Laws Affecting Business
1.INTRODUCTION
Bangladesh is a combination of competitive market, business -friendly environment and cost structure that can give the best returns. Bangladesh offers a well-educated, highly adaptive and industrious workforce with the lowest wages and salaries in the regio n. 57.30% of the population is under 25, providing a youthful group for recruitment. The country has consistently developed a skilled workforce catering to investors needs.
English is widely spoken, making communication easy. Bangladesh is strategically located next to India, China and ASEAN markets.
Bangladesh has proved to be an attractive investment location with its
146.6 million population and consistent economic growth leading to strong and growing domestic demand. Energy prices in Bangladesh are the most competitive in the region. Bangladesh offers the most liberal
FDI regime in South Asia, allowing 100% foreign equity with unrestricted exit policy, easy remittance of royalty, and repatriation of profits and incomes. Bangladesh offers export-oriented industrial enclaves with infrastructural facilities and logistical support for foreign investors. 2.THE COUNTRY
2.1. GEOGRAPHY/STATISTICS
Bangladesh is located in the Southern Asia, bordering the Bay of Bengal with the coastline covering 580 k m between Burma & India with the land boundaries 4,246 km where Burma covered 193 km and India covered
4,053 km. The time difference is GMT+6. The Total are a is 147,570sq km and the total population is 164,425,491.The climate of the country is focused as tropical; mild winter (October to March); hot, humid summer
(March to June); humid, warm rainy mons oon (June to October). Official
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language is Bangla (Bengali). English is widely used in Government,
Business and Universities. Out of total population, Muslim 89.6 %, Hindu
9.3 %, Buddhist 0.5%, Christian 0.3% and Other 0.3%.
2.2. ECONOMY
The economic position of the country is GDP/PPP (2011 est.): $100 billion; per capita $664, Real growth rate: 6%, Inflation: 11.3%. The
Industries are Textiles, Jute, Garments, Tea Processing, Paper Newsprint,
Cement, Chemical Fertilizer, Light Engineering, Sugar, Ceramics and
Pharmacy. Natural resources are Gas, Timber and Coal. Arable land covered 55.39% and permanent crops covered 3.08% of total land area.
Bangladesh exports mainly Ready Made Garments including Knit Wear
(75% of exports revenue). Others include: Shrimps, Jute Goods
(including Carpet), Leather Goods and Tea. Bangladesh imports mostly
Petroleum Product and Oil, Machinery and Parts, Soybean and Palm Oil,
Raw Cotton, Iron, Steel and Wheat.
2.3. CURRENCY AND BANKING
Currency of the country is Bangladeshi Taka (Tk). The financial system of Bangladesh consists of Bangladesh Bank (BB) as the central bank, 4
State Owned Commercial Banks (SCB), 5 government owned specialized banks, 30 domestic private banks, 9 foreign banks and 29 non-banking financial institutions.The financial system also embraces insurance companies, stock exchanges and co-operative banks. Bangladesh Bank is both the Government’s banker and the banker’s ba nk, a “Lender of the
Last Resort”. Bangladesh Bank, like most of the central banks of different countries, exercises monopoly over the issue of currency and the banknotes. 2
2.4. GOVERNMENT/POLITICS
The conventional long form is “People's Republic of Bangladesh” and the conventional short form is “Bangladesh”. The government type is parliamentary democracy. Capital is Dhaka and the administrative 7 divisions are Barisal, Chittagong, Dhaka, Khulna, Raj shahi, Rangpur and
Sylhet. 26 March 1971 is the date of independence and 16 December
1971 is known as Victory Day and commemorates the official creation of the state of Bangladesh.
2.5. LEGAL SYSTEM
Bangladesh seceded from Pakistan in December 1971. The British -era legislation applied in Pakistan after 1947 and post-partition legislation enacted in Pakistan continued to form the basis of Bangladeshi personal status laws, but legal developments since 1972 have been distinct.
Constitution adopted 4 November 1972. Amended in 1977 to remove principle of secularism included in Part II entitled Fundamental Principles of State Policy. After the emergence of Bangladesh in 1971, a rigid constitution has been adopted which came into force on 16 December
1972. The basic law of Bangladesh is the constitution of the People's
Republic of Bangladesh, 1972 as amended from time to time. Till 2010, fifteen amendments to the constitution have been made. All laws of the country are subordinate laws made by the elected Sangsad (the legislature consists of 350 members) conforming to the tenets of the Constitution.
The laws enacted by the legislature and now in operation regulate almost all spheres of life. Ordinarily executive authorities and statutory corporations cannot make any law, but can make by -laws to the extent authorized by the legislature. Such subordinate legislation is known as rules or regulations. Unless found ultra vires of the parent law, such rules or regulations are also enforceable by the court like the laws made by the
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legislature. Important laws of the country may be classified under some broad heads such as land and property laws, personal laws, commercial laws, labour and industrial laws, election laws, law of crimes, service laws, fiscal laws, press laws and laws relating to the remedies. All laws, rules or regulations made by the competent authority are applied in the
Courts and Tribunals. The Courts can be classified into two classes viz. the Supreme Court and; Subordinate Courts and Tribunals. The Supreme
Court of Bangladesh is the apex court with its two divisions, the High
Court Division and the Appellate Division. As the apex court the high court division has been vested with the power to hear appea ls and revisions from subordinate courts, and also to issue orders and directives in the nature of writs to enforce fundamental rights and to grant other reliefs available under the writ jurisdiction. There are civil courts presided by Assistant Judge to try the suits of civil nature and criminal courts presided by judicial magistrate to try the criminal cases. In addition, there are various other laws on different subjects regulating different fields and spheres of activities of national life. To seek reme dy a person has to file a case before the appropriate court or authority. Claims regarding money, property, compensation etc is to be filed before the civil court presided over by the assistant judge or subordinate judge according to value of the claim, and complaint against commission of crime is to be filed either with the local police station or in the criminal court of the magistrate of the first class of the locality. The police investigates the cases lodged with the police station and produces witness es before the court during trial. On the other hand, it is the responsibility of the complainant to produce witnesses before the court in the cases in which magistrates take cognizance on the basis of a written complaint. There are other authorities before which remedies may be sought by an aggrieved party. Those authorities are administrative authorities or tribunals. Except in respect of
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enforcement of fundamental rights, admiralty, company matters and writ petitions, relief cannot be sought directly from the high court division which mainly deals with appeals and revisions from the decisions of the subordinate courts. One of the notable features of the legal system of
Bangladesh is that the legislature can enact any special law for any particular purpose and thereby can form special courts or tribunals. For example, there are labour courts and labour appellate tribunals to decide labour disputes, administrative tribunals and administrative appellate tribunal to decide service disputes of public servants, i ncome tax appellate tribunal to decide income tax disputes, custom, excise and VAT
Appellate tribunal to decide disputes regarding custom and excise duties and VAT, court of settlement to decide disputes about abandoned properties, special judges to try corruption cases against public servants, special tribunals to try criminal cases under the Special Power Act 1974 and Nari-o-ShishuNirjatan Daman Adalats to decide cases of crimes committed against children and women. To decide election disputes the election tribunals are constituted with judicial officers. Family courts have been constituted with assistant judges to decide family disputes. To decide money claims of the banks and other financial institutions
ArthaRinAdalats have been set up presided over by judges, and insolvency courts have been set up presided over by district or additional district Judges to declare defaulting borrowers as insolvent. To try offences committed by children below the age of 16 years, juvenile courts have been formed with the magistrates and sessions judges, and juvenile courts follow the special procedure laid down in the children's Act.
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3. DEFINITION OF LAW AND BUSINESS LAW
LAW
Law, as it is, is the command of the Sovereign. It means, (1) law has its source in sovereign authority, (2) law is accompanied by sanctions, and
(3) the command to be a law should compel a course of conduct. Being a command the law must flow from a determinate person or group of persons with the threat of displeasure if it is not obeyed.
Thus the term Law is used to denote rules of conduct emanated from and enforced by the state.
According to Salmond, "Law is the body of principles recognized and applied by the State in the administration of justice."
According to Holland, Law is, ''a rule of external human action enforced by the sovereign political authority.''
The laws of a country relate to many subjects, e.g., inheritance and transfer of property, relationship between persons, crime and their punishments, as well as matter relating to industr y trade and commerce.
The term Business law is used to include only the last of the aforesaid subjects, i.e. rules relating to industry trade and commerce.
Business Law
Business Law (also referred to as Commercial Law) governs the transactions between bus inesses. This includes business formation; litigation; contracts; mergers and acquisitions; commercial leasing; and consumer protection. Business law deals primarily with the definition of rights and responsibilities, as opposed to the enforcement of laws.
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Business law and commercial law encompass several overlapping issues.
The Uniform Commercial Code (UCC) is the primary governing authority for commercial transactions. Other specified legal areas have developed that are types of business or commercial law . They include
Banking, Bankruptcy, Consumer Credit, Contracts, Debtor and Creditor,
Landlord-Tenant, Mortgages, Negotiable Instruments, Real Estate
Transactions, Sales and Secured Transactions. It is important for all business owners to know and understand the laws that affect their businesses. It is equally important to comply with those laws. Ignorance of the laws has never been a valid excuse in any Court of Law, and it never will be. As a business owner, it is one’s responsibilit y to know what laws affect his business. Business law and commercial law are broad legal topics that encompass business, commerce, consumer transactions, and the formation and management of business entities. Some of the more important areas of commercial law include sales, secured transactions, negotiable instruments, and debtor and creditor law. Business law overlaps, but also includes the formation and management of business entities. An attorney with experience in business and commercial law can help you with all of your questions. Numerous and Varied laws regulate the activities of all businesses and everyone involved in the business from owner to manager to employee.
