Video
The Ultimate Cheat Sheet For Starting And Running Your Business
Author: Dr. Abhijit Gupta
Date: August 26, 2013
Editor’s note: James Altucher is an investor, programmer, author, and several-times entrepreneur. His latest book, “Choose Yourself!” (foreword by Dick Costolo, CEO of Twitter) came out on June 3. Follow him on Twitter @jaltucher.
This is going be a bullet FAQ on starting a business. No joke. If you’re a lawyer, feel free to disagree with me, so you can charge someone your BS fees to give the same advice. If you can think of anything to add, please do so. I might be missing things. If you want to argue with me, feel free. I might be wrong on any of the items below.
There are many types of business. Depending on your business, some of these won’t apply. All of these questions come from questions I’ve been asked.
The rules are: I’m going to give no explanations. Just listen to me.
1) C Corp or S Corp or LLC?
C-Corp if you ever want to take on investors or sell to another company.
2) What state should you incorporate in?
Delaware.
3) Should founders vest?
Yes, over a period of four years. On any change of control the vesting speeds up.
4) Should you go for venture capital money?
First build a product, then get a customer, then get friends-and-family money (or money from revenues which is cheapest of all) and then think about raising money. But only then. Don’t be an amateur.
5) Should you patent your idea?
Get customers first. Patent later. Don’t talk to lawyers until the last possible moment.
6) Should you require venture capitalists to sign NDAs?
No. Nobody is going to steal your idea.
7) How much equity should you give a partner?
Divide things up into these categories: manage the company; raise the money; had the idea; brings in the revenues; built the product (or performs the services). Divide up in equal portions.
8) Should you have a technical co-founder if you are not technical?
No. If you don’t already have a technical co-founder you can always outsource technology and not give up equity.
9) Should you barter equity for services?
No. You get what you pay for.
10) How do you market your app?
Friends and then word of mouth.
11) Should you build a product?
Maybe. But first see if, manually, your product works. Then think about providing it as a service. Then productize the commonly used services. Too many people do this in reverse and then fail.
12) How much dilution is too much dilution?
If someone wants to give you money, then take it. The old saying, 100 percent of nothing is worth less than 1 percent of something.
13) Do you listen to venture capitalist?
Yes, of course. They gave you money. But then don’t do anything they ask you to do.
14) What if nobody seems to be buying your product?
Then change to a service and do whatever anyone is willing to pay for using the skills you developed while making your product.
(“you’re going to rattle the stars, you are”)
“You’re gonna rattle the stars, you are.”
15) If a client wants you to hire their friend or they won’t give you the business (e.g. like a bribe) what should you do?
Always do the ethical thing: Hire the friend and get the client’s business.
16) What do you do when a customer rejects you in a B2B business?
Stay in touch once a month. Never be angry.
17) In a B2C business?
Release fast. Add new features every week.
18) How do you get new clients?
The best new clients are old clients. Always offer new services. Think every day of new services to offer old clients.
19) What’s the best thing to do for a new client?
Over-deliver for the first 100 days. Then you will never lose them.
20) What if your client asks you to do something not in your business plan?
Do it, or find someone who can do it, even if it’s a competitor.
21) Should I ever focus on SEO?
No.
22) Should I do social media marketing?
No.
23) Should I ever talk badly about a partner of an employee even though they are awful?
Never gossip. Always be straight with the culprit.
24) I have lots of ideas. How do I pick the right one?
Do as many ideas as possible. The right idea will pick you.
25) What is the sign of an amateur?
– Asking for an NDA.
– Trying to raise VC money before product or customers.
– Having fights with partners in the first year. Fire them or split before anything gets out of control.
– Worrying about dilution.
– Trying to get Mark Cuban to invest because “this would be great for the Dallas Mavericks.”
– Asking people you barely know to introduce you to Mark Cuban.
– Asking people for five minutes of their time. It’s never five minutes, so you are establishing yourself as a liar.
– Having a PowerPoint that doesn’t show me arbitrage. I need to know that there is a small chance there is a 100x return on money.
– Catch 22: showing people there’s a small chance there’s 100x return on their money. The secret of salesmanship is getting through the Catch 22.
– Rejecting a cash offer for your company when you have almost no revenues. Hello Friendster and Foursquare.
26) What is the sign of a professional?
– Going from bullshit product to services to product to SaaS product. (Corollary: the reverse is amateur hour).
– Cutting costs every day.
– Selling every day, every minute.
– When you have a billion in revenues, staying focused. When you have zero revenues, staying unfocused and coming up with new ideas every day.
– Saying “no” to people who are obvious losers.
– Saying “yes” to any meeting at all with someone who is an obvious winner.
– Knowing how to distinguish between winners and losers (subject of an entire other post but in your gut you know — trust me).
27) When should I hire people full time?
When you have revenues
28) How long does it take to raise money?
In a GREAT business, six months. In a mediocre business, infinity.
29) Should I get an office?
No, not unless you have revenues.
30) Should I do market research?
Yes, find one customer who DEFINITELY, without a doubt, will buy a service from you. Note that I don’t say buy your product, because your initial product is always not what the customer wanted.
31) Should I pay taxes?
No. You should always reinvest your money and operate at a loss.
32) Should I pay dividends?
See above.
33) What should the CEO salary be?
No more than 2x your lowest employee if you are not profitable. This even assumes you are funded. If you are not funded your salary should be zero until your revenues can pay your salary last. Important RULE: the CEO salary is the last expense paid in every business.
34) When should I fire employees?
When you have fewer than six months’ burn in the bank and you aren’t getting revenues growing fast enough.
