Page 174 - Business Principles and Management

Chapter

Legal Aspects of Business 7

7.1 Regulations Maintaining Competition

7.2 Regulations Protecting Business and the Public

7.3 Business Taxes

RE ALITY CHECK

Legal Limits for a Taxi Business

eion Banks, who owned a small taxi business in his hometown, was
meeting for lunch with his lawyer, Laura Maddox. He needed to dis-
Dcuss several matters that had arisen during the past few weeks. While
waiting for the server, Laura said, “You seem quite upset.”
Deion sat back and replied, “I am, Laura. Here are the new tax forms
that need to be filled out. And that’s the easy part. Would you check with
the town officials to see why they want to review my franchise before I
buy another cab? Also, while you’re at the Town Hall, see what you can
do to prevent those officials from giving another taxi firm a license to
operate. This town isn’t big enough for two taxi companies. I’ll get less
business, and it will probably force down my fares. If there is a chance
of going bankrupt, I should probably move my business across the river.
The income tax rate in that state is much lower.”
“Don’t do anything drastic,” said Laura. “Let me see what I can find
out from our government officials. I’ll get back to you in a few days with
both your tax forms and the answers to your questions.”
Deion Banks, like other business owners, must operate within the law.
Laws that regulate business cover both products and services, and they
govern general relationships of businesses with competitors, consumers,
employees, and the public. Deion Banks’s taxi business is no exception.
He currently benefits from being the only taxi company in town, but he
now feels threatened. The town may, indeed, allow someone else the right
to open a competing firm. So what can Deion do?

161