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What is a major risk an entrepreneur may face by failing to follow legal rules?

Answer and explanation

Correct answer: Penalties, possible closure and loss of public trust

Legal rules protect customers, employees, the environment and fair business practices. If an entrepreneur violates them, the business may face fines, cancellation of licences, legal proceedings or even closure. Public trust can also decline, causing customers and business partners to leave. The other options describe automatic benefits that do not follow from non-compliance. Hence, legal non-compliance creates financial, operational and reputational risk.

Related tags

Legal ComplianceBusiness RiskBusinessTrade And CommerceBusiness Trade And CommerceBusiness StudiesClass 11 Mcq

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