35) When should you have sex with an employee?
When you love her and the feeling is mutual.
36) What other reasons should one fire an employee?
– When they gossip.
– When they don’t over-deliver constantly.
– When they ask for a raise because they think they are making below industry standard.
– When they talk badly about a client.
– When they have an attitude.
37) When should you give a raise?
Rarely.
38) How big should the employee option pool be?
15 to 20 percent.
39) How much do advisers get?
One-fourth of 1 percent. Advisers are useless. Don’t even have an advisory board.
40) How much do board members get?
Nothing. They should all be investors. If they aren’t an investor, then one-half of 1 percent.
41) What if one client is almost all of my revenues?
Treat them very nicely. Don’t forget the Christmas gift basket.
42) What’s the best way to sell anything?
Show arbitrage: If they pay X now they are buying something worth X * Y. That is the ONLY way to sell.
43) What is the best way to sell anything?
Part II: fear and agitation. Get them afraid (the world is falling apart). Get them agitated (this is the only way to stop it).
44) What’s the best way to talk about your competition in a meeting?
Use “choice ambiguity” (Google it). Say, “all of my competition is great. I wouldn’t even know how to choose among them.”
45) What’s the best way to value a company?
Ask yourself (no BS): How much would it cost to recreate the technology, services, brand and customers you have already built. Then quadruple it and see what people would pay.
46) Should I ever worry about the news or the economy?
Absolutely not. The best businesses are started in horrible economies.
47) What happened to all of my friends?
You don’t have anymore friends.
48) How do I charge more for my services?
Itemize as finely as possible and charge for each item.
49) Do I charge per hour or per project or per month?
First per project, then per-month maintenance.
50) How do I prepare for a meeting?
Know everything about the clients: competition, employees, industry. Over-read everything.
(read everything)
Read everything.
51) What is the only effective email marketing?
Highly targeted email marketing written by professional copywriters, and the email list is made up of people who have bought similar services in the past six months.
51a) Corollary: If you have zero skills as a copywriter then everything you write will be boring.
52) Should I give stuff for free?
Maybe. But don’t expect free customers to turn into paying customers. Your free customers actually hate you and want everything from you for nothing, so you better have a different business model.
53) Should I have schwag?
No.
54) Should I go to SXSW?
No.
55) Should I go to industry parties and meetups?
No.
56) Should I blog?
Yes. You must. Blog about everything going wrong in your industry. Blog personal stories that you think will scare away customers. They won’t. Customers will be attracted to honesty.
57) Should I care about margins?
No. Care about revenues.
58) Should I spin-off this unrelated idea into a separate business?
No. Make one business great. Throw everything in it. Do DBAs to identify different ideas.
59) Should I hire people because I can travel on a seven-hour plane ride with them?
Don’t be an idiot. If anything, hire people the opposite of you. Or else who will you delegate to?
60) When should I say “no” to a client?
When they approach you.
61) When should I say “yes” to a client?
Every other conversation you ever have with them after that initial “no.”
62) Should I have sex with an employee?
Stop asking that.
63) Should I negotiate the best terms with a VC?
No. Pick the VC you like. Times are going to get tough at some point, and you need to be able to have a heart-to-heart with them.
64) Should I even start a business?
No. Make money. Build shit. Then start a business.
65) Should I give employees bonuses for a job well done?
No. Give them gifts but not bonuses.
66) What should I do at Christmas?
Send everyone you know a gift basket.
67) If my customer just got divorced, what should I say to him?
“I can introduce you to lots of women/men.”
68) When should I give up on my idea?
When you can’t generate revenues, customers, interest, for two months.
69) Why didn’t the VC or customer call back after we met yesterday and it was great?
They hate you.
70) Why didn’t the above call back after we met yesterday and it was great?
“Yesterday” was like a split second ago for them and a lifetime for you. There’s the law of entrepreneurial relativity. Figure out what that means and live by it.
71) Should I hire a professional CEO?
No. Never.
72) Should I hire a head of sales?
No. The founder is the head of sales until at least 10 million in sales.
73) My client called at 3 a.m. Should I tell him to respect boundaries?
No. You no longer have any boundaries.
74) I made a mistake. Should I tell the client?
Yes. Tell him everything that happened. You’re his partner. Not the guy that hides things and then lies about them.
75) My investors want me to focus. Should I listen to them?
No. Diversify in every way you can.
76) I personally need money. Should I borrow from the business?
Only if the business can survive for another six months no matter what.
77) I just bought two companies. Should I put them under the same roof and start consolidating?
No. Not for at least two years.
78) Should I quit my job?
No. Only if you have salary that can pay you for six months at your startup. Aim to quit your job but don’t quit your job.
79) What do I do when I have doubts?
Ask your customers if your doubts are trustworthy.
80) I have too much competition. What should I do?
Competition is good. It shows you have a decent business model. Now simply outperform them.
81) My wife/husband thinks I spend too much time on my startup?
Divorce them or close your business.
82) I’m starting my business, but I have relationship problems. What should I do?
Get rid of your relationship.
83) Should I expand geographically as quickly as possible?
No. Get all the business you can in your local area. Travel is too expensive time-wise.
84) How do I keep clients from yelling at me?
Document every meeting line-by-line, and send your document to the client right after the meeting.
85) I undercharged. What should I do about it?
Nothing. Charge the next client more.
86) I have an idea for an app but don’t know how to execute. What should I do?
Draw every screen and function. Then outsource someone to make the drawings look like they come from a real app. Then outsource the development of the app. Get a specific schedule. Micromanage the schedule.
