Business Laws and Ethics
It’s proved that behind the success of country business world play important role. Successful business has its own features. There are a lot of forces which impact on business for the resistance against those forces there are law and regulations. To follow those laws is necessary for all businessman, these laws protect business and help to be successful. Business affected by ethics. Ethics impact on business from different ways. At different epochs of the world, people, especially the elites of the world, were blind to ethics and morality which were obviously unethical to the succeeding epoch.
This paper examines the ethic’s impact on business. It enables us to understand how different value system, laws and epoch affect on business. The object of this report is to enhance the value of business law and Ethics. The aim is to spark and discussion between business law and Ethics from different angles. The main purpose of this paper is to understand the success of business under the rule and regulations.
Business laws refer to the law that applies to business entities, such as partnership and corporations. Business law regulates the business and bound it to follow the existing policies of business world. This is relationship between businessman (corporations or all over the world) and the country that everything will go no under the rule and regulation. Business law governs the transaction between businesses. Business law includes business formation, litigation, contract, mergers and acquisitions, commercial leasing, and consumer protection. This law deals with primary with the definition of rights and responsibilities, overlapping issues. The Uniform Commercial Code (UCC) is the primary governing authority for commercial transactions. (Ross law Texas Attorney1998).
Business laws, there are some essentials, contract employment law, Environmental law, insurance and liability, Tax law.
Essentials of business law
In all over the world business has essentials without that no business can flourish. Some essentials are as follow,
A business contract is one of the most general legal transactions you will be involved in when running a business. No substance what type of business you run, having an understanding of contract law is a key to creating sound business agreements that will be legally enforceable in the event that a dispute arises. Following is a discussion of the law of contracts.
A contract is a legally enforceable agreement between two or more parties that creates an responsibility to do or not do particular things. The term "party" can mean an individual person, company, or company. No matter whom the parties are, contracts almost always contain the following essential elements:
Parties who are competent to enter into a contract, For example, a mentally disabled person could not enter into a contract. Minors can enter into contracts, but can void them in most cases before they reach majority age. Mutual agreement by all the parties; i.e., all parties have a meeting of the minds on a particular subject. M.S. Baratz (1970) each party either promises to perform and that the party is not legally essential to perform, or promises to abstain from performing an act that it are legally entitled to perform. There are two common type of contract one is bilateral contract, in this type of contract mostly people think of as traditional. And another type of contract is unilateral contract which offer request performance rather than a promise from the person accepting the offer.
Workforce organization is among the most difficult tasks for business owners, from the hiring process and wage issues to workplace safety, discrimination and the termination of employees. Employment law covers all rights and obligations within the employer-employee relationship -- between employers and current workers, job applicants, or former employees. Because of the difficulty of employment relationships and the wide range of situations that can occur employment law involves legal issues as diverse as discrimination, wrongful termination, wages and taxation, and workplace safety. Bennis, W.(1994) Many of these issues are governed by applicable federal and state law. But, where the employment relationship is based on a valid contract entered into by the employer and the employee, state contract law alone may dictate the rights and duties of the parties. Basically employment law explores the safety of working people in an organization as well as explains responsibilities of workers.
Protecting the environment is a serious matter, and the EPA and other federal and state enforcement agencies do not hesitate to prosecute individuals or companies who violate the myriad of laws and regulations that prohibit actions which adversely affect the environment. Sometimes, it helps to be reminded of what can happen if laws are ignored by taking a lesson from those who came before us. Follow up Environmental Law is very important for the protection of business it shows to remove the element from business which are harmful for people lives around the business properties. As well as this identify the rule and regulation to protect the atmosphere to affect by your business.
Insurance and Liabilities
There are a variety of small business insurance plans available to protect you, your business and your employees from devastating financial loss. Going into business is an inherently risky proposition, but that doesn't mean you have to roll the dice unprotected.
