DEPARTMENT OF MANAGEMENT STUDIES

LEGAL ASPECTS OF BUSINESS

Syllabus
Period 1
Introduction to Business Law
Meaning of Business Law, Origin of Business Law, Importance and functions of business law
Period 2
Types of Business Law
Law of Contract, Employment law, labour law, law of intellectual property, securities act, tax
law
Period 3
Significant Business Laws in India I
Indian contract act, 1872, sale of goods act 1930,
Period 4
Significant Business Laws in India II
Indian partnership act 1932, limited liability partnership act 2008
Period 5
Significant Business Laws in India III
competition act 2002, Industrial law,
Period 6
Significant Business Laws in India IV
companies act 2013, negotiable instruments act 1881
Period 7
Significant Business Laws in India V
Consumer protection act 1986, RTI act 2005
Period 8
GST
Meaning – types of GST (CGST, SGST, IGST)
Period 9
Salient features of GST
one nation one tax, dual structure, destination-based tax, ITC, threshold exemption,
composition scheme, online compliance, anti-profiteering measures, increase compliance and
transparency, sector-specific exemptions
Period 10
New GST law
who does it apply for- New GST Framework law.

Period Topic Hours (10 Teaching

Hrs) Methodology
1 Introduction to Business Law: Meaning of 1 PPT+BB
Business Law, Origin of Business Law,
Importance and functions of business law

2 Types of Business Law: Law of Contract, 1 PPT+BB

Employment law, labour law, law of
intellectual property, securities act, tax law

3 Significant Business Laws in India I: Indian 1 PPT+BB

contract act, 1872, sale of goods act 1930,

4 Significant Business Laws in India II: Indian 1 PPT+BB

partnership act 1932, limited liability
partnership act 2008
5 Significant Business Laws in India III: 1 PPT+BB
competition act 2002, Industrial law,
6 Significant Business Laws in India IV: 1 PPT+BB
companies act 2013, negotiable instruments act
1881

7 Significant Business Laws in India V: 1 PPT+BB

Consumer protection act 1986, RTI act 2005

8 GST: Meaning – types of GST (CGST, SGST, 1 PPT+BB

IGST)

9 Salient features of GST: one nation one tax, 1 PPT+BB

dual structure, destination-based tax, ITC,
threshold exemption, composition scheme,
online compliance, anti-profiteering measures,
increase compliance and transparency, sector-
specific exemptions
 10 New GST law: who does it apply for- New 1 PPT+BB
GST Framework law.

Period 1
Introduction to Business Law
1.1Business Law – Meaning:
Business law is a body of rules, regulations, and principles that governs the activities of a
business. It includes concepts such as an organization's fiduciary duty to shareholders, the
legal ways in which directors can be held accountable for their actions, and what constitutes a
breach of a contract.
Business law provides the framework through which businesses are run. The scope of
business law can be found in international treaties and domestic regulations. The United
States is one of the few countries that does not have any domestic regulation governing
business law.

1.2 Origin Of Business Law

Indian Business law is formed based on the English Mercantile Law
Sources of Mercantile Law
 Law Merchant: Law merchant is the main source of Mercantile law. It refers to those
customs and rules that apply to traders and businessmen on their dealings and tradings
with each other.
 Statute Law: Statute law is that law that has been created by the legislation. A statute
is a formal act of the legislature in written form. It has also become an important
source of Mercantile law.
 The Principle of Equity: The principle of equity refers to a set of rules, which neither
originated from customs nor statutory law. Thus, equity rules were formed on the
basis of dictates of conscience which had been decided in the courts of chancery.
 Common Law: Common law consists of a body of rules, which have been defined by
customs, judicial decisions and old scholarly works in the law. It is the unwritten law
of English which applies to everyone in the country. Common law, in this case, refers
to the principles of law that have been evolved by judges through their case
judgments.

