How does the law affect the business world?
Introduction
A. An interesting way to understand the wide-ranging effect that law, regulations and codes have on the day-to-day operations of a business is to create a fictitious company, then consider how different aspects of that company come into compact with the law.
B. Let’s say our company is an international cosmetic organization, Elegance, based in Paris with offices in Europe, Asia, the Middle East and North America, and manufacturing plants in Europe, China, India and South America. The Company makes and sells a wide range of creams, soaps, perfumes and hair treatments, all available under several famous brand names. It also produces medical skin-care products; these are manufactured in Central Europe, and contain medical ingredients used under license from a pharmaceutical company.
C. To get a broad picture of how the law can have an impact on a company like Elegance, we can divide the organization into four general areas: people, products, premises and profit.

People
D. Here, we think about employees, management, shareholders and customers. Elegance has employees in its factories and offices, so they will require contracts of employment. Before anybody can be recruited for a job, the position is advertised – the HP department will be aware of strict of laws relating to discrimination, diversity and equal opportunities. If an employee is guilty of misconduct, then employment law disciplinary procedures must be observed, followed sometimes by dismissal.
E. The company is run by the directors and management; they are obliged to fulfil certain duties and to perform in a responsible way on behalf of the shareholders, the ultimate owners of the company. The directors must keep proper records of the financial status of the company; the company’s legal status will govern what information is made available to the public.
F. The people who buy and use Elegance products expect them to be safe and reliable. These customers have rights under consumer protection law.

Products
G. Poor quality control may result in a serious product liability claim against Elegance, perhaps involving a substantial award for damages. In addition to quality control, the company must consider advertising, packaging and labelling requirements. Elegance must closely monitor what it says about its products, and how it is said. Pharmaceutical products will need to comply with strict medicines legislation. Elegance factories will have contracts for the supply of raw materials; breach of contract may lead to litigation. The company must carefully protect its intellectual property rights – it wants to avoid infringement of patents, trademarks and copyright.

Premises
H. Consider Elegance’s premises – its land and buildings. Is Elegance owner of the real estate, or does it rent offices or factories? As an employer, Elegance must observe health and safety legislation in the factories and in the offices. It has a duty to provide employees with a safe working environment.

Profit
I. A principal aim of an organization such as Elegance is to make money every year. Corporation tax is payable on profits – tax lawyers can arrange schemes for legal tax avoidance, but not tax evasion. That is a criminal offence.

Conclusion
J. This rapid tour round the fictional cosmetics company Elegance should demonstrate that very law aspects of running a typical commercial enterprise escape the influence of the law. It is essential for every company to keep itself fully informed of all relevant and regulations.