87) I want to buy a franchise in X. Is that a good idea?
Only buy a franchise if it’s underperforming and you can see how to improve it. Don’t buy on future hopes; only buy on past mistakes.
88) I want to buy a franchise in X. Is that a good idea?
Rely on the three Ds: Death, Debt, Divorce. When someone dies, the heirs will sell a business cheap. When someone is in debt, they will sell a business cheap. When someone divorces, the couple usually has to sell a business cheap. IMPORTANT: even if the trends in the industry are in your favor, you CANNOT predict the future. But you can use the past to help you get a deal. Always get a deal.
89) I have a lot of traffic but no revenues. What should I do?
Sell your business. There’s only one Google. (Well, there are two or three Googles: Facebook, Twitter … )
90) I have no traffic. How do I get traffic?
Shut down your business.
91) Should I hire a PR firm?
No. Do guerilla marketing. Read “Newsjacking” and “Trust me I’m Lying.” PR firms screw up from beginning to end. The first time I hired a PR firm, instead of sending me my contract they accidentally sent me their contract for “Terry Bradshaw.” He was paying $12,000 a month. Was it worth it for him?
92) My competition is doing better than me across every metric. What should I do?
Don’t be afraid to instantly shut down your business and start over if you can’t sell it. Time is a horrible thing to waste.
93) I’ve been in business now for six years, and my business doesn’t seem to be growing. It’s even slowing down. What should I do?
Come up with 10 ideas a day about new services your business can offer. Try to get a customer for each new service. I know one business in this situation that refuses to do this because their VCs are telling them to focus more. You’re going to go out of business otherwise.
94) Is it unethical to run my business from the side while still at my job?
I don’t know. Did God tell you that in a dream?
95) My customer called me at 5 p.m. on a Friday and said, “We have to talk.” And now I can’t talk to him until Monday. What does it mean?
It means you’re fired.
96) XYZ just sold for $100 million. Should I be valued at that? I’m better!
No, you should shut up.
97) Investors want to meet me and customers want to meet me. Who do I meet if I need money?
You should know the answer to that by now.
98) If an acquirer asks me why I want to sell, what should I say?
That you feel it would be easier for you to grow in the context of a bigger company that has experienced the growing pains you are just starting to go through. That 1+1 = 45.
99) I just started my business. What should I do?
Sell it as fast as possible (applies in 99 percent of situations). Sell for cash.
100) I can change the world with my technology.
No you can’t.
100a) Corollary: Don’t smoke crack.
101) If you’re so smart why aren’t you a billionaire?
Because I sold my businesses early, lost everything, started new businesses, sold them, and got lucky every now and then.
101a) Corollary: These rules don’t always apply. But like Kurt Vonnegut said, “if you want to break the rules of grammar, first learn the rules of grammar.”
RULE #infinity:
You create your luck by being healthy and not regretting the past or being anxious about the future.
Taken from: http://techcrunch.com/2013/08/24/the-ultimate-cheat-sheet-for-starting-and-running-your-business/
When you are out of country, try adapting below measures if it is suitable for you.
- Luggage: In your journey, you might get friends with several peoples or they may prove to be your distant relatives but try to avoid carrying their luggage or any packets in your account. It could have any stuff that could put you in trouble.
- Passport/Visa: Register your passport and visa in the nearest Nepalese Embassy. Incase of any loss or theft, they will help you re-issue one with least possible difficulties. Keep a scanned copy of your passport and visa in your email box.
- Cash: Try to carry eCash and not hard cash to avoid loss from getting robbed.
- Behaviour: Have fun whenever and wherever but try avoiding being hero.
- Goal: Always remember your goal – Why you are going abroad. Focus and fulfill that.
- Remember: That you are not in your land. You are abroad for some goal and hence try to abide all rules and regulations. You can not say that you were unaware of any law. In every law books it is mentioned very clearly – “Ignorance of Law is No Excuse”. Better be safe.
- Lastly: Enjoy and have a good trip. Do leave some comments below. I will appreciate.
With a Nepalese passport getting an abroad visa is very difficult. It becomes very difficult to get desired visa at desired time in a nice and easier way. The main reason behind this is malpractice of submitting fake documents to get visa, getting visa for one purpose but practicing against the grant and nature of visa, staying longer illegally even after visa expiry etc. I am not here to discuss about that. I am just trying to share few of my ideas on getting a visa for genuine reason.
If you are looking to apply for visa abroad, try to have these as much as possible
- Academic/Training/Experience/Recommendation Certificates or Letters: This will help you look professional, serious and trustable.
- Financial Statements: Try to show good income reports, Salary Contracts, Bank Statements for X months as demanded.
- References and Invitation Letters from the country you are going to visit.
- Itenary Details: Accommodation and Travel Plan or proof as per the requirements.
- Ethics: That you will do and act as per the visa grant and will not cause any problem.
If you are on this blog now, then it means you can read English and hence can prepare documents on your own. Hence, make sure that you research first on the web and deal directly with the embassy or consulate on your own rather than through the agents or brokers. Save money be safe and also make moves as per your own findings.
You can search for Visa Consulate or Embassy in Nepal details at this website http://www.visahq.com/embassy/nepal/.
Based on what I have come across, I am sharing few of the links and tools here. You can study it in no time and implement it to enhance your quality of work. Please share if you have any other tools or tricks or any links to them.
