Commercial Law
Commercial laws are also referred to as business laws. Commercial law governs the commercial activities in any business including trade, sales, merchandising etc. Commercial law is a wider branch of law and includes in itself the issues of trade and commerce, sale and purchase, consumer transactions, investment issues, acquisition and mergers, collaboration, licensing, import – export issues, and many other related areas. It is a wide branch of law which encompasses in it all the transactions involved with regard to operating a business.
Commercial law governs the commercial activities in any business including trade, sales, merchandising etc. Activities like:
Norms and rules with regard to starting a business, Incorporation of a Company or any other form of business enterprise, Regulatory Compliance of the business enterprise, Creation of subsidiaries, Mergers and Acquisitions, Collaborations, Investments, Trade, Import and Export, Manufacture and Sale, Distribution, Licensing and franchising, Taxation, Legal Audits, Regulatory compliance falls within the scope and ambit of commercial laws.
Commercial law thus governs all the aspects with regard to a business, from starting a business enterprise, to the investment decisions, to the issues related to imports and exports. To summaries commercial law is the law governing all the commercial transactions involved in a business.
Business entities are the ones most affected by the commercial laws. Commercial law covers wide range of issues which include contract law, company law, securities laws and capital markets, exchange control laws. The business entities come across various issues related to commercial law in their day to day operations. Transactions like mergers and acquisitions, joint ventures also fall in the ambit of commercial laws. Regulatory compliance is also a necessity to ensure that the business entity functions in a smooth manner without any legal hurdles. All the business activities are governed by one law or the other and these all laws collectively are referred to as commercial laws.
The major enactments in the field of commercial law are:
Indian Contract Act 1872
The Act governs the law of contracts in India and specifies the conditions and prerequisites which make a contract valid and further specifies as to what contracts can be termed as void or voidable.
Indian Companies Act 1956
The Act prescribes the law with regard to Companies in India, its incorporation, mode of function, the shareholder requirement etc all are specified in the Act.
The Securities Contracts (Regulation) Act, 1956
The Act keeps a tight vigil over all the Stock Exchanges of India since 20th February, 1957.
The Securities & Exchange Board of India Act, 1992 The Securities Contracts (Regulation) Act, 1956 (hereinafter referred to as the "Act"), containing a mere 31 sections, keeps a tight vigil over all the Stock Exchanges of India since 20th February, 1957.
Foreign Exchange Management Act, 1999
FEMA defines capital account and current account transactions, while power is delegated on Reserve Bank of India to regulate capital account transactions. The basic Objectives of FEMA being:
Facilitate external trade and payments
Promote orderly maintenance of the foreign exchange market in India.
Relax controls on joint ventures, collaborations, subsidiary establishments and the like both in India by foreigners and abroad by Indians.
The Foreign Trade (Development and Regulation) Act, 1992
An Act provides for the development and regulation of foreign trade by facilitating imports into, and augmenting exports from India and for matters connected therewith or incidental thereto.
Arbitration and Conciliation Act, 1996
The Act lays down the law relating to domestic arbitration, international commercial arbitration and enforcement of foreign arbitral awards as also to define the law relating to conciliation and for matters connected therewith or incidental thereto.
Income Tax Act , 1961
The Act is the principal legislation with regard to Tax in the country and it lays down the procedure for collecting tax and the circumstances in which one has to pay taxes.
Competition Act ,2002
The Act lays down the restrictive practices which a business entity must not engage itself in and the procedure in which the same can be checked.
