ISSN (Online) 2456 -1304

International Journal of Science, Engineering and Management (IJSEM)

Vol 10, Issue 7, July 2023

Legal Issues in Startup MNCS in India under

Business Law
[1]
Lokesh. G *, [2] Suganya. S
[1]
Criminologist, Government Law College, Villupuram, Tamil Nadu, India
[2]
Government Law College, Villupuram, Tamil Nadu, India
[1]
[email protected]

Abstract— MNCs are said to be MULTINATIONAL COMPANY which has its own wings on many countries. It is seems too said to be
INTERNATIONAL BUSINESS which operates on one plus country.it has play a major role on the field of economy and growth of both
host country. In India, the economy of the country is both directly and indirectly depends on the MNCs in our country. Though it has
both positive and negative impact over the country. Here we will deeply discuss about the problems which arise during starting up MNCs
under business law in India. In this paper we have clearly mentioned about the problems which arising during g the startup’s and clearly
gives the preventive methods for the startup MNCs and which we will deeply go through it with some remedies and solution at the result
area.

Index Terms— Economy, international business, law field, legal remedies, preventive measures.

internal company should focus on international law,

I. INTRODUCTION Employment law, Intellectual Property law, law of contracts,
Every country in the world focusing on their economy to taxation law, Business acquisition and data protection of a
make their nation wealthier in manner. So many countries host country should need to be followed to gain 100%
focusing on promoting the international business to gain success rate in their business at international level.
much more revenue. In that many countries focusing on to
startup Multinational companies. A Multinational III. RECOMMENDATIONS
Corporation is a company has business operation in at least Field of Law of Contract
one country other than its home country. Before starting the
In day-to-day business life, contract is inevitable. There
MNCs they need to follow the host countries methodology to must be a contract between the parties in the business. The
start an MNC. They also need to follow the host countries law
emergence of standardised international contracts was made
and bind by international law with legal intervention of
possible by the globalisation of business and the global reach
human rights. Following the other countries legal framework of corporate activities. Associated with these transnational
will be strict to follow with reference to the other
contracts are slang and legalese. Standard paperwork for
non-governmental organization have begun to pursue legal
daily business is produced by the consistent usage of the
remedies. So, we can enter the topic of Legal issues in startup
same type of international contract. On the other hand,
MNC in India under business law.
businesses have a critical need for internal standardisation,
The Main Legal Issues in Startup MNC which in turn improves the usage of standard documents in
The first and foremost thing which a MNC company need regular working life.
to focus on legal framework of host country. They need to 1. Specialised Legal Service
touch a hand on the field of international law, Employment Every MNC need to prepare and maintain the legal
law, Intellectual Property Law, Law of contracts, Taxation
documents as per the concerned law. For that there should be
law, Business acquisition and data protection. One of the a specialised legal team by appointing a lawyer, Company
operational barriers that companies looking to expand
secretaries etc. Some of the required
beyond their boundaries often comes up against. Now it is a
qualifications/experience to oversee the legal affairs of the
particularly attractive time for international expansion all the company. The following are.
statistics show. Leading exporting countries such as the
 Licensed law practitioner from the State bar
United States, Netherland and China have seen their
association
international business figures grown by more than 20%,
 Corporate Lawyer with minimum 3years experience
according to trade map. [1]
 With excellent communication skills, both verbally
and in writing
II. FINDINGS
 Outstanding managerial and negotiation skills
In the article, we have found the legal issues while starting
 Highly analytical with strong attention to detail.
an MNC the concern department of external affair of an
 This specialized legal team will oversee the following

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 ISSN (Online) 2456 -1304
International Journal of Science, Engineering and Management (IJSEM)
Vol 10, Issue 7, July 2023

legal proceedings: Your patent can be traded as well.

