CSEET Business Laws & Management Review

Fundamental terms and legal/managerial definitions based on the CSEET Paper 4 study material transcript.

Law (Austin)

The aggregate of rules set by man as politically superior, or sovereign, to men as political subject; the "command of the sovereign."

Volkgeist

The common consciousness of the people, which Savigny identifies as the source of law.

Mandatory Law

A law that calls for an affirmative act, such as the payment of taxes.

Prohibitive Law

A law requiring negative conduct, such as prohibiting the carrying of a concealed weapon.

Permissive Law

A law which allows certain conduct if an individual desires to act, but neither requires nor forbids it.

Customary Law

A traditional common rule or practice that has become an intrinsic part of conduct in a community and is treated as a legal requirement.

Doctrine of Stare Decisis

The rule that a court decision becomes a precedent to be followed in future similar cases; literally, "adhere to the decision."

Ratio Decidendi

The underlying principle or the proposition of law necessary for a judicial decision which constitutes its authority as a precedent.

Obiter Dicta

Judicial utterances delivered in the course of a judgment which were not strictly necessary for the decision and have persuasive value only.

Supreme Legislation

Legislation that proceeds from the sovereign power in the State and cannot be repealed or controlled by any other legislative authority.

Ab initio

A legal maxim meaning "from the beginning."

Audi alteram partem

A legal maxim meaning "hear the other side."

Mens rea

A legal term referring to a "guilty mind."

Company (Section 2(20))

A company incorporated under the Companies Act, 2013 or under any previous company law.

Corporate Personality

The distinct status of a company as a separate legal entity, different from the members who compose it.

Perpetual Succession

The characteristic of a company to continue existing indefinitely despite changes in, or the death or insolvency of, its members.

Corporate Veil

The legal concept that a company has a separate personality from its members; "piercing" it involves looking at the realities behind the entity to hold members liable.

One Person Company

A company which has only one person as a member.

Small Company

A company other than a public company with paid-up share capital not exceeding $50$ lakh rupees and turnover not exceeding $2$ crore rupees, or higher limits prescribed up to $10$ crore and $100$ crore respectively.

Board of Directors

The collective body of the directors of the company.

Independent Director

A director other than a managing, whole-time, or nominee director who possesses integrity, expertise, and has no material or pecuniary relationship with the company.

Agreement

Every promise and every set of promises, forming the consideration for each other; the sum total of offer and acceptance.

Consensus-ad-idem

The "meeting of minds" where parties agree upon the same thing in the same sense and at the same time.

Consideration

Something in return (quid pro quo); some right, interest, profit, or loss given/undertaken by the other party.

Novation

The substitution of a new contract for an existing one, resulting in the discharge of the old contract.

Contract of Indemnity

A contract by which one party promises to save the other from loss caused to him by the conduct of the promisor or any other person.

Bailment

The delivery of goods by one person to another for some purpose, to be returned or disposed of after the purpose is accomplished.

Partnership (Section 4)

The relation between persons who have agreed to share the profits of a business carried on by all or any of them acting for all.

Nemo Dat Quod Non Habet

The general rule that no one can pass a better title than he himself has.

Caveat Emptor

A Latin term meaning "let the buyer beware," implying the buyer must satisfy himself as to the quality of the goods.

Negotiable Instrument

A promissory note, bill of exchange, or cheque payable either to order or to bearer.

Truncated Cheque

A cheque that is truncated during a clearing cycle by generating an electronic image for transmission, substituting physical movement.

Scientific Management

A theory by Frederick Taylor aiming to use systematic study to find the "one best way" of doing each task.

MBO (Management by Objectives)

A strategic management approach that involves aligning an organization's performance goals with both employee and management objectives.

MOST Analysis

A strategic tool for analyzing an organization's plan consisting of Mission, Objectives, Strategy, and Tactics.

Key Managerial Personnel (KMP)

Executive management including the CEO, Managing Director, Company Secretary, Whole-Time Director, and CFO.