Ethical and Legal Issues in the Establishment and Operation of A Business POB

Ethical and Legal Issues in the Establishment and Operation of A Business

Ethics in Business
Business ethics are morals associated with doing the right thing in a business context.
An ethical and law-abiding business will be the one that is set up for honest business purpose.

Ethics VS LAW
LAW Ethics

Formal, written document Unwritten principles

Interpreted by courts Interpreted by each individual

Established by legislatures Presented by philosophers, religious,

professional groups

Applicable to everyone Personal choice

Priority decided by court Priority decided by individual

Court makes the final decision No external decision maker

Enforceable by police and courts Limited enforcement

Ethical and Legal Issues Relating to the Establishment and Operation of a Business
● Ensuring that the business is a bonafide firm or establishment and not using it as a front
for money laundering and other illicit activities.
● Ensuring that capital is legally obtained and not tainted with illegal operations as the
source of funding.
● In the operations of a business, payment of national insurance contributions and taxes.

The Ethical and Legal Principles that must be Adopted in the Establishment and
Operation of a Business
● The adoption of an organisation code of ethics.
Code of ethics is a written statement setting out the expectations and principles
governing the beahviour of an organisation. This usually appears on company’s
document, website and placed on walls in the building for everyone to see.

● Policies on environmental issues.

A policy is a statement of intent on a particular issue. They are usually accessible to
internal and external stakeholders.

● Handling of personal information.

Ethical and Legal Issues in the Establishment and Operation of A Business POB

Examples and consequences of Unethical and Illegal Practices in Business

The negative effects of unethical and illegal practices on the business
● Misleading advertisements – unfair and fraudulent practice on the population
● Withholding of tax – cheating the government of revenue
● Unethical disposal of waste – pollution
● Money laundering – distortions in the national economy.