We are experiencing a global health crisis i.e. the Coronavirus (COVID-19) that is inevitably in the nub of causing a profound impact on the inter alia economy. Although in such a time of cataclysm, the foremost aim for the Founders of institutes is to focus on the health and safety of their respective selves, their families, employees and customers.
It is also essential for the Founders to focus on the uncertain impact on their business during this phase. The impact may force the Founders to make difficult decisions, which must be handled strategically for the present time, followed by at least the current year.
In such a scenario, we have clubbed certain exercises that may help the Founders as part of the economy to deal with the present global crisis (of Coronavirus COVID19). Along with the following aspects, at all times, it is encouraged that the Founders stay aligned through honest, frequent and consistent communication.
It is every employer’s duty to provide a safe and hygienic working environment to ensure infection prevention. There are no specific rules shared by the Indian Government on what is meant by this duty of care. However, there exist special laws like the Factories Act, 1948, wherein:
It is important to keep in view that fundraising during this phase will take a longer period as opposed to earlier times. Hence, patience is key.
When it comes to restructuring, money is king, as due to the current crisis, businesses consider it to be the best to survive.
Working capital is the oil to run day-to-day operations in a business. In the present state of the world, it is of utmost importance that the Founders opt for options that help in saving working capital.
For individuals repaying loans, the Reserve Bank of India (RBI) has offered relief measures to assist in financial strain. Per the circular RBI/2019-2018/186 & Statement on Developmental and Regulatory Policies dated March 27, 2020, RBI has permitted banks and financial institutions to provide a moratorium up to 3 months for all payments due between March 1, 2020 and May 30th 2020.
Given the drastic change in the economy due to COVID-19, it may be a long journey for the Founders to bring their business to normal grounds. In such a situation, aiming for a U shape recovery is better than a V shape recovery.
The Founders are encouraged to be honest, frequent and have consistent communication with the employees of the business.
The Founders must ensure the safety and health of the employees. Working from home, as now imposed by the Indian Government may have negative effects to it as well. The Founders must ensure that work from home is not taken advantage of i.e. at the cost of mental or physical health of any kind.
Moreover, should the employee get infected with the Coronavirus (for instance in the present crisis) during the course of employment i.e. it arose out of employment, the Employers will be obligated to pay compensation. Per the Employee Compensation Act 1923, the Employer must compensate for any injury or death arising out of the employment. However, such payment of compensation entirety depends on the circumstances, nature of the work and injury. As such, each case is different and must be assessed individually.
During this time, engaging with a colleague seems impossible in light of the social distancing obligations. Thus, it is even more important now to engage employers in active communication.
Communication through webinars, conference calls (audio) and/or conference calls (video), on a regular basis, can be the first step.
The teams must stay in contact and communicate as much as possible by staying up to date with the required information or inter alia web challenges. It is of utmost importance that the organization works as a team in this period of isolation, in order to keep the strength of the business alive.
It is important to consider the staff in order to run a business. A few aspects that the Founders are encouraged to consider are discussed here.
A Business Continuity Plan (BCP) ascertains any unplanned scenarios that may disrupt the business and the steps required to recover. A BCP is a lifecycle with the following major steps that must be followed efficiently:
Analysis à Solution Design à Implementation à Testing and Acceptance à Maintenance.
While the Ministry of Finance, India has announced that COVID-19 could be treated as a “natural calamity” for contracting parties having force majeure provisions and having reference to acts like natural calamity, it is important to understand the provisions in view of M&A. In addition to Section 56 of the Indian Contract Act, 1872, discussed in this article, per the provisions of Section 32 of the Act, “the contract can be treated void if the underlying event of such contract become impossible to achieve”.
The seller of the company must assure that all the remedies are adhered to before the conclusion of the transaction. The seller must have enough cash to be able to take care of the liabilities at hand and keep the business in a runnable situation, to avoid the purchaser to be triggered.
Both the parties much spend extended time to draft the provisions of the transaction agreement, keeping in view the scenarios arising out of the global health outbreak.
In light of the current lockdown and the “work from home” policy, there has been a significant increase in the number of cyber-attacks, globally. For example, per the WHO website, hackers and cyber scammers are taking advantage of the coronavirus disease (COVID-19) pandemic by sending fraudulent e-mails and WhatsApp messages that attempt to trick a person into clicking on malicious links or opening attachments. Such similar hacks are a threat to the economy.
As such, the Indian Government has collaborated with the Data Security Council of India (DSCI) to establish a National Center of Excellence that will increase innovation in Indian cyber security. However, until such time, it is advisable for the Founders to indulge in third party assistance for data protection and avoid cyber-attacks.
In sum, during the present crisis, Founders need to keep focus and indulge in business management more efficiently than before. It is important to take into consideration that the end to this pandemic is uncertain. As such, a long-term business plan (<12 months) must be in sight.
Your email address will not be published *
This guide seeks to empower entrepreneurs with the expertise and resources necessary for flourishing in India's vibrant manufacturing industry.View More
Bharatiya Nyaya Sanhita has done away with the “General Explanation” clauses as contained in Sections 8 to 52A of Chapter II of IPC. All these Sections contained definitions as there was no definition clause in IPC.View More
Delhi (Head Office)
Plot No. 66, LGF, #TheHub, Okhla Phase III, Okhla Industrial Estate, New Delhi 110020, India.