Business Environment and Law

To understand the relationship between business environment and law it is better to learn first what is business and what is business environment.

What is business?

Business is any legal activity which is carried out to earn profit. A business may be small or large, at designated place or remains moving, may be of goods or services, may run within the country or do the deals across the border; it may be of any type but it must be done to earn profit. If a trade is done on non-profit basis it can be called anything but business.

What is business environment?

Let’s understand link between business environment and law in a different way. Business environment is whatever inside and outside of business but must be related to it directly or indirectly. Its employees, its office, furniture, goods, services, clients, competitors, buyers, sellers, suppliers, lenders, borrowers, consultants, regulators, monitors, advisors logistic, infrastructure, building, etc all are part of the business environment apart from natural environment, political environment and social standards around it.

Laws applicable to business

There are various laws which a business must follow. Some laws are of general nature while some are specific laws related to a particular type of business.

General laws

The general laws which a business has to follow in any way are criminal laws, labor laws, environmental laws, gender laws, cultural laws, family laws, tax laws, financial laws, etc. Such laws are not directly applicable to any business but every business is bound to follow these laws apart from following laws of its particular field.

Specialized laws

These laws related to special field under which a business is running. Like stock brokerage firm has to abide by all laws related to investment, stock market, wealth tax, income tax, capital gains tax etc. Similarly a commodity business has to follow laws, rules and regulations related trade, import, export, buy, sale, production, manufacturing etc of certain commodity.  An export and import company has to abide by all laws related to import and export including rules related to shipment, financing, letter of credit etc.

Therefore, business environment is not exempted from the application of various laws which a business must follow. A business of banking has to abide by banking laws to run the business of borrowing and lending. It has to fulfill all regulatory requirements before and while doing the business of banking. Similarly a real estate broker has to fulfill the criteria to run the practice of realtor business and must abide by all laws related to property business.


We can say that there is direct relationship of business environment and law where a business operating in good environment of all types comfortably abide by all relevant laws related to generalized and specialized fields because it has all auxiliary support of internal and external factors to abide by all laws applicable to its operations. Is it a business of goods or services; it’s a small business or large entity but its continuity and success depends largely on compliance with all laws, rules and regulations to earn high reputation to enhance clientele.

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Team Editorial

Team Editorial posts contents on this blog under the leadership of Edson Hale who is a pro blogger and widely acclaimed motivation consultant with twenty years experience of perception management on various issues of professional and personal development.

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