Short Questions Answers

1. Point out two legislations related to finance and investment.

Two legislations related to finance and investment are:

• Foreign Investment and Technology Transfer Act, 1992
• Foreign Exchange Regulation Act, 1961.

2. Point out two legislations related to consumer protection.

Any two legislations related to consumer protection in Nepal are as follows.

• Black Market and other Social Crime Punishment Act, 1977
• Consumer Protection Act, 1998:

3. Define law.

Law may be defined as the rule of conduct or procedure established by custom, agreement, or authority. It is enforced by government to govern the behavior of the people and organizations. It determines the behavior of the government, organizations and general people.

4. Write any two characteristics of law.

The two characteristics of law are as follows:

• Written form: Laws are written order or instructions.
• Spirit: Laws have a certain purpose, or intent which is called the spirit of the law.

5. Write any two purposes of business law.

Business law consists of an array of business laws that regulates business activities. Its purposes are as follows:

• To protect the rights of the business as well as consumers.
• To encourage the business to follow ethical practices

6. What do you mean by foreign investment?

Foreign investment means the following investments made by a foreign investor in any industry.

• Investment in equity shares
•  Investment made in the form of loan
•  Reinvestment of earnings

7. What do you mean by one window committee?

One window committee is the committee formed to provide the facilities and concessions to any industry under Industrial Enterprise Act, 1992 from a single place. It is constituted with chiefs of different department as well as representatives from private sector, Federation of Nepalese chamber of commerce and industries (FNCCI).

8. Define technology transfer.

Technology transfer means transfer of any technology made means transfer of any technology made on the following matters.

• Use of any technological right, specialization, formula, process, patent or technical know-how of foreign origin.
• Use of any trademark of foreign ownership
• Acquiring any foreign technical, consultancy, management and marketing service.

9. Write any two functions of the Industrial Promotion Board.

The two functions of the Industrial Promotion Board are mentioned below.

• To render necessary cooperation in formulating and implementing policies, laws and regulations pertaining to the industrialization of the country.
• To maintain coordination between the policy level and the implementation level of the industrial policy.

10. Write any two features of the Income Tax Act.

Some of the notable features of the income tax act are as follows:

• Confinement of all related matters: This act has abolished all tax-related provisions given in other acts.
• Broadened tax base: This act has broadened the tax base. Tax rates are le spelled out in the act.

Short Questions Answers

1. Explain in brief the basic features of law.

Law shapes politics, economics, history and society in various ways and serves as a mediator of relations between people. The basic features of law are as follows.

• Written form: Laws are expressed in written form. However, some laws may be in implied form.
• Spirit: Laws have certain purpose or intent Sanctions: Laws are the forcible means. Fines and imprisonment are used as the forcible sanction of a law.
• Costs: Enforcement of laws requires resources. Side effects: Laws may produce unintended side effects.
• Performance: The performance of a law is its problem-solving benefit minus the measured sum of its burdens.
• Fallibility: Laws may fail in their objective.

2. Explain in brief the features of Foreign Investment and Technology Transfer Act, 1992.

Foreign Investment and Technology Transfer Act deals with permission required for foreign investment, provision of visa and repatriation facility. The following are some of the notable provisions/features of this act.

Definition: The act has defined foreign investment as investment in equity shares, reinvestment of earning and investment made in the form of loan made by a foreign investor in any industry. Technology transfer means transfer of any technology made under an agreement between an industry and a foreign investor.

• Permission: Before acquiring investment and technology transfer, permission should be obtained from the department.
• Repatriation facility: A foreign investor making investment in foreign currency may repatriate the sums of amount received outside Nepal from sale of shares of foreign investment, profit or dividend on account of foreign investment and the amount received as the payment of principal and interest on any foreign loan
• Provision of visa: Visa may be provided to the foreign investor in form of non-tourist visa, business visa and residential visa.
• Settlement of dispute: If any dispute arises between a foreign investor, national investor or the concerned industry, the concerned parties is required to settle the dispute by mutual consultation in the presence of the Department, otherwise according to the prevailing arbitration rules of the United Nations Commission on International Trade Law.

3. Provide a brief overview of the Company Act, 2006 with its features.

Company Act, 2006 deals with registration, operation and liquidation of company. The following are some of the notable features of this act.

