 years (till 6th AGM)

✔ Process:

• Board recommends auditor

• Send AGM notice (21 days)

• Pass ordinary resolution

• Issue appointment letter

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📂 ROC Filing (Important)

• File Form ADT-1 within 15 days

• Mandatory for AGM appointment

• Recommended even for first auditor

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⚠️ Key Conditions

Before appointment, ensure:

• Auditor is eligible (Section 141)

• No disqualification exists

• Consent is properly documented

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🚨 Common Mistakes to Avoid

❌ Missing 30-day deadline
❌ Not obtaining consent letter
❌ Ignoring eligibility criteria
❌ Not filing ADT-1

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ICAI New CPE Rules from 2026 – What Every CA Must Know!

 📢 Big update from ICAI!

From 1st January 2026, the CPE (Continuing Professional Education) rules have been revised.

If you are a Chartered Accountant, this directly impacts your annual compliance.

Let’s break it down .👇

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📌 New CPE Requirements (Simple Table)

🧑‍💼 If you are practicing (Holding COP)

🔹 Below 60 years

👉 Total: 40 Hours

• 20 Hours → Structured (mandatory)

• 20 Hours → Flexible

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🔹 Age 60 to 70 years (⚠️ NEW RULE)

👉 Total: 30 Hours

• 20 Hours → Flexible

• 10 Hours → Mandatory structured (physical/video)

📢 This is a new compliance addition

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🔹 Age 70 to 80 years

👉 Total: 20 Hours

---

🔹 Age 80+

👉 Total: 10 Hours

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🧑‍💻 If NOT practicing (No COP)

• Below 60 → 20 Hours

• Above 60 → ✅ No CPE required

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🌍 Special Case – NRI CAs

👉 Only 20 hours required
👉 Fully flexible

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⚠️ Mandatory Learning Topics (Very Important!)

Every year you MUST complete:

✔️ Standards on Auditing
✔️ Code of Ethics
✔️ Digital Technology

👉 Total: 3 Structured Hours compulsory

📢 ICAI is clearly focusing on quality + ethics + technology

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💻 Online vs Physical Learning

• Only 4 hours allowed online

• Balance must be physical / approved mode

👉 Extra online hours = counted as unstructured

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🎯 Smart Rule (Don’t Miss This)

👉 If you claim exemption BUT:

• You sign reports

• You generate UDIN

➡️ You MUST still complete minimum 10 CPE hours

📢 No more escaping compliance!

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📅 Age Calculation Rule (Tricky but Important)

If you turn:

• 60 / 70 / 80 anytime during the year

👉 New age category applies immediately

✔️ Even if birthday is on 31st December!

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🎁 Who Gets Exemption?

✔️ First year CA
✔️ Senior non-practicing members
✔️ Government officials, judges, etc.

✔️ Special cases:

• Pregnancy

• Medical conditions

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👉 They are about staying relevant in a fast-changing profession

NRI Investing in an Indian LLP?

 

⚠️ Don’t Miss These Critical Compliance Checks!

✍️ A simple, practical guide for NRIs and business owners planning to invest in India through an LLP structure

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🌍 Why This Matters

India continues to attract strong NRI investments across multiple sectors. LLPs are increasingly preferred due to flexibility and tax efficiency.

But here’s the ground reality 👇
👉 Even a genuine investment can become a compliance issue if FEMA, tax, and ROC rules are not properly followed.

Let’s break it down in a simple way.

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🧾 Step 1: Is NRI Investment Allowed in LLP?

✅ YES — but subject to conditions.

✔ LLP must operate in a sector where:

• 100% FDI is permitted

• No performance-linked conditions exist

👉 In simple terms:
Investment is allowed, but eligibility must be checked first.

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💸 Step 2: How Should Money Come Into India?

💡 Investment must come through:

• NRE / FCNR account

• Normal banking channels

📌 Always maintain:

• FIRC (Foreign Inward Remittance Certificate)

• Bank advice

👉 No proper banking trail = FEMA exposure 🚨

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📊 Step 3: Valuation – The Most Ignored Risk

This is a critical compliance area.

