Have to have for government regulation of Business

In the world of business, the company law helps create the right relationship between different parties that are involved in creating true value into the system of economy. Sole traders or partners can land up in trouble if their business becomes unstable and they come under heavy debt due to business.

Limited Company Advantages Are The Key To Secure Business

Since colonial times, government has regulated business. Government regulation is constantly present in our lives. The government has a presence in many areas, such as public utilities, child labor laws, zoning restrictions, and protecting competition in business through antitrust laws. Government regulation makes sure that companies take care of the negative effects they produce in their business. For example, government rules make sure that companies that produce pollution find ways to reduce it.

We need government regulation of business for many reasons. First, regulation is important to protect the general public. Secondly, regulation protects small businesses and allows them to grow.

SMALL FIRMS AND STATE REGULATIONSState and local regulations also play an important role in business.

1) Controlling entry into business;

Price controls

Usually prices are set the market forces (where supply and demand differ) but, in some markets governments may want to artificially set different prices.

Minimum support Prices.

This is when the government doesn't allow prices to go below a certain level. If minimum prices are set above the equilibrium it will cause an increase in prices. The EU has used minimum prices for agriculture.

Maximum Prices

This is when the government wishes to prevent prices going above a certain level. If a maximum price is place below the equilibrium, prices will fall.

The government may wish to use maximum prices to reduce the cost of renting a house.

Ina;government-granted monopoly is a form of compulsion;by which a government grants exclusive privilege to a private individual or firm to be the sole provider of a good or service; potential competitors are excluded from the market by legislation;or other mechanisms of government enforcement.

A patent is a set of rights;granted by a government;or national government to an inventor or his/her assignee for some time;in exchange for a public disclosure..

Financial markets;

So just how much should the government intervene when it comes to our financial markets?; This is a controversial issue that we will look at from two different viewpoints, the Laissez faire approach and the heavy government intervention approach.

The advantage is on the government's side. Government regulations impact a variety of businesses in a variety of ways and consequently impact their customers---from higher than necessary prices forced upon the producer by government fees and licenses to wasted time and effort of workers attempting to follow "guidelines."

Administered price

Keeping in view the interests of the farmers as also the need for self-reliance, Government has been announcing minimum support prices (MSP) major crops.

The more small business "incentives" they legislate, the more chaos and distortion they inject into the business environment.