Law_of_Business

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 asunder 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 its6.6 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. In the present world business plays an important role in every sphere of life. Business determines one’s life style, standard of living, education and even cultural standard. So to lead a better life we need to understand business and study business.   Business is dynamic – always changing. Coping with both predictable and unpredictable events can be easier, more efficient, and less traumatic if we understand business. Study of business will help us to understand that today national economies are no more independent entities rather interdependent and taking an uniform global shape, economic depression in U.S.A. has an impact on the whole world, business and global warming are not different issues, war in Iraq or Afghanistan has some kind of link with business, China becoming a factor in the world economy because of excellent business skill and the system known as “Free Enterprise”. However the road to success will be easier for those who understand how business works. Numerous and varied laws regulate the activities of all businesses and everyone involved in the business, from owner to manager to employee. In this term paper we discuss the major business law categories, which involve torts, contracts, sales, agency, property, bankruptcy, and negotiable instruments etc. Ethics and Laws Affecting Business to Business Creditors Note: In this section, the discussion of legal matters will be limited to the subject of antitrust due to its significance to the credit profession. Choices must be made daily; customer and our company's interests collide, and conflicts must be resolved. Resolution must be quick but considerate, to determine the appropriate action to be taken. Furthermore, complicating all credit decisions is the onus of the resolution being categorized as legal, ethical or both. In our personal lives as well, we are constantly making decisions. Too often, however, many decisions are made subconsciously rather than giving them the attenti10on they warrant. The response to every decision we make bears with it accountability. Was it right or wrong' Fortunately, every decision is not of the magnitude to matter in the big "scheme of life ". For example, driving when we are late causes most of us to "push the speed limit" without really being mindful of breaking the law. In this illustration, it is unlikely the police would cite us for speeding if we were only exceeding the official speed limit by 5 miles per hour. However, the fact that the "law" chose to ignore us does not mitigate the act because we still have a moral obligation to other drivers, our families and ourselves to drive according to the rules which are there to keep us safe. But, if we exceed the limit by 11 miles per hour in the same situation (usually a conscious decision), we would likely be stopped and ticketed for speeding (violating the law). As you can see, the gray line between right and wrong versus legal or illegal is not only a distorted line, but is also in the eyes of the beholder. Do Ethics and Business Mix' Strict business morality might dictate that if ethics and the interests of the business conflict, managers and employees invariably should be told that they must always do the right thing for no other reason than that it is right. On the other hand, it is unlikely that if in some instance what is ethically correct would lead to the demise of our company, we would, as a matter of fact, claim "so be it". In the real world, it is not likely that a businessperson is going to sacrifice their company to claim such altruistic extremism. Although we surly cannot avoid ethical dilemmas, it is clear that none of us should be placed in the situation that we must perpetrate an illegal act for the sake of our company. What most of us need to determine is how we should juggle the confusing mix of ethical/unethical-legal/illegal circumstances. Unfortunately, credit and financial managers, often faced with the predicament of choosing "right from wrong," have had very little to guide them in their decisions. More than most business professionals, credit professionals are at great risk of compromising ethical values and being confronted with situations that violate the law while dealing with a wide variety of issues involved in their day-to-day business. To be truly effective in credit, a credit professional must deal with customers, sales personnel, numerous other corporate departments, competitors and outside professionals. Each can place demands on you that may create ethical or legal dilemmas. Concerns with Right and Wrong The ethics we should be concerned with are fundamental and vital. They are based on the conviction that it is important to do one's best to distinguish between right and wrong and always try to do what is right. Webster's dictionary provides a more formal definition: "ethics are the system of moral principles dealing with what is good and bad and with moral duty and obligation." Ethical and legal behavior is not simply a matter of charac ter, it is a matter of decision making. A person's character is developed one decision at a time. Making proper ethical decisions is what makes the difference between a truly successful businessperson and one who is not. The Ethics / Law Fallacy A common fallacy in discussions about ethics is "If it's legal, it's ethical." Thus, a common response to charges of impropriety is to invoke the law. This legalistic approach to ethics assumes that anything not prohibited by law is, by that fact itself, proper and ethical. The main error in this approach flows from the implicit assumption that legal standards articulate or establish ethical principles. Although to abide by the law carries with it an ethical obligation or responsibility (it is generally unethical to break the law), laws and rules do not depict what an ethical credit professional ought to do. The Difference between Lawfulness and Ethics Laws and rules establish minimal standards of impropriety; they do not define the criteria of ethical behavior. A person is not ethical simply because they act lawfully. Ethical people measure their conduct by basic ethical principles rather than rules. One can be dishonest, unprincipled, untrustworthy, unfair and uncaring without breaking the law. Thus, in making personal or business decisions, the law is only a minimal threshold describing what is legally possible, it does not address the problem of how we should behave. The Canons of Business Credit Ethics The National Association of Credit Management developed the "Canons of Business Credit Ethics" (Appendix A) which established principles for the credit profession to observe. Although to practice in the field of credit, one does not have to be certified, these principles present fundamental guidelines that prudent credit professionals should follow. In the fields of law, medicine and accounting, to name a few, certification carries with it not only an ethical responsibility to follow the Code of the profession, but a legal one. Failure to comply with the guiding principles (Codes) in these fields not only results in revocation of ones license (certification) but exposes the practitioner to criminal liability. Requiring certification to perform in a profession (lawyer, doctor, CPA etc.) is a result of the profession's influence on the public as its customer. A profession, such as credit management on-the-other-hand, where the credit employee's primary responsibility is to their company, does not demand the vocation to be certified because the customer is doing business with the company not the credit manager. In other words, the customer is putting their trust and confidence in the company rather than the credit employee. Performing a job while employed by a company (such