External Environment

SEPTEMBER 21, 2019

Legal Aspect
Objectives:
 Identify the importance of Legal Environment
Describe Business Law
List the Business Law in the Philippines
Factors affecting Organization
1. Economic Forces- regulates the exchange of material, money, energy and
information
2. Technological Forces- generates problem-solving inventions
3. Political-Legal Forces- allocates power and provide constraining and
protecting laws and regulations
4. Sociocultural forces- regulates the values, mores, and customs of society.
How Legal Factors affect Business
Environment
Legal factors are external factors which refer to how the law affects the way
business operate and customers behave.
Legal factors can decide whether or not there is a business behind selling a
certain product and can also affect the mechanisms through which a company
stocks their inventory or interacts with the customer.
Why is legal Environment important to
business?
The business legal environment plays a very
important role in determining the success of
any businesses around the globe. The
government taxes that are being imposed
among other regulatory measures help to
promote economic growth and to protect
consumers from exploitation and other
illegal factors.
BUSINESS LAW It encompasses all of the laws that dictate
how to form and run a business

Business laws establish the rules

that all businesses should follow.

Business law includes state and federal

laws, as well as administrative regulations.
Starting a Business
 knowing different types of Business  creating a business name (Intellectual
Organizations property law)
1. Corporation 1. patent
2. Copyrights and related rights
2. Partnership
3. Trademarks and service marks
3. Limited Liability companies
4. Industrial designs
4. Sole Proprietorship
5. Lay-out designs

Republic Act No. 8293

AN ACT PRESCRIBING THE INTELLECTUAL PROPERTY CODE AND
ESTABLISHING THE INTELLECTUAL PROPERTY OFFICE, PROVIDING
FOR ITS POWERS AND FUNCTIONS, AND FOR OTHER PURPOSES
 Buying a Business
REAL ESTATE LAW- REPUBLIC ACT No. 9646
AN ACT REGULATING THE PRACTICE OF REAL
ESTATE SERVICE IN THE PHILIPPINES, CREATING
FOR THE PURPOSE A PROFESSIONAL
REGULATORY BOARD OF REAL ESTATE SERVICE,
APPROPRIATING FUNDS THEREFOR AND FOR
OTHER PURPOSES
Contract law is the body
of law that relates to making
and enforcing agreements. A breach of contract is when one
A contract is party doesn't hold up his or her end of
PROPERTY LAW- IS THE AREA OF LAW THAT
GOVERNS THE VARIOUS FORMS OF an agreement that a party can the bargain. It's common for parties to
OWNERSHIP AND TENANCY IN REAL turn to a court to enforce. dispute the terms of a business
PROPERTY AND IN PERSONAL PROPERTY, agreement or disagree on how the
WITHIN THE COMMON LAW LEGAL SYSTEM. agreement should be performed.
Business Law in the Philippines
1. Tax Reform Act of 1997 (Republic Act No. 8424) –which amended the National Internal
Revenue Code (NIRC) is the law that governs the national taxation in the Philippines and gives
the Bureau of Internal Revenue (BIR) the power and duty to assess and collect national internal
revenue taxes in the country.
2. The Local Government Code of the Philippines (Republic Act No. 7160) – is the law
governing local taxation in the Philippines, including the taxation on real properties.
3. Labor Code of the Philippines (Presidential Decree No. 442) – is the law that governs
employment practices and labor relations in the Philippines.
4. Intellectual Property Code of the Philippines (R.A. 8293) – is the law that governs the
registration of patents, trademarks and copyright, and the enforcement of intellectual property
rights in the Philippines.
Business Law in the Philippines
5. The Corporation Code of the Philippines (B.P. 68) – is the law that governs the registration
and regulation of corporations in the Philippines.
6. Social Security Act of 1997 (R.A. No. 8282) – the law that mandates employers to register
their business and their employees with the Social Security System (SSS).
7. National Health Insurance Act of 1995 (R.A. No. 7875) – the act that mandates employers to
register their business and their employees with the Philippine Health Insurance Corporation or
PhilHealth.
Business Law in the Philippines
8. Home Development Mutual Fund Law of 2009 (R.A. No. 9679) – the act that mandates
employers to register their business and their employees with the Pag-Ibig Fund (HDMF).
9. Food and Drug Administration (FDA) Act of 2009 (R.A. No. 9711) – the law that governs the
inspection, registration, licensing and monitoring of establishments and health products.
10. Securities Regulation Code of the Philippines (R.A. No. 8799) – the law that governs the
registration and regulation of securities, pre-need plans, and securities market professionals –
and the protection of shareholder interests in the Philippines
 Legal Factors Affecting Business Environment