- Inner Shadows in CSS: Images, Text and Beyond
http://designshack.net/articles/css/inner-shadows-in-css-images-text-and-beyond/ - Watch 3d framework of javascript.
http://threejs.org/ - Language-wide Features in CSS:
http://www.impressivewebs.com/language-wide-features-css/?utm_source=buffer&utm_campaign=Buffer&utm_content=buffer8a7bb&utm_medium=facebook - Visit this site to learn css3 with live view
http://thecodeplayer.com/ - Emmet LiveStyle is a plugin for live bi-directional (editor↔browser) CSS editing of new generation. Currently, it works in Google Chrome, Safari and Sublime Text, more browsers and editors will be available later.
http://livestyle.emmet.io/ - Troubleshooting CSS
http://tympanus.net/codrops/2013/07/17/troubleshooting-css/?utm_content=buffer0a6a0&utm_source=buffer&utm_medium=twitter&utm_campaign=Buffer - Easy way to manage sprites,
http://spritepad.wearekiss.com/ - CSS3 only breadcrumbs.
http://css-tricks.com/triangle-breadcrumbs/ - Unicode table:
http://unicode-table.com/en/#00BB - CSS3 transition, rotate for ie
http://www.useragentman.com/IETransformsTranslator/ - Create CSS3 arrow
http://cssarrowplease.com/ - Convert PSD To CSS3 Easily With CSS3Ps:
http://www.hongkiat.com/blog/psd-to-css3/ - Top 10 CSS Table Designs:
http://coding.smashingmagazine.com/2008/08/13/top-10-css-table-designs/ - Helps you get all vendor prefixes at once.
http://prefixmycss.com/
We all know what QA/QC job is about. It is to make sure that all quality control measures has been implemented and the requirements as demanded by client has been fulfilled before it is being delivered to client.
Vacancy for CSS Developers: Are you looking to build your career as a CSS Developer? Are you looking to learn, develop your skills and work with professional team members of multinational company with 400+ staffs?
Video
Career Summit is a TV Program sponsored by Islington College and hosted by Mr. Saugat Nepal, one of the finest host of Nepal. I was invited to participate in the program as one of the speaker or interviewee. The objective of this program was to guide students or graduates seeking opportunity in building up their career.
The Foreign Investment and Technology Transfer Act,2049(1992)
Author: Legal Advisors Nepal : Prixie
Date: March 11, 2013
THE FOREIGN INVESTMENT AND TECHNOLOGY TRANSFER ACT, 2049 (1992)
AN ACT MADE TO PROVIDE FOR MATTERS RELATING TO FOREIGN INVESTMENT AND TECHNOLOGY TRANSFER
Preamble: Whereas, in the process of industrialization of the country, it is expedient to promote foreign investment and technology transfer for making the economy viable, dynamic and competitive through the maximum mobilization of the limited capital, human and the other natural resources.
1. Short Title and Commencement:
(1) This Act may be called “The Foreign Investment and Technology Transfer Act, 2049 (1992)”
(2) This Act shall come into force immediately .
2. Definitions: Unless the subject or context otherwise requires, in this Act:-
(a) “Industry” means any industry as referred to in Section 3 of the Industrial Enterprises Act, 2049 (1992).
(b) “Foreign Investment” means the following investment made by a foreign investor in any industry”
(1) Investment in Share (Equity)
(2) Reinvestment of the earnings derived from the investment as referred to in Sub-section (1) above,
(3) Investment made in the form of loan or loan facilities.
(c) “Technology Transfer” means any transfer of technology to be made under an agreement between an industry and a foreign investor on the following matters:
(1) Use of any technological right, specialization, formula, process, patent or technical know-how of foreign origin.
(2) Use of any trademark of foreign ownership.
(3) Acquiring any foreign technical, consultancy, management and marketing service.
(d) “Foreign Investor” means any foreign individual, firm, company or corporate body involved in foreign investment or technology transfer including foreign government or international agency.
(e) “Board” means the Industrial Promotion Board Constituted under Section 12 of the Industrial Enterprises Act, 1992.
(f) “Department” means the Department of Industries or Department of cottage and Small Industries of Government of Nepal or any other department office or agency as specified by Government of Nepal.
(g) “Prescribed” or “As prescribed” means prescribed or as prescribed in the Rules made under this Act or in an order issued by the Government of Nepal by notification published in Nepal Gazette.
3. Permission to be Obtained:
(1) Permission of the Department shall be required to be obtained for foreign investment or technology transfer.
(2) A person desiring to avail the foreign investment or technology transfer shall be required to make an application to the Department in the prescribed form along with the prescribed particulars for obtaining permission in that behalf.
(3) If an application is made pursuant to Sub-section (2) the Department shall, in the case of an industry with fixed assists up to five hundred million rupees, itself, and in the case of an industry with fixed assets in excess thereof, in accordance with the decision of the Board, grant permission within thirty days from the date of application. The Department shall communicate the decision made in regard to such permission to the applicant.
(4) Notwithstanding anything contained in Sub-section (1) and (2) no permission shall be granted for making foreign investment in the industries set forth in the Annex.
Provided that permission may be granted for the transfer of technology in such industries.
4. …………………´
5. Facilities and Concessions: (1) ……………………
(1a)…..Å
(2) A foreign investor making investment in foreign currency shall be entitled to repatriate the following amount outside Nepal:-
a) The amount received by the sale of the share of foreign investment as a whole or any part thereof.
b) The amount received as profit or divided in lieu of the foreign investment.
c) The amount received as the payment of the principal of and interest on any foreign loan.
(3) A foreign investor shall be entitled to repatriate outside Nepal the amount received under an agreement for the transfer of technology in such currency as set forth in the concerned agreement.
6. Provisions Relating to Visa:
(1) A foreign national visiting Nepal in connection with undertaking any study or carrying out any research with the objective of making investment in Nepal shall be provided a non tourist visa for up to six months.
