written by | September 26, 2022

What Is Business Law & The Types of Business Law

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Table of Content


We are bound by a vast number of rules and regulations in our society that we must follow. Laws give a foundation as to how we conduct our daily lives, from wearing our seatbelts in the automobile to tax payments to even consuming alcohol at the legal age. 

Corporations are bound by the law in the same way that we are. Laws control and have an impact on how a company is created, run, and even terminates. Even though they both must abide by the law, individuals and businesses differ from one another. 

Did you know?

Bhaba Committee set up in 1950 recommended the Companies Act 1956, which consolidated existing corporate laws and established a new structure for corporate operation in independent India.  

What Is Business Law? 

Business law refers to the principles and set of regulations that control business operations. Business law primarily controls two distinct areas. These divisions cover a business's actual existence and structure as well as its operations and interactions.

  • The control of business enterprises 
  • The control of business activity 

Regulation of commercial enterprises establishes rules and regulations that apply to the firm itself. Therefore, a company must abide by and comply with certain regulations as an independent organisation. Commercial operations are acts carried out by a business and are governed. Businesses are required to abide by a set of regulations that forbid and restrict particular behaviours. 

Types of Business Law 

Formation Law 

The regulations that a corporation must abide by in order to be established and acknowledged as a legal entity are known as formation laws. A company cannot legally perform operations unless it has received the required legal recognition from the law. 

The correct paperwork must be filled out and the necessary criteria must be met in order to assure a legitimate company categorization. This is true from many aspects of formation and incorporation legislation. Businesses must agree on a categorization and how they will conduct themselves. 

This is among the most crucial legal steps that a company may take. Mainly due to the fact that it has an impact on all facets of an organisation. The sort of business that is established will have an impact on the taxes that needs to be paid, the management style, the rules that must be adhered to at the national and state levels, and much more. 

Also Read: How to Start a Successful Business in India?

Employment Law 

The rights and obligations of employers and workers are covered under employment law. Discussed issues in the area of employment law encompass sexual harassment, inappropriate workplace behaviour, wages, workplace health and safety, and unjust discrimination. 

There are some privileges and obligations that must be upheld for both recruiters and employees of a company. Employment law both establishes the rules governing these laws and deals with circumstances and organisations that fail to adhere to the established employment regulations. 

Intellectual Property Law 

Numerous new, original, and innovative ideas are always emerging in our expanding digital world. Companies want to be confident that their concept is not stolen or conceived of by another individual due to the vast number of innovative solutions that are always appearing. 

Inventions, intellectual and creative works, designs, trademarks, names, and logos utilised in business are all considered to be intellectual property. Intellectual property law enables enterprises to safeguard their creative abilities. There are several divisions of intellectual property law, including copyrights and trademarks. 

Taxes  

Despite the fact that there are many different, distinctive businesses, paying taxes unites them all.

Taxes are monetary fees that the central and state governments levy and manage. Businesses will be required to pay its fair share of taxes or face severe repercussions since taxes are not optional. These repercussions may include hefty fines or lengthy prison terms. 

Contract Law and Negotiations 

Contract law includes the formulation, execution, and management of agreements between firms. Agreements among companies and groups are made easier by business contract law. 

It is crucial to choose someone who can manage the work of fulfilling the requirements and objectives of all stakeholders and assisting them in reaching an agreement because many firms and enterprises participate in numerous contracts and negotiations. 

Many well-known and prosperous companies employ what is referred to as "in house counsel." A team of attorneys that focus solely on representing a corporation itself is known as in house counsel. Companies with in-house counsel simply resort to their internal legal departments when creating contracts and managing negotiations rather than hiring attorneys from outside companies.

Also Read: Small Scale Business Ideas with Low Investment

Antitrust Laws 

Antitrust laws are regulations that support preserving healthy commercial competition. Antitrust laws are intended to level the playing field for all participants, or enterprises, in a given industry. These regulations were put in place to assist fight enterprises that abuse their dominance and treat others inappropriately. 

Things that antitrust laws prohibit include: 

Market allocation: When two companies decide to remain in their current locations and refrain from expanding to compete with one another. Instead, they devise plans to restrict access to their goods and services to consumers inside a certain geographic area. 

Price fixing: In most cases, the market determines how much a thing will cost. When companies set a commodity or service's price rather than consumers, this is known as price fixing. Therefore; for example, the price of a burger in a typical fast-food restaurant will be determined by what customers are willing to spend. This motivates businesses to work hard to develop a product they can offer at a price consumer are willing to pay.