4. LAWS THAT AFFECT BUSINESS IN BANGLADESH
It is important for all business owners to know and understand t he laws that affect their businesses. It is equally important to comply with those laws. Ignorance of the laws has never been a valid excuse in any Court of
Law, and it never will be. As a business owner, it is owner’s responsibility to know what laws affect his business.
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Business Law may be defined as that part of law which regulates the transactions of the mercantile community. The scope of commercial law is large. It includes the laws relating to contract, partnership, negotiable instruments, sale of goods companies etc. It is noted that there is no fixed line of division between commercial law and other branches of law, nor is there any conflict or contradiction between them. The law of contract, which is a very important part of commercial law, is appl icable not only to merchants and bankers but also to other persons. Commercial law deals with only those parts of law which are of special importance to the mercantile community. The same laws are applicable to other citizens under appropriate circumstances.
5. THE LAW OF CONTRACT
The Law of Contract deals with agreements which can be enforced through courts of law. The Law of Contract is the most important part of commercial law because every commercial transaction starts from an agreement between two or more persons. An agreement enforceable by law is a contract. Therefore in a contract there must be (1) an agreement and (2) the agreement must be enforceable by law. The object of The Law of Contract is to introduce definiteness in commercial and other transactions. How this is done can be illustrated by an example. X enters into a contract to deliver 10 tons of coal of Y on a certain date. Since such a contract is enforceable by the courts, Y can plan his/her activities on the basis of getting the coal on the fixed date. If the contract is broken, Y will get damages from the court and will not suffer any loss.
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5.1 THE ESSENTIALS ELEMENTS OF A CONTRACT
An agreement becomes enforceable by law when it fulfils certain conditions. These conditions, which may be called the Essential Elements of a Contract, are explained below.
1. Offer and Acceptance: There must be a lawful offer by one party and a lawful acceptance of the offer by other party or parties. An ''offer'' involves the making of a ''proposal''. When the person to whom the proposal is made signifies is assent thereto, the proposal is said to be accepted. 2. Intention to create Legal Relationship: There must be an intention
(among parties) that the agreement shall result in or create legal relations .
An agreement to dine at a friend's house is not an agreement intended to create legal relations and is not a contract.
3. Lawful Consideration: Subject to certain exceptions, an agreement is legally enforceable only when each of the parties to it gives something and gets something. An agreement to do something for nothing is usually not enforceable by law. The something given or obtained is called consideration. 4. Capacity of parties: The parties to an agreement must be legally capable of entering into an agreement; otherwise it cannot be enforced by a court of law. Want of capacity arises from minority, lunacy, idiocy, drunkenness, and similar other factors. If any of the parties to the agreement suffers from any such disability, the agreement is not enforceable by law, except in some special cases.
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5. Free Consent: In order to be enforceable, an agreement must be based on the free consent of all parties. There is absence of genuine consent if the agreement is induced by coercion, undue influence, mist ake, misrepresentation, and fraud. A person guilty of coercion, undue influence etc. cannot enforce it, subject to rules laid down in the Act.
6. Legality of the Object: The object for which the agreement has been entered into must not be illegal, or immo ral or opposed to public policy.
7. Certainty: The agreement must not be vague. It must be possible to ascertain the meaning of the agreement, for otherwise it cannot be enforced. 8. Possibility of Performance: The agreement must be capable of being performed. A promise to do an impossible thing cannot be enforced.
9. Void Agreement: An agreement so made must not have been expressly declared to be void. There are five categories of agreements which are expressly declared to be void. They are:
Agreement in restraint to marriage
Agreement in restraint of trade
Agreement in restraint of proceedings
Agreements having uncertain meaning
Wagering agreement
The elements mentioned above must all be present. If any one of them is absent, the agreement does not become a contract. An agreement which fulfills all the essential elements is enforceable by law and is called a contract. 10
6. THE LAW OF AGENCY
An 'Agent' is a person employed to do any act for another or to represent another in dealing with third persons. The person for whom such act is done, or who is so represented, is called the Principal. For example P appoints X to buy 50 bales of cotton on his behalf. P is the principal and
X is his Agent. The relationship between P and X is called Agency.
Power of attorney
An Agent may be appointed by the Principal, executing a written and stamped document. Such a document is called Power of Attorney. There are two kinds of Power of Attorney: General and Special. A general power is one by which the agent is given an authority to do certain general objectives, e.g., managing an estate or a business. A special or particular power may be appointed by which an agent is authorized to do a specific thing, e.g., selling some goods. A man dealing with a particular agent is bound to find out the limits of the authority by which the authority of the agent can act accordingly.
7. THE LAW RELATING TO SALE OF GOODS
The law relating to the sale of movable goods is contained in the sale of
Goods Acts.
7.1 BUYER, SELLER AND GOODS:
Buyer means a person who buys or agrees to buy goods
Seller means a person who sells or agrees to sell goods
The term 'Goods' includes every kind of movable property except (1) actionable claims and (2) money.
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An actionable claim means a debt or a claim for money which a person may have against another and which he/she may recover by suit. Money means legal tender money.
Goods may be classified into three types: Existing Goods, Future Goods, and Contingent Goods.
Existing goods are goods which are already in existence and which are physically present in some person's possession and ownership.
Future goods are goods which will be manufactured or produced or acquired by the seller after the making of the contract of sale.
There may be a contract for the sale of goods the acquisition of which by the seller depends upon a contingency which may or may not happen. In such cases the goods sold are called Contingent goods.
7.2 SALE AND AGREEMENT TO SELL
Sale: A contract for the sale of goods may be either a sale o r an agreement to sell. Where under a contract of sale the property in the goods is transferred from the seller to the buyer the contract is called a sale. The transaction is a sale even though the price is payable at a later date or delivery to be given in the future, provided the ownership of the good is transferred from the seller to the buyer.
Agreement to sell: When the transfer of ownership is to take place at a future time or subject to some condition to be fulfilled later, the contract is called an agreement to sell. An agreement to sell becomes a sale when the prescribed time elapses or the conditions, subject to which the property in the goods is to be transferred, are fulfilled.
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7.3 THE ESSENTIAL ELEMENTS:
The essential elements of a contract for the sale of goods are enumerated below. 1. Movable goods: The sale of goods act deals only with the movable goods, excepting actionable claims and money. This Act does not a pply to immovable properties.
2. Movable goods for money: There must be a contract for the exchange of movable goods for money. Therefore in a sale there must be moneyconsideration. An exchange of goods for goods is not a sale.
3. Two Parties: Since a contract of sale involves a change of Ownership, it follows that the buyer and the seller must be different persons. A sale is a bilateral contract. A man cannot buy form or sell goods to himself.
4. Formation of the contract of sale: A contract of sale is made by an offer to buy or sell goods for a price and the acceptance of such offer. The contract may provide for the immediate delivery of the goods or immediate payment of the price or both, or for the delivery and payment by installments, or that the de livery or payment or both shall be postponed. 5. Method of forming the contract: Subject to the provision of any law for the time being in force, a contract of sale may be writing, or by word of mouth, or may be implied from the conduct of the parties.
6. The terms of contract: The parties may agree upon any term concerning the time, place, and mode of delivery. The terms may of two types: essential and non-essential. Essential terms are called Conditions, non-essential term are called Warranties.
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8. THE LAW OF PARTNERSHIP
Partnership is the relation between who have agreed to share the profits of a business carried on by all or any of them acting for all. A partnership, as defined in the Act, must have three essential elements -
1. There must be an agreement entered into by two or more
………persons.
2. The agreement must be to share the profits of a business.
3. The business must be carried on by all or any of them.
1. Voluntary Agreement: The first element shows the voluntary contractual nature of partnership. A partnership can only arise as a result of an agreement, express or implied, between two or more persons.
2. Sharing of Profits of a Business: The second element states the motive underlying the information of a partnership. It also lays down that the existence of a business is essential to a partnership. Business includes any trade, occupation or profession. If two or more persons join together to form a music club it is not a partnership because there is no business in this case. But if two or more persons join together to give musical performance to the public with a view of earnin g profit, there is a business and partnership is formed.
3. Mutual Agency: The third element is the most important feature of partnership. It states that persons carrying on business in partnership are agents as well as principals. The business of a firm is carried on by all or by any one or more of them on behalf of all.
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Who can be a partner?
1. Person: A person may be partner if he has the capacity to enter into a contract. Who is a ‘person’? For the purposes of the Partnership Act, the term
‘person’ does not include a partnership or a limited company. Thus a
Company P cannot form a partnership with a Company Q. G. M.
Similarly, a firm X cannot form a partnership with firm Y. But all the partners of firm X and all the partners of firm Y can form a singl e partnership, subject to the rules regarding the number of partners.
2. Minor: A minor cannot be a partner. But in an existing partnership, a minor can be admitted into a firm if all the partners of the firm agree.
Such a minor gets all the benefits of a partnership.
3. Person of an unsound mind: A person who is of unsound mind cannot become a partner.
4. Woman: A woman can be a partner, married or unmarried. Of course a woman cannot be a partner if she is a minor or she is of unsound mind.
