Businesses operate in various markets and the markets are governed by Rules and Regulations. Without rules, even the game of cricket & football cannot be played amicably. Every activity of human is governed by rules and regulations and every country has their own laws. As a good citizen, a businessman should see that he is not violating any laws of the land.
Every business deal involves offer and acceptance and they in turn become contracts. Both the parties should and must perform their part of obligations in the contract. If any party fails to perform his part of obligation then the law provides provision to the aggrieved party to take legal action. What action should be taken, what is valid action, what kind of damages can be claimed, etc., all these are dealt in the first unit of this subject. The other units dwell on very important business laws.
A student should not only read the business laws, but also keep an eye on the latest development in legal business areas. The following were some legal issues of businesses few years ago .
- Apple filed suit against Samsung
- Supreme Court of India has awarded the highest compensation to a NRI doctor in a landmark medical negligence case,
- Few years back TVS motors filed case against Bajaj Auto for using DTS technology, etc.
- Vodafone and tax row
- Nokia tax case
- McDonald’s India moves for arbitration in London – Joint venture dispute with Bakshi
- Google India in legal tangles news
- Oil ministry seeks legal opinion to penalise RIL
The last unit of the syllabus focuses on the business environment and its role. It is pertinent to mention that environment plays a significant role in the performance of business. The popular STEEPLE Analysis (earlier PEST Analysis) should be conducted by every company on regular basis.
Steeple = SocioTechnological, Economical, Environmental, Political, Legal, and Ethical environment.
CORPORATE SOCIAL RESPONSIBILITY
Another important topic that is covered in the last unit is Corporate Social Responsibility (CSR). Every organisation usually spends some amount of money on the social development. But the government has come up with an initiative with regard to CSR. The new Companies Bill 2013 mandates that companies of a certain size spend 2% of their three-year average annual profit towards Corporate Social Responsibility. Every company with net worth of Rs.500 crore or more, or turnover of Rs.1000 crore or more or a net profit of Rs. 5 crore or more during any financial years must constitute a CSR Committee of Board consisting of three or more directors, of which at least one director shall be an independent director.
Each qualifying company must constitute a CSR committee for formulating the CSR policy and effectively implementing and monitoring the CSR activities of the company.The landmark mandate makes India among first nations to have social welfare spending as part of company statute by law.
You are not studying this subject to become a lawyer or an advocate. The purpose is to be well versed with business laws of the country. So that tomorrow you will not violate any law. IGNORANCE OF LAWS OF THE LAND IS NOT AN EXCUSE.
CSR Material links
- http://220.127.116.11/intranet/CorporateSociaResponsbility.pdf – BEST