Are Section 8 Companies Required to Follow Labor Laws Like Gratuity and Provident Fund?

Compliance of Section 8 Companies with Labor Laws

If a company is registered under Section 8 of the Companies Act 2013 for purposes such as education or other social causes related to the community or society, is it required to comply with various labor laws? These laws include gratuity, employees' provident fund, state employees' insurance scheme, labor welfare fund, and others, similar to the compliance required by Private Limited and Limited Liability firms.

Necessity Under the Companies Act

Is compliance necessary under this provision of the Companies Act? If the company employs a number of employees, does an employer-employee relationship, commonly referred to as a master-servant relationship, exist in these types of companies? Can anyone elaborate on this matter?

Companies Act 2013 and Labor Legislation

The Companies Act 2013 does not address relaxation from any labor legislation. To be classified as an industry, it is not necessary to have a profit motive. Conversely, if your establishment is not considered 'an industry,' then these labor Acts will not be applicable to it. Clearly, if it is established that a master-servant relationship exists, then the situation will change.

If your establishment has been registered under The Companies Act, and the number of below Board level employees attracts any Act, then the provisions of that Act will apply to your establishment as well.