Chapter 7 Legal Aspects of Business1

Chapter 7 Legal Aspects of Business

©2008 Thomson/South-Western

Chapter 7 Legal Aspects of Business2

Lesson 7.1 Regulations Maintaining Competition

Goals Explain how federal laws help regulate

monopolies. Explain how federal laws help promote fair

competition.

Chapter 7 Legal Aspects of Business3

Monopolies

Monopoly — exists when only one company provides a product or service without competition from other companies

Natural monopoly — usually involves providing public services, such as public utilities, which have a fairly stable demand and are costly to create

Chapter 7 Legal Aspects of Business4

Promoting Fair Competition

Sherman Act Clayton Act Robinson-Patman Act Wheeler-Lea Act Federal Trade Commission Other federal agencies Bankruptcy relief

Chapter 7 Legal Aspects of Business5

Lesson 7.2 Regulations Protecting Business and the Public

Goals Explain how patent, copyright, and trademark

protection benefits business. Describe the ways in which government

regulations protect consumers. Describe three methods used by state and

local governments to regulate business.

Chapter 7 Legal Aspects of Business6

Intellectual Property

Patent — agreement in which the federal government gives an inventor the sole right for 20 years to make, use, and sell an invention or process

Copyright — sole right to reproduce, publish, and sell literary or artistic work for the life of the author plus 70 years

Trademark — distinguishing name, symbol, or mark placed on a good or service that is legally reserved for the sole use of the owner

Chapter 7 Legal Aspects of Business7

Intellectual Property

PATENTS Motors Mousetraps Games Computers

PATENTS Motors Mousetraps Games Computers

COPYRIGHTS Software Novels Histories Poetry Textbooks

COPYRIGHTS Software Novels Histories Poetry Textbooks

TRADEMARKS Names Symbols

TRADEMARKS Names Symbols

Chapter 7 Legal Aspects of Business8

Regulations Protecting the Public

Food and drugs — Food and Drug Administration (FDA)

Nonfood products — Federal Trade Commission (FTC), Consumer Product Safety Act

Information — Electronic Communications Privacy Act

Chapter 7 Legal Aspects of Business9

State and Local Regulations

Licensing — a way to limit and control those who plan to enter certain types of businesses

Public franchise — contract that permits a person or organization to use public property for private profit

Building codes (control the physical features of structures) and zoning (specifies which land areas may be used for homes and for different types of businesses)

Chapter 7 Legal Aspects of Business10

Lesson 7.3 Business Taxes

Goals Discuss the nature of taxes and the fairness

of progressive, proportional, and regressive taxes.

Identify and explain the most common types of taxes that affect business.

Chapter 7 Legal Aspects of Business11

Fairness of Taxation

Proportional tax (also called flat tax) — tax whose rate remains the same regardless of the amount on which the tax is imposed

Progressive tax — tax based on ability to pay

Regressive tax — tax whose rate decreases as taxable amount increases

Chapter 7 Legal Aspects of Business12

Types of Taxes

Income tax — tax on the profits of businesses and the earnings of individuals

Sales tax — tax levied on the retail price of goods and services at the time of sale

– Excise tax — applied only to selected goods or services

Property tax — tax on material goods owned, such as real property tax (real estate) and personal property tax (movable possessions)

Chapter 7 Legal Aspects of Business13

Comparative Tax Rates

010

20

30

4050

60

JapanUK U.S.

Canada Greece NorwaySpain Fance

SwedenGermany

Tax rate %