Name: Sumaiya Akter Sristy

ID: 19-39715-1

Discuss legal environment in business

Legal environment of business is what makes the working of the enterprise harmonious. It accumulates
every aspect which is remotely concerned with the business firm. The term “Legal environment of
business” relates to the code of conduct of any company. It defines the legal boundaries and the scope of
the firm. Legal environment of business is what makes the working of the enterprise harmonious. It
accumulates every aspect which is remotely concerned with the business firm. The term "Legal
Environment of business" relates to the code of conduct of any company. It defines the legal boundaries
and the scope of the firm. The business legal environment plays a very important role in determining the
success of any businesses around the globe. The government taxes that are being imposed among other
regulatory measures help to promote economic growth and to protect consumers from exploitation and
other illegal factors. The legal environment of business refers to the code of conduct that defines the legal
boundaries for business activity. The nature of business spans over a number of legal realms, all of which
are continuously influenced by the needs and demands of the business community, consumers, and the
government. Legal regulatory factors are important dimensions of business environment. By studying
business environment intelligently, management can avoid legal consequences which many arise due to
non-adherence to legal provisions applicable to the business enterprise. It is better to swim with the
current than against it. The legal environment of business refers to the code of conduct that defines the
legal boundaries for business activity. To understand these boundaries, it is essential to first have a basic
understanding of the law and how it affects businesses and business practices. The nature of business
spans over a number of legal realms, all of which are continuously influenced by the needs and demands
of the business community, consumers, and the government.  
The main laws that affect the business include consumer protection law, antitrust law, environmental law
and the law that protect the public interest. The laws that affect business occupations according to
Alexander et al. (2011) are occupational qualifications, diversity laws, employee’s health and safety.
Laws that affect the business organization are incorporation law, bankruptcy, patents law, copyrights and
trademark law. All these laws affect the business in one way and the other and should be adhered to at all
cost to ensure that the business function is regulated.

Antitrust law

The initial reason of establishing this law was to check the issue of the monopoly that had affected the
business sector for a long time. The law started after the civil war with an increase in petroleum, cotton
and other agricultural products. The Sherman act of 1890 made a declaration that restraint of trade or
other related actions by monopolies were illegal (Earl, 1978).

Objectives of the antitrust law are the Countering Unfair Competition, protecting the rights, priorities and
interests of businesses and consumers by enhancing fair competition for better economic growth. There
are two categories of unfair competition the traditional ones that are the likes of the counterfeits, bribes
and adverts contrary to the product. The other category is by the government by certain persons in power
who misuse their power to access of institutions or generally interference with the economy to a point that
it is seen as sabotage to the local producers or manufacturers. The government however cannot sue or
charge themselves and so they are at liberty to go free on unfair completion. Termination of monopolies
could boost the productivity and quality of products produced.

According to Earl (1978) the antitrust laws are meant to deal with some four serious vices, which include:

The avoidance of entry to agreements, which hamper free and fair competition and lead to eventual
unsuccessful business.

Regulation of monopolies or bigger and dominant companies from preventing small-scale companies
being competitive.

Feasible competition is enhanced in the Oligopolistic industries.

Merging companies need to be monitored to concentrate on production and handle effectively the
economic pressures.

This was later amended by the Robinson-Pitman Act was more of an amendment of the Clayton Act
mainly dealing with the noncompetitive procedures used in the discrimination of the equity in
distribution.

For example in US, capitalist like John Rockefeller had for a long time enjoyed monopoly. They had
build up trust in their customers by forming different organization to ensure that they disguise people and
ensure that they monopolize the market keeping the price of their services high. This ensured that they
limited supply hence resulting into high price of the products in the market. After such unethical
behaviors were well understood by people, there was needed to form mistrust laws to regulate such
behaviors in the business sectors. The law ensured that it regulated one or more company to conspire and
thus limiting the supply and controlling prices of the products. This law in most of the country came amid
big blow that it caused to big business that had formed their bases in monopoly. In a country like United
State, it ensured that the violators received very severe penalties. OPEC, which is an international
organization that regulate oil production in the world ensure that it control the amount of oil that each
country in the world produces (McGraw-Hill, 2002). This ensures that there is no monopoly in the
production of oil by any country.

The Legal Environment of Business ensures that all the business across the globe is regulated thus
working in a regulated environment. The number of laws that are put in place to ensure that the business
act as required affect the way the business execute their duties. Due to the consequences that are attached
therein, the business is forced to comply with these laws or otherwise they will close their business.
Otherwise, these regulations have very well made the environment to be conducive for new business to
come up as competition is ensured. This makes the public to receive quality and cost effective goods and
services that have no or less effect to the environment.