Much of the Indian business law is based on the English common law. As a matter of fact, various legislations introduced by the Brits are still being enforced in a modified form until now. The country’s legal history can be traced as early as the Bronze Age and the Indus Valley civilisation. Since then, the laws in India, including Indian business law, have changed from a religious direction to the existing constitutional and legal system the country has today. You can click here to know more about the brief history of Indian business law.
Indian Business Law: A Brief Primer
When the East India Company was established in India, it became the major turning point of the country’s legal history. The company was given the authority to create laws and enact them in a manner they deem as necessary. In most cases, some people criticise the complexity of the country’s legal system, especially in terms of the Indian business law. Having said that, there are still provisions of the law that are much simpler than those in the United States and Australia.
There are four major sources of Indian business law. These are the English Mercantile law, the Statutory law, judicial decisions, and those from customs and usages. The English Mercantile law, which directly translates to the ‘merchant law’, served as the basis of the structure of the Indian business law. On the other hand, the Statutory laws are the legislations created by the Parliament. A lot of Indian business laws are Statutory laws.
Judicial decisions are crucial sources of the Indian business law. The previous cases decided by the higher courts are often referred in cases being tackled in the lower courts. Meanwhile, Indian business laws based on customs and usages play a significant role in business transactions in the country.
Indian Business Law and Charitable Institutions
In 2014, a law was enacted wherein businesses in India are compelled to ‘give’ two percent of its profits to charitable institutions. According to The Guardian, India is the first nation to enact such law. Companies with annual profits of at least £105m should give away two percent of it in organisations that focus on improving the country’s education system, alleviating poverty, promoting gender equality, and decreasing hunger incidence. As per India’s lawmakers, the law will greatly help the social development efforts in the country.