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Definition, functions, and the importance of Business Law

What is business law ?

Business law refers a set of law governing the following –

  • Rights
  • Relations
  • Conduct of persons
  • Companies
  • Organizations
  • And businesses.

Business law is the practice of law relating to corporations. It means that law relating to the matters which derive directly from the corporation. Thus, it encompasses the formation, funding, governance, and end of the corporation.

However, business law is also known as commercial law, mercantile law, or corporate law. A law that governs the dealings regarding commercial matters quietly known as business law. Besides, business law guides how to set up a business and how to run it. Thus, it includes the law of corporation, business transactions and dealings , business contracts, commercial papers, income tax, intellectual properties related to the business.

What are the functions of business law ?

Some functions of business law is given below. Take a look-

  1. It related to business ethics, substantial law, procedural law, and other court system structure.
  2. It entails the taxation systems for different businesses.
  3. It provides guidelines for compensation and antitrust business.
  4. It also includes rules and regulations about workers’ rights and privileges as workers’ safety, wages, overtime, insurance, etc.
  5. It set the formal process of establishment of a business
  6. It provides guidelines for the selling of corporate goods.
  7. It has must penalty for the violation of the law
  8. It must include bankruptcy and governance of the properties.

Why is business law important for corporation?

The prime concern is that business law helps to resolve the business disputes, maintain order and build a acceptable  standards when it come close to the other business, government and customers.

The major importance of business is described below . Take a look –

  • Business formation: business law is the foundation of any corporation. Initially, a startup needs to pass many legal processes to establish a business. He needs to get a license for doing business and oblige to follow the code of conduct of business.
  • Compensation issues: It is important for handling different compensation issues of the corporations. However, Proper business law can help companies setting issues of compensations and other activities. The law ensures that his\her client will not violate the law. If he does so, he will get punishment under the act.
  • Safeguard the rights of shareholders: Business law protect the rights of the shareholders of the company. Besides, the use of law can successfully handle such issues especially in the case of minority shareholders.

So Learners, learning and maintain business law is very important for any business organization. Moreover,  it helps them from future disputes.

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