A Corporate Entity or a Company in itself is a body that is governed under the various laws since the time it is formed till the moment it is dissolved. The purpose and scope of the formation a corporate entity may be for manufacturing of products or providing services. In this context it may be seen that all the laws linked to the object of the company are usually treated as the laws that govern it, but it isn’t that way. A company is inclusive of many departments that look after various factors and ensure the smooth functioning of the same.
Every department of the company has at least one governing law behind it, which can be classified as the Internal Laws. These internal laws can be classified as; Employees Provident Funds & Miscellaneous Provision Act, 1952, Minimum wages Act, 1948, Payments of Bonus Act, 1965, Payment of Wages Act, 1936, The Workmen's Compensation Act, 1923 & Payment of Gratuity Act, 1972, Information Technology Act, 2000, Industrial Employment (Standing Orders) Act, 1946, Employers Liability Act,1938, Employees State Insurance Act,1948, etc. the above mentioned laws can be further classified on the basis of organizational departments such as Human Resource, Information Technology, Finance and Accounts, Administration and Management etc.
A company may also be governed by certain External Laws, such as Water (Prevention and Control of Pollution) Act 1974, Air (Prevention and Control of Pollution) Rules 1982, Child Labor (Prohibition and Regulation) Rules 1988, Factories Act, 1948, Indian Contract Act, 1872, Partition Act, 1893, Negotiable Instruments Act, 188, 1 etc . These laws are applicable upon the object and purpose of the company.
By the applicability of these laws in a company, usually it gives the idea of over lapping of laws to the lay man, but the actual purpose and scope of applying these laws on the companies is to ensure smooth functioning and provide measures of remedy in case of disputes that may arise. Rise of disputes is uncertain and where as maintenance of smooth functioning has to be certain.
At the very moment when a company is formation it would be guided either under the Companies act, 1956 or the Indian Partnership Act, 1932, depending upon the nature of the company. A company would require many factors such as Resources, Capital, Labor, Management and Technological factors for its functioning. All these listed are allocated by the representatives of the company and thereafter the functioning begins.
Although there are many laws that ensure the smooth functioning but there are such also laws that scrutinize the company when it is found violative of in any nature, therefore even in such circumstances laws such as the Monopolies & Restrictive Trade Practices Act, 1969, Industrial Dispute Act, 1947,
In the situation when a company is unable to perform its object due to financial erosion or though completion in market then, it is seen that such a company requires the help of other companies to survive in the market. It is at this moment when the companies may opt for strategic alliances and there after be governed by the laws such as Sick Industrial Companies (Special Provisions) Act, 1985, & Companies Act, 1956.
The object and purpose of providing these Industrial or Commercial Laws is construct and enshrine the relation between the Company- Government-Judiciary and Employer-Employee. Moreover these laws also provide a remedy to a situation wherein there have been disputes, which have to be resolved.
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