Business law is a broad area that deals with many different aspects of doing business. This area of the law governs such things as business formation and licensing, negotiations, contracts, business operations, and compliance with regulatory and legal provisions. Also known as commercial law, business law applies to companies and individuals involved in any type of commerce including trade, purchasing, franchising, merchandising and sales.
When an entrepreneur wants to open a business, one of the first steps is deciding what kind of business entity to form. There are many options, including: a sole proprietorship, a limited liability company, an S-corporation, a partnership or a C-corporation. Each business type provides varying levels of protection against liability. They also have different reporting and tax requirements. A business law attorney can help new business owners in determining which business structure would best suit the company’s needs.
Starting a Business
People who are starting a business must familiarize themselves with all of the legal requirements for their type of business. Some businesses require specific licenses, and others may be prohibited in certain areas due to local zoning laws and ordinances. Other types of permits might include building permits, occupational licenses, sales tax licenses and permits with the health department, among others.
Most business owners need to draft some form of business plans. Lenders often require plans before they will provide financing for businesses. While some small-business owners write these plans on their own, business lawyers can also help with drafting and reviewing for accuracy. These plans are often a part of a private placement memorandum, a disclosure document that is used to solicit equity capital from investors. The offering of securities is highly regulated by both federal and state law, and thus care should be taken when drafting these documents to ensure they meet all legal requirements.
Business contracts play a large role in how most companies complete their day-to-day operations. In a standard business contract, one party agrees to do something for the other in exchange for consideration (typically monetary compensation). These contracts are primarily drafted in written form and signed by both contracting parties.
In order for a contract to be formed, one party must make an offer that the other party accepts. Contracts normally specify which party will perform a duty. They may detail deadlines for completion, product delivery and other matters.
What about when disputes arise? Business disputes can cover a variety of matters, including:
- employment disputes,
- discrimination complaints,
- contract disputes,
- breaches of fiduciary duty, and
- intellectual property infringement.
While some disputes can be resolved through informal negotiations, mediation or arbitration, others end up involving lawyers and business litigation in court. Resolving a dispute is often a highly complex process, and the outcome depends on facts and details.
It is important for business owners to familiarize themselves with all the different facets of business law that govern their enterprises. Many issues can be avoided (or better managed) by learning about the law that governs business formation and transactions. When things go south, having an experienced commercial law attorney representing you can make all the difference.
Additional Business Law Articles
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- How to Name Your Business
- The Legal Steps to Starting a Business
- An Overview of the Uniform Commercial Code
- What is the Retail Installment Sales Financing Act?
- Breach of Fiduciary Duty
- What Are Negotiable Instruments?
- What is equity financing?
- How to Avoid Big Mistakes in Your New Business
- What Should Be Included in an Employee Handbook?
- What is debt financing?
- Letters of Intent and Term Sheets
- An Ounce of Prevention – How Businesses Can Minimize the Threat of Litigation
- How Do I Resolve a Dispute Regarding Billing, Quality of Repairs, or Warranties?
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- Running a Business: Legal FAQ
- How to Deal with Common Disputes of Family Owned Businesses
- Business Slowdowns, Downsizing, and Cost Reductions
- What is the U.C.C.?
- Due Diligence in Business Mergers and Acquisitions
- How Can a Business Law Attorney Help You Dissolve Your Business?
- The Importance of Business Law Attorneys
- Being Squeezed out of a Family Owned Business?
- The Sarbanes Oxley Act: Success or Failure?
- Common Small Business Tax Deductions
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- Common Contract Terms Explained
- Business Finance Laws
- Advertising Your Business on the Internet
- Are There Any Limits on Executive Compensation?
- Employer Identification Numbers
- Corporations and the Law
- How and Why You Should Prepare a Profit and Loss Statement For Your Small Business
- Laws and Rights for Street Vendors