Legal environment simply means a set of rules and regulations that govern doing business in a given country. These rules and regulations vary from country to country. As home business owner, you need to know how the legal aspects that govern the type of business you are involved in affect you. They may positively or negatively affect your business. How knowledgeable are you about the legal aspects pertaining to starting and running a business in your country?
If you have never bothered to find out about the legal environment in which you operate and how it can impact on your business, it’s important that you try to know how the law affects your business at every stage of its development before it’s too late. And if you intend to start a business, some of the things to give first priority are the legalities involved in running a business in your marketplace. If you are finding it difficult, then I recommend you seek the services of an expert in this area to help you.
In this article, I would like to share with you some of the things to focus on under legal environment, which include the following:
1. The law of ownership
The law of ownership 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 and what the law says on the type of business you want to start. The law affects the type of business you want to set up. For instance, in some developing countries particularly, there may be rules that necessitate the local people to own a certain percentage of a foreign business or its subsidiary.
2. Taxation laws
Understanding the legal environment in the area of taxation and how it affects your business is very important to you. Laws are used to encourage or discourage certain activities or businesses. For example, in most countries, there is no tax levied on people who earn income from online home businesses. But if an internet sales tax is introduced in your respective country, probably most affiliate marketers may pull out of business. If not, their earnings may be affected substantially, making it difficult to sustain their online businesses.
In another related example, if the amount of tax levied on, say, agricultural exports is reduced, you may be encouraged to export more products in other countries. Changes in taxation laws can either boost your business or discourage you in the business you are doing.
3. Use of trademarks, copyrights and patents
A trademark can be defined as the legal protection given to a product. It’s a word or set of words, a design which helps to recognize or identify the source of goods of one party from those of others. For instance, if you have been doing business under certain name and brand, you can claim trademark over that name and brand image by registering it. This enables you to prevent competitors from copying your product.
On the other hand, copyrights are meant to protect the intellectual property like writings, discoveries, designs, music and art to mention but a few. While copyrights protect expression of an idea, patents protect the idea itself. The owner of the copyright has exclusive rights to use his works in the way he wants. But ownership of copyrights can be transferred to other people.
Knowing how trademarks, copyrights and patents work is important so that you can legally protect your products and works from being copied. Secondly, it helps you to avoid falling prey to problems you may encounter when you violate these laws.
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 they are exported. That’s a minimum standard. Failure to meet the minimum standards may lead to failure to succeed in business. You should therefore try to find out the minimum stands required to remain in any business you intend to start or you are already doing.
Lastly, knowing the legal environment in which you operate is important and should be given primary attention if you really want to succeed in your business. Get to know what legal aspects affect your business and how to go about the legalities involved in doing business.