as a credit employee) however, is what makes the issue of ethics such a difficult philosophy to fulfill. As an example: Most credit professionals recognize some duty to keep customer information confidential, although such a duty has limits when the confidential information concerns a danger to their company or other creditors. The credit manager does of course have an obligation (morally) to keep its company safe by taking action which, for example, may require revealing to senior sales/marketing personnel the confidential information prompting a negative credit decision. But, should this creditor notify other creditors' of the customer to keep them out of danger' To the degree that only factual information is distributed, that is acceptable. However, if the confidential information learned is in anyway hypothetical, or the resulting outcome is based on some situation that may or may not happen, the answer is no. Antitrust Laws and Federal Trade Commission (FTC) Guidelines The power of Congress to regulate trade or business practices through the antitrust and trade regulation laws is derived from its constitutional power to regulate interstate and foreign trade and commerce. The regulation and enforcement of antitrust laws is handled by the Federal Trade Commission and the Antitrust Division of the U.S. Department of Justice. There are also individual antitrust laws enforced by state Attorney Generals. The Federal Trade Commission "The Federal Trade Commission enforces a variety of federal antitrust and consumer protection laws. The Commission seeks to ensure that the nation's markets function competitively, and are vigorous, efficient, and free of undue restrictions. The Commission also works to enhance the smooth operation of the marketplace by eliminating acts or practices that are unfair or deceptive. In general, the Commission's efforts are directed toward stopping actions that threaten consumers' opportunities to exercise informed choice. Finally, the Commission undertakes economic analysis to support its law enforcement efforts and to contribute to the policy deliberations of the Congress, the Executive Branch, other independent agencies, and state and local governments when requested. In addition to carrying out its statutory enforcement responsibilities, the Commission advances the policies underlying Congressional mandates through cost-effective non-enforcement activities, such as consumer education." Antitrust Laws The basic federal legislation of the United States applying to monopoly and restraint of trade are the antitrust laws. These laws consist principally of the Sherman Antitrust Act of 1890, as amended; the Clayton Act of 1914, amended by the Robinson-Patman Act of 1936; and the Federal Trade Commission Act of 1914, as amended. The antitrust laws share the same basic objectives and manner of execution. Their general objective is to ensure a competitive economy. This is not applicable in exactly the same manner to all industries and under all circumstances. In certain instances, the Congress of the United State has in fact dispensed with competition. However, the fostering of competition has been and is the governing legislative rule. As to manner of execution, Congress has placed in the hands of the Department of Justice, the Federal Trade Commission (FTC) and the courts a wide discretion in the interpretation and application of these laws. The Antitrust Division of the Department of Justice and the FTC initiate most proceedings invoking the antitrust laws. It therefore follows that, in determining whether and how to frame complaints, and subsequently in proceedings in court to obtain rulings and relief, the Antitrust Division and the FTC substantially influence the development of these laws. The courts, however, are ultimately responsible for interpreting and applying the antitrust laws. They have been vested with a wide range of discretion in construing these statutory provisions and molding their remedies. While the antitrust laws and regulations affect a wide range of business activities, this paper will focus on the appropriate regulations that relate to the functions of credit management. Exchange of Credit Information through the Activities of Credit Groups Antitrust principles that apply to activities of individual companies apply similarly to activities of trade credit group meetings. Consequently, there are great risks inherent in involvement with trade credit groups that must be addressed and assessed. Individual members of trade groups may not engage in anti-competitive conduct such as price-fixing, market allocation or setting production quotas. During meetings, members should be advised to be cautious about group activities. Suggestions to avoiding problems might include: 1. Have the format of the credit interchange report reviewed by counsel for legal compliance. 2. Submit an agenda or programs to counsel prior to meetings. 3. Counsel should view papers before distribution. The following conclusions can be made from the Sherman Act and the Federal Trade Commission Act concerning the activities of trade credit group meetings: 1. Any agreement, expressed or implied, between members of a credit group or other competitors to establish and maintain uniform prices, discounts, terms or conditions of sale, is illegal. 2. Any agreement, expressed or implied, between members of a credit group or other competitors to concertedly refuse to sell merchandise to a person listed as a delinquent in the payment of its accounts to other members of the group, is illegal. 3. Any agreement, expressed or implied, between members of a credit group or other competitors to concertedly refuse to extend credit to accounts listed as delinquent and to place all such accounts on a C.O.D. or cash basis, is illegal. 4. Membership in an industry credit group must be open to all qualified applicants upon non- discriminatory terms and conditions. Companies meeting the general qualifications for membership cannot be arbitrarily excluded and denied the benefits of membership, and particularly the privilege of receiving the credit information gathered and disseminated by the group. However if the credit group establishes standard qualifications for membership and the same are reasonable, it can legally limit its membership and the use of its facilities to companies which meet such qualifications. Such qualifications might be: That the applicant shall be a member of a designated credit association or affiliated association (i.e. NACM or one of its affiliates); That the applicant be engaged in the business of selling its products to customers within a certain territory or classification of product; That the applicant shall have been engaged in business over a stated number of years, and shall have gross sales of not less than a stated amount per year. 5. List of delinquent accounts identifying the name of the debtor and stating the amount owed and accounts turned over to attorneys and collection agencies, are unobjectionable if proper care is taken to exclude the names of persons who have an honest and legitimate reason for not paying their account, and the names are promptly removed when the accounts are paid. It is preferable that the names of the creditors to whom the delinquent accounts are owing, should not be revealed. Coded references to creditors are however, permissible provided such codes are known only to the agency issuing such report. 6. Discussions of delinquent accounts at meetings are unobjectionable provided the discussion is limited to past transactions and there is no agreement, expressed or implied, for uniform action with respect to such customers. Minutes should be taken of all group meetings. 