LEGAL ENVIRONMENT OF

BUSINESS Introduction to
Prof. Law
P. GURU PRASAD
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
pgp4149@gmail.com
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
Remember
no excuse”.

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