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CMA Foundation · Fundamentals of Business Laws and Business Communication · Sources of Law

A statute provides that every company must file its annual return with the Registrar, and prescribes a penalty payable to the government for failure. Another rule in a separate Act states how a civil suit is to be instituted and summons served. Which classification correctly matches the two rules?

The company filing duty with a government penalty is substantive public law with a penal element, because it creates a duty enforced by the State. The rule on instituting suits and serving summons only regulates court process, so it is procedural law.

  1. AFirst is procedural law; second is substantive law
  2. BBoth are substantive law
  3. CFirst is substantive public law with a penal element; second is procedural lawCorrect
  4. DFirst is private law; second is international law

Explanation

The filing duty is imposed on companies by statute and enforced by penalty to the State, so it is substantive law of a public nature. The rule on instituting suits and serving summons only regulates court process, hence procedural law. The first option reverses the pairing.

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