📌 Investment must be at:
👉 Fair Market Value (FMV)

✔ Valuation to be done by:

• Chartered Accountant / Registered Valuer

⚠️ Risks:

• Undervaluation → FEMA violation

• Overvaluation → Income tax scrutiny

👉 Key takeaway:
Valuation should be logical, documented, and defensible.

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🏢 Step 4: Mandatory Filings (Time-Sensitive)

⏳ Strict timelines apply:

• File FDI-LLP(I) → within 30 days of receipt of funds

• File FDI-LLP(II) → within 60 days of allotment

📌 Also file with ROC:

• Form 3 (LLP Agreement amendment)

• Form 4 (Partner/contribution update)

⚠️ Delays can lead to penalties and compounding

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📑 Step 5: Update LLP Agreement Properly

This is not just documentation — it defines rights.

Include:
✔ Capital contribution
✔ Profit-sharing ratio
✔ Exit mechanism
✔ Repatriation rights

👉 Weak agreements often lead to disputes later

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💼 Step 6: Taxation – Simple View

For LLP:

• Tax @ 30%

For NRI Partner:

✔ Share of profit → Exempt from tax
✔ Interest / remuneration → taxable

👉 LLP offers a tax-efficient structure for profit distribution

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🔄 Step 7: Repatriation of Funds

✅ Allowed, subject to:

• Tax compliance

• Banking documentation

⚠️ Practical challenge:
Banks may require detailed documentation before processing

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🚀 Conclusion

NRI investment in LLP is efficient but compliance-driven.

👉 Done right:
✔ Smooth operations
✔ Tax efficiency

👉 Done wrong:
❌ FEMA penalties
❌ Tax scrutiny
❌ Banking hurdles

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⚠️ Disclaimer

This article is for educational purposes only. Professional advice should be taken based on specific facts and circumstances before implementing any transaction.

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💡 Found this useful? Share it with someone planning to invest in India!

GeM Registration in India : How to Sell to Government & Win Big Contracts

CA RAMAKRISHNA SANJAY

7760252581

🔥 Why GeM?

Want the Government as your client?

• Assured payments

• Bulk orders

• No middlemen

GeM (Government e-Marketplace) enables businesses to sell directly to government departments through a fully digital platform.

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📌 What is GeM Registration?

GeM Registration allows businesses to list and sell products/services to:

• Ministries

• PSUs

• Government departments

✅ Who Can Register?

• Proprietorship

• Partnership / LLP

• Private Limited

• Trust / Society

📄 Basic Requirements:

• PAN

• Aadhaar

• Bank Details

• GST (if applicable)

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🧭 Simple Registration Process

1. Register on GeM portal

2. Complete profile & upload documents

3. List products/services

4. Verify via DSC/e-Sign

5. Start selling & bidding

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💰 How You Earn on GeM

• Direct Purchase – Instant orders

• Bidding – Competitive pricing

• Reverse Auction – High-volume opportunities

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📈 Key Benefits

• Direct access to government buyers

• Better cash flow (timely payments)

• Increased credibility

• Equal opportunity for MSMEs

AD Code for Exporters – Meaning, Registration Process, Documents & Benefits

CA RAMAKRISHNA SANJAY

7760252581 

🔷 What is AD Code?

AD Code (Authorised Dealer Code) is a 14-digit code issued by your bank (approved by the Reserve Bank of India).

It links your export transactions with your bank account and is mandatory for customs clearance.

👉 In simple terms:
No AD Code = No export clearance

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🔷 Why is AD Code Important?

AD Code plays a critical compliance role in export business:

• ✔ Enables customs to process your shipping bill

• ✔ Helps RBI track foreign currency inflow

• ✔ Required to receive export payments legally

• ✔ Necessary for claiming export incentives

👉 Without AD Code:

• Your shipment can get stuck at customs

• Payments may face regulatory issues

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🔷 Who Needs AD Code?

You need AD Code if you are:

• An exporter with IEC from Directorate General of Foreign Trade

• Exporting goods outside India

• A merchant exporter or manufacturer exporter

❌ Not required for:

• Service exporters (in most cases)

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🔷 When Should You Apply for AD Code?