7. A by-law provision for expulsion for membership in a trade credit group, or other penalty for violation of its rules, is not illegal and is strongly urged. Advertising and Promotional Programs Federal Trade Commission guidelines (Fred Meyer case) and/or the Robinson-Patman Act make it clear that the seller may be liable under section 5 of the Federal Trade Commission Act for knowingly granting a buyer services or allowances that were not made available on proportionately equal terms to the buyer's competitors. A buyer may also be liable for knowingly inducing the seller to give it favorable treatment. It is a common practice for a buyer to deduct from the seller's invoice the amount of the advertising allowance that the buyer believes it is entitled to receive. Such a practice is normally contrary to the program that the seller has introduced to its customers. The buyer, of course, wishes to make a deduction from the invoice so that in effect, it receives its allowance payment earlier. A strict interpretation of the antitrust laws indicates that if the buyer deducted too much from the invoice or was not entitled to make the deduction, and the seller ignores this action by allowing the deduction, the result is that the seller unlawfully discriminated in favor of the buyer who made the deduction. Such a practice may lead to seller liability for providing an allowance not made available to competing buyers on proportionately equal terms. The Need for a Plan A seller who offers promotional programs and allowances should do so according to a specific plan. If there are many competing customers1 to be considered or if the plan is complex, the seller would be well advised to put the plan in writing. The plan should make payments or services2 functionally available to all competing customers on proportionally equal terms3. Alternative terms and conditions should be made available to customers, who cannot in a practical sense, take advantage of some of the plan offerings. The seller should inform competing customers of the plans available to them, for them to decide in time for them to meet the requirements of the plan. 1 Competing customers are all businesses that compete with each other in the resale of the seller's products of like grade and quality regardless of whether they purchase directly from the seller or through some intermediary. 2 The term services is used to describe that which the seller provides to the buyer to promote the resale of the seller's product by the customer. (I.e. cooperative advertising, demonstrators, catalogs and displays.) 3 Proportionally equal terms can be formulated by basing the payments made or the services furnished on the dollar volume or on the quantity of the product purchased during a specific period. On Pricing and Discounts Advice and guidance for the following section was provided by John F. Mclean of Pillsbury, Madison & Sutro LLP. Mr. Mclean is a leading expert in the field of United States antitrust regulation, and can be reached in San Francisco at the firm's office at 415-983-1297. Illegal price discrimination occurs when a company sells the same product to different b uyers at different net prices and, as a result, adversely affects competition between. The seller and its competitors - • known as primary line competition - competition between Supplier A and Supplier B The favored and disfavored customers - • known as secondary line competition - competition between Wholesaler A and Wholesaler B Your customers' customers - • known as tertiary line competition - competition between Retailer A and Retailer B One key provision for credit professionals to be aware of in the Robinson-Patman Act is covered in section 2 (f), which prohibits a buyer from knowingly inducing or receiving a discriminatory price. Price Discrimination Equals Price Difference A difference in price is measured by the product's net price, taking into account any rebates, discounts - cash, volume, surcharges, freight allowance, credit terms or other factors that impact the price paid. It must be understood, that price discrimination is an act of treating a buyer unfairly. If you are asked by a customer to extend the credit terms, and you have a legitimate reason based on a non-discriminatory profile (or set of circumstances), you may legally grant that customer extended credit terms without offering those terms to the customers' competitors. • Example 1 - Customer A has a "cash flow problem" due to some unexpected event (theft, fire that interrupted business, weather conditions that disrupted selling, etc.). If you allow extra time for customer A to pay, you do not have to offer the same payment arrangements to the competitors of customer A unless they ask for it under the same or similar circumstances. • Example 2 - Customer A's business is disrupted by an earthquake and has requested additional time to pay. It would be advisable for you to locate all competitors of customer A, similarly affected by the earthquake, and offer the same extended credit terms arrangement to them. When the financial or other "crisis" has passed, the customers should be returned to normal terms of sale. Competitive Injury Under section 2 (a) of the Robinson-Patman Act the plaintiff, in a price discrimination suit needs only to prove a probability or reasonable possibility of a substantial injury to competition. It is fundamental that the favored and disfavored customers must compete to be competitively injured. Wholesalers do not compete with retailers (unless the wholesaler also has a retail sales channel). A retailer in San Francisco might not compete with a retailer in New York City. The evidence needed to support an inference of competitive injury depends on whether competition in the primary, secondary or tertiary line is involved. Defenses to a Price Discrimination Claim A price discrimination claim under section 2 (a) of the Robinson-Patman Act is subject to three statutory defenses: 1. Meeting competition 2. Cost justification and 3. Changing conditions Along with these defenses, a seller may avoid liability if the price differential constitutes a "functional" discount. 1. Meeting Competition The meeting competition defense allows a seller to lower its price to a selected customer on the good faith belief that it is meeting the price of a competitor. The defense is established by showing that: • the seller based its price on a review or investigation of a competitor's prices, i.e., as a result of due diligence; • the competitor's prices where then available in the market; • the products involved were of comparable salability; • the competitor's prices were not known by the seller to be illegal. Good faith is tested against the standard of a reasonable and prudent business manager responding fairly to a situation perceived to be one of competitive necessity. The seller must make a reasonable attempt to verify its competitor's price offers via customers or public sources. Such diligence, however, should never be practiced by contacting a competitor directly to ascertain its current price. 2. Cost Justification The cost justification defense allows differences in price that "make only due allowance for differences in the cost of manufacture, sale or delivery resulting from the differing methods or quantities" in the sale or delivery of the products. The defense is cumbersome and not often successful. To prevail, the price discount must not exceed the cost savings created by one or more of these factors. The evidence supporting the savings justification must be developed before the discount is offered. 3. Changing Conditions The changing conditions defense allows price reductions in "response to changing conditions affecting the market for or marketability of the goods concerned, such as but not limited to actual or imminent deterioration of perishable goods, obsolescence of seasonal goods, distress sales under court process, or sales in good faith if discontinuance of business in the goods concerned." The defense would seem to be applicable to a company's sales of equipment that has become technologically outdated. 