Clarification on continuation of operation

Mohammed Bilal Ahmed (Querist) 26 July 2017 This query is : Resolved
Hi,
Can someone please clarify my doubt with appropriate evidence?

My doubt is, "Can a firm/company/factory/shop, etc continue its business even after making continuous losses for 5 consecutive years?

Further, does bonus become eligible in this case?

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M V Gupta (Expert) 27 July 2017
The relevant Acts namely the Partnership Act, Companies Act and the Shops and Establishments Act do not prohibit continuation of a loss making business. Even if the business is not making profit, the employer is liable to pay minimum bonus of 8.33% of the salary or wages earned by the employee. (See Section 10 of Payment of Bonus Act, 1965.)

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Rajendra K Goyal (Expert) 27 July 2017
Academic query.

State material facts of the problem if any.

How are you concerned / related with the query?

Looks like examination question.

Mohammed Bilal Ahmed (Querist) 27 July 2017
Thank you Mr. M V Gupta. Apt answer, this is what i wanted.

M V Gupta (Expert) 27 July 2017
You are Welcome. I enjoy answering academic queries also.

krishna mohan (Expert) 28 July 2017
Yes incurring loss is not an excuse for statutory liabilities like Bonus, Salary etc., Well advised by Mr.Guptaji.

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