1.3Importance of Business Law

Business law plays a vital role in regulating business practices in a country. Here are some
points that prove why business law is so relevant:
• Compensation Issues – Business law is essential to handle various compensation issues in
an organization. A professional business attorney in Santa Rosa can help companies in
settling issues related to compensation and salary management. It is the responsibility of the
attorney to ensure that his or her client does not violate compensation and benefits laws at
any cost. The consequences can be fatal in case of any discrepancies.
• Safeguard the Rights of Shareholders – Business law plays a vital role when it comes to
safeguarding the rights of a company’s shareholders. An experienced business law attorney
can successfully handle such issues along with conflicts related to minority shareholders,
constitutional documents, and resolution by arbitration, and more.
• Business Formation – Business law plays the role of a foundation stone for any business
concern. Establishing business includes a lot of legal processes, leasing, and permits. A
business law attorney is well-versed with all the relevant regulations, and can help the
concern establish its operations successfully
Importance of Business Law
Business law plays a vital role in regulating business practices in a country. Here are
some points that prove why business law is so relevant:
• Compensation Issues – Business law is essential to handle various
compensation issues in an organization. A professional business attorney
in Santa Rosa can help companies in settling issues related to
compensation and salary management. It is the responsibility of the
attorney to ensure that his or her client does not violate compensation
and benefits laws at any cost. The consequences can be fatal in case of
any discrepancies.
• Safeguard the Rights of Shareholders – Business law plays a vital role
when it comes to safeguarding the rights of a company’s shareholders. An
experienced business law attorney can successfully handle such issues
along with conflicts related to minority shareholders, constitutional
documents, and resolution by arbitration, and more.
• Business Formation – Business law plays the role of a foundation stone
for any business concern. Establishing business includes a lot of legal
processes, leasing, and permits. A business law attorney is well-versed
with all the relevant regulations, and can help the concern establish its
operations successfully
Every business concern, either large-scale or small-scale, is bound to comply with
their respective legal regulations. Here are some significant functions of business
law that can help you in understanding it better.
• Includes laws related to business ethics, substantive law, procedural law,
court system structure, and so on.
• Business law entails the taxation system for different types of businesses.
• The level of competition and antitrust are also involved.
• Business law also includes regulations about employee rights and
privileges, workplace safety, overtime rules, and minimum wages law.
• It strives to alleviate the impact businesses have on the environment and
nature. It aims to regulate pesticides, limit air and water pollution,
chemical usage, and so on.
• Business law determines the formal process of establishment of a
business organization and regulations related to the selling of corporate
entities.
• It also includes rights assignment, drafting, and work delegations, breach
of contract, transactions, contracts, and penalties for violation of the
agreement.
• Business law defines laws related to business partnerships, entities, sole
proprietorships, liability companies, and corporations.
• It describes laws related to business and real property.
• Business law analyses the overall impact of computer technology on
other business domains.
• Includes laws related to bankruptcy and governance of the securitie
1.4 Functions of Business Law:
Every business concern, either large-scale or small-scale, is bound to comply with their
respective legal regulations. Here are some significant functions of business law that can help
you in understanding it better.
• Includes laws related to business ethics, substantive law, procedural law, court system
structure, and so on.
• Business law entails the taxation system for different types of businesses.
• The level of competition and antitrust are also involved.
• Business law also includes regulations about employee rights and privileges, workplace
safety, overtime rules, and minimum wages law.
• It strives to alleviate the impact businesses have on the environment and nature. It aims to
regulate pesticides, limit air and water pollution, chemical usage, and so on.
• Business law determines the formal process of establishment of a business organization and
regulations related to the selling of corporate entities.
• It also includes rights assignment, drafting, and work delegations, breach of contract,
transactions, contracts, and penalties for violation of the agreement.
• Business law defines laws related to business partnerships, entities, sole proprietorships,
liability companies, and corporations.
• It describes laws related to business and real property.
• Business law analyses the overall impact of computer technology on other business
domains.
• Includes laws related to bankruptcy and governance of the securities

Period 2
Types of Business Laws
Countries throughout the world recognize and adhere to different forms of business law. The
kinds of business law sections that follow are some of these.
2.1 Law of Contracts
Any written agreement that imposes some type of legal responsibility on the parties to it is
referred to as a contract. Contracts include agreements for the hiring of employees, the selling
of commodities, leases, etc.