4. Functional Discounts While not stated in the statute, the functional discount defense permits a seller to charge different prices based on the buyer's place in the chain of distribution, e.g., wholesaler or retailer. This is permitted because wholesalers do not compete with retailers and there are no adverse competitive consequences from price differences. Still, there are caveats. The discount given to wholesalers should be reasonably related to the costs they incur in reselling the products involved. If the discount is too large, the wholesaler may pass on some of it to its retail customers to the detriment of the retailers who buy directly from the initial seller. | | The Law of Torts A tort is a noncriminal injury to other persons or their property or reputation results from international acts or negligence. While criminal law deals with crimes against society or the state, tort law is concerned with compensating the victims of noncriminal wrong. Derived from the French word for wrong, a tort is a noncriminal injury to other persons or their property or reputation. Torts can be international or they may result from negligence. International torts are deliberate acts by a person or business firm. A tort results from negligence when one party fails to exercise reasonable care and causes injury to another. Negligence torts arise from carelessness rather than international behavior. Product liability is an important part of tort law. Product liability involves the responsibility of business firms for negligence in design, manufacture, sale, and operation of their products. In certain instances, product liability laws have been expanded to cause in which the producers or the marketer of the product is not proved negligent. Under strict product liability, the manufacturer is responsible if the injured party can show that the product was defective, that the defect caused the injury, and that the defect caused the product to be dangerous. The Law of Contracts Any legal agreement enforceable by law is called contract. A contract is a legally enforceable, voluntary agreement between two or more parties. A contact is like a private statute, in which the parties define the considerations they owe each other. Contracts are generally part of most business transactions. They can be either expressed or implied. An express contract is one in which the words are actually put forth, either orally or writing. Generally, oral contracts are just as legally enforceable as written contracts. But since the words used in an oral contract may be difficult to prove at a later time when parties are in dispute, the best policy for business firms to follow is to put all contacts in writing. An implied contract results from the actions of the parties rather than from an explicit promise. Again, since actions can be misunderstood, the best policy in business situations is for the contract to be expressed in words and written down.To be enforceable, a contract must meet several requirements: Voluntary agreement: Both parties must accept the terms of the agreement voluntarily, free of coercion, fraud, and the like. Consideration: Each party must provide something of value to the other, such as money, a product, or a promise to do or not to do something. Contractual capacity: Each party must have the legal ability to enter into a binding agreement. Legality: A contract must not involve any unlawful act. The failure of one party to live up to a contractual agreement is called breach of contact. The Law of Sales Sales law is the body of law involving the sale of products for money or on credit. Sales law, Which grew out of contract law, involves products sold for money or credit' The uniform Commercial Code provides that some sales contacts are binding even if all the requirements for a contract are not met. For instance, a sales agreement is legally binding even if the selling price is left out of the agreement; the buyer must pay the reasonable value of the goods. The law of contracts also establishes the law of warranty for sales transactions. An express warranty is any statement of fact or promise made by the seller to the buyer relating to the products sold, and which an important part of the sales agreement becomes. A warranty is in the nature of a guarantee, although no formal words such as warrant or guarantee need be used. If the products in fact are not as represented by the seller, the seller can be held responsible either to make the products as warranted or to give the buyer the money back. The law also imposes an implied warranty, not specially expressed by the parties, ensuring that the business firm has clear title of the products it sells and that the products will serve the purpose for which they are sold. The Law of Agency A legal relationship between two parties who agree that the agent will act on behalf of the principal is call agency. An agency is business relationship in which a principal appoints an agent to act on his or her behalf. The actions of the agent, authorized by the principal, are legally recognized as though they were performed by the principal. Agents are used in many diverse industries, including insurance, sports, entertainment, and real estate. Generally, agents are paid a fee or commission for their services. Because the principal is bound by the actions of the agent, it is important to put the agency agreement in writing. Generally, a legal document called a power of attorney is granted to authorize the agent to act on behalf of the principal. For instance, a person may grant an accountant power of attorney to act as his or her agent during a tax audit. It is the agent’s duty to act in a professional manner and to exercise good judgment. The agency relationship can be terminated when the task is completed or by mutual agreement of the parties. The Law of Property Anything that can be owned is considered property. Property is something for which a person or business entity has unrestricted right of profession or use. There are several categories of property. Real property is real estate, land, and anything permanently attached to it, such as houses, buildings, and parking lots. Tangible personal property means physical items such as a store’s inventory of goods, equipments, and automobiles. Intangible personal property is that shown by documents and other written instruments, such as checks, money orders, receipts, stocks, and bonds. Three forms of intangible personal property provide legal protection for individuals or business firms. A trademark is a name or symbol registered with the Patent and Trademark office. It guarantees the owner exclusive rights for 20 years and can be renewed as many times as the owner wishes. Patents, granted by the Patent and Trademark Office, give inventors the exclusive right to make, use, or sell their products for 17 years. Patents cannot be renewed. In patent disputes during the 1980s, the courts ruled increasingly in favor of the rights of the patent owners. A copyright, filed with the copyright office, gives the creator exclusive right to publish and sell an original written work. Copyrights last for the lifetime of the author plus 50 years. The Law of Bankruptcy Bankruptcy is a legal procedure for individuals and firms that cannot pay their debts. By declaring bankruptcy, the individual or form ask the court to be declare unable to satisfy creditors and to be released from financial obligations. The debtor’s assets are usually sold to pay off as much of the debt as possible. Three types of bankruptcy are possible: The business firm is dissolved, and the assets are sold to pay off debt. Individuals are allowed to keep a limited amount of assets, determined by federal or state law. Bankruptcy temporarily relieves a company from its debts while it reorganizes and works out a payment plan with its creditors. Bankruptcy allows an individual to establish a plan for repaying debts within three to five years. The Law of