The Insider Toolkit for Business Law
Business law covers a multitude of areas. It can deal with anything related to a business—from creating the business to dealing with employment issues and contracts.
Any time that business makes internal changes or deals with the public, then business law may be involved.
The 6 Common Business Law Interactions
This broad area of the law interacts with other areas of law as well, including:
- Employment and labor law
- Intellectual property (copyrights and trademarks)
- Real estate
- Contracts
- Tax law
- Bankruptcy
As a rule, business lawyers are used before a conflict arises. They create contracts and deals to avoid future litigation. Although they can represent a client in the courtroom, most business lawyers perform transactional work.
The 3 Common Business Formations
Each state has very specific laws that address how businesses in that state are created. Most have to provide specific information to the Secretary of State to be recognized as a legitimate business.
Business owners or investors have the ability to choose the type of business form to use. Below are the three most common types of businesses.
Sole Proprietorship
A sole proprietorship is a “one-man (or woman) show.” One person owns and operates the business. This structure is by far the most common in the United States. It is easier to form and control, but the owner is personally liable for the debts of the business.
Partnership
There are four types of partnerships, and each type varies on how the liability is determined. In a general partnership, there are two or more owners and each is also personally liable for the business’s debts.
In a limited partnership, some partners have more liability than others. In a limited liability partnership, the partners do not have liability for the actions of the other partners, but they may still have personal liability. A limited liability limited partnership has even less total liability.
Corporation
A corporation is a completely separate legal entity from its owners. It does not have as many tax advantages as a partnership or sole proprietorship, but legal liability is extremely limited.
Corporations also have a lot more legal requirements for formation than other types of business structures.
Show Me That in Writing: Contracts and Transactions
Business law also includes creating and dealing with contracts and complex transactions. A business law attorney can create contracts for employment, real estate, large purchases, and virtually any other aspect of a business that may need a written contract.
Certain types of transactions require a written contract to be valid. For example, contracts that involve services that will last more than one year require a written contract.
If you are considering creating a business or if you have a complex transaction in the works, it is important to consult a business law attorney to be sure that your actions are legally valid.
Do not let your hard work go to waste by failing to ensure that the transaction complies with the law.
