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What type of environment is the legal environment for a business?

Answer and explanation

Correct answer: External environment

The governing business-studies concept is the classification of the business environment into internal and external forces. The legal environment consists of laws, regulations, court decisions, government rules, and compliance requirements that influence how a business operates. These conditions are created by institutions outside the individual business, even though the business must respond to them internally. Therefore legal environment is a part of the external business environment, making option B correct. Internal environment refers to factors such as employees, management, owners, and organisational policies. Personal and household environment are not standard classifications of the business environment in this context.

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Business EnvironmentLegal EnvironmentExternal EnvironmentClass 12Business StudiesClass 12 Mcq

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