Negotiable Instruments A written promise to pay a specified sum of money; it can be transferred from one person or firm to another. So, a negotiable instrument is a substitute for money. It is written promise to pay a specified sum of money; it can be transferred from one person or business firm to another. Examples of negotiable instruments include checks, drafts, and certificates of deposits. The Uniform Commercial Code specifies that negotiable instruments must meet the following requirements: • They must be in writing and sighed by the maker or drawer. • They must contain an unconditional promise to pay a certain sum of money. • They must be payable on demand or at a specific date. • They must be payable to a specific person or business firm or to the bearer. The payee must endorse a negotiable instrument before it is transferred. An endorsement is a person’s signature on the back of a negotiable instrument, making it transferable. A blank endorsement is accomplished when the payee signs the back of the instrument. This type of endorsement can be unsafe because any one can cash the instrument once it is endorsed. Using the words for deposit only along with the signature constitutes a restrictive endorsement; it states what the instrument is for and is much safer than a blank endorsement. A special endorsement specifies to whom the instrument is payable by including the person’s or firm’s name on the back of the instrument along with the signature. Restrictive and special endorsements protect the negotiable instrument should it be lost or stolen. Finally, a qualified endorsement means the person who originally signed the instrument, not the endorser, is responsible for payment. The endorser does not guarantee payment if the instrument is not backed by sufficient funds. Government Regulation Acts of Business The federal and state governments have substantial legislation to encourage compaction among business firms. Many laws, such as those outlawing monopolies, price-fixing, and other particles that restrain trade, are intended to help ensure that consumers have a choice in the marketplace and that firms have the freedom to complete. In this section, we discuss federal laws designed to regulate competition among American business firms. Sherman Antitrust Act One f the first laws passed to regulate competition, the Sherman Antitrust Act (1980) declared that two or more business firms could not agree to the prices to be charged for goods. It also prohibited business firms from dividing markets among themselves and from deciding not to sell to or buy from a particular company. The Sherman Antitrust Act was not used for more than a decade. Today the Sherman Act is still the basis for legal action. Clayton Act Congress enacted the Clayton Act in 1914 to strengthen the Sherman Antitrust Act. Specially, the Clayton Act outlawed five practices that reduce competition. These are: • Price discrimination: Charging one firm a lower price for goods than the other firms are charged. • Tying agreements: Requiring a buyer to purchase unwanted products for the right to purchase desired products. • Binding contracts: Requiring a buyer to purchase products from a specific supplier. • Interlocking directorates: A member of the board of directors of one firm serving on the board of a competing firm when the total combined capital of the two firms is more than $1 million. • Community of interest: A business buying stock in a competing firm to reduce completion between the two. Federal Trade Commission Act Federal Trade Commission Act (1914) established the Federal Trade Commission (FTC), a five member committee empowered to investigate illegal trade practices. This act prohibits all unfair methods of competition. The Wheeler-Lea Amendment (1938) expanded the FTC’s power to eliminate deceptive business practices, including those affecting consumers as well as competitors. The FTC acts on its own accord to investigate a firm’s business practices or on complaints made by other firms or individuals. Recent targets have included fly-by-night telemarketers who use television to help sell fraudulent products. Robinson-Patman Act The Robinson-Patman Act, passed in 1936, outlaws price discrimination that substantially reduces competition. Price discounts are legal, however, if they are based on actual lower selling costs, such as discounts for large orders. The act also prohibits advertising and promotional unless they are offered to all retailers regardless of size. Celler-Kefauver Act The Celler-Kefauver Act (1950) outlaws mergers through the purchase of assets, when the mergers tend to reduce the competition. The act also makes it mandatory that all mergers be approved by the FTC and the Justice Department. Antitrust Improvement Act The Antitrust Improvement Act of 1976 strengthens previous antitrust laws. The act gives the FTC and the Justice Department a longer period of time to evaluate proposed mergers. It also allows state attorneys general to prosecute firms accused of price-fixing. Gramm-Rudman Act The Gramm-Rudman Act was passed in 1985 to force politicians to meet annual deficit targets, thereby balancing the budget by 1991. In a 1987 rewrite the date for achieving a balanced budget was postponed to 1993. To reduce the deficit, the government has cut spending on defense and other goods and services, impacting many industries. Gramm-Rudman could also result higher corporate taxes because corporate taxation is one of the major means of reducing the deficits. Deregulation Acts of Business Since the 1970s, a trend toward deregulation of business has been evident. Deregulation is the process of reducing the involvement of government in the regulation of business, by eliminating legal restraints on competition. The goal of deregulation is to make business regulation less complex and to lower the costs of complying with them. Industries that have been most affected by the movement toward deregulation include airlines, railroads and banking. Deregulation of business results in several benefits for business firms and consumers. Regulation costs firms and consumers billions of dollars each year; deregulation eliminates or reduces some of the costs, and the savings can be passed on to consumers. Deregulation can also increase competition, resulting in lower prices for consumers. Increased competition can also lead to better service. Since the government deregulated the banking industry, many banks are providing more services, such as discount brokerages and money market accounts. The major deregulation laws are as follows: Natural Gas Policy Act (1978) Requires pipeline firms to transport natural gas owned by other companies. Airline Deregulation Act (1978) Eliminates regulation of airline rates and schedules. Motor Carrier Act (1980) Allows trucks to travel more freely and change prices more quickly. Staggers Rail Act (1980) Give railroads more flexibility to raise and lower rates without government approval. Depository Institution Act (1982) Permit financial institutions to complete on a more even basis for deposit accounts by paying higher interest rates and to broaden investments beyond homes and small commercial mortgages. Drug Price Competition and Patent Term Regulation Act (1984) Allows genetic drugs to reach the market sooner by awarding patents for shorter periods of time. Business Related Laws of Bangladesh The Customs Act, 1969 Customs wing is primarily responsible for collection of all duties and taxes at the import stage. Apart from collection of government revenue it is also responsible for trade facilitation forcement of government regulations, protection of society and environmental protection, preparation of foreign trade statistics, trade compliance and protection of cultural heritage. The Income Tax Ordinance, 1984 This law is related to collection and management of Income-tax matters in Bangladesh. The Value Added Tax Act, 1991 This