Business is any activity that you undertake for commercial gain. By commercial gain we mean the profit accruing to a person due to sale of goods and services. Any profit accruing to you because of your offering goods or services in exchange for cash or kind is called commercial gain. So, when you engage yourself in a pursuit that has some consideration attached to it, the act of such engagement is called business.
The transactions that can be termed as business and the dealings between people carrying out such transactions are regulated in every country by a set of rules and regulations. Such rules and regulations in a country are binding upon the citizens of that country and the businesses taking place in that country. These rules and regulations are called business laws of that country. So any law that concerns remotely with undertaking of business is called business law. Undertaking of business can relate to various aspects that pertain to the life cycle of the business – beginning its formation to its growth and survival to its death or closure. At every stage in its life cycle a business is associated with Human resources, Finance, Marketing and Technology.
Thus the laws governing HR, Finance, Marketing and technological aspects of a business during its life cycle come under the purview of Business Laws and the branch that deals with their study is called Business Law/mercantile law/commercial law.
The legal framework across the countries can be grouped under Common Law or Civil Law and Criminal Law. Business Laws come within the purview of Common Law or Civil Law depending upon which country we are talking about. While talking in context of Commonwealth countries, we would always group Business laws under Common Law whereas other countries it would be grouped under Civil law. However, certain laws with one name or the other are common to the various countries –
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- Laws governing legality and illegality of Businesses – These include laws for licensing and registration.
- Laws governing Corporations, their functioning, bankruptcy and closure – Companies Act is one such Act that is common to all the countries. However, the nature of the Act may vary.
- Intellectual Property Rights, i.e., laws relating to trademarks, copyrights, patenting, technology transfer, etc
- Laws relating to privacy/protection of data – Laws relating to information Technology aspect of business come under this head.
- Laws relating to employment that regulate the work environment of a country
- Laws relating to Corporate Finance e.g laws for foreign exchange regulation
From the above discussion it is crystal clear that business law is the body of knowledge dealing with rights and obligations of the people and corporations entering into business transactions and varies from one country to other.
Business law is a global phenomenon in the sense that how so ever small or big the country may be, it has a commercial law or business law in place. Its mandatory existence may be attributed to the fact that in the absence of a specific law governing businesses, the corporate scenario will become chaotic with each & every company, going by its legal framework, will carry out business in its own way. There would be no uniformity and in such situation mutual coordination among business houses will deteriorate. Government would not be able to establish amicable relations and carry out business internationally.