Why is following legal rules important in business?
Answer and explanation
Correct answer: To avoid penalties and maintain trust
Legal compliance helps a business operate within laws relating to taxes, contracts, safety, labour, consumers, and the environment. It reduces the risk of penalties and protects the enterprise’s reputation and stakeholder trust. Option A is correct. Breaking laws, misleading customers, or hiding taxes is unethical and may create legal consequences.
Frequently asked questions
What is the correct answer to this question?
To avoid penalties and maintain trust
Why is this the correct answer?
Legal compliance helps a business operate within laws relating to taxes, contracts, safety, labour, consumers, and the environment. It reduces the risk of penalties and protects the enterprise’s reputation and stakeholder trust. Option A is correct. Breaking laws, misleading customers, or hiding taxes is unethical and may create legal consequences.
Which subject and chapter does this question cover?
This is a Class 11 Business Studies question. Chapter: Social Responsibilities of Business and Business Ethics. Topic: Business Ethics.
