Legal Environment

I. INTRODUCTION

        Legal environment of business seeks to increase understanding of the most important legal issues affecting business. At a minimum, one need to know what conduct is legal and what is not, to be able to spot legal problems before they become an issue, and to identify opportunities to create value and manage risk.

        Striking the right balance between business decision-making and legal implications requires an experienced approach. Aspiring business leaders should consider studying the legal codes or the legal system of the place where the business is operating. Legally astute managers are better equipped to convert constraints into opportunities because they recognize the enabling aspects of law and value of compliance.

        The rule of law is very important to business. Can you imagine trying to do business without being able to have any reasonable expectations of other people’s behavior? Would you be willing to conduct business if you had no legal means by which to protect your property interests? And in the case of a dispute, without a rule of law system, there would be no established way of resolving it. Without the rule of law, business would be chaotic. The rule of law establishes rules that people and businesses must follow to avoid being penalized. The rule of law not only allows people to understand what is expected of them in their personal capacities but also sets forth rules for businesses so that they, too, know what is expected of them in their dealings and transactions. In addition, it restrains government and others from infringing on property rights. Should disputes arise, the rule of law provides a peaceful and predictable means by which those disputes can be resolved.

        The rule of law provides guidance and direction in every area of business. For example, it provides a means to bring a complaint against another party to a neutral decision maker so that a decision can be made regarding the dispute. Because of our rule of law system, we know that we are permitted to file a complaint in the proper court to commence litigation. Or we can try an alternative method of dispute resolution if we do not wish to engage in litigation. We know that we are permitted to do these things because our rule of law system allows us to do them. Moreover, we can expect some sort of resolution when we institute such a proceeding. This expectation is reasonable only because we have a rule of law.

II. OBJECTIVES

1. To understand the legal framework functioning in the Philippines.
2. To gain a realistic understanding of how the law actually works.
3. To identify several areas of law that are relevant to business.
4. To distinguish the difference between dispute arbitration and litigation.
5. To know the effect of regulatory change in the business environment.
6. To identify the purpose of lobbying.
7. To know and understand the different aspects of taxation.

III. BODY CONTENT

A. LEGAL SYSTEM

The legal system of the Philippines is a combination of continental civil law and the Anglo-American common law system. The Philippines gained autonomous status from the US in 1935 when the first Philippine constitution was implemented. The present constitution originates from 1987 and is similar to the US constitution.

The Philippine justice system is composed of the Supreme Court, the Court of Appeals, the regional trial courts, the Court of Tax Appeals and the metropolitan and municipal trial courts.