Business Law

A1. INTRODUCTION
A company's or an employer's capital or fund is the money or assets they need to function well
in the current climate and remain viable in the marketplace for the long term. Each company is
searching for a little amount of capital to expand their product line or utilise the money for other
commercial purposes. Various ways are used to create funds. It comprises of funds in exchange
for equity, funds in exchange for debts, or funds in exchange for both. Someone investing in
your firm in exchange for a debt on which you will pay interest at a positive negotiated rate is
known as debt fundraising. Someone might give you money in exchange for some of your
company's shares if you raise money through equity. The investor may consider your company's
fairness while deciding whether or not to give you with financing.

CONCEPT AND APPLICATION

Different types of instruments to raise capital:

In India, each business enterprise has to check-in itself beneath the companies Act, 2013 to get
benefits of the provisions noted therein. The groups Act also specify the numerous units through
which any organization can improve capital. The mechanisms are as follows:

a) Equity-based instruments: Someone would provide you with funding in exchange for a few
stocks in your organization if you raised money through equity. The investor would take portion
of your company's equity in exchange for capital. There is an immediate dilution of the current
shareholding here. As soon as you receive investment, you must dilute the percentage of your
company's stock held by the investor. As a result, he may be entitled to the earnings associated
with that proportion, as well as the right to participate in the company's decision-making process.

There are equity stocks cited below the act via which the budget may be raised. Those are:

1. Equity shares with voting rights

2. Equity shares with differential voting rights

3. Worker stock options

4. Sweat equity shares

Furthermore, there are numerous preferential stocks mentioned inside the act. These are:

1. Collaborating and non-taking part preferential shares

2. Cumulative and non-cumulative preference stocks

3. Redeemable preference shares

a) Debt-based instruments: A debt-based fundraising strategy in which someone invests in

your company in exchange for a loan on which you will be responsible for paying interest at an
agreed-upon rate. The dilution of the organization's shareholding occurs at a later time in this
case. When your company is unable to make profits and you need to repay the investor's
obligations, you can dilute a portion of your shareholdings in the investor's name to pay off the
debts. As a result, the company can preserve its shareholding as long as it can meet the investor's
debt or interest obligations. As a result, it is heavily reliant on a non-profit position.

b) Hybrid instruments (each debt and equity mixed): Each equity and debt security has
protection aspects in these procedures. They're usually issued by the corporation with completely
convertible or partially convertible debentures, or any other type of debenture. At detailed
actions, all of these are convertible into the company's equity stocks.

c) Debentures: Those are the safety evidencing debt due to the holder of debenture by way of
the enterprise repayable in predominant quantity with interest. There are the following types of
debentures referred to in the act:

1. Redeemable debentures

2. Convertible debentures

3. Compulsory convertible debentures

These are the three most commonly employed ways through which an employer might produce
funds or increase capital. The kind of the instrument to be issued by a company is largely
determined by the company's valuation. But, once again, there is a flaw in this approach to
valuation. Any start-up firm faces difficulties in determining the cost of their business because
they have yet to produce sales, collect market, or build goodwill. However, to address this issue,
a thumb rule has been developed under which startups can evaluate the value of their company
using the problem of small factors of safety.

CONCLUSION

Those three are the most widely utilized units through which an employer might create a budget
or increase capital. The nature of the instrument to be issued by a corporation is heavily
influenced by the company's valuation. The company's valuation is the deciding factor in
deciding which instrument to utilize. However, there is a problem with this very idea of
valuation once again.

A2. INTRODUCTION
In 2020, all the laws related to labor welfare and safety were amalgamated underneath four codes,
the industrial relations Code, the Code on Social security, Occupational, protection and health
codes, Code on Wages. These rules eventually shaped India's labor laws, which were previously
dispersed across roughly 150 pieces of legislation that were difficult to review, read, and
interpret. These codes cover both the organization's welfare and the welfare and safety of its
employees. These rules aim to maintain coherence and nonviolent courtship between the
employer and the employee. It also lists the consequences and punishments that companies and
employees may face if they do not follow the law or the conditions outlined in the code.

