Business Environment and Corporate Regulatory Standards

Introduction to Business Entities

If we classify companies as independent legal entities according to the individual, these are divided into societies. Societies are formed when different people put in common work. The individual can be an individual entrepreneur, which includes anyone emancipated over 18 years old.

Specific Environment: The Industry

It consists of the field closest to the business that owns the company. Although it is difficult to define, it can be composed of:

• 1. Customers: People who buy products or services.
• 2. Financial institutions: Entities providing financial services that can facilitate loans.
• 3. Labor market: The company needs to have employees.
• 4. Infrastructure: Roads, highways, or airports.
• 5. Administration: Government regulating various aspects of running the company.
• 6. Natural Environment: The company operates in a natural environment.
• 7. Competition: The other companies within the sector.
• 8. Providers and suppliers: Those who provide raw materials.

The General Business Environment

The general environment is the overall environment that the company shares with other companies, although they may be engaged in different activities.

• Economic: These are factors related to the economic situation of the area, such as the level of development and purchasing power.
• Political-legal: We can cite the country's political stability and the ideological tendencies of the government, as well as labor standards, among others.
• Scientific and technological: Technological factors are derived from scientific advances.
• Socio-cultural: This includes demographics and religious beliefs.
• Environment: This involves ethics first, legal regulations second, and thirdly, the level of public awareness.

Rules Governing the Conduct of the Company

1. Accounting standards: The company is obliged to produce certain records, including the balance sheet, profit and loss, memory (notes), the statement of net assets, and cash flow statements, as well as the book journal.
2. Urban regulations: Planning permission.
3. Tax rules: Value Added Tax (VAT) and Corporation Tax (IS).
4. Environmental standards: Environmental regulations.
5. Rules on legal form: For example, a limited liability company.
6. Business rules: Existing business rules and regulations.