COURSE TITLE

Business law and ethics.

COURSE CODE

BUS3305-01

COURSE INSTRUCTOR

Zalia Israel

UNIT

1
Write an essay in which you discuss three ways in which the law affects business in your

home country. Describe the nature and source of the law involved, give possible reasons for

the law, describe impacts of the law on business (both positive and negative), and suggest

ways that the law could be improved.

Prepare an essay of 1,500 words. The paper should be 12-point font, double spaced, Times

New Roman, and include a final source list.

INTRODUCTION

What is the rule of law? According to United Nations (n.d), “the rule of law is a principle of

governance in which all persons, institutions and entities, public and private, including the State

itself, are accountable to laws that are publicly promulgated, equally enforced and independently

adjudicated, and which are consistent with international human rights norms and standards.” In

every country, there are different laws that govern businesses and these laws apply to big and

small businesses. Governments make these rules and structures so that businesses will be able to

compete against each other. However, government can also decide to change these rules or

amend them from time to time and this will lead to a change in the way businesses operate. This

paper will examine various government laws in Nigeria and how they affect and influence

business environment in Nigeria, the nature and the sources of these laws, reasons for these laws

and the impact it has on businesses.

WAYS IN WHICH LAWS AFFECT BUSINESS IN NIGERIA.

Firstly, in Nigeria there are laws that affect businesses, from taxation, to copyright, to

licensing etc. In Nigeria there is an extensive taxation system covering “ Companies Income Tax,

Education Tax, Stamp Duties, Custom Duties, Excise Duties, Withholding Tax and Value Added

Tax are the major taxes administered by Federal Inland Revenue Service, the State Board of

Internal Revenue majorly administer Personal Income Tax and Withholding Tax, while Local

Government majorly administer levies” (PML Advisory, n.d).. These taxation regulations are
governed by the Federal Inland Revenue Service (FIRS). Most businesses in Nigeria are affected

by the company income tax (CIT) or the corporate tax.

The second law that affect businesses in Nigeria is the trade regulations. There are some

regulations set up by the government of Nigeria to enable decent marketing of goods. The

purpose of this law is to create competition among businesses without violence. For instance,

inspection is always carried out in hospitals and restaurants to check if those businesses can

provide quality services and product to their customers (Dayohub, n.d).

The third law that affects businesses in Nigeria is the interest rates on credits and loans.

There are lots of cons and pros in this law. If there is an increase in interest rates, the cost for

running a business would be high, and vice versa. A business that took a loan with an increased

interest rate, would sell things more expensive which will reduce the customers they attract and it

will make them unable to pay the bank loans, soon enough, they will start looking for ways to cut

corners, by compromising their standard. These laws are the main factor that influences decision

making in Nigerian businesses.

Subsequently, law is a very essential aspect in any society, or groups, or family (but there

it is made mild by calling it rules), as it helps maintain sanity and ensures equality amongst

members while advancing in whatever they do. The law is set to resolve arguments between

individuals and businesses. A place that has more than one person is bound to have some ground

rules, so that when there is disputes they can go back to the book and resolve their conflicts.
 However, according to Edeh (2022), “Law acts as a code of conduct in society, which is

why it is so important. It was also established to provide appropriate standards and regulations

for every one’s behavior and to ensure the government’s three branches’ equity. It guarantees

that civilization runs smoothly. Natural selection and survival would have prevailed if there had

been no rule, and everyone would have been left to their own devices. This isn’t a desired way of

life, for the most part. The law is important because it establishes a socially acceptable standard.

Conflicts between social groups and communities would exist even if they didn’t exist.”

Here are some positive impact of the law on businesses in Nigeria

 “Lower staff turnover, reducing recruitment costs.

 Happier employees, meaning better productivity.

 Lower level of complaints.

 Having high quality products may lead to more sales.

 Customers may have more confidence in the products.

 Employees may have higher productivity if they have good working conditions.

 Ensures a strong brand image.

 Less risk of impersonation by other brands and products.

 Less returns.

 Less chance of being sued by customers.

 Higher sales.” (BBC, n.d).

On the other hand, here is a list of some negative impact of the law in Nigeria.

 The branding and IP must be original.

 Any issues with products could negatively impact sales.

  Conforming to all laws can be expensive, increasing the importance or generating more

sales.

 All products and services must be produced to satisfactory levels.

 Using high quality materials is more expensive.

 Productivity may be reduced by conforming to the working time requirements.

 Can be expensive to ensure that all legal requirements are adhered to.

 Any mistakes can lead to expensive legal action.

 Employers have to be very flexible with employees. (BBC, n.d).

One of the ways the Nigerian Law can be improved is that the government should try to

increase transparency, reduce some tariffs and also protect businesses. Another way the

government of Nigeria can improve the laws is for them to accept electronic signatures, some

documents etc. This would increase the speed at which business transactions is done.

In conclusion, since the laws that govern businesses are so much no business can ever

know it all, however, it is vital that the firms executives are aware of most of these laws, so that

they can run their business effectively and smoothly.

References.

BBC. (n.d). The impact of legislation on businesses.

https://www.bbc.co.uk/bitesize/guides/z49xxyc/revision/

Dayohub, Dayo Adetiloye Business Hub. (n.d). 10 Laws affecting businesses in Nigeria: A must

read for every entrepreneur. https://www.dayoadetiloye.com/10-laws-affecting-businesses-in-

nigeria-a-must-read-for-every-entrepreneur/

Edeh Samuel Chukwuemeka ACMC. (2022). 8 importance of law in the society.

https://bscholarly.com/8-importance-of-law-in-the-society/

PML Advisory. (n.d). Nigerian tax system: structure and administration.

https://pml.com.ng/nigerian-tax-system-structure-and-administration/

United Nations. (n.d). What is the rule of law? https://www.un.org/ruleoflaw/what-is-the-rule-of-

law/#