17 Aug Business laws in India.
Business laws lay down guidelines on how business should be run. Business laws are encouraged to carry out business in the most ethical way. These rules or regulations are applicable in commerce, merchandising, trade and sales. This includes all the laws that are followed when a business is started, when they involve in transactions, when they buy or sell any business and when a firm goes into dissolution. There include separate laws for corporations, partnerships and limited liability companies. In India, the contract law was passed in the year 1872. The bill is an important aspect that comes under business law. Any sale of assets is made after a written agreement is signed by both the parties (the seller and the receiver) enforceable under law. Here are some tips about business laws that every business owner in India must know.
- Rules governing the formation of a company: Before you form your company, decide what is the type and nature of the company: whether it is sole proprietorship, corporation or family business? This has to be determined first because every kind of company would come under different federal laws and state laws. The primary rule to be kept in mind is that any business before it commences has to be registered with the Registrar of companies.
- Finance laws: If you are applying for a loan to run your business, make sure to get agreement for sanction papers, loan agreement letter, and collateral documentation, sanction letter, etc. If you intend investors to invest in your shares, make sure to have documents like the letter of intent, share subscription agreement letter, shareholders agreement, etc.
- Tax laws and accounting laws: A company should be aware of the State and Central taxes and their due date. It has to be kept in mind that the GST has been already rolled out from June 2017. It is essential to maintain books of accounts in your company as per the legal requirement of the Country.
- Security laws: Your company shares can be listed in the SME stock exchange after registering with the Securities Exchange Board of India otherwise called as SEBI. In India, the SEBI is responsible for rating the banking shares.
- Employment laws: This includes the fundamental rights of the employees, other federal regulations, rules the employees have to abide by, etc.
- Intellectual Property Rights: If any invention or discovery is unique to a particular company, the company has the right to protect it under the IPR act. The IPR is to prevent the design from getting imitated by another company or person till its expiry. Intellectual rights include patent, copyrights, trademarks, etc.
- Contract act: Before entering into any business, a formal contract is signed by two parties. The contract act comes into play when either of the two party’s failure to abide by the law.