Why is following legal rules necessary for an entrepreneur?
Answer and explanation
Correct answer: To avoid penalties and maintain trust
Legal compliance helps an enterprise operate lawfully, protect customers and workers, and avoid penalties, closure, claims, or reputational damage. It also builds confidence among customers, suppliers, employees, and financial institutions. Compliance does not mean avoiding taxes illegally or misleading people; it means meeting applicable legal duties honestly and maintaining responsible business practices.
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 an enterprise operate lawfully, protect customers and workers, and avoid penalties, closure, claims, or reputational damage. It also builds confidence among customers, suppliers, employees, and financial institutions. Compliance does not mean avoiding taxes illegally or misleading people; it means meeting applicable legal duties honestly and maintaining responsible business practices.
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.