2.2 Employment Law

The crucial intersection between business and law is employment law. These laws uphold the
policies that control interactions between employees and employers. These address when,
how, how much, and how long workers should be on the job. This is also a type of Business
Law.

2.3 Labour Law

The proper connection between an employee and an employer, as well as pay scales and other
things, are also specified by labor law. However, the union’s relationship with the employer
and employee adds another component to labor regulations.

2.4 Law of Intellectual Property

The intangible results of the operation of the human mind or intellect that are the sole
property of a single entity, such as an individual or business, are referred to as intellectual
property. Intellectual property law, which includes trademarks, patents, trade secrets, and
copyrights, justifies this ownership.

2.5 Securities Act

Securities are assets such as stock market shares and other sources of capital accumulation
and growth. Businesspeople are not allowed to engage in fraudulent activity in the securities
market, according to securities legislation. Insider trading and other types of securities fraud
are punishable under this provision of company law. As a result, it is also known as Capital
Markets Law.

2.6 Tax Law

Taxation in the context of business law refers to levies made against businesses. All
businesses, with the exception of a tiny number of tax-exempt small businesses, are required
to pay their taxes on time; failure to do so is a breach of the corporation tax rules.

Period 3
Significant Business Laws in India I
Now let’s examine a few of India’s significant business laws. There are a number of business
law provisions in the Indian context that are crucial to the nation’s economic sector. Here are
some notes on Indian business law you might find useful.

3.1 Indian Contract Act, 1872

The application of contract law in our nation is governed by the Indian Contract Act, which is
also a type of Business Law. Its criteria for contract legislation include things like:

 Total agreement between the parties on the terms of the contract.

 Legal compensation is provided by both parties.
 In order for a contract to be valid, both parties must be of legal age.
 Neither party shall be intoxicated.
 Uncompelled consent: Neither party ought to have been forced to sign.
 Agency: When one party hires a different party to act on its behalf.
 Final contract enforcement
3.2 Sale of Goods Act, 1930
A sale of goods contract is necessary for the exchange of ownership of a physical, immovable
product between a buyer and a seller for a predetermined sum of money. The Sale of Goods
Act of 1930 governs the contract’s terms and is important business law.

Period 4
Significant Business Laws in India II
4.1 Indian Partnership Act, 1932
When two or more company entities collaborate to launch a new project, this is referred to as
a partnership in the business world. The parties involved divided the investment and earnings
equally. This Business Law governing how partnerships can operate in India is laid forth in
the Indian Partnership Act.

4.2 Limited Liability Partnership Act, 2008

The Indian Partnership Act of 1932 is distinguished from this Act. Even if a partnership
dissolves, a Limited Obligation Partnership remains in operation and solely bears the liability
specified in the contract. It is a distinct legal entity. It is also a type of Business Law.

Period 5
Significant Business Laws in India III
5.1 Competition Act of 2002
The Competition Act of 2002 is a law in India that regulates competition in the market. Its
purpose is to promote competition, protect consumers, and ensure freedom of trade. The act
prohibits anti-competitive practices, such as anti-competitive agreements and abuse of
dominant position. The Competition Commission of India (CCI) is empowered to regulate
combinations and provide remedies.
5.2 Industrial law
Industrial law, also known as labor law, is a set of laws that regulate the relationship between
employees and employers and the conditions under which employees work. It covers a wide
range of issues, including:
 Employment
 Employee-employer relationships
 Wages and salaries
 Working conditions
 Occupational health and safety regulations
 Labor-management relations
 Social security and disability insurance

