Legal Environment of Business in India
Legal Environment of Business in India primarily covers the legal policy, framework and law in which business has to operate. The primary objective of the business is to produce and sell the products/services for profit for the needs/wants of the consumers. These products and services are offered in the marketplace where consumers and buyers can purchase the products/services they are looking for. The entrepreneurs wanted to operate in an environment which is business friendly and consumer friendly. It has to be business friendly so that any entrepreneur who is bringing together the resources for the purpose of producing goods and services. To govern a business transaction there are certain laws which are setup by the Government by which a transaction can be termed as legal and to safeguard the interest of both producer and buyer.
Basic Business Laws
Some basic laws which are also known as mercantile laws help in laying down the rules for basic business transactions:
- Indian Contract Act, 1872
- Sale of Goods Act, 1930
- Indian Partnership Act, 1932
- Negotiable Instruments Act, 1881
- Arbitration Act, 1940
There are laws for Environment protection. These laws are important to save the environment from exploitation where entrepreneurs uses the resources available to such an extent that they cannot be replenished or lost permanently. There are also health hazards and impact to biodiversity if the industry is causing pollution to the environment. Some of these laws are:
- Water (Prevention and Control of Pollution) Act, 1974
- Air (Prevention and Control of Pollution) Act, 1981
- Hazardous Wastes (Management and Handling) Rules, 1989
Companies are formed for the purpose of execution of business. The rules and regulations to govern, formation, registration, share capital, board of directors, their powers, accounting and auditing, mergers and acquisitions, winding of companies are all laid down in the corporate laws for the purpose of running a business. These laws help in running a legal business entity and governs all the aspects a company has to go through from safeguarding the interests of the stakeholders to punishment and penalties for not following the law.
- Companies Act, 2013
- Industrial (Development and Regulation) Act, 1951
- Monopolies and Restrictive Trade Practices (MRTP) Act, 1969
- Competition Act, 2002
- Consumer Protection Act, 1986
Other than these, there are various acts which help the society to run the business within the framework to help the society and business economic development. For example, Intellectual Property Rights, Foreign Exchange Management, SEBI, Employees Protection and Funds, Information Technology Act, Income Tax Act etc.
UGC NET Exam do require some basic knowledge about these laws of India as it constitutes the Legal Environment of business environment.
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