What Happens If Regulatory Policies For A Business Are Violated

By Michael Mills


Regulation can be defined as the business that requires organizations to perform particular procedures.

Government questions businesses to comply with certain governmental regulatory policies.

For instance, the government asks businesses to reveal their generated revenue and earnings to the government.

WhatHappens If Regulatory Policies For A Business Are Violated?

Choose the answer that is correct:

  1. Government creates new business regulations.
  2. Additional investigations are done in the case.
  3. Businesses are given more time to comply with regulatory policies.
  4. Regulatory bodies sanctions and fines the businesses.

Correct Answer: Without a doubt, ā€œDā€ is the correct answer.

Discussion on the answer:

If a business does not comply with business regulation, regulatory bodies have the authority to sanction the business firms.

The remaining three are not accurate because they do not give good meaning.

Government establishes regulatory policies that must be followed by new businesses.

A government body cannot also be given any extra time for complying with regulatory policies. So, option D is the correct answer.

What Are Some Examples Of Regulatory Policy?

There are many examples of regulatory policies.

For instance, the government has established regulatory policies for insurance, banking, environmental impact, minimum wages,and other financial businesses.

In the USA, there are multiple government agencies and independent organizations.

They regulate the market and implement several business regulations. For instance, the Federal Reserve Bank has authority over the regulatory policy.

FED informs banks regarding how much cash the actual bank should possess ā€“ that is the reserve rate of the banks.

On the other hand, the Environmental Protection Agency imposes restrictions on greenhouse gas admissions.

Moreover, the Occupational Health and Safety Administrationregulatesthe conditions of the workplace.

So, injury to employees can be averted.

How Do Regulations Affect A Business?How Do Regulations Affect A Business

There are many sectors in the business that have complained about government regulations.

Corporations and spokespersons of businesses have often denounced governmental rules.

They assert that business regulations are merely illogical obstructions to economic inefficiency, profits, and the creation of jobs.

Unfortunately, many corporations and companies create loopholes, shift abroad, and then violate antitrust laws.

Dealing with governmental regulations becomes hard for businesses now and then.

Following are some of the ways in which business regulations impact the functionality of business:

a. Environmental Protection Agency (EPA)

President Richard Nixon established EPA with the 1970 executive order.

EPA regulates pollutants control, puts restrictions on greenhouse gas emissions, proper extermination of waste materials as well as other eco-friendly practices.

Many companies complain that these regulations are costly. They compromise profits.

b. The Stock and Exchange Commission (SEC)

Congress had established the Stock and Exchange Commission in 1934.

It has established various business regulations such as full disclosure of the IPOs (Initial Public Offering) as well as enforce rules that govern stock trading.

c. The Food and Drug Administration (FDA)

The food and Drug Administration is a body that governs the manufacturing as well as the sale of medicine and food items.

Multiple pharmaceutical companies have complained that the FDA delays the approval of their medicine which is why they lose their investment.

Companies have asserted that the FDA demands more clinical trials even though the drug has shown its usefulness and effectiveness.

FDA delays the introduction of the drug in society that delays the profits of the Company.

Also, higher costs and consequences of the introduction of drugs into the market may deter small organizations from entering the pharmaceutical market.

d. The Federal Trade Commission (FTC)

There are many American firms that consider FTC as the enemy of business organizations.

FTC was established in the year 1914 for the protection of consumers from anti-competitive and deceptive business practices.

Formation of the monopoly companies, price-fixing, and fraudulent advertisement of the tenders and jobs are fraudulent and corruptive practices.

But presently, businesses are not happy with the business regulations of FTC.

FTC is ruining medium and small business organizations with taxes and other business regulations.

e. Sarbanes-Oxley

Most of the American companies around the world complain that Sarbanes-Oxley is the most disturbing business regulation.

In response to the major corporate function, Congress had passed the Sarbanes-Oxley 2001 act.

This act oversees the auditing, accounting, and corporate social responsibility.

Many businesses have complained that compliance with Sarbanes-Oxley is time-consuming, ineffective, and difficult.

Moreover, multiple laws have established that Sarbanes-Oxley would not safeguard the interests of the shareholders against fraud.

So, Sarbanes-Oxley derails the official business procedures to a greater extent.

Is Defined As The Government Requiring Businesses To Perform Specific Procedures?

Regulatory policies are defines as the government rules that require businesses to perform specific procedures.

For instance, the Government requires a business to not produce toxic and harmful gases.

The emission of greenhouse gases affects the weather that affectsthe atmosphere.

It is the businesses that are practicing unsustainable practices. So, government poses laws for businesses to follow.

What Does OSHA And The SEC Have In Common?

Occupational Safety and Health Organization (OSHA)

OSHA is a large American regulatory body that is equipped with powers to inspect the workplaces.

Its main objective is to find any loopholes that can cause harm to employees or workers.

OSHA works to prevent injuries and accidents at workplaces.

OSHA has been striving to make a healthier and happier environment at the workplace.

USA Securities and Exchange Commission(SEC)

The USA Securities and Exchange Commission was established in the year 1934 in response to the market crash.

SEC safeguarded the interests of consumers and the banking interests of the entire nation.

Common Factor between OSHA and SEC

There is one thing that is common between SEC and OSHA. OSHA and the SEC are regulatory bodies that formulate and enforce regulatory policies.

Otherwise, these are two different organizations. OSHA deals with the safety of workplaces while SEC deals with banking.

Bottom Line

Regulatory policies are rules and regulations that are established by relevant authorized bodies.

There are different governmentally authorized bodies that govern and implement regulatory policies in the USA.

There are governmental agencies such as SEC and OSHA.

They monitor whether businesses are complying with the regulatory policies of a business or not.



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