law is related to imposition of Value Added Tax (VAT) on goods and services at import stage, manufacturing, wholesale and retails levels across Bangladesh. The Investment Board Act, 1989 This law is related to the establishment of the Board of Investment for the purpose of promoting industrial investments and offering facilities and assistance necessary for the establishment of industries in the non-governmental sectors and to promote and facilitate investment both from domestic and overseas sources with a view to contribute to the socio-economic development of Bangladesh. The Public Procurement Act, 2006 This law is related to ensure transparency and accountability in procuring work or service with the money of the government fund and the process of open competition and equal treatment of the willing persons of procurement. Company Law | | |RJSC | | |  | | | |The Registrar of Joint Stock Companies and Firms (RJSC) is the sole authority which facilitates formation of companies etc.; and | | | |keeps track of all ownership related issues as prescribed by the laws in Bangladesh. | | | |The Registrar is the authority of the Office of the Registrar of Joint Stock Companies and Firms, Bangladesh. | | | | | | | | | | | |RJSC deals with the following types of entities: | | | | | | | |  | | | |  | | | |i. | | | |Private companies | | | | | | | |  | | | | | | | |ii. | | | |Public companies | | | | | | | |  | | | | | | | |iii. | | | |Foreign companies | | | | | | | |  | | | | | | | |iv. | | | |Trade organizations | | | | | | | |  | | | | | | | |v. | | | |Societies, and | | | | | | | |  | | | | | | | |vi. | | | |Partnership firms | | | | | | | |  | | | |RJSC accords registration and ensures lawful administration of the entities under the provisions of applicable act as under: | | | | | | | |  | | | | | | | |i. | | | |Companies and Trade Organizations: Companies Act, 1994 (Amendment of Companies Act 1913) | | | | | | | |  | | | | | | | |ii. | | | |Societies: Societies Registration Act, 1860 | | | | | | | |  | | | | | | | |iii. | | | |Partnership Firms: Partnership Act, 1932 | | | | | | | |The major functions and activities of RJSC are | | | | | | | |  | | | |  | | | |To incorporate Companies (including Trade Organization), Societies and Partnership Firms under the respective Companies Act 1994, | | | |Societies Registration Act 1860 and Partnership Act 1932, and | | | | | | | | | | | |  | | | |  | | | |To administer and enforce the relevant statutory provisions of these acts in relation to the incorporated companies (including Trade | | | |Organization), societies and partnership firms. | | | | | | | | | | | |  | | | |[pic]Entities | | | | RJSC deals with the following types of entities: | | | | | | | | | | | |  | | | |i. | | | |Private companies | | | | | | | |  | | | | | | | |ii. | | | |Public companies | | | | | | | |  | | | | | | | |iii. | | | |Foreign companies | | | | | | | | | | | | | | | |iv. | | | |Trade organizations | | | | | | | |  | | | | | | | |v. | | | |Societies, and | | | | | | | | | | | | | | | |vi. | | | |Partnership firms | | | | | | | |[pic]  Applicable Acts | | | |RJSC accords registration and ensures lawful administration of the entities under the provisions of applicable act as under: | | | |Companies and Trade Organizations: Companies Act, 1994 (Amendment of Companies Act 1913) | | | |Societies: Societies Registration Act, 1860 | | | |Partnership Firms: Partnership Act, 1932 | | | |[pic]  Name Clearance | | | |This is a pre-requisite for registration of a new company (other than Foreign Company and Partnership firms) or a society or a trade | | | |organization. | | | | | | | |Promoters of a new entity (company, society or trade organization) apply for, and RJSC provides name clearance for one of the | | | |proposed names upon satisfaction that it does not closely match or resembles with any of the already taken names (registered, booked | | | |or under the process of registration of the same entity type) | | | |[pic]  | | | |Registration | | | |Promoters of a new entity apply for, and RJSC issues a certificate of incorporation for a new entity upon satisfaction that the | | | |application conforms to the provisions of the applicable act and that requisite fees are paid. | | | |Returns filing | | | |Registered entities are to file returns in prescribed forms & schedules, and RJSC upon satisfaction approves and archives such | | | |records. There are two (2) types of returns, viz., ‘Annual Returns’ and ‘Returns for any Change in the Entity’ | | | |[pic]Issuance of Certified copies | | | |Anyone can apply for certified copy of record(s) of an entity. In response to any such application and after getting requisite | | | |payment, RJSC issues certified copy of the historical records of an entity. Profit & loss account is however open to only authorized | | | |personnel of the respective entity. | | | |[pic]Winding Up' | | | |A company having resolved to or the court makes an order or Memorandum & Articles of Association provide so for winding up of the | | | |company, submits to RJSC documents of winding up procedures and dissolution. | | The Bangladesh Labor Act, 2006 This law is for recruitment of laborers, relation between employers and employees, fixing minimum wages rate, payment of wages, compensation for accident, formation of trade union, industrial disputes and solution, health, security, welfare and condition of job and environment and probationary period and concerned issues. The Bangladesh Economic Zones Act, 2010 This law is passed for establishing, development and management new economic zones in underdeveloped areas for rapid economic development, employment, production and increasing export and matters related therewith. The Consumer-Right Protection Act, 2009 This law is related to the protection of consumer rights and matters related therewith in Bangladesh. The Companies Act, 1994 This law is related to the formation, registration, management, winding-up of companies and other matters therewith. The Bank Company Act, 1991 This law is related to the construction, management and regulation of the banking companies in Bangladesh. The Money Loan Court Act, 2003 This law is related to the establishment of the Artha Rin Adalats (Money Loan Courts) in Bangladesh to adjudicate the cases relating to the recovery of loans of financial institutions and for the settlement of disputes between the borrowers and the lenders. Earlier, the cases for loan recovery were the jurisdiction of the general civil courts. The Money Laundering Prevention Act, 2009 This law is related to the prevention of money laundering in Bangladesh. Labor Law in Bangladesh   In the question of law it is easily say able that we the people of Bangladesh are not too much respected to the law. People do not as obedient to the law as they supposed to be. In the question of labor law there are The Factory Act 1965, which one is the establish labor law of our country. Beside this our country also obeys the rules and regulations of united nation regarding the labor or these types of community. There are labor laws pertinent to health issues of garment workers in Bangladesh. The laws cover work hours, wages, sick leave, maternity leave and benefits, compensation and other working environment related issues. Because of the lack of implementation and/or violation of the laws, workers often suffer from health hazards both at work and at home. The problem is compounded by the fact that workers are unaware of many of the laws and the benefits they are entitled to because of lack of education and resources. The Bangladesh government, garment employers and different international and national NGOs have important roles to play in reducing the health hazards of workers. The paper discusses different types of illnesses and through narratives of women garment workers explores health hazards experienced by them. It also suggests solutions for policy-makers, NGO activists, employers and workers.  