 To represent the company in legal proceedings For instance, you may sell it or grant a licence for its use.
 To design the company’s policy and position on legal Only original and novel innovations that were made at the
matters time a patent application was made are protected by patents.
 To protect the company from violations and legal Enforcing your patent is your responsibility. The state
risks doesn't keep an eye out for infringements of patents. Any
 To examine the legal issues of the new products and infringement of your patent must be discovered by you, and
services you must protect your rights.
 To negotiate the dealing on behalf of the company 2. Increased Awareness
 To guide the management on regulatory and The invention was created by the inventor after taking the
compliance issues to ensure that compliance by legal customer's adjustments into account. If the patent agent had
regulations. claimed the invention and stated it in the patent specification,
2. SEC10 of Indian Contract Act, 1872 the resulting patent would have given the patent owner a
According to Section 10 of the Indian Contract Act of monopoly on the market. The owner of a patent has the
1872, all agreements are contracts if they are established with option of using his or her own marketing channels or granting
the free assent of parties who are legally able to enter into a third party a licence in order to exploit his or her
contracts, for a legal consideration, and for a legal purpose, exclusivity.
and are not now expressly declared to be void. 3. Creations of IPRs and Ensuring Strong
3. Services of Legal Translation IP protection can be sought for a variety of intellectual
Every country in the globe has a different legal system and efforts including:
set of legal requirements. It is possible for certain nations'  Patents
areas to have even more complicated legislative  Industrial designs are features that can be applied to a
requirements. product in any 2-D or 3-D configuration, shape,
Consequently, a contract in one country may be different surface pattern, or colour combination.
from a contract in another. a provider of legal translation  Trademarks are any name, symbol, or mark used in
services who has specialists in international law to ensure that commerce to identify the maker or provider of a good
the laws of each nation are adhered to in the papers. or service and to facilitate trade in that product or
The demand for legal translation services will increase as service. It is possible to purchase, sell, and licence
international corporations develop further. Working with a trademarks. Beyond the reputation of the commodity
language services provider with a focus on legal translations or service it represents, a trademark has no
is essential if you want to ensure that legal documents are independent life.
translated accurately.  Literary, musical, dramatic, artistic, cinematic,
audiovisual, and computer software works all fall
4. Global Progresses under the umbrella of copyright, which is the legal
The trend of economic globalisation, or the rising right to express ideas in material form.
interconnectedness of national economies globally as a result  Geographical indications are labels that designate a
of an increase in the cross-border movement of commodities, good as coming from the territory of a country, a
services, technology, and capital, has a substantial impact on region, or a locality therein, when a particular quality,
the international economy. International businesses are reputation, or other aspect of the good is primarily
important to this process. Businesses in less industrialised related to its geographic origin. [3]
countries have more opportunity to access more and larger
global markets because to globalisation. As a result, 4. Effective IPRs Law
emerging market companies have better access to money, (i) IPR Awareness: - IPRs' advantages for society as a
technology, human resources, cheaper import costs, and whole in terms of the economy, society, and culture
larger export markets. [2] are becoming more widely known.
(ii) Generation of IPRs
Field of Intellectual Property
(iii) Legal and Legislative Framework - IPR regulations
1. Patent and IP Services that are strong and effective and that balance the
An intellectual property (IP) right for a technological interests of rights holders with broader public
invention is a patent. For a period of 20 years, you can stop interest.
others from making money off of your idea. If you have a (iv) Administration and Management - To strengthen
current patent, you have the authority to decide who may and modernise service-focused IPR administration.
manufacture, sell, or import your invention in those nations. (v) Commercialization of IPRs - Get value for IPRs
through commercialization.

