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The article reveals the mechanisms of entrepreneurial activity encouragement. Much attention is given to legal incentives as a kind of legal norms and an integral part of law. Legal incentives and their effect on business entities are considered through the prism of modern legal understanding. As the object of the study, the authors chose the formation of legal incentives' theory considering the achievements of both Russian and foreign legal framework, philosophy, economics, psychology, biology. The article also includes the analysis of legal incentives' discussion issues. Particularly, authors considered not only positive but also negative consequences of legal incentives and the possibility of legal incentives' applicability for the environmental legal framework development. As a result, the authors concluded that the theory of legal incentives should be considered by authorities when developing concepts and programs to support entrepreneurial activities. Legal incentives are the vital tool of public administration that allows combining public and private interests in the process of legal regulation of entrepreneurial activity.

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