The labor law of Bangladesh contains and formed on such factors which are mentioned bellow-   • Preliminary • Health and Hygiene • Safety • Welfare • Working hours of Adults • Child Labor • Leave and Holidays with Wages • Special Provisions • Penalties and Procedures • Since we are working with the garments industries and there are some specific Export Processing Zone (EPZ) areas for the foreign investors in Bangladesh and there are some specific laws, which refer the conditional relationship between the workers and the employers of the Export Processing Zone (EPZ). The laws are covering some certain areas are- An Act to Make Provisions Relating to the EPZ Workers Association and Industrial Relations whereas it is expedient and necessary to enact law in order to make provisions for recognizing the right of the workers to form association, regulation of relations and settlement of differences or disputes arising between employers and workers in the Export Processing Zones and for matters connected therewith and ancillary thereto. It is hereby enacted as follows: - • Preliminary             Short Title, Extent and Commencement             Overriding Effect of the Act             Inability to Exempt From Any Provision of the Act • Workers Representation and Welfare Committee.             Special Definition of Eligible Worker             Registration and Status of Workers Representation And             Welfare Committee             Rights and Functions of the Committee             Meeting of the Committee • Association • Unfair Practices, Agreements, Etc. • Conciliation And Arbitration • Penalties And Procedure • Epz Labor Tribunal, Appellate Tribunal, Etc. • Miscellaneous Indemnity Bar To Linkage with Political Parties. Transitional and Temporary Provisions Reference to CBA and WA to Include Committee. Monitoring of Referendum and Elections. Garments Industries in Bangladesh  Globalization has hit the populations of the third world hard. Unemployment has risen as established industries have been destroyed and poverty has deepened. Yet the organizations that clear the way for Foreign Direct Investment do have something to be proud of in Bangladesh – the rapid expansion of the garments industry, which now employs approximately 1.5 million people. However, for these workers the joy of having a job is marred by the harsh conditions they endure in the workplace. Bangladesh began creating Export Processing Zones (EPZs) in 1978 to attract foreign capital and earn export dollars. In 1993 the Bangladesh Export Processing Zone Authority (BEPZA) was set up and a blanket ban on trade union activity imposed. This is obviously the most attractive feature for investors, on top of tax breaks and other incentives on offer. The EPZs now employ 70,000 workers, mostly in the garment and shoe-making industries. National labor laws do not apply in the EPZs, leaving BEPZA in full control over work conditions, wages and benefits. However, BEPZA ignores not only national standards but its own. The guaranteed minimum monthly wages of $US70, $US 40 and $US 25 for skilled, unskilled and probationary workers respectively is a laughable fiction. As is the entitlement of permanent workers to annual festival bonuses, medical coverage, and accommodation and transportation allowance. The body has consistently refused to give out letters confirming employment and does not hire any workers on a permanent basis. In reality, earnings average about $20 per month – less than half the official rate – and workers do forced overtime under threat of dismissal. The withholding of pay for months at a time – a practice common throughout the private sector – is also the norm. The situation in the garment industry at large is even worse. The nation’s top export earner employs 1.5 million workers under conditions of super-exploitation. The majority are young women from rural areas who have migrated to the urban centers in search of work. The sweatshops are more like prisons than factories, with no fixed hours, regular breaks or days off. Workers earn between $7 and $10 a month, for an average of 13 hours a day, up to 27 days per month. This comes to an hourly rate of two or three cents! The bourgeois media reports that the industry currently owes $ 300,000 in back pay, a staggering amount considering the miserly wages. Garment workers change jobs frequently because of wage arrears, lay-offs, ill health or harassment from the bosses and their “security guards”. As the vast majority of employees are girls and young women – most living apart from their families – there are many cases of physical and sexual harassments.  Garments Industries in Bangladesh are a very prospecting industries in Bangladesh.  The total demand of our garments can be fulfilled by the domestic made garments and so also this sector is doing very well in the sense of exporting. The major portions of our exports come from the garments industry.  Even though the major portion of the government revenue comes from this sector but only few people are thinking about the present situation of the workers of this sector. As it is very significant issue of the country so intellectuals should watch about it. They have reflected on it how the problem can eliminate on this sector. Working environment and Law in Garments Industries in Bangladesh There are some certain criteria in working condition. Every employer is bound to provide sound working environments for their employees according to different section of the factor is act 1965.  In working environment the following criteria’s should be provide by the environment for employees of his/her organization. This are- Health and Hygiene • Cleanliness * • Disposal of wastages and effluents** • Ventilation and temperature** • Dust and fume** • Artificial humidification*** • Overcrowding*** • Lighting** • Drinking water** • Latrines and urinals** • Spittoons*** Safety • Precautions Incase of fire** • Fencing of machinery*** • Working on or near machinery in motion*** • Employment of children’s on dangerous machines*** • Striking gear and devices for cutting of power*** • Self acting machines*** • Causing of new machineries** • Prohibition of employment of women and children near cotton openers*** • Revolving machinery** • Floors stairs and means of access.* • Excessive weights.* • Production of eyes.* Welfare • Washing facilities. * • Fast aid appliances. ** • Shelters. ** • Canteens.* • Rooms for children’s. ** Working hours • Weekly hours. *** • Weekly holiday. ** • Compensatory weekly holiday. *** • Daily hours. *** • Intervals for rest or meals.* • Spread over. *** • Night shift. *** • Prohibition of overlapping shift. ** • Extra allowance for over time. ** • Restriction on double employment. •  Employment of young person • Prohibition of employment of children. *** • Certificate of fitness. *** • Working hours for children’s. *** • Register of child workers. *** • Power to require medical examination. *** Leave and holidays with wages • Annual leave with wages. *** • Festival holidays. * • Casual leave and seek leave.* • Maternity leave. *** • Wages during leave or holiday periods. *** • Payment in advance in certain case. ** Miscellaneous  • Penalties. • Accident offences by workers. Those are the specific criteria which are mention in the factories act 1965. Each and every section of the law is not mentioned and describe here due to the shortage of space and those are not subject related. Those laws must be followed by the employer of garments worker. Though it is painful but it is true that most of these sections of law are violated by the most garment manufacturer of the country. These laws are violated flowingly- |* |Marked |Partially violated | |** |Marked |Partially violated | |*** |Marked |Totally violated | | | | | The Percentages of violating law in garments factories are given bellow- |Violation of Law |Percentages | |Totally violated |31.37 % | |Mostly violated |43.13 % | |Partially violated |19.61 % | |Not violated |05.89 % |  [pic] Above chart is describing the present scenario of the garments industries of Bangladesh. Most of the labor laws are violated by the most of the factories of the country.  