This article has been written by Mr. Aditya Raj Pandey, a 2nd Year BA LLB student from Symbiosis Law School, Hyderabad
DISCUSS THE FUCTION OF BUSINESS LAWS
Today, with the modernization and huge urbanization around the world, the number of businesses increases on the large scale world wide. Today we can easily saw so many businesses in both rural and urban areas of the country and this ranges from small scale to large scale businesses. Now, as the number of business is growing rapidly, therefore, in order to regulate the conduct of the overall business and also the owners, business laws are passed a long back. In this article, we will chiefly focus on history of business laws, its definition along with the functions and importance.
BRIEF HISTORY OF BUSINESS LAWS AND ITS DEFINITION
In India, there are very big number of entrepreneurs at different places and they tried their best to start and run different kinds of businesses in different parts of the country. Mostly, we can say that they start their business in the local market at the very first place and if the specific idea get succeeded in locality then they expand their work in different parts. Therefore, to regulate their work, businesses or any such corporation we need proper set of rules and regulations and hence different sets of acts were incorporated in our country a long back. In India, the laws and regulations which governs business and commerce are not one or two in numbers, rather it ranges from five to six acts which governs different types and aspects of businesses. At the very first place, we have Indian Contract Act, which was passed during the British or Colonial rule, i.e. in the year 1872. Subsequently after that, the sales of goods act along with Indian Partnership act was passed in the year 1930 and 32 respectively. After freedom from the cruel and oppressive rule of East India Company, we passed Company law in the year 1956 and several changes were also made according to the need of the hour hence Company Law of 2013 is applicable now to whole country. Along with all these acts, our legislature also passed Limited Liability Partnership act in the year 2008, which regulates and controls the businesses in our country in one way or the other.
Now, as we already know the history of Business Law, it is the time to carefully study and understand the definition of business law. Business law is also known by the name of commercial law or corporate law in India. It can be defined as the body of legislation which governs the rights, behaviour and relationships of businesses along with the individuals involved in commerce, sales & trade. Also, an important point to penned down here is that, before understanding the concept of business and business laws, we need understand the contract, as contract always takes place or happens in course of business in one form or the other. Therefore, according to ICA, 1872, contract can be defined as the agreement which is enforceable by the law. Going back again towards the business law, we can also define it in a manner that, It is the code which involved in protecting the rights, liberties along with the solving disputes and maintaining order. Not only this much, business laws also set the standards or the levels for the concerned business and it dealings with government agencies as well as private individuals.
IMPORTANCE OF BUSINESS LAWS IN THE COUNTRY
Business law is one of the most vital laws in any country around the world. Without having these laws, we cannot regulate and maintain proper balance among the businesses of various different categories. Also, business laws, as earlier stated also sets up categories or the standards which every business have to follow properly in order to run their business effectively and smoothly in India. Along with this, there are many other vital features as well which are listed hereby:
- Business laws are so relevant in the matter of compensation. It is because, the business law of any country effectively deals with all these issues of compensation as well as salary management. Also, it is said that, none of the business can violate the proper rules and regulations set for the compensation and benefits.
- Business laws plays an essential role in safeguarding the rights of Shareholders. Shareholders are one of the most vital part of any business or company and thus it is the obligation of business to save their rights and liberties in all possible condition and manner.
- Before starting the business, it is evident that, the owners and some partners of the concerned business should know or should have been aware of the laws or we can say that the rules and regulations regarding the business startups of any kind. Thus, the business law is even imperative for the new owners or those who just started.
- Last but not the least, business laws not only governs the businesses of any country, rather it plays an important role in setting up of any business in the territory, as it provides the legal processes and permits which are essential foundation or base for any company to set up.
FUNCTIONS OF BUSINESS LAWS
The primary function of the law is to ensure that all the business runs or operated properly in the territory and also there should not be any kind of malfunctioning with any of the shareholders or stakeholders of any particular business. Apart from this, it is also evident that, all the companies irrespective of their size, have to comply with the rules of business laws.
Now, along with this, there are many other functions as well, which we will observe and understand in more deeper way possible. At the very first instance we need to understand that business laws not only includes set of rules and regulations, rather it also concerned with ethics of the business, the hierarchy of the courts and any other related legislations. Now, the taxation structure of any kind of business, set of rules and regulations for antitrust are all dealt under the business laws. Along with all these, business laws are also concerned with the nature and its protection and therefore in order to protect nature from harmful chemical, pesticides and other such things, it formulate laws and circulates guidelines to all the corporations which restricts them to dispose such chemicals in the open environment. Additionally, business laws also provide bunch of rules or legislations for the formation of any corporation or company or the selling of the same.
Lastly, an important point to note here is that, business laws not only concerned with rules and regulations regarding set up or healthy competition, rather it also deals and tries to maintain the safety at the workplace for all categories of people, equal wages policy along with overtime payment and policies of any business.
In today’s era it is of utmost importance that for every single purpose, there should be bunch of rules, regulations or the legislations by the authority. It is because, today the level of corruption and other malpractices increased a lot and hence in order to control and eradicate it, we need proper laws and implementation of acts and laws. The same order applies to business laws as well. There are several millions of businesses in India ranging from small scale to large scale of different categories. Thus, in order to regulate the business, maintain the ethics of the business and ensure that no one gets discriminated in the business, business laws provides rules and regulations. Also, apart from the ethics part, it also deals with bankruptcy, and provides aid in protection of new ideas for businesses or new ideas itself. Thus, all in all we can say that, business laws are one of the most vital laws of any country and for establishing and proper working, it is very much needed that the set of rules are implemented properly.
- Indian Contract Act, 1872, No. 9, Acts of Parliament, 1872 (India)
- Sales of Goods Act, 1930, No. 3, Acts of Parliament, 1930 (India)
- Indian Partnership Act, 1932, No. 9, Acts of Parliament, 1932 (India).
- The Companies Act, 2013, No. 18, Acts of Parliament, 2013 (India)
- What is business laws and why it is Important, Blog, Johnston Thomas Law
- Purposes and Function of business laws, upcounsel.
- What is Business Law and Why is it important?, Chanchal Aggarwal, Naukri learning.
- P.C. Tulsian, Bharat Tulsian, Business Law, (Picture Book, 2017)
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