5. Company: In a Company the capacity to enter into contract is determined by the Memorandu m and Articles of the Association of the company. The liability of the members of a firm under the Partnership
Act, for the debts of the firm, is unlimited liability. Therefore, a company cannot become a partner of a firm.
6. An alien: An alien enemy cannot enter into a contract of partnership with a citizen of Bangladesh.
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9. LAW RELATING TO NEGOTIABLE INSTRUMENTS:
Documents of a certain type, used in commercial transactions and monetary dealings, are called Negotiable Instruments.
“Negotiable” means transferable by delivery and “instrument” means a written document by which a right is created in favor of some persons.
The term negotiable instrument literally means “a document transferable by delivery”. Three kinds of instruments are recognized as negotiab le instruments- promissory notes, bills of exchange and Cheques.
9.1 DEFINITION OF PROMISSORY NOTE
A promissory note is an instrument in writing (not being a bank note or a current note) containing an unconditional undertaking signed by the marker, to pay a certain sum of money only to, or to order of a certain person, or to the bearer of the instrument.
9.2 ESSENTIAL ELEMENTS OF PROMISSORY NOTE
From the definition given in the Act it is apparent that the following essential requirements must be fulfilled by an instrument intended to be a promissory note:
1. The instrument must be in writing.
2. The instrument must be signed by a marker of it. A signature in pencil or by a rubber stamp of facsimile is good. An illiterate person may use a mark or cross instead of writing out his name. The signature or mark may be placed anywhere on the instrument, not necessarily at the bottom.
3. The instrument must contain a promise to pay. The promise to pay must be express. It cannot be implied or inferred.
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4. The promise to pay must be unconditional. If the promise to pay is coupled with a condition it is not a promissory note.
5. The maker of the instrument must be certain and definite.
6. A promissory note must be stamped according to the Bangladeshi
Stamp Act.
7. The sum of money to be paid must be certain.
8. The payment must be in the legal tender money of Bangladesh. A promise to pay certain quantity of goods or a certain amount of foreign money is not a promissory note.
9. The money must be payable to a definite person or according to his order. A note is valid even if the payee is misnamed or it is indicated by his official designation only.
10. The promissory note may be payable on demand or after a certain definite period of time.
9.3 DEFINITION OF BILL OF EXCHANGE
A Bill of Exchange is an instrument in writing containing an unconditional order, signed by the marker, directing a certain person to pay a certain sum of money only to, or to the order of a certain person or to the bearer of the instrument.
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9.4 ESSENTIAL ELEMENTS OF A BILL OF EXCHANGE
A Bill of Exchange to be valid must fulfill the following requirements:
1. The instrument must be in writing.
2. The instrument must be signed by a drawer
3. The instrument must be contained an order to pay, which is express and unconditional.
4. The drawer, drawee and the payee must be certain and definite individuals. 5. The amount of money to be paid must be certain.
6. The tender must be in the legal tender money of Bangladesh.
7. The money must be payable to a definite person or according to his order. 8. A bill of exchange must be properly stamped.
9. The bill may be made payable on demand or after a definite period of time. 9.5 DEFINITION OF CHEQUE
A Cheque is a bill of exchange drawn upon a specified bank er and payable on demand.
9.6 ESSENTIAL FEATURES OF CHEQUE
1. A Cheque must fulfill all the essential requirements of the bill of exchange. 2. A Cheque may payable to bearer or to order but in either case it must be payable on demand.
3. The banker named must pay it when it is presented for payment to him at his office during the usual office hours, provided the Cheque is validly drawn and the drawer has sufficient funds to his credit.
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4. Bill and notes may be written entirely by hand. There is no legal bar to
Cheques being hand-written. Usually however, banks provide their customers with printed Cheque forms which are filled up and signed by the drawer.
5. The signature must tally with the specification signature of the drawer kept in the bank.
6. A Cheque must be dated. A banker is entitled to refuse to pay a Cheque which is not dated. A Cheque becomes due for payment on the date specified on it.
7. A Cheque drawn with a future date is valid but it is payable on and after the date specified. Such Cheques are called post -dated Cheques.
8. A Cheque must be presented for payment after the due date but if there is too much delay the bank is entitled to consider the circumstances suspicious and refuse to honor the Cheque.
9.7 ESSENTIAL FEATURES OF NEGOTIABLE INSTRUMENTS
1. Writing and Signature: Negotiable Instruments must be written and signed by the parties according to the rules relating to Promissory Notes,
Bills of Exchange and Cheques.
2. Money: Negotiable instruments are payable by legal tender money of
Bangladesh. The liabilities of the parties of Negotiable Instruments are fixed and determined in terms of legal tender money.
3. Negotiability: Negotiable Instruments can be transferred from one person to another by a simple process. In the case of bearer instruments,
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delivery to the transferee is sufficient. In the case of order instruments two things are required for a valid transfer: endorsement and delivery.
4. Title: The transferee of a negotiable instrument, when he fulfills the certain conditions, is called the holder in due course. The holder in due course gets a good title to the instrument even in cases where the title of the transferor is defective.
5. Notice: It is not necessary to give notice of transfer of a negotiab le instrument to the party liable to pay. The transferee can sue in his own name. 6. Presumptions: Certain presumptions apply to all negotiable instruments. Example: It is presumed that there is consideration. It is not necessary to write in a promissory note the words “for value received” or similar expressions because the payment of consideration is presumed.
7. Special Procedure: A special procedure is provided for suits on promissory notes and bills of exchange. (The procedure is prescribed in the Civil Procedure Code). A decree can be obtained much more quickly than it can be in ordinary suits.
8. Popularity: Negotiable instruments are popular in commercial transactions because of their easy negotiability and quick remedies.
9...Evidence: A document which fails to qualify as a negotiable instrument may nevertheless be used as evidence of the fact of indebtedness. 20
10.TAXATION
1.Federal and state income tax
All governments have the power to collect taxes. State taxation of personal and corporate income parallels the federal system. One of the primary problems with doing business as a corporation is the potential for double taxation, in which our company’s profits are taxed, and any income paid to we as the owner is also taxed.
2.Sales tax
All but three states have enacted sales taxes which affect businesses by taxing transactions. As discussed in Government, Taxes and Financial, we will need to obtain a resale tax identification number. We can find our state's department of revenue online or in the state government section of our phone book.
3.Property tax
Most states assess taxes against real estate as a means of funding state government. The property tax structure can have interesting twists, such as our equipment (including our comp uter) being taxed as real estate or personal property. I have to pay between $20 and $22 every year for my computer, which NV taxes as personal property.
4. Business license fees
These include city or country business license fees. Some states assess special fees for regulated professions and industries (such as beer and wine) which would affect we if we decide to serve wine or champagne for our Royal Teas (this is an afternoon tea with champagne.) Call our
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city or county license office listed in our phone book to find out information on this.
5. Employees payroll/withholding
The federal government has a standard system for requiring employers to deduct and pay various payroll taxes on their salary.
11.THE LAW OF EMPLOYMENT
Employment law comprises all the rights and obligations that define a business owner's relationship with his or her employees. Understanding and complying with these sometimes overlapping state and federal laws can seem overwhelming, especially to a first-time entrepreneur. This section provides a succinct overview of wage, working hours, safety issue and so on.
No matter what kind of business you run, your success or failure depends largely on the quality of your staff. The hiring process, including everything from writing a job description to conducting interviews and choosing the best candidates, should always be done with careful attention to details. This section provides information about job advertisements, illegal interview questions, discrimination laws, drug testing, background checks, employment contracts and related issues. mination, medical leave, overtime and related employment law matters.
a. Contract of employment
The basic feature of labour law in almost every country is that the rights and obligations of the worker and the employer between one another are mediated through the contract of employment between the two. This has been the case since the collapse of feudalism and is the core reality of
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modern economic relations. Many terms and conditions of the contract are however implied by legislation or common law, in such a way as to restrict the freedom of people to agree to certain things to protect employees, and facilitate a fluid labour market. In the U.S. for example, majority of state laws allow for employment to be "at will", meaning the employer can terminate an employee from a position for any reason, so long as the reason is not an illegal reason, including a termination in violation of public policy.
b. Minimum wage
There may be law stating the minimum amount that a worker can be paid per hour. Australia, Belgium, Brazil, Canada, China, Fra nce, Greece,
Hungary, India, Ireland, Japan, Korea, Luxembourg, the Netherlands,
New Zealand, Paraguay, Portugal, Poland, Romania, Spain, Taiwan, the
United Kingdom, the United States, Vietnam and others have laws of this kind. The minimum wage is usually different from the lowest wage determined by the forces of supply and demand in a free market, and therefore acts as a price floor. Each country sets its own minimum wage laws and regulations, and while a majority of industrialized countries has a minimum wage, many developing countries have not. Health and safety
c.Wages, Benefits and Leave Policies
Wages and benefits make up an employee's compensation package; the key is to find a balance that is both attractive to top talent and sustainable for your business. Benefits may include health insurance coverage, retirement plans or other perks sometimes offered along with a salary. In addition to the basics, this section covers the specifics of wage law, leave
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policies, domestic partner benefits, special protections for active-duty military service members, health insurance plu mages:
Wage and Hour Laws: FAQs - Answers to questions about the minimum wage, overtime pay and related issues.
Federal Wage Law: The Fair Labor Standards Act - How federal law governs wage standards, overtime pay and more.
Pay Docking and Unpaid Suspensions- Legal limits on docking the pay of salaried workers.
