diff --git a/legal-api/Makefile b/legal-api/Makefile
index e50bef1227..ca42d47f57 100644
--- a/legal-api/Makefile
+++ b/legal-api/Makefile
@@ -57,12 +57,12 @@ pylint: ## Linting with pylint
 	fi
 
 flake8: ## Linting with flake8
-	. venv/bin/activate && flake8 src/$(PROJECT_NAME)
+	. .venv/bin/activate && flake8 src/$(PROJECT_NAME)
 
 lint: pylint flake8 ## run all lint type scripts
 
 test: ## Unit testing
-	. venv/bin/activate && pytest
+	. .venv/bin/activate && pytest
 
 mac-cov: test ## Run the coverage report and display in a browser window (mac)
 	@open -a "Google Chrome" htmlcov/index.html
diff --git a/legal-api/src/legal_api/services/digital_credentials_utils.py b/legal-api/src/legal_api/services/digital_credentials_utils.py
index 2c4efc40cf..d752e3d3f3 100644
--- a/legal-api/src/legal_api/services/digital_credentials_utils.py
+++ b/legal-api/src/legal_api/services/digital_credentials_utils.py
@@ -19,10 +19,6 @@
 from flask import current_app
 
 from legal_api.models import Party, User
-from legal_api.services.flags import Flags
-
-
-flags = Flags()
 
 DBC_ENABLED_BUSINESS_TYPES_FLAG = 'dbc-enabled-business-types'
 
@@ -30,6 +26,9 @@
 def determine_allowed_business_types(valid_registration_types: List[str],
                                      valid_incorporation_types: List[str]) -> List[str]:
     """Determine if the business type is allowed for digital credentials based on flags."""
+    # Import inside function to avoid circular dependency and ensure app context is available
+    from legal_api.services import flags
+
     if not flags.is_on(DBC_ENABLED_BUSINESS_TYPES_FLAG):
         current_app.logger.warning('%s is OFF', DBC_ENABLED_BUSINESS_TYPES_FLAG)
         return []
diff --git a/legal-api/tests/unit/services/test_digital_credentials_helpers_and_utils.py b/legal-api/tests/unit/services/test_digital_credentials_helpers_and_utils.py
index 97ce0ad618..48202d32be 100644
--- a/legal-api/tests/unit/services/test_digital_credentials_helpers_and_utils.py
+++ b/legal-api/tests/unit/services/test_digital_credentials_helpers_and_utils.py
@@ -59,8 +59,8 @@ def test_determine_allowed_business_types(app, monkeypatch, flag_value, valid_re
     """Test filtering of allowed business types based on flag values."""
 
     # Mock flag values
-    monkeypatch.setattr('legal_api.services.digital_credentials_utils.flags.is_on', lambda _: True)
-    monkeypatch.setattr('legal_api.services.digital_credentials_utils.flags.value', lambda _: flag_value)
+    monkeypatch.setattr('legal_api.services.flags.is_on', lambda _: True)
+    monkeypatch.setattr('legal_api.services.flags.value', lambda _: flag_value)
 
     with app.app_context():
         result = determine_allowed_business_types(valid_registration_types, valid_incorporation_types)
@@ -82,8 +82,8 @@ def test_determine_allowed_business_types_invalid_flags(app, monkeypatch, flag_v
     """Test filtering of allowed business types based on flag values."""
 
     # Mock flag values
-    monkeypatch.setattr('legal_api.services.digital_credentials_utils.flags.is_on', lambda _: True)
-    monkeypatch.setattr('legal_api.services.digital_credentials_utils.flags.value', lambda _: flag_value)
+    monkeypatch.setattr('legal_api.services.flags.is_on', lambda _: True)
+    monkeypatch.setattr('legal_api.services.flags.value', lambda _: flag_value)
 
     with app.app_context():
         result = determine_allowed_business_types(valid_registration_types, valid_incorporation_types)
@@ -93,7 +93,7 @@ def test_determine_allowed_business_types_missing_flag(app, monkeypatch):
     """Test filtering of allowed business types based on flag value not set."""
 
     # Mock flag values
-    monkeypatch.setattr('legal_api.services.digital_credentials_utils.flags.is_on', lambda _: False)
+    monkeypatch.setattr('legal_api.services.flags.is_on', lambda _: False)
 
     with app.app_context():
         result = determine_allowed_business_types(['SP', 'GP'], ['BEN'])