Your business might be a separate entity on paper, but it is always going to be close to your heart. After all, your business is the bread and butter for all practical purposes.
So, what makes a business run smoothly in the longer run? A lot of you might say “sales”. Of course, sales is important and growth in sales every year is a positive sign. This is only possible if the business is doing business ethically as per the law of the land.
Business’ engaging in unethical practices come under the radar at some point of time, leading to a mega boycott by its consumers, suppliers and Government – which eventually making it a business from the past.
Different countries have different business laws. There are a few laws that are common, and a few that are different in each and every country.
Following business laws is very important as –
- You want your business to continue for a long time
- You don not want to end up in jail
- Your business has to be eligible for local, national and international contracts.
When in India, there are few business laws that every single business owner must know.
Business Formation Law
Before you start a business, you need to choose the type of business you wish to run. Are you planning to run a company that is public, a business with limited liability, sole proprietorship, or family business.
Once this is done, the owner must register his company with his regional Registrar of Companies (RoC).
Business runs on money and during the early days it is important to invest sufficient amount of money to keep your ship afloat.
Mainly, there are 3 ways to fund your business:
- Equity: By selling equity shares of your business, you bring cash in return which will help you grow your business.
- Debt: You incur a debt by taking out loan for your business at a fixed interest rate.
- Self-finance: This doesn’t need an explanation. You take money from your savings to fund your business.
You might be the only person working for your business during its early stages, but eventually when your business grows, you will have to start hiring.
When you have employees working for you, you must abide by labour laws and have agreements in place to ensure there are no conflicts in future. Ensuring you meet all labour/ employee law requirements may sometimes require you to hire consultants.
Intellectual Property Laws
If you have A business that invests heavily in research and development and builds new proprietory products – you need to be careful about Intellectual Property laws. It is necessary that you have a copyright, trademark, or patent it so that others cannot copy it.
Information technology laws
The use of technology in almost every single business is mandatory. It is also important to adapt to new technologies so that your business doesn’t lose out on efficiency.
Technology is the life blood of businesses now, but that comes at the risk of online threats. This is why the Government of India has introduced the IT act so that your identity and privacy is legally protected.
This is one of the most important laws to know. The laws that we spoke about until now thrive because of the contract law. This is a contract where both the parties unanimously agree to the stipulated conditions mentioned in the and agree to work together.
This needs to be communicated rightly so that there’s no dispute later on.
All major business players in the Indian market are known to abide by business laws to conduct business in India and the World. Only with clean books of accounts can the local and national population trust a business. This is important for bidding for local, national and international contracts. This ensures longevity and a stable growth for the business.
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