Employer Obligation The employer’s obligation is to correct all hazards identified by the consultant within reasonable period. This commitment is made in advance. The employer must also agree to post the list of hazards that accompanies the consultant’s report. If an employer refuses to correct or verify correction of a serious hazard, the inspector may refer the matter to compliance, a violence of law.  Wage level and Law  Garments workers are not well paid and so also there are no possibilities to be the future bright. Though the garments industries are paying ill but still people are interested enough to get a job in a garments factory. The main reason behind it is the high unemployment rate of the country. People are completing there degree but they are not being able to get appropriate job according to there demand. This is why people are taking job in garments factories. The employers are taking these chances. Since people don’t have any other opportunities so they are performing the job though they are ill paid. Leave and holidays and wages • Annual leave with wages. • Festival holidays. • Casual leave and seek leave. • Maternity leave. • Wages during leave or holiday periods. • Payment in advance in certain case.  Those criteria should be followed by the garments manufacturer of our country but most of them are violated. Sex disparity in wage level is another common phenomenon in the garments factories. Some cases manufacturers are paying ill to women workers though lady workers are giving same services as like men workers.  Labor organization  Labor organizations are existed partially in garments manufacturing industry. Though partially it is existed but these organizations do not have much more freedom to do anything for the labor people. Garments workers should given the opportunity to build a union for their better opportunity. Though the union should not be supported in any short of productive organization but in the case of garments workers it should be established. Otherwise the government should take all the necessary initiative to make their good. Garments workers are all alone their employer will not help them to improve their luck. So it is themselves or the government who should take initiatives for them. Future prospect and Law Though the garments sectors are very prospective one for the Bangladesh’s economy but the people who are making this sector prospective they are not well entertained by the manufacturer and government. There are different types movements are running for them. Different communist parties, NGOs are working for their better prospect. But their condition will not improve until the economy of Bangladesh shines. Recommendations  As the situations are changing so it can be expected by us that the present condition of our garments workers should be changed. Government of Bangladesh has to take each and every proper initiative to make there present situation better. There are three different parties who can do some good job for a little bit food for the garments workers and these three different parties are- • The Government • The Employers and • The workers themselves Here government has some duties to performs which are mentioned bellow- • Build a monitory commission to evaluate the performance of the garments manufacturing organizations. • Make an institute for the garments workers so that they can improve their skills. • Crete pressure on the garments organization to make sure that they are following the rule and regulations of the labor or industrial law of the country. • Provide tax discount on their income to make them lead a better life. • Ensure the industries that they are providing the standard working environment. • Make influenced the NGO’s to be interested to work with the garments workers to improve their life style. • Provide the night schooling facilities to make the garments workers educated which will help to improve their life. • Make a specific area for the garments factories and arrange some housing facility so that they can live their life in a secure environment. • Re-arrange some special bus service for garments workers which was practiced by BRTC. • Regulate the law and make the law established and followed by the garments manufacturer organization. • Try to build up a good relationship between the employer and the worker of garments factories. The fact is not that to improve the present scenario it is not that the only duty to perform by the government and the employer. There are some specific duties which should be performed by the workers themselves. Because they are the real force who can improve their situation.  It is for sure that nobody can help them to improve their situation until they help themselves to improve their condition. What are the duties that the garments workers should perform to improve their present scenario' Those duties or recommendations are given bellow- • Build up some associations to make their present situation. • Encourage themselves to be cooperative minded and try to make some savings to make future productive investment. • Build cooperative society to influence people to save some of their money for future. • Encourage themselves to work together and so also live together. • Try to make their child educated so that their children can get some better job and lead a better life. • Be active and cheerful to improve their present situation. The initiative which should be taken by the garments factories of our country are mentioned bellow- • Not to over or under valued the capabilities of the workers. • Give fair chance of the workers in recruitments of new workers. • Give fair chance of the workers in the terms of sex disparity. • Provide the proper working environment so that workers can work properly. • Provide the clean and hygiene working environment. • Provide maternity leave to the lady workers with their basic salaries. • Provide job securities to their workers. • Provide after retirement facilities like pension, provident fund and so also. • Promotional and carrier improvement facilities so that it can make them motivated. • Opportunities to express free opinion and freedom in performing duties. • Opportunity to form a combined union which should be free from political influence. • Every factory should set a standard wage level for the employees and make sure to follow that standard. • Pay the salaries and bonus to the employees on due time. • Fix the standard working hour for the employees and pay over time for extra work. • Training facility for the new workers so that they can improve their skills. • Pay the extra money for extra work with their basic salary in due time. • Arrange some recreation for the employees as a routine work.  In comparison the salary with the first world country the salary level of our workers are not only poor but also horrible. This is a good reason that people are investing in our country, and the main reason behind is the low labor cost. And it for sure that every people will try to make the highest output from his \ her investments. But one thing should always remember that it will not take huge amount (in compression of the investment of the employer) if the employer try to provide some standard facility to their employees and it is sure that it will not hamper their profit amount cause it will help to increase output. As business is an indispensable part of life there should have some rules and regulations to control and operate it in a disciplined way. In order to do so business laws have been introduced. And in the present world business firms must operate within the boundaries of laws and government regulation.