Legal factors affecting business involve all supervisory and law determinants that can negatively or assuredly affect results of market actions and choices of management of company performing in a particular country.
International groups must analyze and identify those parts (legal environment) independently for every state they function.
Legal factors analysis is an integral part of every necessary analysis method including PEST review, STEEP analysis, PESTEL, PESTLE and other borrowed of strategic business environment analysis.
It should be remarked, that the legal environment is constantly changing, rules are not set in stone and may change according to political and global climate.
Legal factors connected to tax and customs regulations
- Country tax law (may be different in every country agreed by business),
- Tax limitations for particular types of company,
- Export and import limitations,
- Tax relief for any types of products or activities promoting growth,
- Taxes and customs imposed on consumer goods may determine demand,
- Individual interest tax, corporate income tax,
- Overall tax and financial policy (excise taxes).
Here we mention some most important legal factors affecting business.
Legal factors affecting business
Illegal or unauthorized initiatives are blocked in the mid-time, facing lawsuits either by the government or even by some competitors, hence to remain careful.
To be care one potential entrepreneur while going to start the new venture should be aware of the legal concept as under:
1. Inception of Entrepreneurial Venture
A. Laws governing intellectual property
B. Forms of business organization
- Sole proprietorship
C. Tax considerations
D. Capital formation
E. Liability questions
2. An Ongoing Venture: Business Development and Transactions
A. Personal law
- Hiring and firing policies
- Collective bargaining
- Equal Employment Opportunity Commission
B. Contract law
- Legal contracts
- Sales contracts
3. A Growth and Continuity of a Successful Entrepreneurial Venture
A. Tax considerations
- National, state, local
B. Governmental regulations
- Zoning (property)
- Consumer law
- Administrated agencies (regulatory)
C. Continuity of ownership rights
- Property laws and ownership
- Wills, trusts, estates
An entrepreneur need not be a lawyer. He can consult the lawyer on fees. He can have a legal consultant to whom matters relating contract, big-money deal, the big purchase may be referred for scrutiny from the legal point of view.
And the legal opinions must not be overlooked but be taken seriously for required adjustment or modification.
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