Illegal business practices are the practices carried out in a business setting, and they are against the law. These practices, in addition to being illegal, are unethical and can lead to serious adverse effects such as prison time or heavy fines. It is therefore important that your company maintain high standards. High standards in a business involve doing business ethically and legally.
Maintaining a high standard helps maintain your company’s reputation and integrity that cause company development. Some of the illegal practices that you should avoid in your business include:
Insider Trading
Most people cannot describe insider trading. Insider trading is trading a public company’s stock or other securities like bonds based on material and non-public information about the company. For example, if you know that your company will get a new regulation that will benefit a particular form and then buy its shares before this information becomes public knowledge, then you will be doing something illegal. Insider trading also involves violations of one’s duty to the confidentiality of any known understanding.
Employment Discrimination or Harassment
Employment discrimination is the act of an employee being treated less favorably than their colleagues due to some legally protected attributes. Discrimination happens against people due to their race, gender, the nation of origin, and age. If you give the black nationals the labor aspect of your company and the whites the administrative work in your company, then you are discriminating against the blacks.
Employee discrimination may not be very open unless you are careful. It may be that your company, and the black nationals, do good work in the labor sector than in the administration aspect. However, in the eye of the law, it is illegal. Balance is critical, especially if you have a diverse workforce in your company.
On the other hand, if your work environment is hostile for your employees, you conduct an illegal practice of employment harassment. For instance, if your workers work in a factory without personal protective equipment, you endanger their health. This is termed harassment as per the law.
Breach of a Business Contract
The breach of the contract depends on the terms of the agreement. The practice involves the failure to perform the duties listed in a business contract. The approach may also involve a breach of how the contract was formed and benefit the breaching party. For instance, if the deal agreed that the company would repair its equipment every two years, your company must perform these repairs every two years. Failure to perform by the contract of your company is considered unlawful.
Consumer Fraud
Consumer fraud involves any unfair or deceptive tactic used to get customers to purchase your product or service illegally. Some of the ways your company can practice consumer fraud include false advertising or luring your customers into a great deal of a product or service that is no longer available and giving them an alternative product or service. Lying to your customers is baseline illegal and should be avoided.
Financial Fraud
Financial fraud is a crime that many companies widely commit. Financial fraud involves your firm’s financial books’ manipulations to make it seem like your company generates more money. This illegal act is done to get investors to buy stocks and increase your company’s market value. Some people do it and get lucky, and they get their investors. However, if you are thinking about committing financial fraud, then don’t. It is illegal and will cost you handsome monetary value, as well as jail time.
Theft
Theft in your company can take different forms. For instance, when your company fails to refund customers for their returns, you steal from the customer. Embezzlement of company funds is considered theft, as well as stealing warehouse equipment. If you are an employee and steal your company’s equipment either for sale or personal use, you are a thief and illegal. Moreover, theft also implies when you do not pay your employees what they are supposed to be paid. If your boss pays less than the agreed amount for some reasons not stated in the business contract, then they are stealing from you.
These illegal practices are practices that cannot be stressed enough. Therefore, it is your responsibility and that of your company to ensure that these practices are avoided at all costs. Some may seem small to the eyes and morals, but they can lead to severe consequences.
