India has codified business laws that include laws relating to contracts, companies, partnerships, limited liability partnerships, trusts, insolvency, exchange control, competition, and taxation.
These codified laws are supplemented by policy pronouncements, press notes, notifications, and regulations issued by Governmental departments and regulators.
Following are the critical business-related laws in India:
- The Companies Act (1956) and Companies Act (2013): It governs the incorporation, management, restructuring, and dissolution of companies
- The Indian Contract Act: It lays down general principles relating to the formation, enforceability, and breach of contracts; it also deals with the various types of contracts including those of indemnity, guarantee, bailment, pledge, and agency.
- The Limited Liability Partnership Act, 2005: It governs the organization, management, and dissolution of limited liability partnerships.
- Insolvency and Bankruptcy Code: It sets out the law governing insolvencies and bankruptcies of companies, partnerships and individuals and is, presently, notified only for companies.
- Transfer of Property Act: It sets out the law related to property rights in India.
- The FEMA: It governs the inflow and outflow of foreign exchange and investment into or from India.
- The SEBI Act: It governs the functions and powers of SEBI, India’s securities market regulator, and the regulations issued thereunder, including, in particular, the SEBI ICDR Regulations (which govern the capital raising exercise by listed companies or companies proposed to be listed, including public offer, preferential allotments, etc.
- The SEBI Takeover Regulations: It regulates the terms of the mandatory and voluntary tender offers for shares of listed companies.
- The SEBI Insider Trading Regulations: It prohibits dealing in securities of listed companies when in possession of unpublished price sensitive information.
- The SEBI Delisting Regulations: It sets out the process for the delisting of a listed company.
- The SCRA: It governs listing and trading of securities on stock exchanges in India and the Listing Agreement with stock exchanges;
- The Competition Act: It regulates merger and anti-competitive behaviour.
- The Income Tax Act: It prescribes the tax treatment of dividend, capital gains, mergers, demergers, and slump sales.
- Goods and Services tax: It prescribes taxes on the supply of goods and services.
In addition, there are several sector-specific laws (e.g., the Indian Telegraph Act, Drugs and Cosmetics Act, Press Council Act, the Banking Regulation Act, the Insurance Act, and various labour legislations like the Industrial Disputes Act, etc.) that must also be considered depending on the nature and type of the transaction.