Period 6
Significant Business Laws in India IV
6.1 Companies Act, 2013
Companies Act is one type of Business Law. This is the supreme business legislation, which
regulates and establishes the guidelines for all phases of the formation and dissolution of
Indian corporations.
6.2 Negotiable Instruments Act of 1881
The Negotiable Instruments Act of 1881 is a law that defines and amends the law related to
negotiable instruments, such as promissory notes, bills of exchange, and cheques. The act's
objectives include:
 Establishing legitimate provisions for the negotiable instruments system
 Defining an authority to decide issues related to negotiable instruments
 Providing penal provisions to ensure the effective implementation of the negotiable
instruments process
The act provides rights, liabilities, and protections to the following parties:
issuers/drawers, payees, endorsees, drawees, collecting banks, and paying/drawee banks.
The act was amended in 1988 to include cheque defaulters. A person who issues a cheque
without sufficient balance in their account is considered a defaulter, and the act of "cheque
bounce" is a criminal offense

Period 7
Significant Business Laws in India V
7.1 Consumer Protection Act of 1986
The Consumer Protection Act of 1986 is a law that protects consumers in India by
establishing consumer councils and other authorities to settle disputes. The act was enacted to
provide a quicker and simpler way to address consumer grievances.

7.2 Right to Information (RTI) Act of 2005

The Right to Information (RTI) Act of 2005 is a law that gives Indian citizens the right to
access information held by public authorities. The RTI Act's objectives include:
 Promoting transparency and accountability: The RTI Act aims to make the
government more accountable to the people by making information available to
citizens.
 Containing corruption: The RTI Act is intended to help eliminate corruption.
 Making democracy work for the people: The RTI Act is intended to ensure that the
benefits of growth are shared by all sections of society.
The RTI Act applies to the whole of India, except Jammu & Kashmir. It gives citizens the
right to:
 Access information held by public authorities
 Inspect work, documents, and records
 Obtain certified samples of materials
 Obtain information stored in electronic form
If you are denied access to information, you can file a complaint with the State Information
Commission (SIC)

Period 8
GST
8.1 GST (Goods Services Tax)
Meaning:
GST is a unified tax system that replaced multiple indirect taxes levied by both the Central
and State Governments. Under GST, both the Central and State Governments share the
authority to levy and collect taxes on goods and services. This has led to greater
harmonization and uniformity in the tax structure across States, promoting economic
integration.
8.2 Types of GST:
The GST system follows a dual structure, comprising Central GST (CGST) and State GST
(SGST), levied concurrently by the Central and State governments, respectively.
Additionally, an Integrated GST (IGST) is levied on interstate supplies and imports, which is
collected by the Central Government but apportioned to the destination state.

