The provisions

The sections a small business actually runs into.

What each provision requires, what it costs to ignore, and where people get it wrong — in plain English, with the document or calculator that acts on it.

Check your compliance exposure — free

Provisions covered

  • Section 16, Micro, Small and Medium Enterprises Development Act, 2006 — Compound interest with monthly rests at three times the RBI bank rate, and no agreement between the parties can reduce it.
  • Section 403, Companies Act, 2013 — ₹100 per day, per form, with no upper limit — and the clock does not stop until the form is actually filed.
  • Section 138, Negotiable Instruments Act, 1881 — A criminal remedy on three deadlines: 30 days to demand, 15 for the drawer to pay, one month to file.
  • Section 4, Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 — Ten workers of any kind makes an Internal Committee mandatory, and the external member is where most small committees fail.
  • Section 4, Payment of Gratuity Act, 1972 — Fifteen days of wages for every completed year on a twenty-six day month, capped at ₹20 lakh.
  • Section 35, Indian Stamp Act, 1899 — The contract stays valid. A court will not look at it until the duty and the penalty are paid.
  • Section 50, Central Goods and Services Tax Act, 2017 — 18% a year on tax paid after the due date, and 24% where input tax credit has been wrongly availed and used.
  • Section 47, Central Goods and Services Tax Act, 2017 — A daily fee for every day a return is late, capped by the section and reduced further by notification.
  • Section 92, Companies Act, 2013 — MGT-7 within sixty days of the annual general meeting, with a penalty on the company and on its officers if it is late.
  • Section 137, Companies Act, 2013 — AOC-4 within thirty days of the annual general meeting, with a penalty that reaches the directors who signed the accounts.
  • Section 8, Digital Personal Data Protection Act, 2023 — Accuracy, security safeguards, breach reporting, erasure when the purpose ends, and a grievance contact who answers.
  • Section 33, Digital Personal Data Protection Act, 2023 — The Board fixes the amount against the Schedule, where the ceiling for a security-safeguards failure is ₹250 crore.
  • Section 27, Indian Contract Act, 1872 — An agreement restraining anyone from exercising a lawful profession, trade or business is void to that extent — with one statutory exception.
  • Section 73, Indian Contract Act, 1872 — Compensation for loss that arose naturally from the breach, or that both parties knew was likely — and nothing remote.
  • Section 26, Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 — A fine of up to ₹50,000 for failing to constitute an Internal Committee or to comply with the Act, and more on repetition.
  • Section 7, Arbitration and Conciliation Act, 1996 — It has to be in writing, and it has to be an agreement to submit disputes to arbitration — a clause naming a city is not enough.