There are as many forms of liability insurance as there are ways to be liable. Dealing with accidents and lawsuits is part of doing business, so make sure you choose the right kind of insurance to protect yourself. Here are the most common types of small business liability insurance plans:
General liability insurance: Sometimes referred to as a Business Owners Policy (BOP), general Liability insurance plans protect your company from the infamous slip and fall cases. General liability insurance also protects you against liability if you or your employees injure someone or damage property at a customer's location. General liability insurance is typically required in your commercial lease.
Professional liability insurance: Sometimes also referred to as Errors and Omissions insurance (E&O), professional liability insurance protects you against a customer who alleges that he or she suffered a financial loss as a result of an error or an omission in the services offered by your business.
Workers' compensation insurance: Workers' compensation insurance provides medical and disability coverage for your employees in the event of a work-related illness or injury. In addition to providing medical coverage, the workers' compensation protects your business against a lawsuit claiming that your business' negligence was the cause of the work-related illness or injury.
Auto liability insurance: Auto liability insurance covers damage that you or an employee causes in a business-related auto accident. It is advisable to insure any vehicles your business uses, including employees' cars if they are used for business purposes.
Umbrella liability insurance: Sometimes referred to as Excess Liability insurance, umbrella liability insurance offers coverage for claims that exceeds the amount of coverage on your general liability insurance. Rosener, J. B (1990).
Disability insurance: Disability insurance protects you, the business owner, against some of the financial loss that may result from a serious illness or accident resulting in disability. Disability insurance does this by replacing your income for a period of time in the event of a serious accident or illness.
While liability insurance generally protects you and your employees, property insurance protects your physical place of business against many different types of damage and loss. A good property insurance policy should cover all forms of property in your business including:
* The building itself
* Office furniture
* Inventory and supplies
* Computers and other electronics
* Equipment and machinery
* Property fixtures such as lights and carpets
* Personal property kept at your business
Like every form of insurance, coverage can vary greatly from the bare minimum to extensive and detailed coverage. The type of coverage you need may be required under your commercial lease, or at least a bare minimum may be established by the lease.
Basic forms of property insurance will usually protect you from damage by fire, smoke, water sprinkler systems, explosions, riots and vandalism, with broader coverage including additional protection for broken windows, falling objects and water damage. Theft is not covered under the most basic forms of property insurance, and is generally only offered in more detailed, and thus expensive, property insurance packages. Reddin, W.J (1970).
Always carefully check a policy for exactly what is covered, and don't assume anything is covered if it is not explicitly stated. In addition to coverage, always check for liability limits, deductibles and co-pays as well as examining what the process for resolving a claim is. Finally, examine how an insurance policy determines what the value of any property you claim is. Some plans will reimburse you for the cost of replacing the property (guaranteed replacement cost), while others will only reimburse you for the current (depreciated) value of the property.
This overview provides some basic information on business form and federal taxation. There are other options and details that apply to each form of business. For example, a limited liability company may choose to be treated as a corporation for tax purposes because it provides advantages in terms of deductions that a partnership tax status does not. This chart should help you understand the basics and prepare you for a meeting with your attorney who is equipped to help you decide what business form is best suited to your personal tax situation.
Entity: Not an entity separate from the owner, so no separate tax return.
Filing: Owner includes the operations of the sole proprietor-ship on his/her individual tax return.
Federal Employer Tax Number: If a sole proprietor has employees, then a tax number is required.
Multiple Owners: No. If the business has multiple owners it is no longer a sole proprietor-ship.
Taxable Year: Generally, the same as the owner's, which is usually a calendar year.
Entity: Not separate taxable entity, but must file an information tax return.
Filing: Partners include their share of the income, gain, loss, deductions, and credits of the partnership on their personal tax return.
Federal Employer Tax Number: Required.
Multiple Owners: Requires two or more people who carry on a business for profit. Taxable Year: If all partners do not have the same taxable year, the partnership will have to adopt the taxable year of majority interest or a calendar year if there is no majority interest.
Entity: Treated as a partnership for tax purposes but may not have more than 75 shareholders
Filing: Shareholders include their share of the income, gain, loss, deductions, and credits of the corporation on their personal tax return.