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 ISSN (Online) 2456 -1304
International Journal of Science, Engineering and Management (IJSEM)
Vol 10, Issue 7, July 2023

(vi) Enforcement and Adjudication - To make the tools workplace, are only a few of the subjects and issues that are
for enforcing and adjudicating IPR violations covered under the heading of "working conditions”.
stronger.
3. International Workers
(vii) Human Capital Development - To enhance and
broaden human resources, organisations, and The ethical issues faced by MNC's in their treatment of
capacities for IPR-related instruction, training, foreign workers which could bring allegations of misconduct
research, and skill development. in their operations are wage rates and benefits, workplace
environment and standards which contributes to social and
5. Foster a Culture of Creativity and Innovations economic problems, working conditions like job security,
 Encouraging innovation in the educational workplace safety, ventilation.
environment. A reboot is required for the academic
Field of Business Acquisitions
programmes.
 IPR-related concerns require an appropriate resolution Opening the MNC
procedure. Multinational corporation (MNC), also called
 Until and unless India solves loopholes in its IP laws transnational corporation, any corporation that is registered
and regulations, it will not be able to fully benefit from and operates in more than one country at a time. Generally,
the transformative advantages of a strong IP system. the corporation has its headquarters in one country and
 The success of India's main programmes, make in operates wholly or partially owned subsidiaries in other
India and Start up India, hinges on enhancing the countries. Its subsidiaries report to the corporation’s central
innovation environment with greater IPR protections. headquarters.
 In order to inspire the Indian industry to develop and In economic terms, a firm’s advantages in establishing a
to protect and enforce such innovations, more multinational corporation include both vertical and horizontal
education concerning the establishment, protection, economies of scale (i.e., reductions in cost that result from an
and enforcement of IPRs is required. expanded level of output and a consolidation of management)
and an increased market share. Although cultural barriers can
Field on Taxation Law
create unpredictable obstacles as companies establish offices
Fiscal Response to the Covid-19 and production plants around the world, a firm’s technical
Whether or not these businesses had a physical presence, expertise, experienced personnel, and proven strategies
the revenues would still be distributed to market jurisdictions. usually can be transferred from country to country. Critics of
There would be an end to all current digital levies and no the multinational corporation usually view it as an economic
room for future ones. Large multinational businesses will and, often, political means of foreign domination.
now fall under a new 15% category created by Pillar II. Developing countries, with a narrow range of exports (often
of primary goods) as their economic base, are particularly
How to Save Taxes vulnerable to economic exploitation. Monopolistic practices,
There are generally three main channels i.e., register an human-rights abuses, and disruption of more-traditional
Intangible asset such as trademark/patents/ copyright in tax means of economic growth are among the risks that face host
heaven, Debt shifting and Transfer pricing to shifting profit countries.
to lower tax countries. [4]
Good Working Atmosphere
Field on Employment Law You manage your own success in MNCs because these
1. Visa for Foreign Employee companies offer rewarding jobs. They provide their staff with
a cheerful environment and amazing benefits. Hardworking
 Failure to Demonstrate Eligibility Requirements coworkers, supportive managers, and tasty food of MNCs
 Failure to Demonstrate Specialized Knowledge encourage the employees to do their best.
 Salary Structure A multinational company allows you to work with smart
 Incorrect or Missing Supporting Evidence and talented people. Most of the seniors have transparent
 Business Growth communication, great knowledge, and a lot of advice to offer
2. Working Conditions & Timing to their juniors. You will be greatly rewarded with a huge
bonus if you are a hard worker. You get the opportunity to
Workplace variables that have an impact on productivity
work on exciting projects with a team of intelligent and
include working hours, stress levels, level of safety, and
professionally skilled people. You are constantly being
danger. The motivation of the personnel, and therefore their
pushed in to improve your skills. However, you will also find
performance, is highly influenced by improving the work
room for a lot of fun with your co-workers.
environment and conditions. Working time (hours of labour,
International companies give a lot of importance to the
rest times, and work schedules), compensation, as well as the
professional work environment. These companies provide a
physical conditions and mental demands that exist in the
friendly atmosphere and work culture so that their employees

