2.2 Legal Factors

• Arrange the aspects of legal compliance based on their primary benefits for a business.

  1️⃣ Financial: Avoids fines and penalties

  2️⃣ Reputation: Builds trust with consumers

  3️⃣ Operational: Ensures smooth operations
• What is one key benefit of legal compliance for a business's reputation?

  Builds customer trust
• Operational compliance ensures smooth operations and reduces risk
• A company that fails to comply with environmental regulations may face significant fines.
• What are legal factors in business?

  Laws and regulations
• Employment law ensures fair treatment and safety of employees
• What does competition law prevent?

  Monopolies
• Compliance with legal factors helps businesses build trust with consumers.
• Legal compliance avoids penalties and damage to a business's reputation
• Arrange the following areas of legal compliance from most to least frequent:

  1️⃣ Contract law

  2️⃣ Consumer protection

  3️⃣ Employment law

  4️⃣ Environmental regulations

  5️⃣ Competition law
• What is one financial benefit of legal compliance?

  Avoids fines and penalties
• Damage to a company's reputation can lead to a loss of trust
• How does legal compliance ensure operational efficiency?

  Reduces risk
• Adhering to legal requirements helps businesses avoid legal repercussions.
• Why is legal compliance crucial for businesses?

  Avoid penalties and reputation damage
• Failing to comply with environmental regulations may result in significant fines
• Adhering to legal requirements helps businesses maintain a positive reputation.
• Match the aspect with its benefit or consequence:

  Financial ↔️ Avoids fines and penalties

  Reputation ↔️ Builds trust with consumers

  Operational ↔️ Ensures smooth operations
• Order the key legal areas affecting businesses:

  1️⃣ Contract law

  2️⃣ Consumer protection

  3️⃣ Employment law

  4️⃣ Environmental regulations

  5️⃣ Competition law
• Legal factors in business refer to the laws and regulations
• What does contract law govern in business?

  Business agreements and fair practices
• Environmental regulations require businesses to manage waste disposal responsibly.
• Businesses that engage in anti-competitive practices such as price-fixing violate competition
• Match the legal area with its definition:

  Contract Law ↔️ Governs agreements between parties

  Consumer Protection ↔️ Protects consumers from unfair practices

  Employment Law ↔️ Ensures fair treatment of employees
• Which legal structure has unlimited liability and profits taxed as personal income?

  Sole Proprietorship
• Choosing the appropriate legal structure depends on business goals, risk tolerance, and financial strategy
• Compliance with environmental regulations can enhance a company's reputation and customer loyalty.
• Legal compliance involves following laws such as contract law, consumer protection, employment law, environmental regulations, and competition law.
• Match the legal area with an example:

  Contract Law ↔️ Contracts with suppliers

  Consumer Protection ↔️ Accurate product labeling

  Environmental Regulations ↔️ Waste disposal standards
• Which legal structure has unlimited liability and simple setup?

  Sole Proprietorship
• What are the three main considerations when choosing a business legal structure?

  Liability, tax, complexity
• In a sole proprietorship, profits are taxed as personal income
• A sole proprietorship offers unlimited liability to the owner.
• What type of liability do general partners in a partnership have?

  Unlimited
• An LLC provides liability limited to business assets
• A corporation's profits are taxed only once at the corporate level.

  False
• Arrange the legal structures in order of increasing complexity:

  1️⃣ Sole Proprietorship

  2️⃣ Partnership

  3️⃣ Limited Liability Company (LLC)

  4️⃣ Corporation
• Which legal structure is most suitable for a tech startup aiming to attract investors?

  Corporation
• Match the legal structure with its key feature:

  Sole Proprietorship ↔️ Unlimited liability

  Partnership ↔️ Profits taxed as income

  Corporation ↔️ Complex tax structure

  LLC ↔️ Limited to business assets
• What is the primary goal of employment law?

  Fair treatment and safety