Garnishment of Wages - Overview of the wage garnishment process.
State Minimum Wage Laws - State-by-state guide to minimum wage laws.
Unpaid Internship Rules - How to stay within the law when implementing internship programs.
Tools and Resources - State wage and labor laws and related resources for employers.
Payroll Taxes - An explanation of when employers must withhold taxes and breakdown of state and federal taxes involved.
State Pay Day Requirements - State by state information on when and how often employers must pay employees.
Tipped Employees and the FLSA - Federal rules on wages for tipped employees.
and other wage and benefit issues.
Benefits:
Pros and Cons of Offering Employee Benefits - Advantages and drawbacks of putting benefits on the negotiating table.
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Health Insurance Overview - Basics of how federal laws affect employment health benefits.
Choosing the Right Health Plan for Your Em ployees - How to choose the best employee health insurance plan.
Retirement Plans and Pensions - Articles and resources pertaining to employee retirement plans and pensions.
Domestic Partner Benefits - Overview of benefits offered to nonmarried partners of covered employees.
Employee Benefits Dictionary - Definitions for commonly used employee benefit terms.
Leave Policies:
Leave Policies in the Workplace FAQs - Answers to frequently asked questions about employee leave policies.
Vacation and Sick Leave - How to effectively manage vacation and sick leave policies.
Family and Medical Leave - Overview of federal and state family and medical leave laws, plus government resources.
Providing Military Leave - How federal law provides leave for active duty military servicemembers.
Military Service and Re-Employment Rights - How federal law protects the re-employment rights of active duty military personnel.
Time Off for Voting and Jury Duty - Laws protecting time off for employees to vote or to serve on a jury.
d.Discrimination and harassment
Discrimination or harassment in the workplace should never be tolerated; they undermine productivity a nd expose businesses to potentially costly lawsuits. Federal law protects employees from discrimination on the basis
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of race, gender and a number of other protected characteristics. Federal law also protects employees from harassment, a form of sex discrimination that includes unwelcome sexual advances or taunts. The following resources will get you up to speed on harassment and discrimination, while providing strategies for handling employee complaints and creating a more harmonious workplace.
Types of Employment Discrimination and Harassment:
Age Discrimination
Disability Discrimination
Equal Pay Discrimination
National Origin Discrimination
Pregnancy Discrimination
Race Discrimination
Sex / Gender Discrimination
Sexual Orientation Discrimination
Genetic Information Discrimination
e. Workplace Safety and privacy
Federal guidelines for workplace safety and health are established and enforced by the Occupational Safety and Health Administration
(OSHA). Employees may not have a reasonable expectation of privacy when sending personal messages from their employer-provided email accounts. But that doesn't mean there is no privacy in the workplace.
The
following
articles
cover
the
monitoring
of
employee
communications, the use of lie detector tests, background checks and related workplace privacy issues.
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f. Employment Termination
Certain legal obligations and restrictions come into play when a company fires, lays off or otherwise ends the employer-employee relationship. Understanding a departing employee's COBRA insurance rights, when it's illegal to fire an employee, how to issue a final paycheck and other aspects of employment termination can help you avoid legal and regulatory exposure. This section provides legal primers, tips and resources about ending the employer -employee relationship.
12. THE LAW OF ENVIRONMENT
Every business in this country is affected by environmental laws, and many businesses deal with one or more environmental laws and the administrative agencies that enforce them on a daily basis. For example, businesses must inform and educate their employees about hazardous materials in the workplace as required by the Occupational Safety and
Health Administration (OSHA), and they must inform their communities about such materials on their premises pursuant to the Comprehensive
Environmental Response, Clean Up, and Liability Act (CERCLA —the
Superfund Program). Manufacturing facilities must apply for and adhere to permits from the federal Environmental Protection Agency (EPA) regarding emissions into air and water. Businesses generating haza rdous wastes must comply with the EPA's manifest system (a record -keeping system), and the disposal of both hazardous and non -hazardous waste is regulated extensively. Businesses are increasingly being required to clean up or pay for cleanup of environmental contamination caused by their past acts and practices. Further, businesses are now being required to monitor their production methods and seek ways to prevent pollution.
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Environmental regulations are constantly changing and, as J. Stephen
Shi and Jane M. Kane noted in Business Horizons, "businesses, especially small-to mid-sized businesses, understandably have a hard time staying abreast of all rules and regulations. [But] whether or not a firm knowingly violated a regulation or was not aware of the violation is irrelevant. Businesses, in the eyes of the law, have a duty to find out what regulations apply to their industry and comply with them."
Therefore, for any business person, it is helpful to be familiar with the problems addressed by our environmental laws, the provisions of those laws, and the kinds of mechanisms and administrative agencies through which those laws are enforced.
Key environmental issues affecting business include industrial waste, sustainable development of raw materials and water and air emissions.
These issues affect business because laws require businesses to change equipment and procedures to meet imposed standards, whic h costs businesses money. Many businesses undertake stricter changes in an effort to preserve the environment. These businesses pay for the protective and proactive environmental measures and attempt to recoup the expenses through consumer good will or the added consumer base gained from an environmentally friendly policy.
a.WASTE
Businesses that manufacture products create, at some point in the manufacturing process, manufacturing waste. Environmental laws and good environmental citizenship prohibit the indiscriminate dumping of manufacturing byproduct, so businesses must decide how best to dispense with it. Many implement recycling programs; others sell what they can of
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the waste to other manufacturers who use it in their own manufacturing processes as raw material. Either way, the effect is additional cost to the business in man hours, procedures, equipment and handling all specific to moving the waste products out of the business manufacturing process and facilities. Sustainable Development of Raw Materials
All manufacturers use raw materials to put together their goods. When these raw materials are natural, such as wood, laws and good environmental citizenship require that the business take measures to replace what it uses. Christmas tree farms are a prime example, as sellers buy from growers who harvest and replant in order to keep from depleting entire forests of naturally occurring pine trees. Again, the affect on business is cost in terms of higher raw materials costs, which usually include the suppliers cost to replant and restock the natural raw materials.
b. EMISSIONS
Manufacturing processes often generate air and/or water emissions, which include particle or chemical-filled smoke, ash and particles and chemicals that seep into ground water through run-off. Environmental protection laws require businesses to protect the e nvironment from exposure to these emissions. Remedial process include placing screens of specified gauges over smoke stacks, filtration of waste water and lining of retention ponds with clay and poly liners. New regulations are implemented frequently that require retrofitting of manufacturing facilities with increased protections, such as screens of even finer gauges
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and pond liners of newer and safer materials. All of these measures are costly to business and affect businesses first by decreasing profit ma rgins.
c. NOISE LAW
Noise is unwanted sound. Depending on its frequency, intensity and duration, noise can constitute a nuisance. At certain decibels, noise may also harm human health.
Noise Nuisance
Noise disturbance may be treated as a nuisance under t ort law if it causes unlawful interference with a person’s use or enjoyment of their land, or of some right over, or in connection with such land. The legal remedies for noise nuisance under tort law are generally damages and, in some cases, injunctions - court orders requiring a noise nuisance to stop or to prevent it from continuing or recurring.
How do local authorities decide if there is a statutory noise nuisance?
Noise level
Time and duration of noise
Nature and location
Importance and value of the activity causing the noise
What can be done?
Once the local authority is satisfied that a statutory noise nuisance has occurred, it can issue an abatement notice. An abatement notice may require that the noise be stopped altogether or limited to certain times of the day. It may also require the perso n who has caused or os responsible forthe noise nuisance to take necessary steps to comply with the
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conditions prescribed in the notice. Breach of an abatementis a criminal offence. Although the appropriate local authority is normally the appropriate authority to treat noise nuisance complaints, the police might also in practice be contacted, particularly if the noise disturbance could amount to a breach of peace or if it is accompanied by anti-social, threatening or violent behaviour.
Key Noise Legislation
1. Control of Pollution Act 1974
2. Noise Insulation Regulations 1973, 1975 and 1988
3. The Environmental Protection Act 1990
4. Noise and Statutory Nuisance Act 1993
5. Criminal Justice and Public Order Act 1994
6. Noise Act 1996 as amended by the Anti-social Behaviour Ac t 2003
7. Housing Act 1996
8. Crime and Disorder Act 1998 as amended by the Police Reform
Act 2002
9. Building Regulations 2000 (SI 2000/2531) made under the
Building Act 1984
10. Police Reform Act 2002
11. Licensing Act 2003
12. Anti-social Behaviour Act 2003
13. The Control of N oise at Work Regulations 2005
14. The Environmental Noise (England) Regulations 2006
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REFERENCES
Reference Books:
1. Business for the 21st Century by Steven J. Skinner and John M.
Ivancevich
2. Commercial Law Including Company Law and Industrial Law by
Arun Kumar Sen and Jitendra Kumar Mitra
3. Fundamental of Company Law by A. I. Khan
4. Doing Business in Bangladesh – Howlader yunus & Co.Chartered
Accountants
Reference Websites and Portals http://en.wikipedia.org/wiki http://www.investorwords.com http://www.answer.com http://www.law.cornell.edu http://www.hg.org/ http://www.uscourts.gov/FederalCourts http://www.nos.org/secbuscour/ http://en.wikipedia.org/wiki/Labour_law http://smallbusiness.chron.com/environmental-issues-affect-business4175.html http://en.wikipedia.org/wiki/Liability_insurance http://www.qbe.asia/Business/General-Liability/Insurance.html 32
Bangladesh is a combination of competitive market, business -friendly environment and cost structure that can give the best returns. Bangladesh offers a well-educated, highly adaptive and industrious workforce with the lowest wages and salaries in the regio n. 57.30% of the population is under 25, providing a youthful group for recruitment. The country has consistently developed a skilled workforce catering to investors needs.