Organizational Law Employees Protection laws

Securities Law Laws regarding health and
safety at workplaces
Contract Law
Consumer Protection Laws
Security against haphazard
termination of employees
Organizational Law
Business organization law is the body of
law that relates to creating, managing
and dissolving businesses. There are
several ways to organize a business. Each
type of business structure has its own set
of rules to follow.
Sole Proprietorship
Corporations
Limited Liability Corporation
S Corporation
Partnership
Securities Law
A security is an investment in a
business. It can take the form of
shares of stocks, bonds, a package of
loans or mortgages offered for sale by
a financial institution or a financial
instrument representing investment
in a company or an international
project.
 Contract Law

A contract is a legally enforceable

agreement between two or more
parties where each assumes a legal
obligation that must be completed.
Ex. Buying Property, Applying for Car Load, Signing
employment-related paperwork, ad agreeing to
terms and conditions when buying products and
services.
Consumer Protection Laws

Republic Act No. 7394 “The Consumer Act of the Philippines”

It is the policy of the State to protect the interests of the consumer, promote his general
welfare and to establish standards of conduct for business and industry.

consumer protection is a group of laws and organizations designed to ensure

the rights of consumer as well as fair trade, competition and accurate information in
the marketplace.
Ex. A government may require businesses to disclose detailed information about products
particularly in areas where safety or public health is an issue, such as food.
 Consumer Protection Laws
It is designed to protect consumers from fraudulent companies or practices, and
preserve their rights in the marketplace.

Weight and Measures Act: These laws
ensure that the goods sold are weighed
on Standard weighting equipment.
Trade Description Act: This law ensures
that it is illegal to deliberately give
misleading impression about products.
Consumer Credit Act: According to this
Act, consumers should be given
information of the credit agreement and
should be made aware of the interest
rates, length of loan while taking a loan.
Sale of Goods Act: a contract in which
goods are sold and bought, it means
whereby the seller transfer the property
in the goods to the buyer for a
consideration called price.
Employees Protection laws

REPUBLIC ACT NO. 6715

AN ACT TO EXTEND PROTECTION TO LABOR, STRENGTHEN
THE CONSTITUTIONAL RIGHTS OF WORKERS TO SELF-
ORGANIZATION, COLLECTIVE BARGAINING AND PEACEFUL
CONCERTED ACTIVITIES, FOSTER INDUSTRIAL PEACE AND
HARMONY, PROMOTE THE PREFERENTIAL USE OF
VOLUNTARY MODES OF SETTLING LABOR DISPUTES, AND
REORGANIZE THE NATIONAL LABOR RELATIONS Different governments have passed laws to
COMMISSION, AMENDING FOR THESE PURPOSES CERTAIN protect the interest of employees. These laws
PROVISIONS OF PRESIDENTIAL DECREE NO. 442, AS protect them against unfair discrimination at
AMENDED, OTHERWISE KNOWN AS THE LABOR CODE OF work and when applying for jobs. It ensures
THE PHILIPPINES, APPROPRIATING FUNDS THEREFORE that no one is discriminated against on the
basis of such things as race, religion, sex, age,
AND FOR OTHER PURPOSES or color.
 Security against haphazard termination of employees

It is illegal now for businesses to

dismiss the employees for joining
trade unions. Before dismissal of any
worker, there must be warning with
proper reasons, otherwise, the case
may be treated as an unfair
dismissal.
 Laws regarding health and safety at workplaces
RA No. 11058 An Act Strengthening Compliance with Occupational Safety and
Health Standards (OSHS) and Providing Penalties for Violations Thereof.”

Employees receive protection from The highest hygienic standards at

dangerous machines.
At the workplace, employees should
be given clothing and equipment that
meet the highest safety standards.
Employees should have a reasonable
temperature at their workplaces.
the workplace and washing facilities
should be met for the sake of
employees.
Employees to have enough
breaking periods while working.