CONCEPT AND APPLICATION

Protection of employees:
The Indian Judiciary has over and over given diverse judgments where it has ensured the safety
of employees. The personnel is given a lot of interest because they're in a disadvantageous or
weak role compared to the employers. They're the ones who have suffered the exploitation by
using these organization training for the last -three centuries. That’s why the judiciary has
constantly kept a soft stance for the betterment of the employee class. However, it needs to be
stated that whenever these employees cannot be included, they often take undue advantage of the
energy of leniency being given to them. Hence, at that point, the judiciary takes a specific tough-
line stance because the final objective is to hold a cordial relationship between the employer and
the worker. For this reason, the whole lot is decided based on the data and instances of the case.
The subsequent are a number of the instances wherein the judiciary or the law has aimed closer
to the safety or the welfare of the employees:

a) Vijay Cotton turbines v nation of Rajasthan and Edward Cotton turbines v state of
Ajmer

In this case, it was said that the nation is obligated under Ar 43 of the charter to secure not only
the physical subsistence of employees, but also their health and decent living conditions, which
should be beneficial to the public's overall health. It was important to place limits on the freedom
of contract in order to safeguard people from being exploited by their employers.
Wages were set in advance by the company and the employee through a contract of employment.
Even so, in the majority of cases, it results to the employee/employees being exploited because
of their poor negotiation skills. As a result, the kingdom moved quickly to establish a legislative
minimum salary below which the agency could not operate.
It changed into held in this case that if a person company is not capable of providing its worker
wages at par with the minimum wages, they're no longer allowed to carry on business. The same
cannot be said to violate fundamental rights under art 19(1) (g), i.e., freedom to carry on trade,
career, or business of one’s own choice.
So, here, the court docket has included the interest of the personnel using making sure them
minimum wages and telling the enterprise that if you are using any workers, then you need to
pay them minimal wages to preserve your employment or business; otherwise, you need to shut
down your business as it isn't capable of fully satisfy the desires of your human resource. That is
how the judiciary has aimed to defend the welfare of the employees.

a) Mackinson Mackenzi & company Pvt. Ltd. v Ibrahim Mhd. Issac (1970):
Facts: In this case, a worker (Sheik) went on to become a seaman. He began to have chest pain
sooner or later. The doctor was unable to find anything odd in his chest. He was experiencing
insomnia and chest pain. He was given a sedative by the medical officer. He became completely
vulnerable to everyone's scrutiny. He indicated he was going to bed at 6:15 p.m., and he wasn't
seen for a while, nor was the dead body retrieved.

Judgment: The court docket in this case explored the notion of brought risk. According to the
additional commissioner, no proof of death had been established, hence no recompense to the
deceased's relatives was required. The supreme court, on the other hand, granted compensation.
However, when the matter was being heard by the Supreme Court, they said that restitution
could no longer be accepted, and the additional commissioner became more strict in their
approach. Each out of employment and in the route of work must be evaluated in order to supply
upward force to a compensation claim. It's a long distance since the workers should be on the job
at the time of the coincidence.
CONCLUSION
The Indian judiciary has issued various rulings ensuring employee safety on different occasions.
Because they are in a disadvantaged or weak position in comparison to the employers,
employees are given a lot of attention. They might be people who are actively looking for work.
For the previous three centuries, they have been exploited by these employer teachings.

A3. (A) INTRODUCTION

In recent years, we have seen a considerable increase in the number of partnership corporations
in India. The government has enacted many legislation to demonstrate this relationship.
Previously, when partnerships were not as common, the Partnership Act of 1932 provided the
most clear laws. Nonetheless, as partnerships have grown in scope over time, a need for limited
liability partnership law arose, resulting in the Limited Liability Partnership Act of 2008.

