Hiring Dilemma: Is It Safe to Hire Without Pay Slips and Offer Letters?

Dear friends, I have a problem in the organization and request your valuable answers:

Problem Statement

I recruited a candidate and provided an email offer letter with the date of joining. One of his company employees informed me that he has been working with the concern for only four months. However, in the profile given to me, it is stated that he has been working there since November 2009.

To be cautious, I conducted a third-party background verification and found that he has indeed been working there since November 2009, as mentioned in his resume. I informed the candidate to bring his offer letter, relieving letter, and the last three months' pay slips to clarify the situation.

Now, I hear that the company he works for is only a proprietary concern and they don't issue offer letters or pay slips. Can I proceed with hiring this person? Can the proprietary concern take any action regarding this? What is the exact difference between a proprietary concern and a Private Limited Company?

Attribution: https://www.citehr.com/member.php?u=275222

Regards

If you believe your third-party verification is correct, then you can go ahead. There are many proprietary organizations that do not provide any offer letter or payslip.

I agree with Santosh.

Proprietorship Concern:

1. Owner is an individual.
2. Owner is responsible for all activities of the proprietorship concern.
3. There is a lack of internal control system. It is always flexible as per the wish of the owner.
4. Fewer rules and regulations.

Private Limited Company:

1. A Private Limited Company is governed by the Companies Act, 1956.
2. Registration: The registration of a company is compulsory. There are two stages in registering a private limited company: the first is 'Incorporation' and the second is 'Commencement of Business'. A private limited company can start business after obtaining a certificate of incorporation.
3. Number of Members: There must be at least two persons for starting a private company, and the maximum number of members can be fifty.
4. Legal Status: A Private Company has a separate legal entity. It has a common seal and can enter into contracts by affixing its seal. Members of the company can also enter into contracts with the company.
5. Liability: The liability of shareholders is limited to the value of shares held by them. The members are not personally liable for the obligations of the business.
6. Transfer of Shares: A shareholder can sell his shares whenever he feels so. There is no binding on the transfer of shares of a company.
7. Management and Control: A private company is managed by elected representatives of the shareholders.
8. Statutory Obligations: A private company is required to maintain prescribed books and have a periodical audit. Some information has to be supplied periodically to the Registrar of Companies.
9. Continuity: The continuity of a company is not affected by the death or insolvency of a member. The members may change, but the company will not be affected.
10. Authority of Members: A shareholder has no implied authority to bind the company. A shareholder cannot act on behalf of the company.
11. Winding Up: A private company is wound up only through court. If the court is satisfied that there is a reasonable ground for winding up the company, only then it is to be wound up. A proper procedure is also to be followed.

Regards