Business Law
Introduction:
The business environment are governed by laws and when it comes to business law it encompasses numerous topics related to the mechanics of business in relation to the running of the business in a manner that is within the parameters of the laws.
The running of the business that entails the start of the business, the buying and selling for starting the business, and the subsequent managing and then the closing of the business. The lawmakers govern the laws.
The lawmakers are the establishment that in essence sets the course of laws concerning the running of the business. The lawmaker includes the government both federal and state and the regulations from the administrative side.
The laws of the business are however, different for different businesses, every sector and industry are governed by the laws that are regulated with regards to the nature of the business, hence running of a corporation such as Microsoft, or companies in partnerships and companies with limited liabilities have differ set of business laws that governs them.
The Issues:
The laws are there for a reason to make sure that the rules and regulations are followed diligently by business, companies that do not abide by the laws are severely dealt with when it comes to the management of the monetary issues the business law that got the writers attention is the Bankruptcy Law.
Bankruptcy:
In general terms bankruptcy entails to the status of a company or a person from a legal perspective with regards to not being able to pay the debts that is owned to the creditors i.e. banks or financial institutions or companies.
The law for bankruptcy is imposed by the court and the person who has lent the money i.e. the creditor always initiates the proceeding for this business law.
Bankruptcy Law:
The laws regulation as mentioned above in essence focus on the inability of the debtors by dividing the assets of the debtor to the creditor. The law makes sure that the distribution of the assets whether it is fixed or not, is distributed as per the share set by the legal framework.
However, the significance of bankruptcy law from a business perspective is that it has many branches when it comes to the execution of the law.
The proceedings for the bankruptcy also involves a situation where in, the business remains in the business and the subsequent profits or earnings is utilized in taking care of the debtors.
Another principle that entails the business law for bankruptcy, allows the relief from the credit owed to the debtors that is ruled by the lawmakers, this rule has affected numerous people and the significance of this rule allows many businesses to create a situation where they render themselves as unable to pay.
US Bankruptcy Chapters:
With regards to United States the bankruptcy falls into the following chapters, some of the prominent chapters are Chapter 7 that in essence involves the assets liquidation, Chapter 11 focuses on the reorganization of the bankruptcy terms with regards to the individual or the company.
Another Chapter that deals with Bankruptcy is number 13, the specifications in this chapter deals with creating a plan in relation to paying the debt through the agreed terms and conditions as instructed by the court to the creditors (Legal Information Institute, 2014).
Since the procedures for filing, bankruptcy is different around the world the focus is also on the procedure in terms
Bankruptcy filing specifications vary widely among different countries, and also depend on the procedural competency of the company or an individual.
Business Case Studies for Bankruptcy:
Some of the largest and biggest cases of bankruptcies showcase the facts that are aforementioned and with regards to the business corporations the Chapter 11 filing is prevalent.
As mentioned by Alex Howe (2011), in his documentation of the 11 largest bankruptcies in American history, the list entails some big names such as Lehman Brothers who were not bailed out by the government, valued at $691 billion at bankruptcy through the filing of Chapter 11.
Although, there are many big names in the list Enron is a pertinent case study that has been studied in academic institutions and also an example of business law’s implementation in unethical accounting practises.
The United States Bankruptcy Courts supervise the litigation cases and are part of the District Courts and are also conjoined with the United States Trustees that was initiated by the Congress to administer and supervise the proceeding related in an effective manner.
UK Bankruptcy Chapters:
The UK bankruptcy chapters follows the Enterprise Act of 2002, however, the amendments were made in 2004 that in essence created a big impact on the bankruptcy law in the UK. From a business and individual perspective the changes were positive.
The changes helped the companies and the individuals to take care of issues emanating from filing bankruptcy and the government made it easier for to find a solution relating to debts (Suzie, H, 2013).
Although, done in good faith the changes in law, created an irony, that the good intention of the changes in the law was manipulated by companies and individuals in view of securing a financial package.
The changes in bankruptcy law in UK have made it very easy for the debtors as if the creditor file for bankruptcy as that way the debtors are forced to pay only a small amount of the debt and the rest is wiped off.
With regards to individuals it is not only the common people who suffer the ignominy of filing bankruptcy, the rich and famous also suffer the fate of living life king size, as stated on The Richest (2012), about the top 10 famous celebrities how have filed for bankruptcy, names such as Larry King, Mike Tyson, MC Hammer. Lawrence Taylor to name a few.
Conclusion:
On a concluding note, form a business law perspective, bankruptcy is one aspect that has affected all and sundry from the rich and poor, big and medium sized companies, celebrities and CEO’s.
The companies operate in a business environment that is cut-throat and to be able to maintain a competitive advantage companies tend to overdo the utilization of resources that create issues from an internal and external perspective in such a manner that the strategy ends in creating a negative impact on the company.
In this age it is important to take into account the operational aspects so that to avoid any financial issues in view of the fact that the credibility of an individual and company is at stake and that once lost, it may get difficult to get back the trust with regards to business dealings and operations.
References
Alex, H (2011). The 11 Largest Bankruptcies in American History. Business Insider. Retrieved from http://www.businessinsider.com/largest-bankruptcies-in-american-history-2011-11?op=1
Legal Information Institute (2014). Bankruptcy: An overview. Retrieved from http://www.law.cornell.edu/wex/bankruptcy
Suzie, H (2013). Bankruptcy Law and You. Retrieved from http://www.becomingbankrupt.co.uk/bankruptcy-laws-and-you.html
The Richest (2012). Top10 Celebrities Who Have Filed Bankruptcy. Retrieved from http://www.therichest.com/expensive-lifestyle/money/celebrity-bankruptcies/
