External Influences - Legal

Law and regulation restrict business activity in order to defend social good (consumers, fairness in business, fraudulent / criminal behaviour). Laws are created by governments (local, state, federal), administered by regulatory bodies, and adjudicated in courts. 

Legal compliance is the act of operating within the bounds of the law. Breaching the law results in fines, individual charges, brand damage. Legal compliance is time consuming and expensive (red tape) but necessary to avoid risk of legal breaches.

Legal regulations may be confusing; all levels of government have various jurisdictions / responsibilities or oversight.

Laws can change; resulting in changes being forced upon business activity and the creation of new opportunities. Business owners must be aware of all laws impacting their business.