How law protects businesses

How law protects businesses


Business law is a wide body of laws relating to business organizations, business structures, and business transactions. included in the business law field are issues related to real estate, tax, and also the environment. Business law include the law that governing sales, contracts, commercial paper, agency and employment law, business organizations, bailments, and property. Other popular areas include insurance, estate planning and wills, and consumer and creditor protection. Business law may encompasses issues such as starting, buying, or selling a small business, managing a business, dealing with contracts, or dealing with employees, among others. The Uniform Commercial Code (UCC), that governs sales and commercial paper, has been adopted in some form by almost all states. There are agencies at the state and federal level that administer the law in such issues such as employment affairs and credit protection and consumer. The laws aim to protect fair business practices and due process rights for aggrieved workers and others.

In Morocco, business law is inspired by French law, from which it has borrowed a vast number of provisions regarding contract and company law. The major principles for executing and drafting contracts will be familiar to foreign investors, although they may face difficulties when it comes to the actual application of the different clauses. For instance, in the event of nonfulfilment of an obligation, penalty clauses are rarely used in Morocco and the judge alone can decide on how a conflict is to be resolved.

Given the difficulties involved in debt recovery and the somewhat random nature of legal decisions, before getting into an agreement it is best to seek advice from a company specialized in information on business repute. Care should also be taken in choosing the ways of payment and the contract should be drawn up by specialists.

Although Moroccan law allows for contracts to be ruled by the law of other countries and for a foreign jurisdiction to be chosen as a competent for dispute settlement, but still difficult to obtain the application of rulings made outside Morocco. A programme of reforms launched by the Moroccan Minister of Justice with encouragement from the World Bank and the US Agency for International Development should help improve the integrity and speed of legal procedures in the Kingdom.

Government plays a vital role in most economies of the world by establishing a market system and driving the region's Gross Domestic Product (GDP),

The role of government in the economy is not merely to tax and spend part of the economy's income. Government maintains institutions that are very important for economic growth.

Protection of property rights, police protection, a judicial system to administer justice and enforce contract, national defence, and bank regulation are some of the beneficial government activities that contributed on the economic growth.

The role of the government toward the economic development

In the recent time, the economic growth is such a huge phenomenon. The world became a Small village where people know each other. Trade between different organizations became easier than before because of the new international trade law. Therefore we can notice that most of companies they look for the cheapest sources of supply in the country where they can get the best deal, and sell their products all over the world. There is no doubt that economic growth has influenced countries worldwide in many sectors.

The importance of law to economic protection and growth has been increasingly studies by economist. They used history and theory to make the case that legal because the past events are studied as a way to understand the present.

In the long tradition of political economy, economists have always taken account of government actions, but this has changed over the years. In the eighteenth and early nineteenth centuries, governments become the enemy. The problem was to liberate private production and exchange from the stranglehold of government control. This emancipation of the market was in large measure accomplished, and most economists thought that it contributed to acceleration of growth in the developed countries.

After free market economies were in place, of course government was in the background. It was expected to protect life, property and to establish a legal framework for economic activity.

Morocco was one from the other countries which benefits from the economic growth. We are going to see how the Moroccan government participates strongly in the sustainable economic growth.

Morocco is considered an approximately liberal economy governed by the law of supply and demand; morocco has followed a policy of privatization of certain economic sectors which used to be in the hands of the government. Morocco has become a senior player in the African economic affairs.

The government reforms and steady yearly growth in the region of 4-5% from 2000 to 2007 including 5% year-on-year growth in 2003-2007 the Moroccan economy is much stronger than just a few years ago. Economic growth is far more diversified, with new services and industrial poles, like Casablanca and tangier,

In 1980s the Moroccan government has followed an economic program toward accelerating real economy growth with the support of the International Monetary Fund,

The Paris club of creditors and the World Bank.

Company law in Morocco allows foreign investors to acquire holdings in existing companies or companies in the process of being set up, as long as the activity is open to foreign investment, that a capital increase is subscribed to or that existing shares are acquired. The numerous reforms made in the past ten years contribute to greater transparency and improve the protection offered to minority shareholders.

Business creation is also possible, as formalities have been greatly simplified since sixteen regional investment centers were opened in the main cities in 2002. A single form available at these centers enables entrepreneurs to carry out most of the formalities within two to seven days. Despite this progress, it is still highly recommended to use the services of business consultants for advice on legal, fiscal and accounting procedures and to serve as intermediaries with the different administrations.

On the social side, after twenty years of negotiations, Morocco has just taken a decisive step, with the introduction of new labor laws on 1st June 2004. The Labor Code complies with the basic ILO recommendations and proscribes discrimination and breaches of freedom or of laws relating to trade union membership. The many legal initiatives that have been completed or are currently in progress should lead to improvements in legal security in the Kingdom and thereby help to reassure international investors.

(1)In the actual time, Morocco offers a reliable statistics on economics and human development, approaching the same international standards. Confidence in the country's political stability and transparency is also an important asset which many comparable countries do not have. The Moroccan government became more and more rigid in contract law. The legal and fiscal framework shows a striking similarity with those of France and the European Union, which is a positive element for the intensification of international trade. This can explain the numerous free trade agreements with many countries and regions.

(European union, Turkey, USA, United Arab Emirates...) and (morocco - US. Free trade agreement), morocco in terms of taxes and tariffs, in 1995 Investment Charter Law, whose simplified tax code superseded dozens of antiquated investment laws. The tax incentives within the Investment Charter include a 2.5 percent discounted tax rate for land acquisitions intended for housing developments; a 0.5 percent tax on any company contributing to capital formation or capital increase; and an exemption from registration fees associated with the purchase of land intended for capital investment. As an additional incentive measure, Morocco simplified the country's customs schedule, applying two flat-rate tariffs on all imported machinery, parts, equipment, capital goods, and accessories bought into Morocco to expand a business, The Charter also shields foreign investors from paying value added tax (VAT) on imported equipment, materials, and goods; and exempts start-up firms from license fees, corporate taxes, and general income taxes for five years. Thereafter, new businesses are required to pay a tax that is deeply discounted.

