Legal Environment for Business in Nepal

24 October 2016

Saroj Shrestha 1

Legislation Legislation is the law made by the legislative

body of the government. Latin term ‘Legis’ + ‘latern’ denote ‘Law +

making’. It means that the lawmaking body of the government is legislature.

It is the main source of law in the modern states. Legislative: Legislative is a body of elected

representatives from among the general public, who are empowered to make rules of the country.

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The law passed by the legislative body of the government is called legislation or statutes.

It makes amends and ratifies the laws and is called statute. It is made according to the change of time and is the outcome of long series of discussions among the representatives of the people. e.g. Contract Act, 2056, Company Act, 2063

The law relating to business is made in the parliament, where representatives of the people do participate. They make a law after fulfilling a long series of discussion.

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• Judicial decisions are known as precedents. ‘A precedent is a judicial decision which contains in itself a principle’. Such principle is created in the course of verdict, which fulfils the vacuum of law.

• Such a principle is regarded as the law for cases of the same nature and is binding to the subordinate courts.

• Law is that what the justice says in his decision.

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It is another important source of law. Agreement between the nations is called treaty. International laws are the collections of such

conventional laws and agreements such as law of sea, law of land, law of war etc.

International business organizations are more active in national, regional and world business nowadays. e.g. GATT, WTO, EU, SAFTA treaties.

Bilateral Agreements between nations and conventions of the business communities are the significant sources of national and international business laws. e.g. Nepal India Transit Treaty and Nepal India Trade Treaty

• An executive body also makes laws in the name of ordinance, order and regulations.

• It also fulfils the vacuum of law and is more useful to maintain day to day administrative function of the executive.

• This power of the executive body (Council of Ministers) is derived from express delegation of legislative of the government.

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Business law has a vital role in creating, developing, conducting, regulation, controlling, enhancing and systemizing the business activities.

It is common knowledge that ignorance of law is not excused. Law breaching activities are regarded as crimes.

The businessperson also needs to be acquainted with the legal principles and provisions that are connected with the business.

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8Saroj Shrestha

If you have any questions or concerns, please discuss ..

Thank you !