(2) A foreign investor or dependent family or authorized representative of such a foreign investor and department family of such authorized representative shall for the purpose of stay in Nepal be provided a business visa until the foreign investment is retained.
Provided that a foreign investor who, at a time, makes investment in an
amount no less than one hundred thousand United States dollar or in convertible foreign currency equivalent thereto, and his/her dependent family shall be granted a residential visa until such investment is retained.
7. Settlement of Disputes:
(1) If any dispute arises between a foreign investor, national investor or the concerned industry, the concerned parties shall be required to settle the dispute by mutual consultations in the presence of the Department.
(2) If the dispute could not be settled in the manner as referred to in Sub-section (1) it shall be settled by arbitration in accordance with the prevailing arbitration Rules of the United Nations commission on International Trade Law (UNCITRAL).
(3) The arbitration shall be held in Kathmandu. The laws of Nepal shall be applicable in the arbitration.
(4) Notwithstanding anything contained in Sub-sections (1), (2) and (3) above, disputes arising in regard to foreign investment made in the industries with investment as prescribed may be settled as mentioned in the foreign investment agreement.
8. Power to Frame Rules: Government of Nepal may frame necessary Rules for carrying out the objectives of this Act.
9. This Act to Prevail: Notwithstanding anything contained in the existing laws, matters stipulated under this Act and Rules made there under shall be dealt accordingly.
9A. Power to Make Alternation or Amendment in Annex: Government of Nepal may, by notification in the Nepal Gazette, make necessary alterations or amendments in Part (B) of the Annex.
10. Repeal and Savings:
(1) The Foreign Investment and Technology Act, 1981 is hereby repealed.
(2) All acts performed or action taken under the Foreign Investment and Technology Act, 1981 shall deemed to have been performed or taken under this Act.
Annex
(Relating to Sub-section (4) of Section (3) Industries not to be granted permission for making foreign investment)
Part (A)
1. Cottage Industries.
2. Personal Service Business (Business such as Hair Cutting, Beauty Parlour, Tailoring, Driving Training etc.)
3. Arms and Ammunition Industries.
4. Explosives, Gunpowder
5. Industries related to Radio-Active Materials.
6. Real Estate Business (Excluding Construction Industries)
7. Motion Pictures Business (Produced in _……….. the language of the nation)
8. Security Printing
9. Currencies and Coinage Business
Part (B)
1. _Other Retail Business except the Retail Business instantly conducted more than
Two countries as International transaction.
2. _…………………
3. _……………………
4. _…………………….
5. _……………………
6. _………………..
7. _……………, Bidi (Tobacco), _………… (excluding those exporting more that 90%)
8. Internal Courier Service
9. Atomic Energy
10. _……………..
11. Poultry Farming
12. Fisheries
13. Bee-Keeping
14. Other Consultancy Services such as Management, Accounting, Engineering and Legal Services besides Consultancy Services having the foreign investment up to Fifty One percent.
15. Beauty paler
16. Domestic food processing methods in rent .
17. Local catering Service
18. Rural tourism
Act No. 9 of the year 2049 B.S.
An Act to provide for Labour
Preamble: Whereas it is expedient to make timely provisions relating to labour by making provisions for the rights, interests, facilities and safety of workers and employees working in enterprises of various sectors.
Chapter 1.
Preliminary
1. Short title and commencement:
(1) This Act may be called as the “Labour Act, 2048 (1992)”.
(2) It shall come into force immediately.
2. Definitions. In this Act, unless the subject or context otherwise requires :-:
(a) “Production process” means any of the following processes:
(i) works relating to making, altering, repairing, ornamenting, engraving, finishing, packing, oiling, washing, cleaning, breaking-up, dismantling or other kinds of activities given to any article or substance with a view of bringing it to its use, sale, distribution, transportation, or disposal.
(ii) pumping of oil, water, or sewage;
(iii) generating, transforming, and transmitting energy; or
(iv) printing, lithography, photography, book-binding and other similar work.
(b) “Enterprise” means any factory, _company, organisation, association, firm, or group thereof, established under the prevailing laws for the purpose of operating any industry, profession or service, where ten or more workers or employees are engaged and this expression also includes:
(1) Tea estates, established under the law for commercial purpose;
(2) Enterprise operating within the industrial districts established by government of Nepal where less than ten workers or employees are engaged.
(c) “Employee” means persons engaged in the administrative functions of the enterprise.
(d) “Worker” means a person employed on the basis of remuneration _…………to work in any building, premises, machinery or any part thereof used for any productions process or providing service, or any act relating to such work or for any unscheduled works and this expression also includes any worker working at piece-rate, contract or agreement.
(e) “Manager” means a person appointed for performing the functions in the Enterprise.
(f) “Proprietor” means the person having final authority on the activities of the Enterprise and this expression also includes any person appointed as the Chief of any §branch or unit of the Enterprise with powers to exercise final responsibility or authority in respect thereof.
(g) “Factory Inspector” means a factory inspector appointed by Government of Nepal and this expression also includes the Senior Factory Inspector.
(h) ……………….
(i) “Minor” means a person who has attained the Ôage of sixteen years but has not completed the age of eighteen years.
(j) “Adult” means a person who has completed the age of eighteen years.
(k) “Energy” means electrical or mechanical energy. Provided that, this word shall not include any energy generated from human or animal sources.
(l) “Seasonal Enterprise” means an Enterprise which cannot be operated or which is not feasible to operate in any season other than the specific season and this expression also includes a Seasonal enterprise which cannot operate more than one hundred and eighty days in one year.
