What An Mba Should Know About Law

LEGAL ENVIRONMENT OF

Introduction to Prof. Law P. GURU PRASAD

BUSINESS

M.Com., (University of Madras) P.G.Diploma in Foreign Trade Management, (SICC) L.L.B., (Acharya Nagarjuna University) M. Phil., (Annamalai University) Senior Finance, law & Accounting Faculty Center Academic Coordinator INC - GUNTUR [email protected]

What is

Law?

Law is...

Law is an instrument of social justice of the state that seeks to provide justice, stability & security in the society

Law is...

Law is...

LAW Since time immemorial every society has

its own law. Law is a social science – grows with society. Law means different things in different times – highly dynamic concept with core values Dharma (Hindu), Hukum (Islamic), Jus (Roman), Droit (French), Richt (German)

What is law? Romans: Law is the standard of what is just

and unjust.

Hindus:

Law is the command of God. Hence, the Ruler is also bound by law.

Austin: Law is the aggregate of rule set by

men as politically superior, or sovereign, to men as politically subject. In other words, law is command of the sovereign.

Kelson’s Pure Theory:

Law norms are ‘ought’ norms (Grundnorms or basic rules of recognition of the legal system) Every legal act relates to a norm which gives legal validity to it.

Roscoe

Pound: The task of law is continually more efficacious social engineering (balance between competing interests in society).

Salmond:

the body of principles recognized and applied by the state in the administration of justice.

SOURCES OF LAW Custom

Precedent Legislation Morals and equity Opinions of experts

Essentials of a Custom Antiquity Continuance Peaceable enjoyment Obligatory force Certainty Consistency Reasonableness / public policy Conformity with statute law

What is a Precedent? According to Oxford Dictionary,  Precedent is a previous instance or case

which is, or may be taken as an example of rule for subsequent cases, or by which some similar act or circumstances may be supported or justified. Precedents are the results of creative role of the judges while dealing cases. Res judicata- A matter already settled in court; cannot be raised again- is an instance of precedent. Stare-decisi- (stand by decided cases),  Ratio decidendi (law declared)

Legislation Promulgation of legal rules by an authority

which has the power to do so. (Parliament, Legislatures, President, Governor, King/Queen etc.). Also known as Supreme Legislation. Subordinate / Delegated legislation (Rule making power of executive)

What an MBA student know in Law He should develop a ‘legal sense’ to know

his rights and obligations as per relevant law.

“Ignorance of law is no excuse”.

Remember

There are many legislations affecting the

business entity today. Basic knowledge of some of the legislations, rules, notifications and clarifications under various provisions of the concerned Acts would help in carrying out the business without legal problems.

Some of Acts may be grouped under:  General Laws,  Procedural Laws  Commercial & Corporate Laws  Environmental Laws  Labor and Industrial Laws  Taxation Laws

General Laws The Constitution of India [395 Articles divided

into 22 Parts and 12 Schedules – fundamental rights, directive principles, constituting )

The Indian Penal Code, 1860 [ general penal

code contained in 511 sections divided into 23 chapters)

Family Laws /personal laws (Hindu, Muslim &

Christian – governing majority, adoption, inheritance of property, marriage, divorce, guardianship etc. in different Acts)

Procedural codes The Code of Civil Procedure, 1908 [158

sections and 51 Orders ]

The Code of Criminal Procedure, 1973 [484

sections divided into 38 chapters with 2 schedules – 1st schedule about classification of offences and 2nd schedule contains various forms used in following the procedure.]

The Indian Evidence Act, 1872 [167 sections

divided into 11 parts) deals with proving facts by evidence–oral or written or circumstantial. Facts are the basis on which the rights and liabilities are ascertained to determine the case before hand.

Commercial & Corporate Laws  The Indian Contract Act, 1872  The Indian Partnership Act 1932  The Negotiable Instruments Act,     

1881 The Companies Act, 1956 The Foreign Exchange Management Act, 1999 The Competition Act, 2002 The Securities Exchange Board of India Act, 1992 The Consumer Protection Act, 1986

Environmental Laws:  The Water (Prevention and Control of

Pollution) Act, 1973  The Air (Prevention and Control of Pollution) Act, 1981  The Environment (Protection) Act, 1986

Industrial and Labor Laws           

The Factories Act, 1948 The Industrial Disputes Act, 1947 The Trade Unions Act, 1926 The Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 The Employees’ State Insurance Act, 1948 The Industrial Employment (Standing Orders) Act, 1946 The Workmen’s Compensation Act, 1923 The Maternity Benefit Act, 1961 The Minimum Wages Act, 1948 The Payment of Bonus Act, 1965 Shops and Establishment Acts of concerned States.

Direct & Indirect Taxation Laws:  The Income Tax Act, 1961  The Customs Act, 1962  The Central Excise Act. 1944  The Central Sales Tax Act, 1956 &

concerned State General Sales Tax Acts.  Host of State Acts & Rules relating to sales, excise etc.

LEGAL ENVIRONMENT OF BUSINESS Thank You & Wish you great professional career

Prof. P. GURU PRASAD M.Com (UM), L L. B (ANU), M. Phil (A.U )., P.G.Diploma in Foreign Trade Management

Senior Finance, law & Accounting Faculty