About Business & Comercial Knowledge

1. Topic : Business Commercial
Knowledge

5. Introduction to Business and
Commercial Knowledge

6. Introduction to Business and
Commercial Knowledge
Any business plan or model is
built on the foundation of commercial
knowledge. In fact, commercial knowledge
is a basic amenity for any kind of business
structure. Be it a business organization or
any other economic activity, everything
revolves around the understanding of
commercial knowledge.

7. Business and Commercial
Knowledge
Business and commerce is vast,
eclectic and ever evolving and expanding.
BCK IS VAST:
 The universe of business is vast.
 It includes a range of business activities.
It includes manufacturing, trading and
services.

16. BCK IS ECLECTIC:
(MULTIDISCIPLINARY)
 BCK is eclectic : it derives from various
disciplines e.g. marketing, accounting & finance,
operations, human behaviour (psychology,
sociology), laws, economics, ethics etc.
BCK IS EVER EVOLVING & EXPANDING :
 BCK domains are ever evolving and
expanding.
 Exp: information and communications
technology has introduced several terms in the
lexicon of BCK e.g. 24X7, B2B, B2C, BPO,
chips, etc.

17. Economic and Non-Economic
Activities
I. Economic Activities :
(A). Business
CHARACTERISTICS OF ECONOMIC
ACTIVITIES:
 Economic activities are income generating
 Economic activities are productive in Nature
 Even consumption is an economic activity
 Savings, Investment and Wealth

18. Business
“Business may be defined as a human
activity directed towards producing or
acquiring wealth through buying and
selling of goods”. —L.H. Haney.
Economic Activities
Economic activities are means of
livelihood. Business, profession and
employment are major types of economic
activities.

21. 1. Economic activities are income generating
2. Economic activities are productive in Nature
 Production/Purchase of Goods or Provision of
Services
 Exchange of Goods/Services for a Value-Called Price
Goods produced/purchased or services generated
by business are sold to others for a value called
price. Gods/services not exchanged for value are not
a part of business.
 Regularity of Dealings
Business means those activities which are
conducted on a systematic and regular basis. One or
two casual transactions could not be called business.

22.  Undertaking of Risk
There is no business without risk. Risk is that
element which differentiates business from other
economic activities. Actions and reactions of
competitors, changing social values and govt policies
etc., are some of the many factors which create risk in
business.
 Profit Motive
Business is an economic activity, which is
planned as a means of livelihood by the businessman
for the satisfaction of his needs. In fact, profit is the
reward for undertaking the element of risk inherent in a
business activity.

23. Economic Activity:
(b) Profession
Profession might be defined as an occupation (or
economic activity); which involves rendering of services
of a specialized nature for a fee-called professional
charges.
main features of a profession are
 Rendering of Services of a Specialised Nature
In a profession, a professional renders just services.
He does not deal in goods. For example, a doctor giving
medicines to a patient is not selling medicines. In fact,
giving medicines is just incidental to rendering
specialised medical services, for which a patient visits a
doctor.

24.  Formal Education and Training
To acquire expertise, formal education
and training in the discipline pertaining to
profession are essential requirements of a
profession.
 Domination of Service Element
In a profession, service to people or
society has domination over the monetary
aspect of professional activity. The professional
must render services for which he has
specialised knowledge and skills

25. Economic Activity:
(c) Employment
Employment is an economic activity based on an
agreement between the employer and the employee; under
which the employee renders services for the employer, in
return for a payment called salary or wages.
Features of employment are
 Agreement
The basis of employment is an agreement made
between the employer and the employee; who specifies the
work to be done by the employee and details of the terms
and conditions of employment.

26.  Employer-Employee Relationship
Employment, as an economic activity, is based on a
relationship called ’employer-employee relationship’;
which is created by the agreement of employment.
 Mutual promises
Employment is based on mutual promises of employer and
employee. The employee promises to render his
personal services to the employer; the employer
promises to compensate those services in the form of a
payment called salaries/wages.

27. Non-Economic Activities
Non-economic activities are those, which are
inspired by many motives – other than earning money.
 Leisure-Time Activities:
Whose aim generally is to derive pleasure in one’s
idle time e.g. hobbies like singing, painting for pleasure,
working in one’s own garden, playing cards, playing
games and sports etc.
 Family-Obligation Activities:
Which are inspired by love for family e.g. a woman
cooking food at home for her husband and children and
looking after children, a teacher teaching to his/her own
children at home, a doctor treating his family members
etc.

28.  Religious and Cultural Activities:
Which are inspired by need for mental satisfaction
and happiness, e.g. going to temple, mosque and
worshipping God, celebrating festivals like Holi, Diwali,
Christmas, and Id etc.
 Social Welfare Activities:
Which are inspired by the emotional feeling of
sympathy for others e.g. extending charity to the poor,
undertaking relief work for people affected by flood, war,
earthquake, drought etc.

33. Scope of Business Law
 The Indian Contract Act - ?
 Negotiable Instruments Act - ?
 The Payment of Bonus Act - ?
 The Employees Provident Funds & Miscellaneous Act - ?
 The Payment of gratuity Act - ?

36. Offer
Acceptance

37. Offer + Acceptance = Agreement

38. The Indian Contract Act 1872
25th April 1872
1. The agreement should be between two parties. An
agreement is the result of a proposal or offer by one party
followed by its acceptance by the other.
2. The agreement should be between the parties who are
competent to contract.

41. Negotiable Instruments Act - 1881
Meaning
A Negotiable Instrument is a signed writing containing an
unconditional promise to pay an exact sum of money.

45. The Payment of Bonus Act – 1965
25th Sep, 1965
Meaning
The term bonus means extra amount in money,
bonds or goods over what is normally due. The term is applied
especially to payments to surplus profits.

47. The Employees Provident Funds &
Miscellaneous Act – 1952
14th
March, 1952
 To ensure welfare measures for labours

49. The Payment of gratuity Act – 1972
16th September 1972
Meaning
Gratuity is an amount (as a lump sum payment) which is
paid by employee for his past services when the employment
is terminated.

50. Thank You….