Q:

What is the role of law in business?

A:

Quick Answer

According to HG.org, businesses laws are implemented to provide all organizations in the marketplace with fair conditions to succeed. The actions of businesses, their owners and their employees are regulated by laws meant to protect businesses from other entities that want to cheat them and vice versa.

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Full Answer

According to the National Business Education Association, all businesses must be created to exist under the laws of the place where they reside. For businesses operating between cities or internationally, they must comply with all laws that affect them in both regions. Because business law is vast and complex, a business needs to have lawyers to interpret and advise proper action to ensure compliance.

"The Legal and Ethical Environment of Business" explains that to aid businesses and their legal staff, governments create regulating bodies. Agencies such as the U.S. Securities and Exchange Commission exist to protect investors and consumers by holding businesses accountable for any dangerous or fraudulent practices.

HG.org explains that business law is meant to provide guidelines by which businesses are able to avoid litigation. It is beneficial to seek the counsel of lawyers who specialize in business law before a business forms because these lawyers are acquainted with the pitfalls the new business seeks to avoid. A good lawyer is able to structure contracts and exchanges such that the business remains compliant with law to minimize liabilities while remaining as profitable as possible.

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