Period 9
9.1 Salient Features of GST
Goods and Services Tax (GST) is a comprehensive indirect tax levied on the supply of goods
and services in India. Here are some of the salient features of GST:
a. One Nation, One Tax: GST replaced multiple indirect taxes levied by the Central and
State Governments, such as excise duty, service tax, value-added tax (VAT), and
others. It brought uniformity in the tax structure across India, eliminating the
cascading effect of taxes.
b. Dual Structure: GST operates under a dual structure, comprising the Central GST
(CGST) levied by the Central Government and the State GST (SGST) levied by the
State Governments. In the case of Inter-state transactions, Integrated GST (IGST) is
applicable, which is collected by the Central Government and apportioned to the
respective State. Import of goods or services would be treated as inter-state supplies
and would be subject to IGST in addition to the applicable customs duties.
c. Destination-based Tax: GST is a destination-based tax, levied at each stage of the
supply chain, from the manufacturer to the consumer. It is applied to the value
addition at each stage, allowing for the seamless flow of credits and reducing the tax
burden on the end consumer.
d. Input Tax Credit (ITC): GST allows for the utilization of input tax credit, wherein
businesses can claim credit for the tax paid on inputs used in the production or
provision of goods and services. This helps avoid double taxation and reduces the
overall tax liability.
e. GST would apply on all goods and services except Alcohol for human consumption.
GST on five specified petroleum products (Crude, Petrol, Diesel, ATF & Natural Gas)
would by applicable from a date to be recommended by the GSTC. Tobacco and
tobacco products would be subject to GST. In addition, the Centre would have the
power to levy Central Excise duty on these products. Exports are zero-rated supplies.
Thus, goods or services that are exported would not suffer input taxes or taxes on
finished products.
 f. Threshold Exemption: Small businesses with a turnover below a specified threshold
(currently, the threshold is ₹ 20 lakhs for supplier of services/both goods & services
and ₹ 40 lakhs for supplier of goods (Intra–Sate) in India) are exempt from GST. For
some special category states, the threshold varies between ₹ 10-20 lakhs for suppliers
of goods and/or services except for Jammu & Kashmir, Himachal Pradesh and Assam
where the threshold is ₹ 20 lakhs for supplier of services/both goods & services and ₹
40 lakhs for supplier of goods (Intra–Sate). This threshold helps in reducing the
compliance burden on small-scale businesses.
g. Composition Scheme: The composition scheme is available for small taxpayers with
a turnover below a prescribed limit (currently ₹ 1.5 crores and ₹ 75 lakhs for special
category state). Under this scheme, businesses are required to pay a fixed percentage
of their turnover as GST and have simplified compliance requirements.
h. Online Compliance: GST introduced an online portal, the Goods and Services Tax
Network (GSTN), for registration, filing of returns, payment of taxes, and other
compliance-related activities. It streamlined the process and made it easier for
taxpayers to fulfill their obligations.
i. Anti-Profiteering Measures: To ensure that the benefits of GST are passed on to the
consumers, the government established the National Anti-Profiteering Authority
(NAA). The NAA monitored and ensured that businesses do not engage in unfair
pricing practices and profiteering due to the implementation of GST. All GST anti-
profiteering complaints are now dealt by the Competition Commission of India (CCI)
from 1st December, 2022.
j. Increased Compliance and Transparency: GST aims to enhance tax compliance by
bringing more businesses into the formal economy. The transparent nature of the tax
system, with the digitization of processes and electronic records, helps in curbing tax
evasion and increasing transparency.
k. Sector-specific Exemptions: Certain sectors, such as healthcare, education, and basic
necessities like food grains, are given either exempted from GST or have reduced tax
rates to ensure affordability and accessibility.
l. Accounts would be settled periodically between the Centre and the States to ensure
that the credit of SGST used for payment of IGST is transferred by the Exporting
State to the Centre. Similarly, IGST used for payment of SGST would be transferred
by the Centre to the Importing State. Further, the SGST portion of IGST collected on
B2C supplies would also be transferred by the Centre to the destination State. The
transfer of funds would be carried out on the basis of information contained in the
returns filed by the taxpayers.

Period 10
New GST law
10.1 Who does it apply to?
  To every person who supplies goods and/or services of value exceeding Rs 20 lakh in
a financial year. (Limit is Rs 10 lakh for some special category states). Compulsory
registration for these. And GST must be paid when turnover exceeds Rs 20 lakh (Rs
10 lakh for some special category states).
 To any person making inter-state taxable supply of goods and/or services
 Every e-commerce operator
 Every person who supplies goods and/or services, other than branded services,
through e-commerce operator
 Aggregators who supply services under their own brand name
 Casual Taxable Person
 Non-Resident Taxable Person
 Person required to deduct/collect tax (TDS/TCS)
 Input Service Distributor
 Person supplying online information and database access or retrieval services from a
place outside India to a person in india, other than a registered taxable person.
 Person required to pay tax under Reverse Charge
 Person supplying the goods on behalf of other taxable person (eg. Agent)
 GST does NOT apply to Agriculturists
 GST does not apply to any person engaged exclusively in the business of supplying
goods and/or services that are not liable to tax or are wholly exempt from tax under
this Act
10.2 What is the GST framework as per the new law?
GST is expected to replace a myriad of indirect taxes such as VAT, customs duty, Excise,
CST, Service Tax, Entertainment Tax with a single tax called the Goods and Services Tax.
 Broadly there will be 2 forms of GST in India.
 At the intra-state level (when goods travel within a state) and at the inter-state
level (when goods travel between states).
 At the intra-state level two types of GST shall be levied CGST (Central Goods and
Services Tax) and SGST (State Goods and Services Tax).
 At the inter-state level IGST (Or Integrated Goods and Services Tax) shall be levied.
 Imports shall be considered as inter-state supply.
 Exports shall be zero rated.
 Supplies to SEZ will be Zero-rated