All the laws which pertain to how what and why of how businesses are legally allowed to and supposed to function are encompassed by what is business law. Business law meaning includes contract laws, manufacturing and sales laws, and also hiring practises and ethics. In simple words, it refers and pertains to the legal laws of business and commerce in the public as well as the private sector. Note that it is also known as commercial law and corporate law, due to its nature of regulating these worlds of business.
Business law is an important aspect of law in general because, without the same, the corporate sector, manufacturing sector and retail sector would be in tyranny. The aim of putting business and law together is to maintain safe and functional working spaces for all individuals involved in the business, whether they’re running it or working for the people running it.
There are several types of business law that are recognised and followed by countries world over. Some of these include the types of business law sections that follow.
A contract is any document which creates a sort of legal obligation between the parties that sign it. Contracts refer to those employee contracts, sale of goods contracts, lease contracts, etc.
Employment law is where it is imperative for business and law to meet. These laws enforce the rules and regulations that govern employee-employer relationships. These cover when, how and for how much and how long employees should work.
Labour law also indicates the appropriate relationship between employee and employer, and also pay grades and the like. However, an additional element to labour laws is the relationship of the union with the employer and employee.
Intellectual Property Law
Intellectual property refers to the intangible products of the working of the human mind or intellect, which are under the sole ownership of a single entity, such as an individual or company. The validation of this ownership is provided by intellectual property law, which incorporates trademarks, patents, trade secrets and copyrights.
Securities refer to assets like shares in the stock market and other sources of capital growth and accumulation. Securities law prohibits businesspersons from conducting fraudulent activities from taking place in the securities market. This is the business law section which penalises securities fraud, such as insider trading. It is, thus, also called Capital Markets Law.
In terms of business law, taxation refers to taxes charged upon companies in the commercial sector. It is the obligation of all companies (except a few tax-exempted small-time companies) to pay their taxes on time, failure to follow through which will be a violation of corporate tax laws.
Let us now take a look at some of the important business laws in India. In the Indian context, there are several business law sections of major importance to the country’s commercial sector. Here are some Indian business law notes that you will find helpful.
The Indian Contract Act governs the working of contract laws in our country. Some of its requirements for contract laws are:
Absolute acceptance of the contract by both parties.
Lawful consideration from both parties.
Competent to contract:
Neither party should be a minor.
Neither party should be of unsound mind.
Free consent: neither party should have been coerced into signing.
Agency: when one party engages another party to act in place of it.
Final enforcement of contracts
The transfer of ownership of a tangible, immovable commodity between a buyer and a seller for a decided amount of money warrants a sale of goods contract, whose specifics are governed by the Sale of Goods Act of 1930.
Indian Partnership Act 1932
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A partnership in business refers to when two or more business entities come together to create a new venture together. The investment and profits are split evenly between the involved parties. The Indian Partnership Act provides the laws under which partnerships in India can function.
Limited Liability Partnership Act 2008
This Act is differentiated from the IAP of 1932. A Limited Liability Partnership is a separate legal entity, which continues with its business as is, even if a partnership dissolves, only suffering the liability as mentioned in the contract.
This is the ultimate business law, which oversees and provides the rules pertaining to each aspect of creation as well as dissolution of companies established in India.
Q1. What is the Important Business Law Notes that I Need to Understand Business Laws in India?
Ans: To understand business laws in India, the business law notes you need are regarding the history of business law in India. This begins in colonial India, with the Indian Contract Act of 1872 which is used even today in governance pertaining to the commercial sector. Other important Acts that have come up over the years are the Sale of Goods Act of 1930, Indian Partnership Act of 1932, Limited Liability Partnership (LLP) Act of 2008 (differentiated from the 1932 Partnership Act), and the Companies Act of 2013.
Q2. What are the Types of Business Law and What are Their Functions?
Ans: There are several types of business law that have come up over the years in the journey of capitalism through the years. Contract law creates a legal obligation; employment and labour laws safeguard the rights of workers; intellectual property laws safeguard the brain-child of companies and individuals; securities laws police the capital market and safeguard it from fraudulent practises; and tax laws ensure that all of a company’ dues to the government are paid on time. All these legal laws of business connect the two (business and law) to ensure the highest efficiency of work in the commercial sector.