Concept of Business Law
Law affects a business directly or indirectly. It Business guides business activities. It either promotes threats. source of or restricts a business. A business has to follow the laws of the country. Hence, it is necessary for business managers to have knowledge of the laws that have a direct bearing on business activities. Business laws are the source of opportunities or threats. In Nepal, the laws related to deregulation, privatization, and antitrust have created significant business opportunities. On the other hand; consumer protection, environmental, and labor-related laws may pose threats to businesses. The managers in a business organization are required to scan and monitor the legal framework to assess their impact on the business and react accordingly.
Purposes of Business Law
Business laws/ regulations promote or obstruct the business. They are the foundations of the legal environment. The main purposes of business legislation are mentioned below.
- To protect the rights of the business as well as consumers.
- To encourage the business to follow ethical practices.
- To develop the business in a sustainable way.
- To enhance the contribution of the business sector towards national development.
Business Legislations in Nepal
The business legislations in Nepal are mentioned below.
1. General business legislation:
The general business legislation in Nepal is mentioned below.
- Private Firm Registration Act, 1958: It deals with the provisions of registering and operation of private firms engaged in trade and industry.
- Partnership Act, 1964: This act highlights the legal provisions on partnership. It deals with the registration, renewal, and dissolution of the partnership.
- Company Act, 2006: It deals with the registration, operation, and liquidation of the company.
- Industrial Enterprise Act, 2016: The industrial enterprise act 2016 deals with the registration, operation, facilities, and dissolution of industries in Nepal.
2. Labour related legislation:
The labor-related legislation in Nepal is mentioned below.
- Bonus Act, 1974: It deals with the provision of bonuses to be distributed to the employees. According to this act, the amount of bonus to be distributed should not exceed 10% of the total profit. It should also not be more than the total salary of six months.
- Labour Act, 1992: The Labour Act, 1992 deals with different facets of labor administration as well as labor welfare. It has specified job security, working hours, remuneration, health and safety, and settlement of disputes.
- Trade Union Act, 1993: It provides a legal base for organizing trade unions. A minimum of 10 employees representing at least 25% of the total employees are entitled to form a union. This act encourages collective bargaining. The main objectives of the trade unions as specified by the act are improving the working condition of the workers, enhancement of economic conditions of labor, and improving labor productivity.
- Foreign Employment Act, 1992: It deals with foreign employment. It has made the provision of licensing for opening up foreign employment offices. A certain amount has to be deposited for opening foreign employment office. It also prescribes the procedures of workers selection and sending for foreign employment.
- Child Labour Act, 2000: According to this act, children below 14 years of age are defined to be child laborers. It prohibits children in hazardous works. If the children are made to work for more than 6 hours a day and a maximum of 36 hours a week, it is regarded as illegal.
- Industrial Training Act, 1982: It deals with the provisions regarding the training of workers for the enhancement of industrial skills. It has made the provision of Training Council.
3. Finance and Investment Legislation:
The different acts related to finance and investment in Nepal are as under.
- Foreign Investment and Technology Transfer Act, 1992: It deals with the procedures of foreign investment and technology transfer in Nepal. It has made the provision of permission required for foreign investment, provision of visa and repatriation facility, and operate within its guidelines.
- Foreign Exchange Regulation Act, 1961: It deals with the licensing provisions related to the exchange of foreign currency in Nepal. It states that the person or firm or institutions wishing to involve in foreign exchange transactions must get a license from Nepal Rastra Bank.
- Income Tax Act, 2002: This act deals with the legal provisions of income tax administration in the country. It has broadened the tax base.
- Value Added Tax Act, 1997: This act has highlighted the different provisions of VAT administration, Some of them are; registration for VAT, an obligation of registrants, penalty, VAT exemption, etc.
4. Consumer Protection Legislation
The legislation related to consumer rights protection are as follows:
- Black Market and other Social Crime Punishment Act, 1977: It aims to protect the consumers from illegal hiking of price. This act has the provision of regulating and monitoring the market to ensure the reasonable price of goods and services.
- Food Act, 1966: It deals with the protection of the health of the people from non-qualitative foods. It has provisions of monitoring to ensure the right quality of the food products.
- Consumer Protection Act, 1998: This act deals with the provisions of consumer rights in Nepal. It provides some rights to the consumers like the right to be safe, the right to be informed, the right to get heard and get compensation, etc.
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