In India, laws governing Companies are mainly to be found in the Companies Act, 1956. Voluminous and containing 658 Sections, 15 Schedules and several Rules, the Companies Act, 1956 is modeled on the English Companies Act.
Any entrepreneur desirous of doing business in India has an option to form a Company, Private or Public with limited liability under the provisions of the Companies Act.
A Private Limited Company must have a minimum number of 2 and a maximum number of 50 shareholders whilst a Public Company needs a minimum number of 7 shareholders with no upper limit. Before commencing any business, a Public Company is obliged to obtain a certificate from the Registrar of Companies, whilst a Private Company can commence its business and exercise borrowing powers immediately upon its incorporation. The shares of a private limited company are not freely transferable and it cannot offer its shares or debentures to public for subscription. However, there are major exemptions and privileges enjoyed by a Private Limited Company under the Companies Act, 1956.
In India Income Tax is an annual tax both in its imposition and structure, each previous year being a separate unit. Income and loss in the previous year are irrelevant unless they come under the special provisions concerning the carry forward of business loss, capital loss or similar provisions.
Tax is on total income of an entity and it also depends upon whether the tax payer is resident in India or not. Relatively very lengthy and complicated the Income Tax Act, 1961 converse almost all the aspects of levying and recovery of tax and every year additions are being made therein and provisions are being altered. A significant head of tax under the Indian Income Tax is the capital gains tax and is termed as short term capital gains and long term capital gains. Any profits or gains arrived from the capital assets are chargeable with tax under this head.
In addition to the Income Tax, Gift Tax, Wealth Tax, Sales Tax, State Sales Tax, etc. are the other modes of revenue for Centre and State.
India being a cosmopolitan country tolerates personal laws of its citizen. As a result each citizen of India is entitled to have his own personal laws inter alia in the matter of marriage and divorce. Hindus are governed by Hindu Marriage Act, 1955 which provides for the conditions of a Hindu Marriage where under the bridegroom should be of 21 years and bride of 18 years, they both should be Hindus and should not be within the degree of prohibited relationship or sapindas, neither party should have a spouse living nor any party should be subject to recurrent attacks of insanity or epilepsy, either of them should not be suffering from mental disorders or should not be unfit for marriage and procreation of children and both should be of sound mind and capable of giving valuable consent. Divorce under the Hindu Marriage Act 1955 can be obtained on the grounds of Adultery, Cruelty, Desertion for two years, Conversion in religion, Unsound mind, Suffering from venereal disease and/or Leprosy has renounced the world not heard for 7 years no resumption of co-habitation for one year after the decree of judicial separation, no restitution of conjugal rights for one year after decree for restitution of conjugal rights, Husband guilty of rape, sodomy or bestiality and if after an order of maintenance is passed under the Hindu Maintenance and Adoptions Act or the Criminal Procedure Code there has been no cohabitation for one year.
As regards the maintenance and adoption of children, Hindus are governed by The Hindu Adoption and Maintenance Act.
Muslims are governed by their personal laws under which “Nikah” (i.e. marriage) is a contract and may be permanent or temporary and permits a man 4 wives if he treats all of them equally. To have a valid “Nikah” under the Muslim Law, presence of a Qazi (Priest) is not necessary. Merely a proposal in the presence and hearing of two sane males or one sane male and two sane female adults, all Muslims and acceptance of the said proposals at the same time constitute a valid Nikah under the Muslim Personal Law. A husband can divorce his wife without any reasons merely by pronouncing thrice the word “Talak”. However for a Muslim woman to obtain divorce certain conditions are necessary. For Parsees there is a Parsee Marriage & Divorce Act, 1939 which governs the provisions of their marriage and law and for Indian Christian there is a Indian Christian Marriage Act 1889. Persons of any religion who get married under the Special Marriage Act, 1954 are governed by the said act. There are certain penal provisions also in the Criminal Procedure Code providing for the maintenance of the wife and punishment for bigamy.
In India a person can get an estate in real property either as a free hold or as a leasehold estate. Occupation and use of real property can also be in two ways, as an owner or as a tenant. Till now there were restrictions for a foreigner to acquire rights in a real property. They still continue to exist, though in a milder form. Foreigner in India can not venture to acquire and dispose off a real property as an Indian National would be in a position to do so. Though there are no restrictions for a foreigner to acquire real property on tenancy basis there are restrictions on a foreigner to acquire real property on ownership basis. In a transaction wherein a foreigner acquires or disposes off real property on ownership basis it would be necessary to obtain permission from the Reserve Bank of India and to comply with various provisions of the Foreign Exchange Regulations Act.
Central Laws which affect acquisition, holding of and disposal off an immovable property in India are the Transfer of Property Act, 1908, Indian Contract Act, 1872, Specific Relief Act, 1963, Urban Land (Ceiling & Regulation) Act, 1976, Land Acquisition Act, 1894, certain provisions of the Income Tax Act which obliges parties in certain metropolitan cities to obtain prior permission of the Income tax authorities for acquiring or giving up or transferring the property above a particular value. The State Acts, which would affect a real property transaction, are Stamp Laws of each State, Rent Laws of each State, etc.
Though it can be said as primitive in the age of computers, India still has a method and system of recording real properties. Each transaction of a real property whether be a sale, mortgage, gift, lease, exchange, transfer or charge, all are recorded with a registering authority and title to a property can be traced as far back as 60 years and more. The method of preparing documents connected with the real property transactions are almost akin to England and most of the documents their contents are of the same nature and language as prepared in England.