(m) “Day” means period of twenty-four hours starting from any midnight and ending at another midnight.
(n) “Week” means a period of seven days starting from midnight on Saturday or from midnight of such other day as prescribed by the Department of Labour.
(o) “Welfare Officer” means the welfare officer appointed under this Act.
(p) “Labour Officer:” means the Labour Office appointed under this Act and this expression also includes the Senior Labour Officer.
(q) “Labour Court” means the Labour Court under this Act.
(r) ” Remuneration” means the remuneration or wage to be received in cash or kind from the Enterprise by the worker or employee for the works performed in the Enterprise and this expression also includes any amount to be received in cash or kind for the works done under piece-rate or contract. Provided that, this expression does not include any kind of allowance or facility
(s) “Prescribed” or “as prescribed” means prescribed or as prescribed in the Rules framed under this Act.
CHAPTER – 2
Employment and Security of Service
3. Classification of Job:
(1) The Proprietor shall classify the job of the workers and employees of the Enterprise according to the nature of production process, service or functions of the Enterprise and shall provide the information thereof to the concerned Labour Office.
(2) If the classification done pursuant to Sub-section (1) requires any amendment, the Labour Officer may, stating the reasons thereof, issue a directive to the Proprietor and it shall be the duty of the Proprietor to abide by such directive.
4. Appointment of Worker and Employee:
(1) In cases where it is required to appoint a worker or employee in any post classified pursuant to Section 3, the Manager Shall have to advertise in order to select such a worker or employee and the worker or employee so selected shall have to be provided with appointment letter and be engaged at work..
(2) The worker and employee appointed under Sub-section (1), §shall be kept on probation period unless he/she completes the continuous service period of one year and, based on, his/her efficiency, sincerity discipline, diligence towards works, punctuality, etc in this period he/she shall be appointed permanently. An appointment letter shall be provided with the name of the post of the worker or employee and his/her remuneration and conditions of service while making such appointment. Information thereof shall also be provided to the Labour Office.
Clarification: For the purpose of this Sub-section, the words ” the continuous service period of one year” means the period of two hundred forty days engaged at work during a period of twelve months in an Enterprise, or the period served continuously in a Seasonal Enterprise during the period of such a running season, by a worker or employee and, while calculating the said two hundred forty days, public and weekly holidays shall also be counted.
(3) The worker or employee engaged on piece-rate or contract in the works of permanent nature of an Enterprise shall also be appointed permanently under Sub-section (2).
(4) The workers or employee engaged under Sub-section (3) shall be entitled to facilities provided in this Act according to the scale of his/her post.
(5) …….
4A. Prohibition of Engaging Non-Nepalese Citizens at Work:
(1) Non-Nepalese citizens shall not be permitted to be engaged at work in any of the posts classified pursuant to Section 3.
(2) Notwithstanding anything contained in Sub-section (1), if a Nepalese citizen could not be available for any skilled technical post even after publishing an advertisement in national level public newspapers and journals, the Manager may submit an application to the Department of Labour along with the evidence of such fact for the approval to appoint a non-Nepalese citizen.
(3) If it is found, in conduction of an inquiry upon the submission of any application pursuant to Sub-section (2), that a Nepalese citizen would not be available for the skilled technical post mentioned in the application, the Department of Labour may, on the recommendation of the Labour Office, grant approval to engage a non-Nepalese citizen at work years for a maximum period of upto five years not exceeding two years at a time and, in the specialized kind of skilled technical post, for a period upto seven years.
(4) The Manager, who engages non-Nepalese citizens at work pursuant to Sub-section (3), shall have to make arrangements for making the Nepalese citizens skilled and for replacing the non-Nepalese citizens gradually by them. ”
5. Engagement in Work:
(1) ………..
(2) Minors and females may be engaged in the works normally from six o’clock in the morning till six o,clock in the evening, except in the prescribed conditions.
(3) By making an appropriate arrangement with mutual consent between the proprietor and the worker or employee, the females may also be engaged in the works similar to the males.
(4) The Manager may transfer a worker or employee to any branch or unit of the Enterprise without causing any difference in the nature or standard of work. .
(6) Computation of period of Works: For the purpose of computing the period of
works performed in the Enterprise by any worker or employee, the following
period shall also be counted.
(a) the period remained in reserve under Section 11; and
(b) the period stayed §with remuneration leave.
7. Appointment in Contract Service: If an Enterprise needs to increase in production or service immediately, any person may be appointed in contract, by fixing a time period and setting forth the remuneration to be received by him/her and the terms of service, for any specified work other than the works of the Enterprise which are permanent in nature.
8. Change of Ownership shall not Adversely Affect: Any change in the ownership of the Enterprise shall not be deemed to have affected on the terms and conditions of service of the workers and employees of the Enterprise.
9. Separate Registers of the Workers and Employee to be Kept: (1) In each Enterprise, the Proprietor shall maintain separate registers of the workers and employees mentioning the following particulars –
(a) Name of the worker or employee,
(b) Nature of job,
(c) Remuneration and method of its payment,
(d) Other prescribed particulars.
(2) The register maintained under Sub-section (1) shall have to be submitted when demanded by the Labour Officer, Factory Inspector or any other person designated by the Labour Office.
10. Security of Service: The service of any permanent worker or employee may not be terminated without following the procedures prescribed by this Act or the Rules or Bylaws made under this Act.
11. Keeping on Reserve: (1) In case where the curtailment of production or service in any Enterprise for some period is necessary or where operation of the Enterprise cannot be continued for some special circumstance, the Proprietor, under Subsection (2), may curtail its production or service or may close the Enterprise or a part of thereof.
