Question

How legal issues may impact on a business ? Provide an example

Answer 1

Business Structures:

The Business Structure is nothing but the Form in which the business is established either by Company, Firm, LLP, sole proprietorship, Depends upon the structure of the business laws will get tied with neck of the business and Need to follow relevant laws regularly otherwise severe penalty may be imposed .

For Example: If it is a company they need to follow and biding the rules issued by security exchange commission over submission of audited financial statements on time after auditing with Licensed CPA’s otherwise they will take very severe action from Imprisonment to close down the Business.

Taxes:

It is one of major issue with any business, It consists of many types of taxes rather than single tax mode.it is huge impact on business as every contract or earning of income we need to deduct certain percentage of amount before making any payment to both inside and outside people it is very huge tragedy over business trasactions and sometimes it insisted a factor to terminate the contract due to taxes.

For Example

If you are paying salaries we have to deduct several taxes before payment to employees as it leads to crub to payments and A Company taking an outsource contracts from outside the country it leads pay taxes double.Even though getting quality work with low cost. Taxes covering entire amount benefit from such Low cost work ,It leads to an issue to choose the contracts.

Employees Contracts:

They shall be a contract with employees when recruiting with term that we should not remove improperly, Failed which the employees trade unions get into touch, charge them with compensation. Moreover the Employee laws are very strict in all developed countries.

Dissatisfied Customers:

We have so many products to sell, we should provide customer care for dealing with warranties or guaranties after sell, otherwise it will leads a bad mouth word spread over the world ,which may leads to legal repercussion and Huge impact on the profits of the business

Immigration Laws:

The entity must check the proper documents regarding immigration to work to pay relevant charges to government before Joining any employee. Failing which , During the Immigration audit ,It may huge impact on the goodwill of the business and have to legal punishments and Collect huge fees.

Acts of Employees in the Business Environment:

Acts of the employees some times , leads to defamatory to the company , activities such as Sexual harassment , Discriminations, etc, for this We should enter into an agreement with employees not to done any of the defamatory acts in the company ,failing which debar from the company and Have a legal repercussions

Licenses / Trade Marks / Copy Rights:

Sometimes Our own designed products may be lead to violation of other Licenses ,Trade marks, Copyrights ,which may impact every business and it is more in case of big company as many of the threats coming from the competitors to curb or stop or defame our business.

Data Protection in case of Listed Company:

Today world data is very sensitive information which might be protected otherwise we have to forgo many of the profits as data leakage

For Example:

Information about the supplies is very important at the time of scare resources.