Which of the following is an example of legal environment?
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → Trade Union Act
Option (1) Death/Birth Ratio — Incorrect. It is a population figure, so it belongs to the social environment, not the legal one.
Option (2) Trade Union Act — Correct. It is a law passed by the Government. Laws, court judgments and orders of authorities form the legal environment of business.
Option (3) Prevailing Political System — Incorrect. It belongs to the political environment.
Option (4) Public Debt — Incorrect. It is a money matter of the Government, so it belongs to the economic environment.
NCERT (2026-27 Edition): “(v) Legal Environment: Legal environment includes various legislations passed by the Government administrative orders issued by government authorities, court judgments as well as the decisions rendered by various commissions and agencies at every level of the government— centre, state or local. …” “…In India, Constitutional Provisions; Companies Act 2013; Industries (Development and Regulations) Act 1951; Foreign Exchange Management Act and the Imports and Exports (Control) Act 1947; Factories Act, 1948; Trade Union Act; 1926; Workmen’s Compensation Act, 1923; Industrial Disputes Act, 1947, Consumer Protection Act, 1986, Competition Act, 2002 and host of such other legal enactments as amended from time to time by the Parliament, is important for doing business. …” |