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Why is knowledge of legal rules necessary before starting an enterprise?

Answer and explanation

Correct answer: To avoid penalties and risk of closure

Before starting, an entrepreneur should identify rules related to registration, taxation, safety, employment, consumer protection, and the particular business activity. Compliance reduces the risk of fines, legal action, suspension, or closure and supports responsible operation. It cannot automatically increase profit. Its purpose is lawful and safe business conduct, not frightening customers or copying competitors.

Related tags

Legal-ComplianceEnterprise-PlanningEntrepreneurship DevelopmentMsme And Business EntrepreneurshipBusiness StudiesClass 11 Mcq

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