CONCEPT AND APPLICATION

Ways to resolve the differences without approaching court:

In recent years, the industry has begun to employ alternative conflict resolution procedures. This
method of resolving disputes has just recently become popular in India. The most important
rationale for using opportunity techniques to resolve conflicts is to save time and money. The
Arbitration and Conciliation Act of 1996 details the many methods for resolving disputes outside
of the legal system. Arbitration, conciliation, mediation, consumer counselling, Lok Adalat, and
other forms of dispute resolution are included. For every opportunity method, we've specific
legislations to manipulate the proceedings. To solve the dispute thru arbitration, the events have
to input into a settlement announcing that the dispute is to be resolved using the arbitrator. It's far
from the requirement of phase 7. Now, there are various kinds of arbitration that a party can
choose. It consists of but isn't restricted to:

a) Institutional Arbitration: Here, the arbitration institutions are approached through the parties
for the resolution in their dispute.

b) Ad- Hoc Arbitration: Here, there may be no standardized body this is to be approached by
the parties for resolving their disputes. They can appoint an impartial third party with certain law
information to clear up their dispute.

c) International commercial Arbitration: If one of the parties is from another country, or the
business on which the dispute is based is based in another country, or the arbitration is held
outside of India, the arbitration is referred to as international commercial arbitration.

d) Med-Arb Arbitration: It is a method in which parties first attempt to resolve their dispute
through mediation, which takes far less time and money and requires far fewer technicalities
when it comes to the application of legal guidelines and the production of proof, and then
proceed to an arbitration forum if they believe the dispute has not been resolved satisfactorily or
if additional discussions are required.

CONCLUSION

As a result, in the short term, the partners can use any ADR strategy to resolve their issue outside
of the court of law, avoiding any discrepancies that may arise inside the regular court system.

A3. (B) INTRODUCTION

Section 4 of the Partnership Act of 1932 defines a partnership as a group of two or more men or
women who have agreed to share a percentage of the profits earned by the firm under the
supervision of all members or on behalf of various contributors.
Phase four, in addition, stipulates the essential features of a partnership. Those are:

a) Agreement among partners

b) There must be two or greater members

c) The agreement should be in accord of sharing of income
d) The joint venture or firm needs to have a business purpose
e) There must be a mutual business
f) The liability of all the companions could be unlimited.

CONCEPT AND APPLICATION

Advantages of resolving the dispute without going to the court:

The Arbitration and Conciliation Act of 1996 explains the numerous methods for resolving legal
disputes. Arbitration, conciliation, mediation, patron counselling, Lok Adalat, and other
processes are included. For each alternative technique, we have various laws in place to regulate
court proceedings. The following are some of the advantages of using opportunity conflict
resolution techniques:

a) Less time-consuming/ fast settlement of dispute: in the Arbitration, the events have full
autonomy to choose the forum, the law to be implemented, the time while the hearing is to occur,
this all helps in fast disposal of case as compared to the traditional court machine.

b) Less costly: no charges might be imposed on every new hearing since there is less time
involved.

c) Party autonomy: Both the parties have the complete autonomy to decide the regulation to be
applied, the discussion board wherein the listening to is to take location, the individual or the
arbitrator to conduct the arbitration intending, it is known as party autonomy.
d) Control of method: It is due to party autonomy that events manage the technique of the
proceedings.

e) Choice of the discussion board: In contrast to the court docket machine, there may be no
hierarchy in the opportunity dispute decision mechanism. The parties can randomly pick out any
of the forums to facilitate dispute resolution.

f) A wide variety of troubles can be considered: the ADR process is much more flexible than the
conventional court device. A massive variety of problems may be mentioned there.

g) A wide range of potential outcomes: in contrast to litigation, various remedies or results are to
be had in the ADR system together with repayment, injunction, etc.

h) Flexibility of system: ADR is bendy, unlike the court gadget, which could be very fixed in
nature.

CONCLUSION
Alternative conflict resolution approaches are now being used in the industry. In the last decade,
India has seen a boom in alternative conflict resolution strategies. The most important
justification for settling disagreements using alternative tactics is that they save time and money.