Why Business Law is Important
When it comes to running a business successfully and avoiding significant disputes and problems, business law provides a valuable service that maintains order and protects businesses from clients, individuals, and others.
Business Law as a Whole
Business law, also referred to as commercial law, encompasses a range of legal requirements surrounding the forming, running, dissolving and interacting with a business.
Conducting business with no laws or regulations surrounding business conduct and interaction would ultimately be a chaotic and dysfunctional situation - business law is crucial in maintaining order, protecting rights and resolving disputes regarding businesses and business interactions with individuals, clients, and other businesses. When there is a clear and understood definition of expectations and standards, it is ensured that all parties involved within a transaction are satisfied and treated fairly.
Particular Areas Where Business Law is Crucial
There are various real world examples that effectively demonstrate the importance and diversity of business law.
Whether a business consists of a small team, or is a multinational corporation, business law can come into play regarding internal and external business conduct. In order to protect employees, customers, clients and the business itself, business law covers everything from employment law and contracts, to intellectual property and bankruptcy.
Some examples of areas where business law is particularly important include:
- Wages - Paying employees appropriately is a standard maintained by business law.
- Hiring - in order to avoid misconduct such as discrimination, hiring minors, and inappropriately screening potential employees.
- Workplace safety - workplace health and safety measures should be upheld by business law.
Business Law and Professional Services
Professional services are another area where commercial law is very important. When your line of work involves taking accountability for the success and failure of clients and other businesses, business law is crucial. If a client claims that you have provided inadequate advice or services as a result of your work, or otherwise is acting illegally in their interactions with your business, involving business law in the situation will ensure that fair outcomes are achieved.
Indemnity insurance is a good example of why business law is important for professional services; it will usually cover legal expenses, as well as any costs associated with your business if your service has caused a client to lose money. Having something such as NRMA professional indemnity insurance on your side is crucial in ensuring that you are protected against claims of financial loss, injury or damage regarding actions and errors within your professional performance. Indemnity insurance will usually cover legal expenses, as well as any costs associated with your business if your service has caused a client to lose money.
Other situations where indemnity insurance might be necessary are when you handle people's private information, when a client insists you have it, or where you are part of a professional body that requires it. Common examples can include accountants, engineers, business consultants and surveyors - each of these roles involve significant accountability regarding the suitability and impact of their services.
The Risks of Non-Compliance
When business law is found to be broken, penalties, punishments and other repercussions can include fines, lawsuits, lawsuits, license suspensions, and more.
Often, business owners are tempted to cut corners and make unethical decisions in the pursuit of profit and growth for their business. Often, constant changes in business law also increase the difficulty faced by employers and businesses in adhering to business rules.
As a result, it is important that businesses implement a range of measures that are designed to minimise misconduct - this is often done through the use of a compliance officer, thorough and accurate completion of paperwork, and a generally compliant business culture.
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