1. CHAPTER 5: BUSINESS LAW
When you have completed this chapter, you will be able to:
Identify the different kinds of laws that affect businesses.
Describe the different kinds of laws that protect workers on the job.
Explain how tax laws affect business profits.
Explain the differences between copyrights, patents, and trademarks.
Describe the different laws that protect workers on the job.
Explain the importance of the National Labor Relations Act.

2. CHAPTER 5: BUSINESS LAW Government Regulation of Business
Congress and state legislatures pass laws that regulate business.
Regulations are rules that government agencies issue to implement the laws.
Businesses have to make sure that they comply with laws and regulations.

3. LAWS THAT REGULATE BUSINESSES 5.1
CHAPTER 5: BUSINESS LAW
LAWS THAT REGULATE BUSINESSES 5.1
Government Regulation of Business
There are six important areas of law that affect business operations.
Corporate Law
Tax Law
Intellectual Property Law
Consumer Law
Commercial Law
Licensing and Zoning Law

4. CHAPTER 5: BUSINESS LAW Government Regulation of Business
Corporate Law
Corporate law regulates how businesses can set themselves up to operate as companies.
Regulations are rules that government agencies issue to implement the laws.
Businesses have to make sure that they comply with laws and regulations.

5. CHAPTER 5: BUSINESS LAW Government Regulation of Business
Corporate Law.
The three kinds of business entities or legal forms of ownership are:
Sole proprietorship
Partnership
Corporation

6. CHAPTER 5: BUSINESS LAW Government Regulation of Business
Corporate Law
A sole proprietorship is a business run by a single individual.
Advantages:
Control entire business
Keep all profits
Make decisions quickly
Pay fewer taxes
Disadvantages:
Full responsibility for the business
Full liability for all debts
Owner could become ill or disabled

7. CHAPTER 5: BUSINESS LAW Government Regulation of Business
Corporate Law
A partnership is an association of two or more persons who jointly own a for-profit business.
According to The Uniform Partnership Act, a “person” can be a corporation, an organization, or an individual.
Advantages:
Combine their talents and financial resources
Share decision making responsibilities
Pay less taxes than a corporation
Disadvantages:
Full responsibility for business debts
Disagreements
Bind each other to contractual agreements with others

8. CHAPTER 5: BUSINESS LAW Government Regulation of Business
Corporate Law
A corporation is a business formed under state or federal statutes that is authorized to act as a legal person.
A corporation exists apart from its owners and can be taxed and sued like an individual.
Advantages:
Stockholders receive a share of the profits
No management responsibilities
Raise money by selling stock
Easier time getting credit
Disadvantages:
Must comply with more federal laws
Register with a state gov’t. agency
Double taxation (taxes on profits and also to state and federal government)

9. CHAPTER 5: BUSINESS LAW Government Regulation of Business Tax Law
Tax law regulates how much money businesses must pay the government to help provide services for the public.
Taxes are monies paid by corporations and individuals and are used to fund gov’t. programs and services (e.g., highways, the military, and schools).
We will look at three types of taxes:
Income Tax
Property Tax
Withholding Federal Taxes

10. CHAPTER 5: BUSINESS LAW Government Regulation of Business Tax Law
Income Tax is a tax levied against a business’s profits.
Property Tax is a tax levied against property, buildings, or land owned by a business; they are based on an assessed valuation.
Withholding Federal Taxes is money that businesses collect from workers; income taxes are withheld from employees’ earnings.
Managers make location decisions based on taxes in a particular area.

11. CHAPTER 5: BUSINESS LAW Government Regulation of Business
Intellectual Property Law
Intellectual property law regulates how businesses can protect inventions and new products.
Protections include:
Patents
Trademarks
Copyrights

12. CHAPTER 5: BUSINESS LAW Government Regulation of Business
Intellectual Property Law
Patents: gives exclusive right to make, use, and sell an invention for 17 years.
Trademark: a word, name, symbol, or slogan a business uses to identify its own goods and set them apart from others.
Copyright: protection for creative works (literature, music, plays, dances, paintings, movies, maps, computer programs…); confers sole right to reproduce, sell, or allow use by others; lasts for the holder’s life plus 70 years.

13. CHAPTER 5: BUSINESS LAW Government Regulation of Business Consumer Law
Consumer law protects individuals against business activities that might be harmful to them.
Regulatory agencies include:
Federal Trade Commission (FTC) takes action against companies when there is a “pattern of wrong doing.”
Food and Drug Administration (FDA) protects consumers against problems with mislabeled and impure foods, drugs, cosmetics, and medical devices; approves new drugs before they can be sold.