(2) Permission from the Labour Office in case of a period up to fifteen days and from the Department of Labour in case of a period for more than that shall have to be taken while curtailing the production or service or closing the Enterprise or any part thereof as mentioned in Sub-section (1). The Labour Office shall, inform the Department of Labour of such permission in case it has given permission.
(3) While doing curtailment in the production or service pursuant to Subsection (1), any worker working on shifts or on wages or §permanent worker or employee of the Enterprise except the employee shall be kept reserve on the condition of receiving half of his/her remuneration.
Provided that, such worker or employee shall continue to receive the appropriate facilities which he/she is receiving.
(4) If any worker or employee kept in reserve pursuant to Sub-section (3) refuse to work on another assignment or similar nature equal §on remuneration offered by the proprietor in the same Enterprise or another Enterprise under his/her control or if he/her does not come in the Enterprise once a day during office hours or on other situations as prescribed, the Proprietor may withheld the remuneration and facility of such worker and employee.
12. Retrenchment and reinstatement: (1) If, for any special circumstances, the production or service of the Enterprise had to be curtailed or the Enterprise has to be closed party or wholly for more than three months, the Proprietor may, with the approval of Government of Nepal through the Department of Labour, retrench in the number of the workers and employees, partly or wholly, of the Enterprise.
(1A) If the Manager makes a demand to Government of Nepal for approval in respect of the retrenchment of workers or employees pursuant to Sub-section (1), Government of Nepal shall have to make decision within two months on whether such retrenchment of employees to be made or not.
(2) While retrenching the workers or employees under Sub-section (1), engaged in similar type of works, those §permanent workers or employees who were appointed in the last shall be retrenched first.
Provided that, if it is required to retrench some of the workers or employees appointed earlier, not following the prescribed order of retrenchment such retrenchment may be made by specifying the reasons thereof.
(3) While doing retrenchment as per Sub-section (2), it shall be done as
follows –
(a) By providing a notice with the reasons or retrenchment either one month in advance or paying the remuneration of one month in case of worker or employee who is permanent _…………… and
(b) By paying a lump sum compensation to each worker or employee of the amount of remuneration calculated by multiplying the number of each year of service performed at the Enterprise by the amount of his/her present remuneration for 30 days.
Explanation: For the purposes of this Clause, the work performed for at least six months in any year shall be counted as one year of service.
(4) The provisions of Sub-section (3) shall not applicable to any worker or employee appointed under contract service.
(5) If anybody has to be engaged in the job of worker or employee retrenched earlier, priority shall be given to the retrenched workers or employees.
Explanation: For the purposes of Section 11 and 12 the “Special Circumstance” shall mean damage, break down or failure of machines or the Enterprise and thereby causing stoppage in the production or failure in the supply of fuel, electricity, coal or similar energy or due to any kind of force majeure or insufficient supply of raw materials or stock piling of the produced goods due to loss of sale or other similar situations.
13. Seasonal Enterprise: (1) The workers or employees of a seasonal Enterprise shall not be deemed to be on reserve during off-season period.
(2) The beginning and closure of operation of seasonal Enterprise shall be informed to the Labour Office.
(3) The permanent worker of employee shall have to be paid with at least twenty five percent of his/her remuneration as retaining allowance for the period of closure of a seasonal Enterprise during off-season..
(4) The decision of the Department of Labour shall be final in relation to any dispute as to whether any Enterprise is a seasonal or not.
Explanation: While computing the period of two hundred and forty days, the public Holidays and weekly holidays shall also be counted.
14. _……………………
15. Compulsory Retirement: The Proprietor may compulsorily retire any worker or employee who has crossed the age of fifty five years.
Provided that he/she may extend the period of service of any worker of employee by five years, in case the worker or employee is indispensable for the operation of the functions Enterprise.
CHAPTER – 3
WORKING HOURS
16. Working Hours: No worker or employee shall be deployed in work for more than eight hours per day or forty eight hours per week and they shall be provided one day as weekly holiday for every week.
17. Computation of Commencement of Working Hour: The time for starting of work by worker or employee shall be as prescribed by the Proprietor.
18. Intervals for Refreshment and Rest: In any Enterprise where work may be interrupt, no worker or employee shall be deployed in work for more than five hours continuously without providing an interval of half an hour for tiffin. In any Enterprise where works have to be carried out continuously without interruption, such intervals shall be provided on rotation basis. Such interval of half an hour shall be deemed to have been included within the daily working hours.
19. Extra Wages for overtime to be Provided: (1) Where any worker or employee is engaged to work for more than eight hours in a day or forty eight hours in a week, he/she shall be paid overtime wages at the rate of one and one-half time of his/her ordinary rate of wages.
Provided that, no worker or employee shall be compelled to work overtime.
(2) While deploying any worker or employee to work overtime, generally the duration shall not exceed four hours per day and twenty hours per week.
20. Attendance Register to be Kept: Each Enterprise shall keep attendance register of its workers and employees.
CHAPTER – 4Remuneration
- 21. Minimum Remuneration Fixation Committee: (1) Government of Nepal may fix the minimum remuneration, dearness allowances and facilities of workers or employees or Enterprises on the recommendation of the Minimum Remuneration Fixation Committee and the notification on rates so fixed shall be published in the Nepal Gazette.
(2) Government of Nepal shall, in order to fix the minimum remuneration, dearness allowances and facilities, constitute a Minimum Remuneration Fixation Committee consisting of the equal number of representatives of workers or employees, Managers and Government of Nepal.
