Business law, sometimes called mercantile or commercial law, deals with the creation of new businesses and the issues that arise as existing businesses interact with the public, other companies, and the government.
There are two distinct areas of business law; regulation of commercial entities through laws of partnership, company, bankruptcy, and agency, and the second is regulation of commercial transactions through the laws of contract.
Business law provides rules and guidance for companies to follow before disputes occur. Attorneys who practice in this area are experts at structuring transactions to minimize a company’s exposure to litigation.
Business law attorneys specialize in transactional work, meaning they do not represent clients in court. In fact, business lawyers are often hired for the purpose of avoiding future litigation.
Business law draws on a variety of legal disciplines, including:
- Business formation and dissolution
- Business investments and securities law
- Employment law
- Immigration law
- Sales of consumer goods
- Protection of trade secrets
- Commercial law and contracts
- Antitrust matters
- Intellectual property
- Tax law
- Bankruptcy, and more
Business Formation and Internal Agreements
All new companies must comply with certain laws before opening for business. Business law attorneys assist clients with new entity formation by filing the necessary legal documents, and may also help clients choose the business entity best suited for their enterprise.
Businesses can be formed as corporations, limited liability companies (LLCs), partnerships, and other entities. Most of these business forms can be further customized to meet the needs of the company.
While the selection of the appropriate business entity depends on a number of factors, the primary purpose of most entities is to shield owners from individual liability. Operating a business that is not set up to provide limited liability means that the owners are putting all of their personal assets within reach of the business’s creditors. By working with an attorney at the inception of the business, this situation can easily be avoided.
Business law attorneys are also available to draft the internal agreements that will control how a new company is managed. A common example is an LLC operating agreement. This document should be drafted with care, as it governs how the company’s owners will share profits and losses, make important business decisions, and transfer their ownership rights.
Business law attorneys handle many kinds of employment law matters, including:
Wrongful termination – Under the Colorado at-will employment rule, employees can lose their jobs at any time. However, when a termination is wrongful or unlawful, business lawyers can help their clients recover wage loss or other damages.
Discrimination – Business law attorneys handle employment discrimination cases involving sexual harassment, hostile workplace environments, racial discrimination, and discrimination based on religion, age, gender, ethnicity or national origin, disability, and sexual orientation.
Sexual harassment – Business lawyers represent employees who have been victims of sexual harassment in the workplace. These situations can also lead to a hostile work environment, which is unacceptable and illegal.
Business law and immigration law often intersect. Businesses may have employees from other countries. They may want international employees on a full-time basis, they may need temporary workers, or they may need to bring a worker just for a short period of time for a special event. Knowing how to navigate federal immigration laws is an important aspect of business law that helps companies get the manpower they need.
Sales of Consumer Goods
It is also not uncommon to have disputes with customers regarding a shipment of goods or the provision of services. Many goods and services come with implied warranties. This means businesses that deliver goods or services to customers can have disputes with their customers regarding whether the goods or services were delivered or up to the standard expected.
Protection of Trade Secrets
Trade secret protection is more important than ever given increased workforce mobility and industrial espionage, as well as the advent of technology that makes misappropriation easier than it used to be. The loss of a trade secret can undermine a business’s competitive advantage.
Business law attorneys can advise clients on “best practices” to avoid misappropriation and on how to enforce their rights in the face of threatened misappropriation. Business lawyers also defend clients against claims of misappropriation, unfair competition, and related claims that have the potential to shut down their business.
Contract Drafting and Negotiations
A lot of business law has to do with preparing and negotiating contracts. A contract can be anything from a lease agreement to a purchasing agreement to an agreement with a third-party vendor to sell a product. A lot of contract law comes from common law. Common law isn’t written down anywhere. Instead, its principles of law and rules that have developed through the courts over time.
Business law attorneys must not only understand the elements of contract law from both statutes and common law, but they must also appreciate the nuances that might impact enforcement of a contract. They must work with their clients in order to skillfully negotiate and draft contracts that work to the client’s best interests.
Breach of Contract
Any breach of contract can result in a lawsuit requiring either monetary compensation or a remedy to the situation. Clients must decide which path to take when initiating a lawsuit for a broken contract with another party. Business lawyers can explain the process and which options are available.
Business law is often a key part of contract disputes. Most states follow the Uniform Commercial Code (UCC), which is often the standard for a valid contract. However, each state can have a different statute of limitations for how much time can pass after the breach of contract and the wronged party can still sue. For example, under Colorado business law, the statute of limitations for breach of contract is three years.
Most businesses want to control a large share of the market and to grow and expand. Companies who want to increase their profits and their market share need to make sure that they go about it in legal ways. Companies that employ deceptive or unfair practices in order to cut out competitors or avoid competition might find themselves the subject of allegations of anti-trust violations. Business law attorneys help their clients identify conduct that might amount to antitrust before the behavior has the chance to create problems for the business.
Intellectual property law involves rules for securing and enforcing legal rights to inventions, designs, and artwork. The law also secures assets like personal property and real estate. These laws give people incentives to improve creative works to gain a profit, which can be beneficial to the community.
Business lawyers help clients in many different ways, such as:
- Establishing and protecting intellectual capital
- Licensing inventions
- Transferring proprietary technology
- Drafting licensing agreements
- Negotiating settlements
- Conducting IP asset due diligence
Tax law determines how different types of businesses are taxed.
Businesses pay taxes. There are estimated taxes, employee taxes, and deductions to be aware of. In addition to helping a business comply with tax requirements, a business lawyer helps their client take legal steps to minimize their tax burden. They may help the business apply for special tax forgiveness or waivers that might be available in a certain location or for certain industries.
Lawyers help businesses in both good times and bad. When businesses go through financial difficulties, they need lawyers to help them determine their options. Filing bankruptcy might be the only option or the best option for a struggling business.
Making the decision to file for bankruptcy is just the beginning. There are many different types of bankruptcy filings available to businesses. They have different requirements, and there might be a reason that a business should choose one type of filing over another. Business lawyers can give their clients advice on the pros and cons of different actions. Once the business makes a plan, lawyers can help the company complete the filing accurately and stay in compliance with the associated requirements.
Business laws can be extremely complicated and made even more so because they can vary from state to state. Contact one of our experienced business law attorneys at the Contiguglia Law Firm to help you determine which laws are applicable to your business and ensure your company’s success.
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