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Governments have since time in memorial been regulating business activities in the country. American businesses have been regulated so that the government can effectively monitor imports, exports, tax revenue, existing and upcoming industries. These regulations have constantly been faced by opposition from business men who feel that the regulations set up are restricting.
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Governments give businesses regulations for various reasons. First is that the government is responsible for the safety and welfare of its citizens. Through fiscal policies that ensure that industries produce safe and high standard, the government protects its citizens from harmful commodities. The government also protects its citizens through price floors and price ceilings. This is a situation where the government puts a price limit oncommodities to protect the consumers from exploitation by producers and on the other hand, protect producers from prices that are unfavorable to them. This ensures that all parties involved in the trade are satisfied.
The second rationale is that the governments police businesses in order to look after the interests of the preexisting industries in the country. This is done through issuing of licensing permits and government inspections. These measures assist the government to weed out fraudulent and poorly qualified industries from entering the market and disrupting the economic growth.
The third reason is that governments need to keep tabs on all business activities taking place in the country for the purpose of revenue generation. Funds paid by businesses for certificates and permits are ways in whiich the government creates revenue. Businesses also constantly pay taxes which are also part of government revenue. Governments are able to determine the amount of tax each business should pay by reviewing their returns and cash books. This ensures that all businesses are taxed fairly and that government has enough revenue to carry out its day to day operations.
Governments always rely on businesses for the viability of the country. This is because businesses give the country financial support that it requires to carry out its daily activities. Industries form the backbone of the country. Commissions and boards in industries are gateways through which the government regulates the industries and other business activities. This ensures that there is both free flow of commerce and regulation of businesses.
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