Best practice:

👉 Apply before your first export shipment

Also required when:

• Exporting from a new port

• Changing your export bank account

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🔷 How to Get AD Code? (Step-by-Step)

✅ Step 1: Contact Your Bank

Approach your current account bank (Authorised Dealer bank)

---

✅ Step 2: Submit Documents

Basic documents required:

• IEC Certificate

• GST Registration

• PAN Card

• Bank details

• Request letter

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✅ Step 3: Get AD Code Letter

Your bank will issue:

• 14-digit AD Code

• Official signed & stamped letter

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✅ Step 4: Register AD Code on ICEGATE

Register through ICEGATE:

• Upload AD Code letter

• Select port

• Get customs approval

👉 Note:
AD Code must be registered separately for each port

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🔷 Frequently Asked Questions (FAQs)

❓ Is AD Code mandatory?

👉 Yes, for exporting goods from India.

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❓ Can I have multiple AD Codes?

👉 Yes, but advisable to use one primary bank for simplicity.

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❓ Is AD Code required for every port?

👉 Yes, separate registration required for each port.

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❓ How long does it take?

👉 1–3 working days from bank + ICEGATE approval time.

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ECGC Registration in India – Eligibility, Benefits, Cost and Complete Process for Exporters

CA RAMAKRISHNA SANJAY

7760252581

Exporting goods or services to international markets involves payment risk from foreign buyers. To protect Indian exporters from such risks, the Government of India has established Export Credit Guarantee Corporation of India (ECGC).

ECGC provides export credit insurance, helping exporters safeguard their receivables and expand into global markets with confidence.

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What is ECGC Registration?

ECGC registration refers to obtaining export credit insurance coverage from the Export Credit Guarantee Corporation.

It protects exporters against:

✔ Non-payment by foreign buyers
✔ Insolvency of overseas buyers
✔ Political risks in importing countries
✔ Delays in payment beyond agreed credit terms

ECGC operates under the administrative control of the Ministry of Commerce and Industry.

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Who Should Obtain ECGC Registration?

ECGC coverage is particularly useful for:

📦 Exporters selling goods on credit terms
🌍 Businesses exporting to new international buyers
🏭 Manufacturers entering high-risk export markets
🏦 Exporters seeking bank finance against export receivables

Banks also prefer exporters to have ECGC coverage when granting packing credit or post-shipment finance.

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Types of ECGC Policies

ECGC offers different policies depending on export activity.

1. Shipment Comprehensive Risk Policy

This is the most common policy used by exporters.
It covers short-term export receivables against commercial and political risks.

2. Specific Shipment Policy

Provides insurance for a particular export order or shipment.

3. Buyer Exposure Policy

Suitable when exporters have regular business with specific overseas buyers.

4. Export Turnover Policy

Covers entire export turnover under a single policy.

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Step-by-Step ECGC Registration Process

Step 1 – Obtain Import Export Code (IEC)

Exporter must first obtain IEC from the Directorate General of Foreign Trade (DGFT).

Step 2 – Register on ECGC Portal

Visit the official ECGC website and create a customer account.

Step 3 – Submit Online Application

Provide details such as:

• IEC number
• PAN of the exporter
• Business profile
• Export markets
• Bank details

Step 4 – Upload Required Documents

Typical documents include:

📄 IEC certificate
📄 PAN card
📄 GST registration
📄 Bank certificate
📄 Financial statements
📄 Export orders (if available)

Step 5 – ECGC Risk Assessment

ECGC evaluates:

• Exporter financial profile
• Buyer country risk
• Export experience

Step 6 – Policy Issuance and Premium Payment

After approval, the exporter pays the insurance premium, and the policy becomes active.

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Government Cost for ECGC Registration

There is no fixed registration fee for ECGC.

The main cost is the insurance premium.

Typical cost range:

• Premium: 0.3% – 0.8% of export value
• Minimum premium: ₹5,000 – ₹10,000 annually (approx.)

The premium depends on:

✔ Country risk classification
✔ Credit period offered to buyer
✔ Export turnover
✔ Type of policy selected

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Conclusion

ECGC registration is an important risk management tool for exporters. By providing insurance protection against payment defaults, it enables Indian businesses to trade globally with greater financial security.