Monopolies: A corporation that completely eliminates or significantly reduces competition in a particular industry is considered a monopoly. 

Lawsuits 

The domain of lawsuits is among the most destructive and chaotic areas of company law. A lawsuit is a complaint or disagreement that is made before a judge in court against the other individual or party. Both individuals and corporations can file lawsuits or be sued in court. 

Businesses are frequently the target of legal action brought by a dissatisfied client.

Litigation settlements outside of courtroom are the most typical method that cases are addressed. To bypass the drawn-out and expensive legal procedure, a corporation will reach a settlement with the entity who is suing them. Or a company may assert its innocence by going to court and having the judge make the judgement. 

Also Read: How to get a DMart franchise? Here is your Complete guide

Bankruptcy Laws 

No one likes to do it, yet some businesses will eventually have to declare bankruptcy. A firm that files for bankruptcy has a number of choices available to it, each having advantages and disadvantages. Making the right decision to assist the struggling firm is a necessary step in the legal process of declaring bankruptcy. A business that wants to file for bankruptcy must appear in court to report and reorganise its obligations. 

Conclusion

Business law includes all the laws that address the how, what, or why of how firms are permitted to operate lawfully and are expected to do so. Contract law, manufacturing and sales legislation, recruiting procedures, and ethical standards are all included in the definition of business law. It speaks of and relates to the legal regulations that govern business and trade in both the public and private sectors. Due to the way it governs various business sectors, it is also referred to as corporation law and commercial law.
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FAQs

Q: Is business law commercial law?

Ans:

The selling and distribution of products, as well as the funding of specific transactions, are the main topics of commercial law. Business law emphasizes on the additional facets of business, such as incorporation, acquisitions and mergers shareholder rights, and real estate obligations like renting out warehouses or private offices.

Q: What is the difference between corporate law and business law?

Ans:

While Corporate Law focuses on the activities, operations, and legitimacy of a company, business law is concerned with the underlying laws necessary for an organization's establishment. In simpler words, corporate attorneys prepare the contracts, which are then reviewed by business lawyers.

Q: Is business law a good career?

Ans:

This area of law has good reputation and recognition. The candidate must be diligent, competitive, and knowledgeable in business law as well as allied fields like financial law, compliance, due diligence, human rights, environmental legislation, investment law, insurance law, intellectual property law, constitution, and foreign trade law.

Q: What are purposes of business law?

Ans:

Company law primarily aims to uphold stability, create a set of commonly recognised norms, settle disputes, and defend rights and freedoms when it involves business and its interactions with clients, regulators, and other enterprises. 

Q: Why do we study business law?

Ans:

Business managers who are knowledgeable about business laws can address a range of legal challenges and, once they grasp the core of the situation, make superior judgement judgments. They don't need continual assistance from the legal team to manage daily decision-making tasks.

Q: What do you mean by business law?

Ans:

The body of legislation that governs the rights, relationships, and behaviour of people and corporations participating in commerce, marketing, trading, and sales is known as business law, sometimes referred to as commercial law or corporate law. 

Q: What is the business law in India?

Ans:

All commercial interactions and employee behaviour related to such enterprises are governed by business law. While there are still certain pre-independence-era business laws in use in India, more business laws are constantly being established.

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Disclaimer :
The information, product and services provided on this website are provided on an “as is” and “as available” basis without any warranty or representation, express or implied. Khatabook Blogs are meant purely for educational discussion of financial products and services. Khatabook does not make a guarantee that the service will meet your requirements, or that it will be uninterrupted, timely and secure, and that errors, if any, will be corrected. The material and information contained herein is for general information purposes only. Consult a professional before relying on the information to make any legal, financial or business decisions. Use this information strictly at your own risk. Khatabook will not be liable for any false, inaccurate or incomplete information present on the website. Although every effort is made to ensure that the information contained in this website is updated, relevant and accurate, Khatabook makes no guarantees about the completeness, reliability, accuracy, suitability or availability with respect to the website or the information, product, services or related graphics contained on the website for any purpose. Khatabook will not be liable for the website being temporarily unavailable, due to any technical issues or otherwise, beyond its control and for any loss or damage suffered as a result of the use of or access to, or inability to use or access to this website whatsoever.