English is widely spoken, making communication easy. Bangladesh is strategically located next to India, China and ASEAN markets.
Bangladesh has proved to be an attractive investment location with its
146.6 million population and consistent economic growth leading to strong and growing domestic demand. Energy prices in Bangladesh are the most competitive in the region. Bangladesh offers the most liberal
FDI regime in South Asia, allowing 100% foreign equity with unrestricted exit policy, easy remittance of royalty, and repatriation of profits and incomes. Bangladesh offers export-oriented industrial enclaves with infrastructural facilities and logistical support for foreign investors. 2.THE COUNTRY
2.1. GEOGRAPHY/STATISTICS
Bangladesh is located in the Southern Asia, bordering the Bay of Bengal with the coastline covering 580 k m between Burma & India with the land boundaries 4,246 km where Burma covered 193 km and India covered
4,053 km. The time difference is GMT+6. The Total are a is 147,570sq km and the total population is 164,425,491.The climate of the country is focused as tropical; mild winter (October to March); hot, humid summer
(March to June); humid, warm rainy mons oon (June to October). Official
1
language is Bangla (Bengali). English is widely used in Government,
Business and Universities. Out of total population, Muslim 89.6 %, Hindu
9.3 %, Buddhist 0.5%, Christian 0.3% and Other 0.3%.
2.2. ECONOMY
The economic position of the country is GDP/PPP (2011 est.): $100 billion; per capita $664, Real growth rate: 6%, Inflation: 11.3%. The
Industries are Textiles, Jute, Garments, Tea Processing, Paper Newsprint,
Cement, Chemical Fertilizer, Light Engineering, Sugar, Ceramics and
Pharmacy. Natural resources are Gas, Timber and Coal. Arable land covered 55.39% and permanent crops covered 3.08% of total land area.
Bangladesh exports mainly Ready Made Garments including Knit Wear
(75% of exports revenue). Others include: Shrimps, Jute Goods
(including Carpet), Leather Goods and Tea. Bangladesh imports mostly
Petroleum Product and Oil, Machinery and Parts, Soybean and Palm Oil,
Raw Cotton, Iron, Steel and Wheat.
2.3. CURRENCY AND BANKING
Currency of the country is Bangladeshi Taka (Tk). The financial system of Bangladesh consists of Bangladesh Bank (BB) as the central bank, 4
State Owned Commercial Banks (SCB), 5 government owned specialized banks, 30 domestic private banks, 9 foreign banks and 29 non-banking financial institutions.The financial system also embraces insurance companies, stock exchanges and co-operative banks. Bangladesh Bank is both the Government’s banker and the banker’s ba nk, a “Lender of the
Last Resort”. Bangladesh Bank, like most of the central banks of different countries, exercises monopoly over the issue of currency and the banknotes. 2
2.4. GOVERNMENT/POLITICS
The conventional long form is “People's Republic of Bangladesh” and the conventional short form is “Bangladesh”. The government type is parliamentary democracy. Capital is Dhaka and the administrative 7 divisions are Barisal, Chittagong, Dhaka, Khulna, Raj shahi, Rangpur and
Sylhet. 26 March 1971 is the date of independence and 16 December
1971 is known as Victory Day and commemorates the official creation of the state of Bangladesh.
2.5. LEGAL SYSTEM
Bangladesh seceded from Pakistan in December 1971. The British -era legislation applied in Pakistan after 1947 and post-partition legislation enacted in Pakistan continued to form the basis of Bangladeshi personal status laws, but legal developments since 1972 have been distinct.
Constitution adopted 4 November 1972. Amended in 1977 to remove principle of secularism included in Part II entitled Fundamental Principles of State Policy. After the emergence of Bangladesh in 1971, a rigid constitution has been adopted which came into force on 16 December
1972. The basic law of Bangladesh is the constitution of the People's
Republic of Bangladesh, 1972 as amended from time to time. Till 2010, fifteen amendments to the constitution have been made. All laws of the country are subordinate laws made by the elected Sangsad (the legislature consists of 350 members) conforming to the tenets of the Constitution.
The laws enacted by the legislature and now in operation regulate almost all spheres of life. Ordinarily executive authorities and statutory corporations cannot make any law, but can make by -laws to the extent authorized by the legislature. Such subordinate legislation is known as rules or regulations. Unless found ultra vires of the parent law, such rules or regulations are also enforceable by the court like the laws made by the
3
legislature. Important laws of the country may be classified under some broad heads such as land and property laws, personal laws, commercial laws, labour and industrial laws, election laws, law of crimes, service laws, fiscal laws, press laws and laws relating to the remedies. All laws, rules or regulations made by the competent authority are applied in the
Courts and Tribunals. The Courts can be classified into two classes viz. the Supreme Court and; Subordinate Courts and Tribunals. The Supreme
Court of Bangladesh is the apex court with its two divisions, the High
Court Division and the Appellate Division. As the apex court the high court division has been vested with the power to hear appea ls and revisions from subordinate courts, and also to issue orders and directives in the nature of writs to enforce fundamental rights and to grant other reliefs available under the writ jurisdiction. There are civil courts presided by Assistant Judge to try the suits of civil nature and criminal courts presided by judicial magistrate to try the criminal cases. In addition, there are various other laws on different subjects regulating different fields and spheres of activities of national life. To seek reme dy a person has to file a case before the appropriate court or authority. Claims regarding money, property, compensation etc is to be filed before the civil court presided over by the assistant judge or subordinate judge according to value of the claim, and complaint against commission of crime is to be filed either with the local police station or in the criminal court of the magistrate of the first class of the locality. The police investigates the cases lodged with the police station and produces witness es before the court during trial. On the other hand, it is the responsibility of the complainant to produce witnesses before the court in the cases in which magistrates take cognizance on the basis of a written complaint. There are other authorities before which remedies may be sought by an aggrieved party. Those authorities are administrative authorities or tribunals. Except in respect of
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enforcement of fundamental rights, admiralty, company matters and writ petitions, relief cannot be sought directly from the high court division which mainly deals with appeals and revisions from the decisions of the subordinate courts. One of the notable features of the legal system of
Bangladesh is that the legislature can enact any special law for any particular purpose and thereby can form special courts or tribunals. For example, there are labour courts and labour appellate tribunals to decide labour disputes, administrative tribunals and administrative appellate tribunal to decide service disputes of public servants, i ncome tax appellate tribunal to decide income tax disputes, custom, excise and VAT
Appellate tribunal to decide disputes regarding custom and excise duties and VAT, court of settlement to decide disputes about abandoned properties, special judges to try corruption cases against public servants, special tribunals to try criminal cases under the Special Power Act 1974 and Nari-o-ShishuNirjatan Daman Adalats to decide cases of crimes committed against children and women. To decide election disputes the election tribunals are constituted with judicial officers. Family courts have been constituted with assistant judges to decide family disputes. To decide money claims of the banks and other financial institutions
ArthaRinAdalats have been set up presided over by judges, and insolvency courts have been set up presided over by district or additional district Judges to declare defaulting borrowers as insolvent. To try offences committed by children below the age of 16 years, juvenile courts have been formed with the magistrates and sessions judges, and juvenile courts follow the special procedure laid down in the children's Act.
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3. DEFINITION OF LAW AND BUSINESS LAW
LAW
Law, as it is, is the command of the Sovereign. It means, (1) law has its source in sovereign authority, (2) law is accompanied by sanctions, and
(3) the command to be a law should compel a course of conduct. Being a command the law must flow from a determinate person or group of persons with the threat of displeasure if it is not obeyed.
Thus the term Law is used to denote rules of conduct emanated from and enforced by the state.
According to Salmond, "Law is the body of principles recognized and applied by the State in the administration of justice."
According to Holland, Law is, ''a rule of external human action enforced by the sovereign political authority.''
The laws of a country relate to many subjects, e.g., inheritance and transfer of property, relationship between persons, crime and their punishments, as well as matter relating to industr y trade and commerce.
The term Business law is used to include only the last of the aforesaid subjects, i.e. rules relating to industry trade and commerce.
Business Law
Business Law (also referred to as Commercial Law) governs the transactions between bus inesses. This includes business formation; litigation; contracts; mergers and acquisitions; commercial leasing; and consumer protection. Business law deals primarily with the definition of rights and responsibilities, as opposed to the enforcement of laws.
6
Business law and commercial law encompass several overlapping issues.
The Uniform Commercial Code (UCC) is the primary governing authority for commercial transactions. Other specified legal areas have developed that are types of business or commercial law . They include
Banking, Bankruptcy, Consumer Credit, Contracts, Debtor and Creditor,
Landlord-Tenant, Mortgages, Negotiable Instruments, Real Estate
Transactions, Sales and Secured Transactions. It is important for all business owners to know and understand the laws that affect their businesses. It is equally important to comply with those laws. Ignorance of the laws has never been a valid excuse in any Court of Law, and it never will be. As a business owner, it is one’s responsibilit y to know what laws affect his business. Business law and commercial law are broad legal topics that encompass business, commerce, consumer transactions, and the formation and management of business entities. Some of the more important areas of commercial law include sales, secured transactions, negotiable instruments, and debtor and creditor law. Business law overlaps, but also includes the formation and management of business entities. An attorney with experience in business and commercial law can help you with all of your questions. Numerous and Varied laws regulate the activities of all businesses and everyone involved in the business from owner to manager to employee.