APEDA Registration for Exporters in India | Eligibility, Benefits, Process & Documents

 

CA RAMAKRISHNA SANJAY

7760252581

India is a major exporter of agricultural and processed food products. To regulate and promote these exports, the Government established the Agricultural and Processed Food Products Export Development Authority under the Ministry of Commerce & Industry.

Exporters dealing in certain agricultural products must obtain a 📜 Registration-cum-Membership Certificate (RCMC) from APEDA before exporting these products.

This article explains ✅ who needs APEDA registration, 📌 its benefits, and 🧾 how to obtain it.

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📌 What is APEDA Registration?

📜 APEDA Registration refers to obtaining an RCMC certificate issued by APEDA.

It allows exporters to legally export scheduled agricultural and processed food products from India.

⚙️ Since 2023, applications are submitted through the portal of
Directorate General of Foreign Trade using the e-RCMC system.

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👤 Who Should Obtain APEDA Registration?

APEDA registration is mandatory for exporters dealing in certain scheduled agricultural products, such as:

🌾 Fruits & vegetables
🥩 Meat and poultry products
🥛 Dairy products
🍯 Honey and jaggery
🍚 Cereals and cereal products
🍬 Sugar products
🌺 Floriculture products
🍲 Processed food products

👉 Any person or entity exporting these products must obtain APEDA registration after obtaining Import Export Code (IEC).

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🏢 Who Can Apply for APEDA Registration?

The following business entities can apply:

👤 Individual exporters
🏪 Proprietorship firms
🤝 Partnership firms
🏢 LLPs
🏭 Private Limited Companies
📦 Export trading companies

✔ The basic requirement is having a valid IEC issued by DGFT.

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🌟 Benefits of APEDA Registration

Obtaining APEDA registration offers several advantages for exporters.

🌍 1. Export Promotion Assistance

APEDA provides financial assistance to promote agricultural exports.

🎪 2. Participation in International Trade Fairs

Registered exporters can participate in international exhibitions and buyer-seller meets.

📊 3. Market Intelligence Support

Exporters receive updates on global demand, export opportunities, and international markets.

🧪 4. Quality Development Programs

APEDA helps exporters improve quality standards and global compliance.

💰 5. Access to Export Incentives

Registered exporters can access various export promotion schemes and support programs.

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📑 Documents Required for APEDA Registration

Typically the following documents are required:

📜 Import Export Code (IEC)
🪪 PAN card of the applicant
🏦 Cancelled cheque / bank certificate
🧾 GST registration certificate (if applicable)
📍 Business address proof

⚠️ Most details are automatically fetched from the IEC database during the application.

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📥 Once approved, the RCMC certificate can be downloaded online.

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✅ Conclusion

APEDA registration is an essential compliance requirement for exporters dealing in agricultural and processed food products.

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Mandatory Annual Health Check-Up Under New Labour Code

✍️ CA RAMAKRISHNA SANJAY

  📞 +91 77602 52581

India’s labour law reforms aim to strengthen worker safety, health monitoring, and workplace welfare. One important compliance requirement relates to periodic medical examinations of workers.

This requirement arises from the Occupational Safety, Health and Working Conditions Code, 2020 (OSH Code).

This guide explains in a simple and practical manner:

✔ Who is covered
✔ Which establishments must comply
✔ Employee thresholds
✔ Applicability date
✔ Possible exemptions

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⚖️ What Does the New Labour Code Say?

The OSH Code, 2020 empowers the government to require free medical examinations for workers in certain situations.

💡 Important:

The entire cost of the medical check-up must be borne by the employer.

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👷 Who Are Covered Under This Provision?

The rule mainly applies to “Workers” under the labour code.

A worker generally includes persons employed in:

🏭 Factories
🏗 Construction establishments
⛏ Mines
⚓ Dock work
🏭 Manufacturing units
🚬 Beedi and cigar establishments

❗ Managerial and administrative employees are generally not treated as workers under this code.

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🏢 Which Establishments Are Covered?

