International Business Law: Relevance, Nature, and Legal Principles

This essay provides a comprehensive overview of international business law, emphasizing its relevance to individuals and businesses. It delves into the nature of business law, highlighting its role in maintaining order, resolving issues, and protecting rights. The essay discusses various types of business laws, including employment, immigration, and intellectual property law, and examines the legal aspects of business formation, such as legal entities, compliance, and contracts. It also explores different business formation structures, including sole proprietorships, partnerships, limited liability companies, corporations, and non-profit organizations. Furthermore, the essay outlines the legal principles related to the formation of contractual agreements, emphasizing the essential elements of a contract and the key principles that make an agreement legally enforceable. The document is available on Desklib, a platform offering a wide range of study tools and solved assignments for students.

INTERNATIONAL
BUSINESS LAW

RELEVANCE AND NATURE OF BUSINESS LAW TO INDIVIDUALS
AND BUSINESS
Commercial law or business law is the body of law which is formed to govern business
and commerce. This branch of civil law deals with issues that are faced by private and public
law. Business law regular its corporate contracts, hiring practices and the manufacturing and
sales of consumer goods. The primary objective of business law is to maintain order, resolve
issues, create accepted standards, protect rights and liberty of business, government authorities
and customers. Business law focuses on various factors, such as- contracts, transactions,
bankruptcy, banking, trade regulations, finance and intellectual property. The nature of business
law is to define rules that must be followed by companies. Business law is helpful in protecting
the right of company and of the people who work for the organization. This helps in establishing
certain standards that must be followed by companies. There are different types of business laws,
which can be stated as- employment law, immigration law, consumer goods sales, antitrust law,
litigation law, intellectual property law, taxes, bankruptcy. The nature of business law depends
on the geographical area in which the business activities a carried out. Governance authority is
also responsible for creating an impact on the nature of law. The three main areas of business law
formation of a business venture, taking over a business and managing a business. Corporate laws
are applicable to all types of business entities.
The relevance of business law is to understand corporate, consumer and commercial law
which supports in setting benchmarks in product quality, E-Commerce safety standards,
production and operation standards and human resource involved in the organization. The
company also focus on offering the rights of employees within the organisation through which
they can meet the employment related business laws. Business law are essential for individuals
and for business as well, as there are certain sets of rules and regulations that helps in meeting
the quality of work life, work life balance of employees which ensure employee safety at
workplace and meeting the legal requirements can support companies in strengthening their
competitive position and brand image in the dynamic industry. Firms, brands, and companies
employ business law to keep things in order which reflects the significance of business law in
companies. They protect the interests of the firm and its employees while also contributing in the
development of a standard for how things should be done.

The founding and general nature of corporations, the enumeration of corporate traits,
corporate legal identity, capacity, purpose, and objects, and the distribution of corporate
responsibilities are all topics covered by the most common legal theories of corporations. Natural
law theory of morality is a philosophical and ethical framework that says that humans have
intrinsic principles that drive their thoughts and behaviours. According to natural law theory,
these norms of right and evil are inherent in people and are not produced by society or court
judges. For example, natural law assumes that everyone believes that murdering another person
is unethical and that the punishment for murder is acceptable.
LEGAL ASPECTS OF BUSINESS FORMATION
Business formation is an essential factor for opening a business which is the medium of
distinguishing a business entity. A business formation can be done through four formats, which
are- Limited Liability Company (LLC), partnership, sole proprietorship, corporations and non-
profit. In simple terms, business formation can be considered as the process of incorporation of
business or registering a company which will be operating in the marketplace by offering
products and services. Business structure is the legal structure of the company which is
responsible for creating an impact on the day-to-day operations. The companies operate
according to their legal structure which depends on the business structure that has been focused
by the company while operating. Legal aspects of business define the roles of law on all aspects
of business ownership and management. Therefore, the legal aspects of business focus on legal
ethics, court procedures, contracts, consumer law, property law, employment law, environmental
and international law.
Some of the legal aspects that are focused by companies while performing their
operations are-
 Legal entity- all type of companies falls under some form of entities and that governs the
way business is treated under the law. Business structure, such as- LLC, C-Corps, S-
Corps and LLPs are considered as free-standing entities which own special rights. On the
other hand, the companies, such as- sole proprietors, takes advantage of full liability and
rewards of the company. The type of legal entity is used in business formation can
different the rules and laws that must be enforced in the organization while operating in