4. LAWS THAT AFFECT BUSINESS IN BANGLADESH
It is important for all business owners to know and understand t he laws that affect their businesses. It is equally important to comply with those laws. Ignorance of the laws has never been a valid excuse in any Court of
Law, and it never will be. As a business owner, it is owner’s responsibility to know what laws affect his business.
7
Business Law may be defined as that part of law which regulates the transactions of the mercantile community. The scope of commercial law is large. It includes the laws relating to contract, partnership, negotiable instruments, sale of goods companies etc. It is noted that there is no fixed line of division between commercial law and other branches of law, nor is there any conflict or contradiction between them. The law of contract, which is a very important part of commercial law, is appl icable not only to merchants and bankers but also to other persons. Commercial law deals with only those parts of law which are of special importance to the mercantile community. The same laws are applicable to other citizens under appropriate circumstances.
5. THE LAW OF CONTRACT
The Law of Contract deals with agreements which can be enforced through courts of law. The Law of Contract is the most important part of commercial law because every commercial transaction starts from an agreement between two or more persons. An agreement enforceable by law is a contract. Therefore in a contract there must be (1) an agreement and (2) the agreement must be enforceable by law. The object of The Law of Contract is to introduce definiteness in commercial and other transactions. How this is done can be illustrated by an example. X enters into a contract to deliver 10 tons of coal of Y on a certain date. Since such a contract is enforceable by the courts, Y can plan his/her activities on the basis of getting the coal on the fixed date. If the contract is broken, Y will get damages from the court and will not suffer any loss.
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5.1 THE ESSENTIALS ELEMENTS OF A CONTRACT
An agreement becomes enforceable by law when it fulfils certain conditions. These conditions, which may be called the Essential Elements of a Contract, are explained below.
1. Offer and Acceptance: There must be a lawful offer by one party and a lawful acceptance of the offer by other party or parties. An ''offer'' involves the making of a ''proposal''. When the person to whom the proposal is made signifies is assent thereto, the proposal is said to be accepted. 2. Intention to create Legal Relationship: There must be an intention
(among parties) that the agreement shall result in or create legal relations .
An agreement to dine at a friend's house is not an agreement intended to create legal relations and is not a contract.
3. Lawful Consideration: Subject to certain exceptions, an agreement is legally enforceable only when each of the parties to it gives something and gets something. An agreement to do something for nothing is usually not enforceable by law. The something given or obtained is called consideration. 4. Capacity of parties: The parties to an agreement must be legally capable of entering into an agreement; otherwise it cannot be enforced by a court of law. Want of capacity arises from minority, lunacy, idiocy, drunkenness, and similar other factors. If any of the parties to the agreement suffers from any such disability, the agreement is not enforceable by law, except in some special cases.
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5. Free Consent: In order to be enforceable, an agreement must be based on the free consent of all parties. There is absence of genuine consent if the agreement is induced by coercion, undue influence, mist ake, misrepresentation, and fraud. A person guilty of coercion, undue influence etc. cannot enforce it, subject to rules laid down in the Act.
6. Legality of the Object: The object for which the agreement has been entered into must not be illegal, or immo ral or opposed to public policy.
7. Certainty: The agreement must not be vague. It must be possible to ascertain the meaning of the agreement, for otherwise it cannot be enforced. 8. Possibility of Performance: The agreement must be capable of being performed. A promise to do an impossible thing cannot be enforced.
9. Void Agreement: An agreement so made must not have been expressly declared to be void. There are five categories of agreements which are expressly declared to be void. They are:
Agreement in restraint to marriage
Agreement in restraint of trade
Agreement in restraint of proceedings
Agreements having uncertain meaning
Wagering agreement
The elements mentioned above must all be present. If any one of them is absent, the agreement does not become a contract. An agreement which fulfills all the essential elements is enforceable by law and is called a contract. 10
6. THE LAW OF AGENCY
An 'Agent' is a person employed to do any act for another or to represent another in dealing with third persons. The person for whom such act is done, or who is so represented, is called the Principal. For example P appoints X to buy 50 bales of cotton on his behalf. P is the principal and
X is his Agent. The relationship between P and X is called Agency.
Power of attorney
An Agent may be appointed by the Principal, executing a written and stamped document. Such a document is called Power of Attorney. There are two kinds of Power of Attorney: General and Special. A general power is one by which the agent is given an authority to do certain general objectives, e.g., managing an estate or a business. A special or particular power may be appointed by which an agent is authorized to do a specific thing, e.g., selling some goods. A man dealing with a particular agent is bound to find out the limits of the authority by which the authority of the agent can act accordingly.
7. THE LAW RELATING TO SALE OF GOODS
The law relating to the sale of movable goods is contained in the sale of
Goods Acts.
7.1 BUYER, SELLER AND GOODS:
Buyer means a person who buys or agrees to buy goods
Seller means a person who sells or agrees to sell goods
The term 'Goods' includes every kind of movable property except (1) actionable claims and (2) money.
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An actionable claim means a debt or a claim for money which a person may have against another and which he/she may recover by suit. Money means legal tender money.
Goods may be classified into three types: Existing Goods, Future Goods, and Contingent Goods.
Existing goods are goods which are already in existence and which are physically present in some person's possession and ownership.
Future goods are goods which will be manufactured or produced or acquired by the seller after the making of the contract of sale.
There may be a contract for the sale of goods the acquisition of which by the seller depends upon a contingency which may or may not happen. In such cases the goods sold are called Contingent goods.
7.2 SALE AND AGREEMENT TO SELL
Sale: A contract for the sale of goods may be either a sale o r an agreement to sell. Where under a contract of sale the property in the goods is transferred from the seller to the buyer the contract is called a sale. The transaction is a sale even though the price is payable at a later date or delivery to be given in the future, provided the ownership of the good is transferred from the seller to the buyer.
Agreement to sell: When the transfer of ownership is to take place at a future time or subject to some condition to be fulfilled later, the contract is called an agreement to sell. An agreement to sell becomes a sale when the prescribed time elapses or the conditions, subject to which the property in the goods is to be transferred, are fulfilled.
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7.3 THE ESSENTIAL ELEMENTS:
The essential elements of a contract for the sale of goods are enumerated below. 1. Movable goods: The sale of goods act deals only with the movable goods, excepting actionable claims and money. This Act does not a pply to immovable properties.
2. Movable goods for money: There must be a contract for the exchange of movable goods for money. Therefore in a sale there must be moneyconsideration. An exchange of goods for goods is not a sale.
3. Two Parties: Since a contract of sale involves a change of Ownership, it follows that the buyer and the seller must be different persons. A sale is a bilateral contract. A man cannot buy form or sell goods to himself.
4. Formation of the contract of sale: A contract of sale is made by an offer to buy or sell goods for a price and the acceptance of such offer. The contract may provide for the immediate delivery of the goods or immediate payment of the price or both, or for the delivery and payment by installments, or that the de livery or payment or both shall be postponed. 5. Method of forming the contract: Subject to the provision of any law for the time being in force, a contract of sale may be writing, or by word of mouth, or may be implied from the conduct of the parties.
6. The terms of contract: The parties may agree upon any term concerning the time, place, and mode of delivery. The terms may of two types: essential and non-essential. Essential terms are called Conditions, non-essential term are called Warranties.
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8. THE LAW OF PARTNERSHIP
Partnership is the relation between who have agreed to share the profits of a business carried on by all or any of them acting for all. A partnership, as defined in the Act, must have three essential elements -
1. There must be an agreement entered into by two or more
………persons.
2. The agreement must be to share the profits of a business.
3. The business must be carried on by all or any of them.
1. Voluntary Agreement: The first element shows the voluntary contractual nature of partnership. A partnership can only arise as a result of an agreement, express or implied, between two or more persons.
2. Sharing of Profits of a Business: The second element states the motive underlying the information of a partnership. It also lays down that the existence of a business is essential to a partnership. Business includes any trade, occupation or profession. If two or more persons join together to form a music club it is not a partnership because there is no business in this case. But if two or more persons join together to give musical performance to the public with a view of earnin g profit, there is a business and partnership is formed.
3. Mutual Agency: The third element is the most important feature of partnership. It states that persons carrying on business in partnership are agents as well as principals. The business of a firm is carried on by all or by any one or more of them on behalf of all.
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Who can be a partner?
1. Person: A person may be partner if he has the capacity to enter into a contract. Who is a ‘person’? For the purposes of the Partnership Act, the term
‘person’ does not include a partnership or a limited company. Thus a
Company P cannot form a partnership with a Company Q. G. M.
Similarly, a firm X cannot form a partnership with firm Y. But all the partners of firm X and all the partners of firm Y can form a singl e partnership, subject to the rules regarding the number of partners.
2. Minor: A minor cannot be a partner. But in an existing partnership, a minor can be admitted into a firm if all the partners of the firm agree.
Such a minor gets all the benefits of a partnership.
3. Person of an unsound mind: A person who is of unsound mind cannot become a partner.
4. Woman: A woman can be a partner, married or unmarried. Of course a woman cannot be a partner if she is a minor or she is of unsound mind.