The OSH Code regulates establishments where industrial operations or labour-intensive activities exist.

Covered Establishments

✔ Factories
✔ Mines
✔ Building & construction establishments
✔ Dock work establishments
✔ Beedi and cigar manufacturing units
✔ Establishments employing contract labour
✔ Establishments employing inter-state migrant workers

These establishments must follow health, safety, and welfare provisions under the Code.

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📊 Threshold Limits for Applicability

The applicability depends on the number of workers employed.

🏭 Establishment	📌 Threshold
Factory using power	10 or more workers
Factory without power	20 or more workers
Building & construction establishments	10 or more workers
Contract labour establishments	50 or more contract workers
Inter-state migrant workers	10 or more workers
Mines & dock work	No specific threshold

Once these thresholds are crossed, health and safety provisions become applicable.

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🩺 When Is Annual Health Check-up Required?

Medical examinations are mandatory in the following situations.

👤 Category of Worker	🏥 Requirement
Workers aged 45 years and above	Free annual health check-up
Workers in hazardous occupations	Periodic medical examination
Workers exposed to chemicals, dust, or industrial hazards	Mandatory medical monitoring

💡 Employer must bear the full cost of these medical examinations.

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🧾 Frequently Asked Questions (FAQs)

❓ Is annual health check-up mandatory under the new labour codes?

Yes. The OSH Code, 2020 empowers the government to mandate free medical examinations for certain categories of workers, particularly older workers and those working in hazardous environments.

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❓ Who must bear the cost of the medical check-up?

💡 The employer must bear the entire cost of the medical examination.

Workers should not be charged for these health check-ups.

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❓ Are office employees or IT professionals covered?

Generally no.
The provision mainly applies to workers in industrial establishments such as factories, construction sites, mines, and manufacturing units.

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❓ Is this rule already in force?

No.
Although the OSH Code was enacted in 2020, it will come into effect only after government notification of the rules.

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❓ Are health check-ups required only for workers above 45 years?

Workers above 45 years typically require annual check-ups, but workers involved in hazardous processes may require periodic medical examinations regardless of age.

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❓ What records should employers maintain?

Employers may need to maintain:

✔ Medical examination reports
✔ Worker health records
✔ Hazard exposure monitoring data

These records help demonstrate compliance with workplace safety laws.

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✍️ CA RAMAKRISHNA SANJAY

  📞 +91 77602 52581

What is Crèche Pay in the New Labour Code?

 

Code on Social Security, 2020 and Maternity Benefit Act, 1961 require certain employers in India to provide crèche (child-care) facilities for employees with young children. Many employees and HR professionals commonly refer to the monetary alternative as “crèche pay.”

This article explains what crèche pay means, when it is applicable, and how employers comply with the rule under the new labour framework.

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👶 What is Crèche Pay?

Crèche pay is a child-care allowance paid by an employer when a physical crèche facility is not provided.

Legally, the law mandates a crèche facility, but many organizations provide a monthly childcare allowance or reimbursement instead. This allowance is informally called crèche pay.

👉 In simple words:
Crèche Pay = Childcare allowance given instead of providing a crèche facility.

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🏢 When is Crèche Facility Mandatory?

Under Indian labour law:

✔ A crèche facility must be provided if an establishment employs 50 or more employees.

This rule applies to:

• Companies

• Factories

• Shops and establishments

• Offices and corporate workplaces

The requirement originally comes from the Maternity Benefit Act amendment and continues under the Code on Social Security framework.

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📊 How Employers Comply with the Crèche Requirement

Compliance Method	Explanation
In-house crèche	Child-care facility inside the office or factory
Shared crèche	Facility shared with nearby establishments
Tie-up with daycare	Agreement with external childcare centres
Crèche allowance (Crèche Pay)	Monthly reimbursement to employees

Many modern companies prefer crèche allowance because maintaining a physical facility can be operationally difficult.

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⏰ Special Rights for Employees

If a crèche facility exists, employees are entitled to:

✔ 4 visits per day to the crèche
✔ Visits include rest intervals
✔ Facility must be within prescribed distance from the workplace

These rights primarily support working mothers returning from maternity leave.

