What is Legal Environment?

This resource gives information on legal environment and its government policies relating to legal or regulatory environment.

The government, in every country, regulates the business according to its defined priorities. Legal system of a country is framed by the government. The laws which are passed by the government for business operation is called legal environment. In every country, the government regulates business activities. These regulations of government are considered as legal environment. In practice legal and regulatory goes hand in hand. The limits for business operations are decided by regulatory environment & this is also called legal environment.

Legal environment in a country has a dominating position on all decisions of organization. As all business policies are highly influenced by government, the organization should have thorough knowledge of these policies because non-implementation of legal policies results in heavy fines, penalties & punishment & therefore every organization must follow all these regulations.

Following are some of the government Acts & government policies relating to legal or regulatory environment for business operations:-

  • The Sale of Goods Act, 1930.
  • Indian Companies Act, 1956.
  • Income Tax Act, 1961.
  • The Consumer Protection Act, 1986.
  • The Weights & Measures Act, 1958.
  • Environment Protection Act, 1986.
  • Agricultural Policy.
  • Industrial Policy.
  • Foreign Investment Policy.
  • Monetary Policy.
  • The Factories Act, 1948.
  • The Minimum Wages act, 1948.

    This was all about the legal environment as explained above.


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