Kara Sears
Businesses may break the law for a number of reasons, including to stay competitive or to gain an advantage over smaller rivals. However, many businesses also break the law without realising, due to the abundance of business laws that are in place. This can include failure to make federal payroll tax deposits, or falsely claiming to have the experience, qualifications or resources to fulfil a contract.
| Characteristics | Values |
|---|---|
| Research | Businesses can avoid breaking the law by keeping up to date with the latest developments in the business world |
| Knowledge | Businesses have a good idea of what not to do to avoid legal trouble |
| Fear of prosecution | Businesses may suspect they could be sued, but don't think they will be prosecuted |
| Fear of losing business | Businesses may be afraid of losing customers or investors if they break the law |
| Fear of losing employees | Businesses may be afraid of losing employees if they break the law |
| Ethical standards | Businesses may have ethical standards that prevent them from breaking the law |
| Lack of opportunity | Businesses may not have the opportunity to break the law |
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What You'll Learn
- Businesses may break the law to stay competitive
- Lack of knowledge about the law is not an excuse in court
- Businesses may break the law unintentionally
- Businesses may break the law by failing to make federal payroll tax deposits
- Businesses may break the law by falsely claiming to have the experience, qualifications or resources to fulfil a contract
Businesses may break the law to stay competitive
Businesses may also break the law to gain an advantage over their competitors. For instance, a business owner may falsely claim that their company has the experience, qualifications or resources to fulfil a contract within a certain period. While this would be unethical, the business may assume that they will not be prosecuted.
Start-up companies or those with insufficient working capital may not pay their federal payroll tax deposits, leaving them with more cash flow.
In some cases, businesses may break the law unintentionally. There are so many business laws that it is impossible for business owners to know every single one. While lack of knowledge is not an acceptable excuse in court, many business owners may not realise they are breaking the law.
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Lack of knowledge about the law is not an excuse in court
While it is impossible for business owners to know every single business law, most businesses have a good idea of what not to do in order to avoid legal trouble. However, there are certain cases where a business could be breaking the law unintentionally. Lack of knowledge about the law is not an excuse in court. For example, a business owner who falsely claims their company has the experience, qualifications or resources to fulfil a contract within a certain period could be prosecuted. Other ways businesses can unknowingly break the law include failing to make federal payroll tax deposits and failing to mark patented products.
Businesses may also choose to break the law to stay competitive. For example, a business may pay bribes to government officials to compete with smaller rivals who are not formally registered.
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Businesses may break the law unintentionally
Businesses may also fail to make federal payroll tax deposits, which is a way to increase cash flow. This is particularly common among startup companies or companies with insufficient working capital. Businesses may also fail to mark patented products, which can lead to other companies in their network breaking the law and can result in the loss of their intellectual assets.
Executives may suspect they could be sued, but most never think they’ve committed something egregious enough that they’d be prosecuted under the full extent of the law. However, lack of knowledge is not an acceptable excuse in court, and businesses are legally obligated to refrain from destroying any relevant documents if they are involved in litigation.
Forthcoming research in the Strategic Management Journal suggests that firms pick and choose when to ignore laws and regulations and pay bribes to government officials to compete with smaller rivals who are not formally registered.
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Businesses may break the law by failing to make federal payroll tax deposits
Businesses may break the law for a number of reasons. Some businesses may break the law to stay competitive, for example, by paying bribes to government officials to compete with smaller rivals who are not formally registered. Businesses may also break the law unintentionally, as it is impossible for business owners to know every single law.
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Businesses may break the law by falsely claiming to have the experience, qualifications or resources to fulfil a contract
Businesses may break the law for a variety of reasons. Some businesses may be unaware that they are breaking the law, due to the abundance of business laws that are in place. However, lack of knowledge is not an acceptable excuse in court. Other businesses may break the law to stay competitive, for example, by paying bribes to government officials to compete with smaller rivals who are not formally registered.
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Frequently asked questions
Businesses may break the law without realising it. There are so many business laws that it's impossible for business owners to know every single one. However, ignorance is not a defence in court.
Businesses that break the law can be prosecuted. Executives may suspect they could be sued, but most never think they've committed something egregious enough that they'd be prosecuted under the full extent of the law.
Examples include failing to make federal payroll tax deposits, failing to mark patented products, and falsely claiming to have the experience, qualifications or resources to fulfil a contract.
Yes, businesses may choose to break the law to stay competitive. For example, they may pay bribes to government officials to compete with smaller rivals who are not formally registered.