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💡 Example to Understand Crèche Pay

Example 1 – IT Company

Employees: 200

Instead of running an office daycare, the company provides:

₹5,000 per month childcare allowance

This allowance is commonly called crèche pay.

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📌 Quick Summary

Particular	Details
Applicable law	Code on Social Security & Maternity Benefit Act
Threshold	50 or more employees
Requirement	Provide crèche facility
Alternative practice	Childcare allowance (Crèche Pay)
Employee benefit	4 visits per day to the crèche

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🔎 Frequently Searched Questions

Is crèche pay mandatory in India?
The law mandates a crèche facility, not specifically “crèche pay.” However, many companies provide childcare allowance as an alternative.

At what employee strength is crèche mandatory?
When an establishment has 50 or more employees.

Can companies give allowance instead of a crèche?
Many companies provide childcare reimbursement, but compliance depends on state labour rules.

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✅ Conclusion

Crèche provisions under the new labour framework aim to support working parents and promote workplace inclusion. 

Understanding this provision helps both employers stay compliant and employees know their workplace rights.

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CA RAMAKRISHNA SANJAY
📞 +91 77602 52581

Impact of New Labour Codes on Contract Labour in India – Simple Guide for Businesses

 

📘 Contract Labour under India’s New Labour Codes – 

India has simplified labour regulations by introducing four new labour codes. These reforms aim to protect workers while making compliance easier for businesses.

One major area affected is contract labour — how companies hire workers through contractors.

The main laws governing this are:

• 📜 Occupational Safety, Health and Working Conditions Code, 2020

• 📜 Code on Social Security, 2020

• 📜 Industrial Relations Code, 2020

Understanding these rules is important for business owners, HR professionals, and compliance advisors.

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⚖️ Core Activity vs Non-Core Activity

The new labour codes focus on where contract labour can be used.

🔹 Core Activity

Core activity means the main business work of an organisation — the activity that generates revenue.

Examples:

Business	Core Activity	Contract Labour
🏭 Manufacturing company	Producing goods	❌ Generally not allowed
💻 IT company	Software development	❌ Generally not allowed
🏥 Hospital	Medical treatment	❌ Generally not allowed

For such activities, companies should normally hire regular employees or fixed-term employees.

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🔹 Non-Core Activity

Non-core activities are support services that help the business operate but are not the main work.

Examples:

Business	Non-Core Activity	Contract Labour
🏢 Office	Housekeeping	✅ Allowed
🏭 Factory	Security services	✅ Allowed
🏥 Hospital	Canteen management	✅ Allowed

These activities are commonly outsourced to contractors.

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📊 Threshold Limit Increased

Earlier, under the
Contract Labour (Regulation and Abolition) Act, 1970,
the law applied when 20 contract workers were employed.

Under the new labour codes:

✔ The law applies when 50 or more contract workers are engaged.

This change reduces compliance burden for smaller establishments.

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🪪 Single License for Contractors

The new framework allows contractors to obtain a single license valid across India.

Benefits include:

✔ Easier deployment of workers
✔ Reduced paperwork
✔ Simplified labour administration

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👨‍💼 Responsibility of the Principal Employer

Even when workers are hired through a contractor, the principal employer may still be responsible if the contractor fails to:

• pay wages

• follow labour laws

• provide welfare facilities

Therefore companies must monitor contractor compliance carefully.

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🚨 Common Mistakes Companies Make

Many businesses face labour disputes due to these mistakes:

❌ Using contract labour in core business activities
❌ Keeping contract workers continuously for many years
❌ Poor contractor agreements
❌ Not maintaining proper labour records
❌ Weak monitoring of contractor compliance

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📌 Practical Example

Activity	Core / Non-Core	Contract Labour
Machine operation in factory	Core	❌ Not allowed
Packaging support	Non-Core	✅ Allowed
Security services	Non-Core	✅ Allowed
Special technical installation	Exception	⚠ Possible

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Businesses should review their manpower structure, contractor agreements, and compliance systems to align with the new labour law framework.

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CA RAMAKRISHNA  SANJAY

📞 +91 77602 52581

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