MP3 and legality of its distribution

All of us have heard of MP3 and are its daily users. But when it comes to legally using MP3 format, there is a slight hitch, because of the ignorance on legality of the MP3 format. I know few of my friends, in whose companies, having .mp3 files is a crime! So, they are deleted as soon as they are found. Such being the scenario, it was important to know what exactly it is. Below are few sites that give some information regarding this aspect.

• Is MP3 Legal?   ( Digital Millennium Copyright Act ) 
• MP3 Licensing and Patent issues 
  
• Legal MP3 Downloading - illegal MP3 File sharing
• MP3 FAQs

In conclusion, they all aim at saying that MP3 is a format like any other audio format - legal but bound by copyrights. Its distribution is a question mark which is different depending on each country's policies.
Anyone to throw better light into it, always welcome...