Federal Employer Tax Number Required:
Multiple Owners: Usually more than one shareholder. No more than 75 shareholders, who must be individuals, or the IRS will not treat corporation as a partnership for tax purposes.
Taxable Year: Can usually choose its taxable year.
Entity: A taxable entity separate from its shareholders that may have an unlimited number of shareholders.
Filing: Corporation must file and pay taxes at the corporate level; the shareholders must pay taxes on the distributions they receive.
Federal Employer Tax Number Required:
Multiple Owners: Usually more than one shareholder.
Taxable Year: Can usually choose its taxable year.
Limited Liability Company:
Entity: Not always a separate taxable entity, but must file an information tax return.
Filing: Depending on its election, may choose to be taxed as a partnership or a corporation.
Federal Employer Tax Number Required:
Multiple Owners: No. Every state except Massachusetts allows single member LLC. Taxable Year: If members do not all have the same taxable year, the LLC must adopt the taxable year of majority interest or a calendar year if there is no majority interest.
Business ethics is a form of applied ethics or professional ethics that examine ethical principle and moral or ethical problems that arise in a business environment. It applies to all aspects of business conduct and is relevant to the conduct of individuals and business organizations as a whole. Applied ethics is a field of ethics that deals with ethical question in many fields such as medical, technical, legal, and business ethics. Rosener, J. B (1990).
Business ethics can be both a normative and a descriptive discipline. As a corporate practice and a career specialization, the field is primarily normative. In academia descriptive approach are also taken. The range and quantity of business ethical issues reflects the degree to which business is perceived to be at odds with non-economic social values.
History of Business Ethics
Business ethics begin part of the large social ethics, always been affected by the ethics of the epoch. At different epochs of the world, people, especially the elites of the world, were blind to ethics and morality which were obviously unethical to the succeeding epoch. History of business, thus, is tainted by and through the history of slavery history of colonialism and later by the history of cold war. The need for business ethics in the current epoch had begun gaining attention since 1970s. Historically, firm started highlighting their ethical stature since the late 1980s and early 1990s, as the world witnessed serious economic and natural disasters because of un ethical business practice. Rosener, J. B (1990) The Bhopal disaster and the fall of Enron are instances of the major disasters triggered by bad, corporate ethics. The history of cold war fought through and fought for American business firms abroad. Ideologically, promotions of firms owned by American nationals were presented as if were freedom and the local resistance against the firms were labeled communist upraising sponsored by the soviet Block.
Why Business Ethics
Discussion on ethics in business is necessary because business can become unethical, and there is plenty of evidence as in today on unethical corporate practice. Even Adam Smith opened that ‘people of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices’ Business does not operate in a vacuum. Firms and corporations operate in the social and natural environment. By virtue of existing in the natural and social environment, business is duty bound to be accountable to the natural and social environment in which it survives. Irrespective of the demand and pressure upon it, business by virtue of its existence is bound to be ethical, for at least two reasons: one, because whatever the business does affect its stakeholders and two , because every of the juncture of action has trajectories of ethical as well as unethical paths wherein the existence of the business is justified by ethical alternatives it responsibility chooses. One of the condition that brought business ethics to the forefront is the demise of small scale, high trust and face –to-face enterprises and emergence of huge multinational corporate structures capable of drastically affecting everyday lives of the masses.
Overview of Ethics Issues
There are some common issues in business ethics,
Philosophy of business:
One of the aims of this, issues is to maximum return to the shareholders, then should be seen unethical for a company consider the interests and right of anyone else.
Corporate social responsibility:
An umbrella term under which the ethical right and duties existing between companies and society is debated.
Issues regarding moral rights and duties between a company and its shareholders fiduciary responsibility, stakeholder concept v Shareholders concept.
Ethical issues concerning relations between different companies: e.e. hostile take over’s, industrial espionage.
Political contributions made by corporations.
Law reform, such as the ethical debate over introducing a crime of corporate manslaughter.
The misuse of corporate ethics polices as marketing instruments.