Legal environment, business registration and business ethics
Form, compliance and conduct
A business must choose a legal form. Common forms are sole trader, partnership, private company and cooperative. A sole trader has full control but unlimited liability; a partnership shares capital and risk but partners may be jointly liable; a company is a separate legal person with limited liability, subject to registration and reporting. In Botswana, business names and companies are registered with the Companies and Intellectual Property Authority, while tax obligations involve the Botswana Unified Revenue Service. Registration is not the same as obtaining sector licences, health permits or trading permits. Contracts need offer, acceptance, consideration and intention to create legal relations. Consumer protection, employment law, intellectual property and fair competition also apply. Ethics goes beyond legality: honesty, fair pricing, confidentiality, avoiding conflicts of interest and respecting stakeholders.
Traps
Limited liability is not a shield for fraud, personal guarantees or reckless trading. Registration does not replace licences. Ethics and law overlap but are not identical: something legal may still be unethical. Do not list contract elements without applying them.
Worked example
Two friends want to run a hardware store. A partnership shares capital and control but exposes personal assets; a private company limits liability but adds registration, reporting and accounting costs. Rule of thumb: comply before you trade, and choose the form that matches liability, control, capital and administrative capacity.