14. CHAPTER 5: BUSINESS LAW Government Regulation of Business
Commercial Law
Commercial law regulates how businesses enter into contracts with other businesses and with consumers.
The basic law document that governs these dealings is called the Uniform Commercial Code.
A contract is an agreement between two parties to carry out a transaction, such as the sale of goods from a seller to buyer; a contract creates an obligation between the agreeing parties.

15. CHAPTER 5: BUSINESS LAW Government Regulation of Business
Licensing and Zoning Law
Licensing laws regulate who can go into certain businesses.
Zoning laws regulate where they can establish operations.
Local governments establish building codes (ordinances) that may regulate such things as maximum height, minimum square feet of space, or types of materials used for construction.

16. CHAPTER 5: BUSINESS LAW WORKERS AND THE LAW 5.2
The Importance of Employment Laws
In this section you will learn:
The five major kinds of employment laws
The three major federal equal employment opportunity laws
The importance of occupational safety and health laws
How the Fair Labor Standards Act protects workers
Five benefits laws with which companies must comply
How labor relations laws protect workers’ rights

17. CHAPTER 5: BUSINESS LAW WORKERS AND THE LAW 5.2
The Importance of Employment Laws
In the early part of the twentieth century, employees were at the mercy of companies with respect to amount of salary, dangerous working conditions, and discriminatory hiring practices.
In the 1930’s Congress and state legislatures passed employment laws that regulated the relationship between companies and their workers, and give workers significant rights and benefits.

18. CHAPTER 5: BUSINESS LAW WORKERS AND THE LAW 5.2
The Importance of Employment Laws
Companies must comply with five major kinds of employment laws:
Equal Employment Opportunity (EEO) laws prohibit discrimination against workers.
Occupational safety and health laws require compliance with federal, state, and local government standards.
Wage-hour laws establish minimum wage, overtime, and child labor standards.
Benefits laws guarantee certain benefits.
Labor relations laws protect the right to organize unions to bargain collectively for better wages and working conditions.

19. CHAPTER 5: BUSINESS LAW WORKERS AND THE LAW 5.2
The Importance of Employment Laws
Equal Employment Opportunity (EEO) Laws :
The Civil Rights Movement of the 1960’s resulted in Title VII of the Civil Rights Act of 1964.
Under Title VII, companies were prohibited from discrimination on the basis of race, color, religion, sex, or national origin.
Title VII created the Equal Employment Opportunity Commission which could sue employers on behalf of workers.

20. CHAPTER 5: BUSINESS LAW WORKERS AND THE LAW 5.2
The Importance of Employment Laws
Equal Employment Opportunity (EEO) Laws :
The Age Discrimination in Employment Act protected employees between ages 40 and 70 against discrimination.
The Americans With Disabilities Act (ADA) prohibits discrimination against persons with disabilities.

21. CHAPTER 5: BUSINESS LAW WORKERS AND THE LAW 5.2
The Importance of Employment Laws
Occupational Safety and Health Laws :
The Occupational Safety and Health Act created the Occupational Safety and Health Administration (OSHA).
OSHA sets for keeping workplaces clean and free of hazards.
OSHA routinely visit workplaces to ensure compliance with government regulations.
Employees can request an OSHA inspection due to suspected violations.

22. CHAPTER 5: BUSINESS LAW WORKERS AND THE LAW 5.2
The Importance of Employment Laws
Wage-Hour Laws :
In 1938 Congress passed the Fair Labor Standards Act (FLSA) also known as the Wage-Hour Law.
It addresses overtime, minimum wage, and child labor standards.
Employing children under age 14 is prohibited.

23. CHAPTER 5: BUSINESS LAW The Importance of Employment Laws
WORKERS AND THE LAW 5.2
The Importance of Employment Laws
Benefits Laws
There are five different benefits laws:
Social Security Act (1935): retirement income and health insurance (Medicare)
Employee Retirement Income Security Act (ERISA):protects retirement fund money
Unemployment Insurance Laws: financial assistance during unemployment; 2 criteria
Worker’s Compensation Laws: workers are insured against illness, injury, or death on the job
Family and Medical Leave Act (FMLA): employees get up to 12 weeks of unpaid leave

24. CHAPTER 5: BUSINESS LAW WORKERS AND THE LAW 5.2
The Importance of Employment Laws
Labor Relations Laws :
The National Labor Relations Act (NLRA) give employees the right to form unions.
Unions are groups of workers that collectively bargain for higher wages and better working conditions.
The NLRA says that companies must bargain “in good faith.”
Three of the most powerful unions are the Teamsters (diverse group; started with freight drivers), the National Education Association, and AFL-CIO (The American Federation of Labor and Congress of Industrial Organizations) which is a federation of over 50 labor unions from pilots to teachers.

25. CHAPTER 5: BUSINESS LAW
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