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International Journal of Science, Engineering and Management (IJSEM)
Vol 10, Issue 7, July 2023

can work with more concentration and with less stress. These aforementioned organisational challenge.
companies offer better career growth opportunities both in
Corporate Social Responsibility
terms of money as well as skills. MNCs offer a great balance
between work and life. The only thing needed to survive in an  The public interest should be taken into account when
MNC is to do what you have been asked to do and the rest is running a business. The various attitudes and business
likely to fall your way. practises that CSR expresses are quite diverse.
 Through "social activism," a firm may direct a
1. Friendly Environment percentage of its earnings towards charitable causes,
A development that is eco-friendly makes efficient use of such as the construction of hospitals or schools or the
resources like energy, water, and other resources to lessen the allocation of human resources to such causes. Every
overall effects of the built environment on both human health decision and action made by a firm under the
and the environment. boosting worker productivity and "Balancing Approach" would take into consideration
occupant health. Using less energy, driving less, walking not just the interests of the company's shareholders but
more, eating more locally grown food, joining environmental also those of its employees, suppliers, consumers, and
organisations to fight air pollution, producing less waste, creditors. [5]
planting more trees, and many other things would be
wonderful places to start. IV. SUMMARY
Ethical Issues in Business  By 2020, there will be around 40.000 MNCs operating
The company leader needs to understand the basic in India, with about a quarter million affiliates abroad.
dimensions involving conflicts among different MNCs are well-liked since India has one of the
responsibilities that come under human being, territory etc. economies that is expanding the fastest and a sizable
The company leader /executive’s responsibilities can be market population. By allowing 100% foreign equity,
divided into four spheres. the government has also recently loosened its
1. Personal ethical value, restrictions on foreign direct investment (FDI).
2. Responsibility as economic agent,  MNCs have a huge economic impact, provide
3. Responsibilities as organizational leaders and employment for millions of people, and produce vast
4. Responsibilities in cooperative capitalism. [5] money. They are large corporations that have their
Together these four spheres provide a map of the moral roots in one nation (the "home") and establish
territory of business management. operations in several different nations (the "host") at
the same time. Over 50% of the capital assets are
Fragmentation and Difference to Authority domestically sourced, as are the bulk of the Board of
People are prompted by this to define their roles Directors.
specifically and to keep their knowledge base small. The  Host nations that are still developing typically have
effects of people's activities are insulated by fragmentation. operations established up there. The cost of labour and
In the worst-case scenario, people lack a feeling of personal materials is typically lower here than it is back home.
accountability or see themselves as inert parts of a machine. Developing nations will likewise have more lenient
Deferring to those in authority above you in an organisation laws and rules. MNCs bring about modernisation,
is a risk that is related to this tendency. Another hindrance to support infrastructure expansion, boost the economy,
moral behaviour is performance pressure, deadlines, and create jobs, and close the technology deficit in
emergencies. For the most part, managers just keep their exchange.
ethical concerns to themselves. Though this tendency can be
countered by a positive ethical climate, it is quite a challenge V. RESULT
to create and maintain it. So, before entering startup the MNC in INDIA, each and
Lenses and Levers every department covered in this field should need to go
The company's beliefs, attitudes, and conventions will through for 100%success rate and need to sustain in this
weaken this firm and deter honesty, respect, fairness, and a country which will helps in both economic and wealth of a
sense of responsibility within its rank if managers don't strive country. So, I recommend these things for sustain the MNCs
hard to address these issues. Several fundamental elements in India for longer periods for success and growth over the
affect the ethical climate of the firm. Everyone is a LENS country.
AND A LEVER.
REFERENCES
 As lenses each make clear the kind of ethical culture a
corporation supports. [1] https://seprotec.com/blog/legal-issues-in-international-busine
 As Levers, they can all assist managers in changing ss/
[2] https://nap.nationalacademies.org/read/6113/chapter/6#21
the atmosphere at a business and overcoming the

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International Journal of Science, Engineering and Management (IJSEM)
Vol 10, Issue 7, July 2023

[3] https://www.drishtiias.com/to-the-points/paper3/intellectual-
property-rights
[4] https://taxguru.in/income-tax/multinational-companies-save-t
ax.html
[5] Law of Business – Dr M.M. Sulphey Dr Az-Har
Basher.Fourth Edition.

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