Objectives• Introduction to Legal Aspects of Business in India• Components of Legal System• Constitutional Provisions• Freedom of Trade, Profession & Occupation
Introduction to Legal Aspects of Business in India• Laws reflect the policy framework of the Governmental structure of India.• Ensure that every company is functioning as per this framework.• Every enterprise must take into account this legal set up while framing the basic aims and objectives of its company.• Necessary for efficient and healthy functioning of the organization and helps it to know about the rights & responsibilities.
• The Companies Act, 1956• The Indian Contract Act, 1872• The Industries (Development and Regulation) Act, 1951• Trade Unions Act• The Competition Act, 2002• The Arbitration and Conciliation Act, 1996• The Foreign Exchange Management Act (FEMA), 1999• Intellectual property rights• Laws relating to labour welfare
Components of Legal System• Legislature – Parliament forms the union legislature and comprises of two houses: • Rajya Sabha - Council of States, and • Lok Sabha - House of the People• Executive – President – Vice-President – Council of Ministers – Ministers of State and Deputy Ministers – Cabinet Secretariat – Ministries of the Government
Components of Legal System• Judiciary Supreme Court High Court MetropolitianDistrict Level City Level Court Court Company Law Board Tribunals
Constitutional Provisions• Enacted by the Constituent Assembly on 26 November 1949, and came into effect on 26 January 1950.• Constitution has 22 Parts with 395 articles & 12 Schedules for a total of 1,17,369 words.• Constitutional provisions are made for the citizens of India and also includes the fundamental rights and duties of the citizens of India.
Constitutional Provisions• Part III – Fundamental Rights – Article 19• Part IV – Directive Principles and Fundamental Duties – Article 41• Part XII – Finance, Property, Contracts and Suits – Article 298• Part XIII – Trade and Commerce within the territory of India – Article 301-307
Part III Fundamental Rights1. Right to freedom2. Right to equality3. Right to protest against exploitation4. Right to religious freedom5. Right to education and culture6. Right to constitutional remedies7. Right to elementary education
Article 19• Protection of certain rights regarding freedom of speech, etc• (1) All citizens shall have the right (a) to freedom of speech and expression; (b) to assemble peaceably and without arms; (c) to form associations or unions; (d) to move freely throughout the territory of India; (e) to reside and settle in any part of the territory of India; and (f) to practice any profession, or to carry on any occupation, trade or business
Article 19• 19(6) Nothing shall affect the operation of any existing law, or prevent the State from making any law relating to,(i) the professional or technical qualifications necessary for practicing any profession or carrying on any occupation, trade or business, or(ii) the carrying on by the State, or by a corporation owned or controlled by the State, of any trade, business, industry or service, whether to the exclusion, complete or partial, of citizens or otherwise
Article 19(6) (i)• The State can make any law imposing, in the interests of the general public, reasonable restrictions on the exercise of such right; or• A law relating to professional or technical qualification necessary for practicing a profession or trade; or• Reasonable restrictions on trade needs to be there• A good deal of social control should be there
Article 19(6) (ii)• The state has the authority to exercise trade monopoly and is not required to justify its actions.• No objection can be taken under Article 19(1)(g).• It can be either complete or partial monopoly.• It may be to the exclusion of all or some of the citizens .• The right of the citizens to carry on trade has been subordinated to the right of the State to create a monopoly in its favour.• It protects only those statutory provisions which are ‘Basically & Essentially’ necessary for creating State Monopoly.• State cannot create monopoly in favour of third persons for their benefit.
Part XII Finance, Property, Contracts and Suits• Article 298 Power to carry on trade, etc. The executive power of the Union and of each State shall extend to:1. The carrying on of any trade or business2. The acquisition, holding and disposal of property3. The making of contracts for any purpose
Part XIII Trade, Commerce and Intercourse Within the Territory of India• Article 301 Freedom of trade, commerce and intercourse – Subject to the other provisions of this Part, trade, commerce and intercourse throughout the territory of India shall be free.• Article 302 Power of Parliament to impose restrictions on trade, commerce and intercourse – May be required in the public interest.
Part XIII Trade, Commerce and Intercourse Within the Territory of India• Article 303 Restrictions on the legislative powers of the Union and of the States with regard to trade and commerce Clause (1) – Not giving any preference to one State over another, – Not making any discrimination between one State and another. Clause(2) – To do so for the purpose of dealing with a situation arising from scarcity of goods in any part of the territory of India.
Part XIII Trade, Commerce and Intercourse Within the Territory of India• Article 304 Restriction on trade, commerce and intercourse among States – Impose tax on goods. – Impose reasonable restrictions as may be required in the public interest.• Article 305 Saving of existing laws and laws providing for State monopolies – Nothing in articles 301 and 303 shall affect the provisions of any existing law except, the President may by order otherwise direct to do so.• Article 307 Appointment of authority for carrying out the purposes of articles 301 to 304
Part IV Directive Principles of State Policy• Article 41 – Right to work, to education and to public assistance in certain cases. – The State shall, within the limits of its economic capacity and development, make effective provision for securing the right to work, to education and to public assistance in cases of unemployment, old age, sickness and disablement, and in other cases of undeserved want.