domestic and international marketplace and such factors creates impact on the activities
of business.
 Compliance- This is one of the legal factors which must be dealt by companies.
Compliance to local city or country, state and federal laws are something which must be
considered by companies. Such factors are responsible for reflecting the roles and
employee rules and safety laws which must be performed by companies. Compliance is
seen by business owners and can be challenging for entities due to high uncertainty in
laws while performing business activities. Compliance is forced while forming a business
as this helps in evaluating the legal formalities which must be taken care by the entities.
 Contracts- As in order to form a business and to operate in the marketplace, it is
essential to enter into a contract which can be the medium of defining the working
relationship and resembles of business. By engaging into contracts, companies focus on
notice which will be defining the parties who are responsible for contract, laws that will
be governing contract, entire agreement for executing the contract, term and termination,
force majeure, payment schedules or deliverables, severability, warranty and
confidentiality that must be maintained as per the contract.co tracts are the legal aspects
which are significantly important for companies as these can be helpful in creating terms
and conditions that must be followed by companies operating under the contract.
 Resolving disputes- The primary purpose of setting up legal system is to resolve
conflicts/ disputes faced by the company which can be internal as well as external. The
legal aspects that must be foreseen by the companies helps them in resolving issues and
disputes that can be faced by entities.
Some of the business formations structures are discussed beneath:
 Sole proprietorship- This is the one of the easiest business formations which involves
single individual who is liable for managing day to day operations of the company. This
type of business does not require separate income tax forms from the owner as there is no
separate legal entity of company from its owner. The cost that is incurred in such form of
business is related to taxes and operating license fees. For example, companies and
sellers that are using eBay as the medium of business are operating as sole proprietor

which offers them, opportunity to generate higher revenues with the help of using e-
commerce platform offered by eBay.
 Partnership- Partnership is a form business structure which involves two or more
business owners. Such form of business entities does not have separate legal entity from
its owners. This form of business structure requires less paperwork and all partners are
required to share profit and loss according to their share and hold in the business. Partner
disagreements are also a possibility, which might slow down business operations. For
example, some of the companies came together as partners through which they can share
their profits and loss, develop contractual relationship and maintain unlimited liability.
Some of the companies that collaborated for benefit are- Red Bull and GoPro, Spotify
and Uber, Levi’s and Pinterest and more.
 Limited liability company- This is the form of business where members have limited
liability over the company as per their share in the organization. This form of business
protects owners from personal responsibilities for its debts or liabilities. Such form
companies are hybrid entities that combines characteristics of a business with those of
partnership pr sole proprietorship companies. The corporate structure of limited liability
company protects the owners from any repayments of company’s debt or liability and
must be liable to contribute as per their liability in the organization as per the contract.
 Corporations- A corporation is a type of business entity that creates a legal barrier
between the enterprise and its owners. It is difficult and expensive to establish, and it
requires owners to comply with more stringent tax and regulatory requirements. The two
most popular types of companies are C-corporations and S-corporations. An S-
corporation can have up to 100 shareholders and works similarly to a partnership, but a
C-corporation is a legal body apart from its owners.
 Non-profit organizations- NPO business formations are legal entity which is organized
and operated for collective, public or social benefits which operates as business aiming to
generate profits for their owners. Such business entities are granted tax exempt status by
the Internal Revenue Services (IRS). To qualify IRS requirements for tax exemption, an
organization must be a separate entity or foundation. It is essential for nonprofit
organisation to qualify tax exemption under Internal Revenue Code Section 501 (c)(3)
which is considered as the most favorable as all donations fall under this section. The

structure of nonprofit companies is managed under this section and the state and federal
regulations which must be fulfilled by such businesses to operate successfully in the
industry.
LEGAL PRINCIPLES IN RELATION TO FORMATION OF
CONTRACTUAL AGREEMENTS
Contractual agreement can also be stated as contract which can be stated as legally
enforceable agreement entered into by two or more parties to do, or refrain from doing, one or
more things specified in the contract. Such form of agreement is legally enforceable which
creates, defines and governs mutual rights and obligations among parties. This is the contract
which defines the transfer of goods, services and money and all transactions that will be incurred
in the organization. Such form of agreements is responsible for legally binding two or more
parties on the basis of terms and conditions of the contract. This also allow in restricting the
companies in engaging in certain acts by creating mutual consent in performing the operations.
The major elements of contractual agreement are- contractual offer, acceptance of an offer,
awareness and consent, consideration, competence and capacity and contract legality. There are
three basics essential for the creation of contracts, which are- agreement, contractual intention
and consideration. The basic principles which are required for agreement to be legally
enforceable are-mutual assent, offer and acceptance, adequate consideration, capacity and legal
entity. These principles are kept in mind before forming and finalizing a contract through which
all legal requirements and activities can be fulfilled.
Legal principles are considered as set of standards which must be fulfilled by companies
and organisation in the economy with the help of farming contractual agreement that has been
developed on the basis of legal principles. Some of the factors in the key elements that must be
covered in a contractual agreement which will be legally enforceable are- obligation and
conditions, performance of each party to complete their obligations, terms of payment and
breach of contract which involve repercussions in any condition when any party breach the
contract. The key principle of contractual agreement will be focusing on the contractual offer
which will rely on demand and responsibilities which will be helpful in forming terms and
conditions for meeting the offer stated in the contract. Both parties must accept the terms of
contract willfully and must be aware of all the terms and conditions that are stated in the contract

else the contract will be considered as null or void. The principal of forming a contractual
agreement focuses on legal capacity or ability that can be made by companies through which
they can establish business venture and operate in dynamic business environment while meeting
all legal requirements. The contractual agreement while forming a business must be abided by
the laws of jurisdiction where business have been established and according to the legal
formalities of state or country.