5. Company: In a Company the capacity to enter into contract is determined by the Memorandu m and Articles of the Association of the company. The liability of the members of a firm under the Partnership
Act, for the debts of the firm, is unlimited liability. Therefore, a company cannot become a partner of a firm.
6. An alien: An alien enemy cannot enter into a contract of partnership with a citizen of Bangladesh.
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9. LAW RELATING TO NEGOTIABLE INSTRUMENTS:
Documents of a certain type, used in commercial transactions and monetary dealings, are called Negotiable Instruments.
“Negotiable” means transferable by delivery and “instrument” means a written document by which a right is created in favor of some persons.
The term negotiable instrument literally means “a document transferable by delivery”. Three kinds of instruments are recognized as negotiab le instruments- promissory notes, bills of exchange and Cheques.
9.1 DEFINITION OF PROMISSORY NOTE
A promissory note is an instrument in writing (not being a bank note or a current note) containing an unconditional undertaking signed by the marker, to pay a certain sum of money only to, or to order of a certain person, or to the bearer of the instrument.
9.2 ESSENTIAL ELEMENTS OF PROMISSORY NOTE
From the definition given in the Act it is apparent that the following essential requirements must be fulfilled by an instrument intended to be a promissory note:
1. The instrument must be in writing.
2. The instrument must be signed by a marker of it. A signature in pencil or by a rubber stamp of facsimile is good. An illiterate person may use a mark or cross instead of writing out his name. The signature or mark may be placed anywhere on the instrument, not necessarily at the bottom.
3. The instrument must contain a promise to pay. The promise to pay must be express. It cannot be implied or inferred.
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4. The promise to pay must be unconditional. If the promise to pay is coupled with a condition it is not a promissory note.
5. The maker of the instrument must be certain and definite.
6. A promissory note must be stamped according to the Bangladeshi
Stamp Act.
7. The sum of money to be paid must be certain.
8. The payment must be in the legal tender money of Bangladesh. A promise to pay certain quantity of goods or a certain amount of foreign money is not a promissory note.
9. The money must be payable to a definite person or according to his order. A note is valid even if the payee is misnamed or it is indicated by his official designation only.
10. The promissory note may be payable on demand or after a certain definite period of time.
9.3 DEFINITION OF BILL OF EXCHANGE
A Bill of Exchange is an instrument in writing containing an unconditional order, signed by the marker, directing a certain person to pay a certain sum of money only to, or to the order of a certain person or to the bearer of the instrument.
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9.4 ESSENTIAL ELEMENTS OF A BILL OF EXCHANGE
A Bill of Exchange to be valid must fulfill the following requirements:
1. The instrument must be in writing.
2. The instrument must be signed by a drawer
3. The instrument must be contained an order to pay, which is express and unconditional.
4. The drawer, drawee and the payee must be certain and definite individuals. 5. The amount of money to be paid must be certain.
6. The tender must be in the legal tender money of Bangladesh.
7. The money must be payable to a definite person or according to his order. 8. A bill of exchange must be properly stamped.
9. The bill may be made payable on demand or after a definite period of time. 9.5 DEFINITION OF CHEQUE
A Cheque is a bill of exchange drawn upon a specified bank er and payable on demand.
9.6 ESSENTIAL FEATURES OF CHEQUE
1. A Cheque must fulfill all the essential requirements of the bill of exchange. 2. A Cheque may payable to bearer or to order but in either case it must be payable on demand.
3. The banker named must pay it when it is presented for payment to him at his office during the usual office hours, provided the Cheque is validly drawn and the drawer has sufficient funds to his credit.
18
4. Bill and notes may be written entirely by hand. There is no legal bar to
Cheques being hand-written. Usually however, banks provide their customers with printed Cheque forms which are filled up and signed by the drawer.
5. The signature must tally with the specification signature of the drawer kept in the bank.
6. A Cheque must be dated. A banker is entitled to refuse to pay a Cheque which is not dated. A Cheque becomes due for payment on the date specified on it.
7. A Cheque drawn with a future date is valid but it is payable on and after the date specified. Such Cheques are called post -dated Cheques.
8. A Cheque must be presented for payment after the due date but if there is too much delay the bank is entitled to consider the circumstances suspicious and refuse to honor the Cheque.
9.7 ESSENTIAL FEATURES OF NEGOTIABLE INSTRUMENTS
1. Writing and Signature: Negotiable Instruments must be written and signed by the parties according to the rules relating to Promissory Notes,
Bills of Exchange and Cheques.
2. Money: Negotiable instruments are payable by legal tender money of
Bangladesh. The liabilities of the parties of Negotiable Instruments are fixed and determined in terms of legal tender money.
3. Negotiability: Negotiable Instruments can be transferred from one person to another by a simple process. In the case of bearer instruments,
19
delivery to the transferee is sufficient. In the case of order instruments two things are required for a valid transfer: endorsement and delivery.
4. Title: The transferee of a negotiable instrument, when he fulfills the certain conditions, is called the holder in due course. The holder in due course gets a good title to the instrument even in cases where the title of the transferor is defective.
5. Notice: It is not necessary to give notice of transfer of a negotiab le instrument to the party liable to pay. The transferee can sue in his own name. 6. Presumptions: Certain presumptions apply to all negotiable instruments. Example: It is presumed that there is consideration. It is not necessary to write in a promissory note the words “for value received” or similar expressions because the payment of consideration is presumed.
7. Special Procedure: A special procedure is provided for suits on promissory notes and bills of exchange. (The procedure is prescribed in the Civil Procedure Code). A decree can be obtained much more quickly than it can be in ordinary suits.
8. Popularity: Negotiable instruments are popular in commercial transactions because of their easy negotiability and quick remedies.
9...Evidence: A document which fails to qualify as a negotiable instrument may nevertheless be used as evidence of the fact of indebtedness. 20
10.TAXATION
1.Federal and state income tax
All governments have the power to collect taxes. State taxation of personal and corporate income parallels the federal system. One of the primary problems with doing business as a corporation is the potential for double taxation, in which our company’s profits are taxed, and any income paid to we as the owner is also taxed.
2.Sales tax
All but three states have enacted sales taxes which affect businesses by taxing transactions. As discussed in Government, Taxes and Financial, we will need to obtain a resale tax identification number. We can find our state's department of revenue online or in the state government section of our phone book.
3.Property tax
Most states assess taxes against real estate as a means of funding state government. The property tax structure can have interesting twists, such as our equipment (including our comp uter) being taxed as real estate or personal property. I have to pay between $20 and $22 every year for my computer, which NV taxes as personal property.
4. Business license fees
These include city or country business license fees. Some states assess special fees for regulated professions and industries (such as beer and wine) which would affect we if we decide to serve wine or champagne for our Royal Teas (this is an afternoon tea with champagne.) Call our
21
city or county license office listed in our phone book to find out information on this.
5. Employees payroll/withholding
The federal government has a standard system for requiring employers to deduct and pay various payroll taxes on their salary.
11.THE LAW OF EMPLOYMENT
Employment law comprises all the rights and obligations that define a business owner's relationship with his or her employees. Understanding and complying with these sometimes overlapping state and federal laws can seem overwhelming, especially to a first-time entrepreneur. This section provides a succinct overview of wage, working hours, safety issue and so on.
No matter what kind of business you run, your success or failure depends largely on the quality of your staff. The hiring process, including everything from writing a job description to conducting interviews and choosing the best candidates, should always be done with careful attention to details. This section provides information about job advertisements, illegal interview questions, discrimination laws, drug testing, background checks, employment contracts and related issues. mination, medical leave, overtime and related employment law matters.
a. Contract of employment
The basic feature of labour law in almost every country is that the rights and obligations of the worker and the employer between one another are mediated through the contract of employment between the two. This has been the case since the collapse of feudalism and is the core reality of
22
modern economic relations. Many terms and conditions of the contract are however implied by legislation or common law, in such a way as to restrict the freedom of people to agree to certain things to protect employees, and facilitate a fluid labour market. In the U.S. for example, majority of state laws allow for employment to be "at will", meaning the employer can terminate an employee from a position for any reason, so long as the reason is not an illegal reason, including a termination in violation of public policy.
b. Minimum wage
There may be law stating the minimum amount that a worker can be paid per hour. Australia, Belgium, Brazil, Canada, China, Fra nce, Greece,
Hungary, India, Ireland, Japan, Korea, Luxembourg, the Netherlands,
New Zealand, Paraguay, Portugal, Poland, Romania, Spain, Taiwan, the
United Kingdom, the United States, Vietnam and others have laws of this kind. The minimum wage is usually different from the lowest wage determined by the forces of supply and demand in a free market, and therefore acts as a price floor. Each country sets its own minimum wage laws and regulations, and while a majority of industrialized countries has a minimum wage, many developing countries have not. Health and safety
c.Wages, Benefits and Leave Policies
Wages and benefits make up an employee's compensation package; the key is to find a balance that is both attractive to top talent and sustainable for your business. Benefits may include health insurance coverage, retirement plans or other perks sometimes offered along with a salary. In addition to the basics, this section covers the specifics of wage law, leave
23
policies, domestic partner benefits, special protections for active-duty military service members, health insurance plu mages:
Wage and Hour Laws: FAQs - Answers to questions about the minimum wage, overtime pay and related issues.
Federal Wage Law: The Fair Labor Standards Act - How federal law governs wage standards, overtime pay and more.
Pay Docking and Unpaid Suspensions- Legal limits on docking the pay of salaried workers.
Garnishment of Wages - Overview of the wage garnishment process.