(3) While making recommendation in regard to dearness allowances and facilities of workers or employees, the Minimum Remuneration Fixation Committee constituted under Sub-section (2) may do so on the basis of geographical areas.
(4) The rates of minimum remuneration, dearness allowances and facilities fixed pursuant to Sub-section (1) shall be effective only from the date of publication of a notification to that effect in the Nepal Gazette.
(5) In cases where the Minimum Remuneration Fixation Committee could not be constituted or even if it is constituted, it could not make recommendation, nothing contained in the foregoing Sub-sections shall be deemed to have barred fixing the minimum remuneration, dearness allowances and facilities of workers and employees of Enterprises by Government of Nepal.
(6) No agreement may be entered into between the manager and workers or employees in a way to make the minimum remuneration, dearness allowances and facilities lesser than those fixed pursuant to Sub-section (1).
(7) The other functions, duties and powers of the Minimum Remuneration fixation Committee shall be as prescribed.
21A. Annual Increment in Remuneration: (1) The worker and employee appointed permanently pursuant to Sub-section (2) of Section 4 shall receive an increment in remuneration each year.
(2) The amount of increment in remuneration to be received pursuant to Sub-section (1) shall be equal to the half day’s remuneration of the concerned worker or employee.
(3) Notwithstanding anything contained in Sub-section (1) above, such increment in remuneration shall not be provided in cases where the remuneration is withheld pursuant to subsection (2) of Section 52.
22. Payment of Remuneration, Allowances and Facilities: It shall be the responsibility of the concerned Manager to provide the remuneration, allowances and facilities to be received by a worker or employee of the Enterprise.
23. Period of Remuneration: The Proprietor may fix the period of payment of remuneration to the workers or employees on weekly, fortnightly or monthly basis in way not exceeding the period of one month.
Provided that, this provision shall not apply in respect of the persons who are working on daily wages, piece-rate or contract basis.
24. Prohibition on Deduction of Remuneration: (1) The remuneration of workers or employees shall not be deducted expect under the following circumstances –
(a) In case it is required to realize any fine.
(b) In case it is required to deduct against absence;
(c) In case it is required to deduct against loss or damage of cash or kind of the Enterprise caused intentionally or negligently;
(d) In case it is required deduct in respect of providing prescribed facilities;
(e) In case it is required to deduct in respect of advance or over payment of remuneration;
(f) In case it is required to deduct in respect of the period of suspension;
(g) In case it is required to deduct under the order of government office or court’
(h) In case it is required to deduct as per the notification of Government of Nepal published in the Nepal Gazette; or
(i) In case it is required to deduct in respect of income tax or any other tax levied under prevailing laws.
(2) The limit of amount to be deducted pursuant to Sub-section (1) the method of deduction, the period of deduction and other related matters shall be as prescribed.
25. Petition to be Filed in cases a Deduction in Remuneration Made or Delay
Caused in Payment or other Facilities not provided or Delay Caused in
providing such Facilities in an Undue Manner: (1) Except in cases of happening of a mistake or failure to fix the remuneration amount or inability to pay the remuneration due to the occurrence of an unforeseen incident or of special circumstance or failure on part of the concerned worker or employee to come to receive his/her remuneration or his/her refusal to receive the same; if, in an undue manner, a deduction in remuneration is made or a delay is caused in payment or in case of release from suspension or annulment o f expulsion by a judgment of a court, the remuneration for the period of such expulsion or suspension is not paid or a delay is caused in such payment or the allowance, gratuity or the amount of provident fund or compensation to be received by a worker or employee is not paid or delay is caused in such payment, the concerned worker or employee him/herself or through his/her attorney may file a petition in the Labour Office.
(2) The petition as referred to in Sub-section (1) shall have to be filed within six months from the date of deduction in remuneration or causing delay in payment or non payment of allowance, gratuity, amount of provident fund or compensation or causing delay in such payment.
(3) While conducting necessary inquiry and examination on the petition filed pursuant to Sub-section (1), if it is proven that the remuneration has been deducted in an undue manner or a delay has been caused in payment or the amount of allowance, gratuity, provident fund or compensation has not been paid or a delay has been caused in such payment, the Labour Office may give order requiring to make payment of such remuneration, allowance, gratuity, amount of provident fund or compensation to the concerned worker or employee and to pay the concerned worker or employee amount upto three times of such amount in default for atonement thereof.
(4) If it is proven that the petition under Sub-section (1) has been filed with a malicious motive or with an intention of causing unnecessary trouble or distress to the Manager, the Labour Office may give order requiring the petitioner to pay not exceeding one thousand rupees for compensation to the Manager.
(5) The Labour Office shall make available to the concerned party the amount to be paid or handed over in accordance with the order issued under Subsection (3) or (4) by getting recovered and realized the same by taking all or any of the following action:-
(a) By keeping withheld the movable and immovable properties of the concerned Enterprise, worker or employee in accordance with the prevailing law
(b) By keeping withheld the deposit amount of the concerned Enterprise, worker or employee being kept in any Government Office or in any Corporate body with the ownership of Government of Nepal or the amount to be paid or handed over the concerned Enterprise, worker or employee by such Office or corporate body,
(c) By keeping withheld the import or export of the concerned Enterprise, worker or employee.
(d) By keeping withheld the discount, facilities or concessions of the concerned Enterprise, worker or employee to be obtained under the prevailing law.
26. Appeal: The party dissatisfied with the Order issued pursuant to Sub-section (3) or (4) may file an appeal to the Labour Court within thirty five days of the receipt of information of such order and the decision of the Labour Court shall be final.
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