• Incorporation: Any person desirous of undertaking any enterprise with profit motive may, either singly or jointly with others, incorporate a company.
• Application: Application is to be made for incorporation of company along with the memorandum of association and the articles of association of the proposed company.
• Limited liability: The liability of a shareholder of a company incorporated under this act in respect of its transactions is limited to the maximum value of shares which he has subscribed or undertaken to subscribe.
• Number of shareholders: The number of shareholders of a private company should not exceed fifty. With public company, it should be seven in minimum and a maximum of any number.
• Terms to be abided: A company incorporated under this act should abide by the following terms.
  • •  The company should carry on all of its activities and transactions by its name.
    •  A private company should add the words “private limited” to its name as the last words and a public company should add the word “limited” to its name as the last word.
    •  A private company cannot sell its shares and debentures publicly.
    •  A company can not open a partnership or private firm.
• General meetings: The general meetings of a company should be as follows.

• • • Annual general meetings
    • Extra-ordinary general meeting.
• Board of directors: The appointment and number of directors of a private  company should be as provided in its articles of association. Every public company should have a board of directors consisting of a minimum of three and a maximum of eleven directors.
• Appointment of auditor: Every company should appoint an auditor under this act to have its accounts audited. The appointment of auditor is made by annual general meeting.

4. Highlight the major provisions of the Private Firm Registration Act, 1958.

This act deals with the provisions of registering and operation of private firms engaged in trade and industry. The main features of this act are mentioned below.

• Compulsory registration: All the private firms must be registered to the concerned Department.
• Application: A person intending to register a private firm should submit an application in the prescribed format along with the prescribed fee. bon9.07
• Seek particulars: The concerned Department may seek the particulars of the accounts of a firm registered under this act.
• Cancellation of registration: The concerned Department may cancel the registration of a private firm in the following circumstances:

• • • If a firm fails to effect renewal of the firm within the prescribed period.
    • If the owner submits an application to the concerned Department for the termination of registration of his/her firm upon setting out reasonable reason.
    • If a firm is found to have registered providing false particulars.
    •  If a firm fails to submit the particulars sought within prescribed period.
• Penalty: A fine from five rupees to fifty rupees may be imposed to the firm operated without registration. If a person submits false particulars in application, a fine from twenty five rupees to Fifty Rupees is imposed on him/her. If a private firm fails to provide information within the prescribed period or provides false information, a fine from twenty five rupees to fifty rupees is imposed.

5. Explain some notable features of the Partnership Act, 1964.

The partnership act highlights the legal provisions or interest and convenience of general public . The following are some of the notable features of partnership act.

• Registration and issuance of certificate: A firm should be registered in the concerned Department within a period of six months from the date of establishment.
• Renewal: An application should be submitted to the concerned Department in the prescribed format with prescribed fee for the renewal of a firm within a period of thirty five days of the expiry of fiscal year.
• Seek particulars: The concerned Department may seek particulars of the accounts of the firm.
• Cancellation of registration: The concerned Department may cancel the registration of a firm in the following conditions;
  • • If a firm registered for commercial business fails to cause to effect renewal of the firm within the stipulated time.
    •  If the partners submit an application to terminate the registration of the firm with reasonable reasons to the concerned Department.
    •  If a firm fails to submit the particulars sought by the concerned Department within prescribed period
• Mutual relation of partners: The mutual rights and duties of the partners in partnership firm are determined by an agreement made between the partners.
• Use of property: The property of the partnership firm cannot be used for any other purpose other than the purpose of the partnership business.
• Share of profit and loss: The sharing of profit and loss between/among the partners is done on the basis of agreement. It should be shared on the capital investment basis if such provision does not exist in the agreement.
• Entitlement to represent the firm: Every partner may, subject to agreement, represent the firm and the act of a partner which is done to carry on the business of the firm should bind the firm.

6. Explain the important features of the Foreign Employment Act, 2007.

 It deals with various aspects of foreign employment. Its features are as follows:

• Specification of the countries: The Government specifies countries for carrying on the foreign employment business.
• Bilateral agreement: The Government makes a bilateral labor agreement with a foreign country.
• Selection of institution: The Government selects any licensee institution through open competition and send workers through such institution.
• Prohibition: This act has prohibited carrying on the foreign employment business without obtaining a license, sending a minor for employment and gender discrimination.
• Prior approval: A licensee should make an application to the department for prior approval to send workers for foreign employment.
• Publication of advertisement: On receipt of approval from the department, the licensee publishes an advertisement in a daily newspaper of national circulation to be published in the Nepali language, setting out the details as prescribed and giving the time-limit of at least seven days, for the selection of the workers.
• List to be prepared: Upon receipt of an application from the interested candidates, the licensee should select workers and prepare a list of selected persons, post such list on the notice board of the office of the licensee and submit a copy thereof to the Department of foreign employment.
• Approval for passports: If a licensee has to take passports of those persons who have been selected for foreign employment for visas, approval of the department has to be obtained.