Labor laws Morocco has also reformed many of its labor laws and clarified employment rules. The government is improving the country's pool of skilled labor by stepping up funding for public learning institutions that offer vocational training. These were one of the steps that the Moroccan government tokes to encourage and protect the free trade agreements.

The Moroccan government is trying to" fix a base" for the formal contract law. Economic growth often starts without strong courts and efforts to improve the quality of the judiciary are often the consequence, not the cause, of economic development; but if growth starts without good judicial institutions, economic growth may create a demand for quality courts at higher levels of development.

The Moroccan economy is growing because of the changes that have been based particularly on the judicial system. The courts are more serious, efficient and transparent than before tanks to the increase of professionalism of court staff, and we can say that there is an obvious increase in the investments in morocco, in the last five years the number of foreign investments in Marrakech, Tanger and Agadir exceeded people's expectations. Plenty of foreigner are buying lands or houses others invests their money in the Hotel industry, restaurants, coffee shops...Also one significant thing I must mention which is the transfers of Moroccans residing abroad. Considerable transactions were made by Moroccan residing abroad because they became more optimistic about the economic future of Morocco and they trust in the Moroccan law and how the law protects those businesses.

These were some information about how law protects businesses and contribute in the development of the Moroccan economy.

United Kingdome is a developed country with a high quality of judicial and court system,

The role of the government to protect businesses is very strong and we can see this based on what the British Economy especially in England achieved within several years pasts.

The Economy of England is one of the most important economies in the world, and is the largest in the United Kingdom. England is highly industrialized and developed, with IT finance, manufacturing, and pharmaceuticals playing major roles.

England was the world's first industrialized nation. As England acquired colonies around the world, it became wealthy from the products and goods brought in from Canada, America, and Australia.

One of the largest and newest sectors of the English economy is finance, most of which is based in London. Reinsurance, insurance, investing, banking, business services, and the London Stock Exchange make up the finance industry in England.

The agriculture industry in England comprises about 2% of GDP, and supplies approximately 59% of the country's food requirements. It is highly-efficient and mechanized. Most (about 65%) of the agriculture industry relies on livestock such as sheep and cattle.

The principal crops raised are barley, wheat, oats, potatoes, sugar beets, apples, and other fruits and vegetables. England's agriculture industry relies heavily on EU subsidies. Fishing also comprises a considerable percentage of the English economy.

Tourism employees 6.1% of the working population of England, with London being the major attraction and hub for visitors.

The government's role in the economy, in both local and central government are included and lumped together, but the transactions of public corporations are excluded. That concept of government is used will depend on the purpose in view. A firm looking for contracts in the supply of educational equipment might want to concentrate on lower layers of government and the pattern of educational expenditure within those lower layers. A firm supplying capital equipment to nationalized fuel and power undertakings would wish to have data on public corporations' role in government and in the economy. A firm interested in defense contracting acquiring background on government activities might confine its attention to the central government budget. A firm which considered it possible to bargain with government about tax treatment of its capital expenditure or its liability to pay some national tax, such as a value added tax (VAT), might again wish to concentrate on the tax 'burden' imposed by central government. The problem of definition will reappear time and time again. Governments may attempt to control the prices of industrial goods and interfere in wage settlements with workers. Regulation has become particularly important, influencing the activities of public enterprises that have been privatized and as a form of consumer protection for those investing in the stock market or in pensions and life insurance. Such regulations will represent a significant influence on industrial and commercial decision-making, going far beyond the influence of government expenditure and taxation alone.

The biggest and successful companies and banks in the world are located in UK especially in London; It stock exchange is the destination of many stakeholders of different nationalities. Each month thousands of transactions are made with billions of dollars which requires the best monitoring way and security. Written evidence may well be useful proof that a contract was made, it is sometimes crucial to proof of your rights if the contract involves complex terms or future performance. I n developed countries people are no more happy or satisfied to set terms only by words or mouth.

In English law a minority of contracts must be written in order to be valid. This include contracts to sell land under the law of property (Miscellaneous Provision) Act 1989, and contracts to obtain credit which are governed by the Consumer Credit Act 1974[1]. In such situations if there is no contractual document, the law will treat the transaction as if it does not exist even if there are other proofs or evidence. Yet, contracts became compulsory for each business transaction. As explained above, developed countries are facing so many transactions which are a heavy burden for the government; the best way to control it is Formal contracts. (13-14)


The Moroccan government and English government make hard efforts to protect businesses and help them to survive under the continuous changes of the economy and also the hard competition in the markets.

The Moroccan government provides a direct aid to companies that have suffered most from the world economic crisis. The measures are primarily aimed in protecting jobs and production facilities.

The state would also help companies improve liquidity by stepping up state guarantees to finance working capital requirements and placing a possible moratorium on the repayment of current long-term loans. Banks would help companies by spreading payments; the government would give preferential treatment to the leather, textile, and automotive sectors to export of their products, particularly with export insurance. Financial support would also be provided to seek out external markets. The government would take on 80% of their canvassing costs, as it continues its support both for trustworthy projects and for export sectors, to promote investment that is productive in terms of creating both jobs and wealth. But this is a first step to encourage assistance for sectors that are in trouble and they are still pragmatic and will work to support the sectors which have been affected by the world's economic crisis.


Adams, Alix. Law for business students. (s.d.): page 46.

Alix Adams,. Law for business students. page 46.

Alix Adams,. Law for business students. page 46.


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