What is Corporate Law?
3rd Year, B.A. LL.B
Student at Institute of Law, Nirma University
A corporation is a legal entity i.e. a separate legal personality from the people who made it and that which exists to conduct some business. A set of rules and regulations that govern these corporations along with the persons who form it, own it, operate it and manage it, which includes their rights and obligations is corporate law.
A corporation has limited liability that allows it to take risks and make diverse investments. Also, corporations usually have well defined hierarchy and structure to conduct their affairs. Corporate law governs the commercial transactions between parties, the stakeholders, shareholders and consumers.
The basic objective behind these set of laws is to keep all the corporations on the same footing so as to provide each a level playing field. Corporate law is civil in nature which provides civil remedies in case of disputes. Disputes arising between corporations are subject matter of civil courts. However, criminal liability may be put upon employees and officials of a corporation in case of offences of criminal nature like fraud, criminal breach of trust and the like.
With the increasing trend of globalizing businesses, the scope of corporate law has become wider. And Corporate Law is among the most popular specializations that is opted by students. In order to excel in the field of Corporate Law, it needs development of in-depth knowledge of business and commercial laws, and awareness of the recent trends in business and legislative developments.
Although corporate law is the foundation stone of economic activities, practicing corporate law is challenging as it includes within its ambit complex concepts and tackling these require exercise of sound judgment.
There are various categories in the wide area of Corporate Law where particular set of laws deals with only a specific subject-matter.
In India the various categories include The Companies Act, 2013which is an act to consolidate all the laws relating to companies in India, Competition Act, 2002which deals with promoting fair competition in market and includes provisions of strict penalties for the anti-competitive practice, Foreign Trade Act, 1992which deals with the rules and regulations governing foreign trade i.e. imports and exports, The Securities and Exchange Board of India Act, 1992 which aims at protection of interest of investors in securities market and regulate such markets.
Matters of banking and finance, capital markets, real estate are some other aspects included under Corporate Law. Corporate laws are in place not to make working of these corporations complex by setting detailed norms, a large amount of compliances and stricter penalty rules but they are in place to add opportunities for fairer markets. Other matters that corporate law deals with are mergers and acquisitions, corporate frauds and corporate insolvency.
Compliance is one of the main branches of corporate law. The major work in this category includes keeping an eye on the compliance of rules by corporations. Non-compliance of these rules leads to heavy penalties on corporations. Corporate law, these days, offer a wide range of practice areas for students and professionals. A career in corporate law usually requires skills like communication skills, analytical thinking, understanding of commercial laws, reasoning and judgment and also numerical abilities.
The development of corporate law in India is still at a nascent stage with many dimensions waiting to be explored and it has an array of contours wide open. A lot has been done, and a lot is still needed to have Indian Corporate Laws prepared to meet the demands of increasing global trends of business.
The topic discussed here is a brief of the subject matter and should not be substituted as proper legal advice. If a matter comes up under this topic then it is strictly advisable to consult a professional for advice and for the procedure and practice to be followed.