The legal environment is one of the components of the business environment. It refers to rules and regulations that govern doing business in a given country. These rules and regulations differ from one country to another. You need to know how the legal environment can affect your business as a business person. It may positively or negatively affect your business. How knowledgeable are you about the legal aspects of starting and running an activity in your country?
If you have never found out how the legal environment impacts your business, it’s high time you did it. Know how the law affects your business at every stage of its development before it is too late! And if you intend to start a business, some of the things to prioritise are the legalities you may encounter in running a business. If you find it difficult, then seek the services of an expert to help you.
On What Aspects of the Legal Environment Should You Focus?
1. The law of Ownership
The legal climate entails the legality of ownership. The ownership law refers to who owns what type of business in a given country. If you want to start a business, you need to learn who owns what. What the law says about the type of business you want to begin is essential. The law affects the kind of business you want to set up. For instance, there could be rules that necessitate local people to own a certain percentage of a foreign business enterprise or its subsidiary in some developing countries.
2. Taxation Laws
Understanding the legal environment in taxation and how it affects your business is very important. Countries use regulations to encourage or discourage certain business activities.
For example, there is no tax levied on people who earn income from online businesses in Uganda. But if the government introduces an internet sales tax, most affiliate marketers in Uganda may pull out of business. If not, their earnings may be affected substantially, making it difficult to sustain their online activities.
In another related example, if the amount of tax levied on, say, agricultural exports reduce, you may be encouraged to export more products to other countries. Changes in taxation laws either boost your business or discourage you in the business enterprise you operate.
3. Use of Trademarks, Copyrights and Patents
The Law
A trademark is a legal protection assigned to a product. It is a word or set of words, a design that helps to recognise or identify the source of goods of one party from those of others. For instance, if you have been doing business under a particular name and brand, you can claim a trademark over that name and brand image by registering it. It enables you to prevent competitors from copying your product.
On the other hand, copyrights protect intellectual property like writings, discoveries, designs, music and art, to mention but a few. While copyrights protect the expression of an idea, patents protect the idea itself. The copyright owner has exclusive rights to use his works in the way he wants. But ownership of copyrights is transferable to other people.
Knowing how trademarks, copyrights and patents work is vital for the legal protection of your products and works from people copying them. Second, it assists you in avoiding complications that may arise as a result of breaking these rules.
4. Understanding the Minimum Standards
As a business owner, you need to know some of the minimum technical standards you should meet when doing your business. For instance, flowers should be fresh before they are accepted where you export them. That’s a minimum standard. Failure to meet the minimum requirements may lead to the inability to succeed in business. You should, therefore, try to find out the minimum standards required to remain in any business you intend to start or do.
Knowing the legal environment in which you operate is essential and should be given attention if you want to succeed in your business. Get to know what legal aspects affect your business. Secondly, learn how to go about the legalities involved in doing business.
Lastly, do you have additional information on how the legal environment affects small home businesses? Use the comment section below to share it with us!
0 Comments