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Law and regulation “Laws” are the written statutes, codes, and opinions of government organizations by which citizens, businesses, and persons present within a jurisdiction are expected to govern themselves or face legal sanction. Sanctions for violating the law can include (a) civil penalties, such as fines, pecuniary damages, and loss of licenses, property, rights, or privileges; (b) criminal penalties, such as fines, probation, imprisonment, or a combination thereof; or (c) both civil and criminal penalties.

Very often it is held that business is not bound by any ethics other than abiding by the law. Milton Friedman is the pioneer of the view. He held that corporations have the obligation to make a profit within the framework of the legal system, nothing more.<ref>{{#invoke:Footnotes|harvard_citation_no_bracket}}.{{#invoke:Footnotes|harvard_citation_no_bracket}}</ref> Friedman made it explicit that the duty of the business leaders is, "to make as much money as possible while conforming to the basic rules of the society, both those embodied in the law and those embodied in ethical custom".<ref name=f1970>Friedman, M. (1970). "The Social Responsibility of Business is to Increase Profit", The New York Times Magazine.</ref> Ethics for Friedman is nothing more than abiding by 'customs' and 'laws'. The reduction of ethics to abidance to laws and customs however have drawn serious criticisms.

Counter to Friedman's logic it is observed{{ safesubst:#invoke:Unsubst||$N=By whom |date=__DATE__ |$B= {{#invoke:Category handler|main}}[by whom?] }} that legal procedures are technocratic, bureaucratic, rigid and obligatory where as ethical act is conscientious, voluntary choice beyond normativity.<ref name=ag43>Agamben, G. (1993) The Coming Community, trans. Michael Hardt. Minneapolis: University of Minnesota Press, p. 43 ISBN 0-8166-2235-3</ref> Law is retroactive. Crime precedes law. Law against a crime, to be passed, the crime must have happened. Laws are blind to the crimes undefined in it.<ref>{{#invoke:Footnotes|harvard_citation_no_bracket}}</ref> Further, as per law, "conduct is not criminal unless forbidden by law which gives advance warning that such conduct is criminal.<ref>United States of America, Plaintiff-appellee, v. Kristine D. Vasarajs, Defendant-appellant—908 F.2d 443—Justia US Court of Appeals Cases and Opinions. Cases.justia.com. Retrieved on 2010-09-02.</ref> Also, law presumes the accused is innocent until proven guilty and that the state must establish the guilt of the accused beyond reasonable doubt. As per liberal laws followed in most of the democracies, until the government prosecutor proves the firm guilty with the limited resources available to her, the accused is considered to be innocent. Though the liberal premises of law is necessary to protect individuals from being persecuted by Government, it is not a sufficient mechanism to make firms morally accountable.<ref>{{#invoke:Citation/CS1|citation |CitationClass=journal }}</ref><ref>{{#invoke:Citation/CS1|citation |CitationClass=journal }}</ref><ref>{{#invoke:Citation/CS1|citation |CitationClass=journal }}</ref><ref>{{#invoke:Citation/CS1|citation |CitationClass=journal }}</ref>


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