State Minimum Wage Laws - State-by-state guide to minimum wage laws.
Unpaid Internship Rules - How to stay within the law when implementing internship programs.
Tools and Resources - State wage and labor laws and related resources for employers.
Payroll Taxes - An explanation of when employers must withhold taxes and breakdown of state and federal taxes involved.
State Pay Day Requirements - State by state information on when and how often employers must pay employees.
Tipped Employees and the FLSA - Federal rules on wages for tipped employees.
and other wage and benefit issues.
Benefits:
Pros and Cons of Offering Employee Benefits - Advantages and drawbacks of putting benefits on the negotiating table.
24
Health Insurance Overview - Basics of how federal laws affect employment health benefits.
Choosing the Right Health Plan for Your Em ployees - How to choose the best employee health insurance plan.
Retirement Plans and Pensions - Articles and resources pertaining to employee retirement plans and pensions.
Domestic Partner Benefits - Overview of benefits offered to nonmarried partners of covered employees.
Employee Benefits Dictionary - Definitions for commonly used employee benefit terms.
Leave Policies:
Leave Policies in the Workplace FAQs - Answers to frequently asked questions about employee leave policies.
Vacation and Sick Leave - How to effectively manage vacation and sick leave policies.
Family and Medical Leave - Overview of federal and state family and medical leave laws, plus government resources.
Providing Military Leave - How federal law provides leave for active duty military servicemembers.
Military Service and Re-Employment Rights - How federal law protects the re-employment rights of active duty military personnel.
Time Off for Voting and Jury Duty - Laws protecting time off for employees to vote or to serve on a jury.
d.Discrimination and harassment
Discrimination or harassment in the workplace should never be tolerated; they undermine productivity a nd expose businesses to potentially costly lawsuits. Federal law protects employees from discrimination on the basis
25
of race, gender and a number of other protected characteristics. Federal law also protects employees from harassment, a form of sex discrimination that includes unwelcome sexual advances or taunts. The following resources will get you up to speed on harassment and discrimination, while providing strategies for handling employee complaints and creating a more harmonious workplace.
Types of Employment Discrimination and Harassment:
Age Discrimination
Disability Discrimination
Equal Pay Discrimination
National Origin Discrimination
Pregnancy Discrimination
Race Discrimination
Sex / Gender Discrimination
Sexual Orientation Discrimination
Genetic Information Discrimination
e. Workplace Safety and privacy
Federal guidelines for workplace safety and health are established and enforced by the Occupational Safety and Health Administration
(OSHA). Employees may not have a reasonable expectation of privacy when sending personal messages from their employer-provided email accounts. But that doesn't mean there is no privacy in the workplace.
The
following
articles
cover
the
monitoring
of
employee
communications, the use of lie detector tests, background checks and related workplace privacy issues.
26
f. Employment Termination
Certain legal obligations and restrictions come into play when a company fires, lays off or otherwise ends the employer-employee relationship. Understanding a departing employee's COBRA insurance rights, when it's illegal to fire an employee, how to issue a final paycheck and other aspects of employment termination can help you avoid legal and regulatory exposure. This section provides legal primers, tips and resources about ending the employer -employee relationship.
12. THE LAW OF ENVIRONMENT
Every business in this country is affected by environmental laws, and many businesses deal with one or more environmental laws and the administrative agencies that enforce them on a daily basis. For example, businesses must inform and educate their employees about hazardous materials in the workplace as required by the Occupational Safety and
Health Administration (OSHA), and they must inform their communities about such materials on their premises pursuant to the Comprehensive
Environmental Response, Clean Up, and Liability Act (CERCLA —the
Superfund Program). Manufacturing facilities must apply for and adhere to permits from the federal Environmental Protection Agency (EPA) regarding emissions into air and water. Businesses generating haza rdous wastes must comply with the EPA's manifest system (a record -keeping system), and the disposal of both hazardous and non -hazardous waste is regulated extensively. Businesses are increasingly being required to clean up or pay for cleanup of environmental contamination caused by their past acts and practices. Further, businesses are now being required to monitor their production methods and seek ways to prevent pollution.
27
Environmental regulations are constantly changing and, as J. Stephen
Shi and Jane M. Kane noted in Business Horizons, "businesses, especially small-to mid-sized businesses, understandably have a hard time staying abreast of all rules and regulations. [But] whether or not a firm knowingly violated a regulation or was not aware of the violation is irrelevant. Businesses, in the eyes of the law, have a duty to find out what regulations apply to their industry and comply with them."
Therefore, for any business person, it is helpful to be familiar with the problems addressed by our environmental laws, the provisions of those laws, and the kinds of mechanisms and administrative agencies through which those laws are enforced.
Key environmental issues affecting business include industrial waste, sustainable development of raw materials and water and air emissions.
These issues affect business because laws require businesses to change equipment and procedures to meet imposed standards, whic h costs businesses money. Many businesses undertake stricter changes in an effort to preserve the environment. These businesses pay for the protective and proactive environmental measures and attempt to recoup the expenses through consumer good will or the added consumer base gained from an environmentally friendly policy.
a.WASTE
Businesses that manufacture products create, at some point in the manufacturing process, manufacturing waste. Environmental laws and good environmental citizenship prohibit the indiscriminate dumping of manufacturing byproduct, so businesses must decide how best to dispense with it. Many implement recycling programs; others sell what they can of
28
the waste to other manufacturers who use it in their own manufacturing processes as raw material. Either way, the effect is additional cost to the business in man hours, procedures, equipment and handling all specific to moving the waste products out of the business manufacturing process and facilities. Sustainable Development of Raw Materials
All manufacturers use raw materials to put together their goods. When these raw materials are natural, such as wood, laws and good environmental citizenship require that the business take measures to replace what it uses. Christmas tree farms are a prime example, as sellers buy from growers who harvest and replant in order to keep from depleting entire forests of naturally occurring pine trees. Again, the affect on business is cost in terms of higher raw materials costs, which usually include the suppliers cost to replant and restock the natural raw materials.
b. EMISSIONS
Manufacturing processes often generate air and/or water emissions, which include particle or chemical-filled smoke, ash and particles and chemicals that seep into ground water through run-off. Environmental protection laws require businesses to protect the e nvironment from exposure to these emissions. Remedial process include placing screens of specified gauges over smoke stacks, filtration of waste water and lining of retention ponds with clay and poly liners. New regulations are implemented frequently that require retrofitting of manufacturing facilities with increased protections, such as screens of even finer gauges
29
and pond liners of newer and safer materials. All of these measures are costly to business and affect businesses first by decreasing profit ma rgins.
c. NOISE LAW
Noise is unwanted sound. Depending on its frequency, intensity and duration, noise can constitute a nuisance. At certain decibels, noise may also harm human health.
Noise Nuisance
Noise disturbance may be treated as a nuisance under t ort law if it causes unlawful interference with a person’s use or enjoyment of their land, or of some right over, or in connection with such land. The legal remedies for noise nuisance under tort law are generally damages and, in some cases, injunctions - court orders requiring a noise nuisance to stop or to prevent it from continuing or recurring.
How do local authorities decide if there is a statutory noise nuisance?
Noise level
Time and duration of noise
Nature and location
Importance and value of the activity causing the noise
What can be done?
Once the local authority is satisfied that a statutory noise nuisance has occurred, it can issue an abatement notice. An abatement notice may require that the noise be stopped altogether or limited to certain times of the day. It may also require the perso n who has caused or os responsible forthe noise nuisance to take necessary steps to comply with the
30
conditions prescribed in the notice. Breach of an abatementis a criminal offence. Although the appropriate local authority is normally the appropriate authority to treat noise nuisance complaints, the police might also in practice be contacted, particularly if the noise disturbance could amount to a breach of peace or if it is accompanied by anti-social, threatening or violent behaviour.
Key Noise Legislation
1. Control of Pollution Act 1974
2. Noise Insulation Regulations 1973, 1975 and 1988
3. The Environmental Protection Act 1990
4. Noise and Statutory Nuisance Act 1993
5. Criminal Justice and Public Order Act 1994
6. Noise Act 1996 as amended by the Anti-social Behaviour Ac t 2003
7. Housing Act 1996
8. Crime and Disorder Act 1998 as amended by the Police Reform
Act 2002
9. Building Regulations 2000 (SI 2000/2531) made under the
Building Act 1984
10. Police Reform Act 2002
11. Licensing Act 2003
12. Anti-social Behaviour Act 2003
13. The Control of N oise at Work Regulations 2005
14. The Environmental Noise (England) Regulations 2006
31
REFERENCES
Reference Books:
1. Business for the 21st Century by Steven J. Skinner and John M.
Ivancevich
2. Commercial Law Including Company Law and Industrial Law by
Arun Kumar Sen and Jitendra Kumar Mitra
3. Fundamental of Company Law by A. I. Khan
4. Doing Business in Bangladesh – Howlader yunus & Co.Chartered
Accountants
Reference Websites and Portals http://en.wikipedia.org/wiki http://www.investorwords.com http://www.answer.com http://www.law.cornell.edu http://www.hg.org/ http://www.uscourts.gov/FederalCourts http://www.nos.org/secbuscour/ http://en.wikipedia.org/wiki/Labour_law http://smallbusiness.chron.com/environmental-issues-affect-business4175.html http://en.wikipedia.org/wiki/Liability_insurance http://www.qbe.asia/Business/General-Liability/Insurance.html 32
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