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A business always has the potential to become a legal entity through incorporation. And a company is always indulged in one or other form of business. There are certain laws that deal with the business and companies running those businesses. Below is an explanation to ‘What is the relationship between law and business?’ in case the readers are yet to figure out. But is there a difference between corporate law and business law? Follow all the pointers hereby for an in-depth understanding which shoots the doubts once and for all regarding what is business and corporate law and the difference between them.
What is the Relationship Between Law and Business?
Business in general and simple way can be understood as buying or manufacturing or availing a product or service at a certain price and then selling the same in the market at a higher price. The profits gained from a business are used up for survival. During business, interests of several people are involved, inclusive of those who are conducting the business and those from whom and to whom the product or service is being purchased and sold. To save the interests of all the people involved in a business, laws are made. There are laws of contract to make the parties abide by their agreements, there are employment laws to safeguard employees from any kind of exploitation, and many more. With the increasing scope for incorporation, it is paramount to save the interests of all the people so that one’s weighty gains do not necessarily scroll over the basic interests of another. This is where the relationship between law and business regards.
Is Corporate Law and Commercial Law the Same?
The scope of corporate law roams around the creation and being of a corporate entity. It includes investor interests, management of the company and compliance with legal formalities uplifting the interests of people associated. All such requirements of a company are taken care of by the corporations lawyer.
On the other hand, business exchange among two corporate entities is dealt with under commercial laws. All the communication that takes place during a trade and the legal obedience underneath are commercial law aspects. Both commercial and corporate law are interconnected with each other.
What Is The Difference Between Business Law and Corporate Law?
People often ask ‘Is corporate law the same as business law?’. By now, the answer is pretty obvious that they are not actually one and the same thing. Many corporate law firms in Kolkata as well as other cities have legal professionals with knowledge of both the laws. The difference between corporate law and business law has been explained through the table below.
Difference Between Business Law and Corporate Law
|
Business Law |
Corporate Law |
|
Administered by laws of both State and Central Governments |
Mainly controlled and directed by the Ministry of Corporate Affairs |
|
Regulated by provisions of contracts |
Main legislation - Companies Act, 2013 |
|
Deals with Company’s overall business |
Deals with rules and guidelines on sale and purchase of goods in the market |
|
Focuses more on legal impact on business |
Gives obligations and rights as a corporate entity |
|
Legalities related to company’s foundation |
Legalities related to operations, validity and activities of the company |
|
Enforces policies |
Evades unnecessary litigation through behind the scene legal formalities |
|
Regulates tax liabilities, tax benefits and expenses |
Interaction between companies, investors, management, etc. |
|
Mainly responsible for review of contracts |
Takes care of the drafting the contracts during business |
Types of Corporate Law
There are various legislations in India which lay the corporate law in India. Given below are some of the major laws that deal with the functioning of corporate sector:
- Indian Contract Act, 1872
- The Companies Act, 2013
- Provisions regarding Mergers and Acquisitions
- Provisions of Corporate Governance
- Securities and Exchange Board of India Act, 1992
- Securities Contract (Regulation) Act, 1956
- Depositories Act, 1996
- Income Tax Act, 1961
Differences Between Business Lawyer and Corporate Lawyer
Business and corporate lawyers, both are responsible for statutory compliance for companies in India. Corporate mandate and bureaucratic relations are taken up by corporate lawyers while the legality related to taxation, employees, etc. is a business lawyer’s responsibility. Merger and acquisition lawyers take up the tasks of both business as well as corporate lawyers depending upon the role they have to play.
Business Lawyers are responsible for abiding by the local as well as central laws at the time of both foundation and winding up of the company. Business lawyer does not necessarily need to take care of an established company. They take care of drafting business plans for investors. There are contract lawyers among them as well for the purpose of review, while drafting the same is on a corporate lawyer’s plate.
On the other side, large scale businesses or corporations are represented through corporate lawyers. Contractual obedience in order to avoid litigation is what a corporate lawyer does. Industrial lawyers also play along with the corporate lawyers for compliance purposes. One of the benefits of corporate lawyer is that they ensure business negotiations are legally safe and also keep advising over the corporate affairs through legal view point.
Conclusion
By now, it is clear that the difference between business law and corporate law is not so obvious. It is a matter of understanding of the laws applicable and the entity so involved. Usually, the corporate lawyers in a company take care of business laws as well. Thus, the concerned professional has to know both business laws and corporate laws.
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