What is a Subsidiary?

A subsidiary company is defined under Section 2(87) of the Companies Act, 2013 as a company where another company (holding company) meets either of the following conditions:
✅ Owns more than 50% of its total share capital; or
✅ Controls the composition of its Board of Directors.

The parent (holding) company has significant control over the subsidiary’s operations, decision-making, and financial reporting.

What is a Joint Venture (JV)?

A joint venture is a business partnership where two or more companies collaborate for a common goal. Although the Companies Act, 2013 does not explicitly define a JV, it is generally understood as a strategic alliance where parties:
✔️ Contribute capital, resources, and expertise
✔️ Share risks and profits
✔️ Make joint decisions as per the JV agreement

A JV can be structured as a company, partnership, or contractual arrangement, depending on the agreement between the parties.

Key Differences Between a Subsidiary and a Joint Venture

Real-Life Examples

🚗 Subsidiary Example:
Maruti Suzuki India Ltd. is a subsidiary of Suzuki Motor Corporation, Japan, where Suzuki holds a majority stake and controls its operations.

🔩 Joint Venture Example:
Tata Steel and Nippon Steel formed a JV in India to manufacture high-quality steel, sharing expertise, investment, and control.

The Building & Other Construction Workers’ Welfare Cess (BOCWW Cess) is a levy imposed on the construction costs incurred by employers for building and other construction activities.

As per Section 2(1)(d) of the Building and Other Construction Workers (Regulation of Employment and Conditions of Service) Act, 1996, read with Section 2(d) of the Building and Other Construction Workers’ Welfare Cess Act, 1996, the term “building or other construction work” has a broad scope. It includes activities such as construction, alteration, repairs, maintenance, and demolition related to various structures, including buildings, streets, roads, railways, airfields, irrigation systems, drainage works, flood control projects (including stormwater drainage), power generation and distribution, waterworks, oil and gas installations, electric lines, telecommunication networks, dams, canals, tunnels, bridges, pipelines, transmission towers, and cooling towers. The government may also specify additional construction works through notifications. However, it excludes any construction activities covered under the Factories Act, 1948, or the Mines Act, 1952.

The BOCWW Cess is imposed on the total construction cost incurred by employers. As per Sections 3(1) and 3(3) of the Building and Other Construction Workers’ Welfare Cess Act, 1996, along with Notification No. S.O. 2899 dated 26.09.1996, the cess is charged at 1% of the total construction cost.

Many businesses in India wonder whether an invoice must be signed or if a system-generated invoice is legally valid. Let’s break it down from both GST and Income Tax perspectives.

1. GST Rules on Invoice Signatures

As per Rule 46 of the CGST Rules, 2017, an invoice must contain specific details such as:
✅ Supplier’s Name & Address
✅ GSTIN
✅ Invoice Number & Date
✅ Description of Goods/Services
✅ Taxable Value & GST Amount

However, a physical signature is NOT mandatory if the invoice is issued electronically. Businesses can simply add a note stating:
📝 “This is a system-generated invoice and does not require a signature.” Here Computer generated means generated through a computer System/application.

What About E-Invoicing?

For businesses with a turnover of ₹5 crore or more (from 1st August 2023), e-invoicing is mandatory. These invoices are digitally signed by the Invoice Registration Portal (IRP), making a physical signature unnecessary.

2. Income Tax Perspective on Invoice Signatures

The Income Tax Act, 1961, does not prescribe any format for invoices, nor does it require a signature. However, invoices should contain necessary details to support expenses or revenue for tax assessments.

• For Tax Audit Cases (Section 44AB): No requirement for a signature, but proper record-keeping is necessary.
• For TDS Deductions: A signed invoice is not mandatory, but details must be accurate for compliance.
• For Books of Accounts (Section 44AA): Invoices serve as supporting documents, but again, no signature is required.

3. When Should You Sign an Invoice?

Although signatures are not mandatory, some situations may require them:
✔️ Export Transactions: Foreign clients may request a signed invoice.
✔️ Government Contracts: Some government departments require physical signatures.
✔️ Legal Disputes: A signed invoice can provide stronger evidentiary value.

Conclusion: What Should You Do?

For most businesses, a computer-generated invoice with a disclaimer is legally valid. If required, businesses can use digital signatures (DSC) or scanned signatures instead of manual signing.

👉 Recommended Disclaimer for Your Invoices:
📌 “This is a system-generated invoice and does not require a signature.”

This ensures compliance while keeping your invoicing process efficient.

Shareholders’ liability is limited to their shareholding in the company. They are not personally responsible for the company’s debts or actions beyond the unpaid amount, if any, on their shares.

However, shareholders may face personal liability if they engage in fraudulent activities. In the case of companies with unlimited liability, shareholders can be held responsible up to the amount they agreed to contribute to the company’s assets in the event of winding up. Shareholders who also serve as directors may have additional legal responsibilities.