What is Meant by Legal Responsibility?

Legal: "Conforming to or permitted by law or established rules.

Responsibility: (1) Something for which one is responsible. (2) Liable to be called to account as the primary cause, motive or agent. (3) Liable to legal review or in case of fault to penalties."

Above I have defined legal and responsibility, but what do they mean together?

Legal responsibility refers to obligations placed on people and in particular businesses, which are determined by law and controlled by governments. There are penalties if a company does not operate lawfully. There are laws which control many aspects of a business which include, but are not limited to:

• Corporate interrelationships 
• Insider trading 
• Meetings of shareholders 
• Contents of financial statements 
• Retention of records 
• Taxable earnings

Businesses themselves do not live or breathe. They are owned and operated by people, and it is these people that hold legal responsibilities. It is important to note that these laws are not used strictly for punishment; rather they are used to protect people in our society. These laws are there to make sure business practices are fair and the same regardless of the company. They are there to protect employees’ rights and freedoms, and to prevent people from becoming a victim of illegal business practices.