Business law varies according to state, local and federal jurisdictions. However business law encompasses any legal issues concerning the establishment, licensing, transactions, taxing, labor concerns, ownership, and operation of a business. Legal advice and services regarding business law is performed by a corporate or business attorney. All of the issues concerning business law vary according to the nature of the business that is conducted by a corporation.
Registering a business
Every business must register with the state, local and federal authorities to be legally recognized and have the all the rights and privileges inherent in owning a business. This process involves several steps to that include, registering business structure, registering to pay taxes, registering a business name, and registering to get a business permit. The steps necessary to achieve this vary from state to state, therefore, it is important to consult a lawyer to gain an understanding of what must be done.
Incorporating a business
There are several different structures that a prospective business owner can choose from with varying structures of ownership and legal structures of businesses. This step can determine if further steps are necessary. The legal structures of businesses each have different terms of ownership, liability, and government regulations. The forms of legal structures include: Sole proprietorship, partnership, corporations, s-corporation, limited liability corporation, non-profit, and cooperative. These legal structures each meet different needs of a corporation and are legally treated differently from one another.
• Sole proprietorship – A business owned by one person. It is distinguished from a partnership or corporation.
• Partnership – a business venture owned by more than one person for profit. The partnership is based most often on a formal written agreement but can be based on an oral agreement, or just a handshake. Each partner determines the amount of liability based on the percent of ownership as defined in the terms of the agreement.
• Corporation – an organization formed with government approval to function as a artificial person for the purpose of carrying on a business. This corporation can sue or be sued. Corporations can avoid personal civil claims against the individuals that comprise a corporation, unless the corporation commits an act of fraud. Corporations can sell or issue to share holders, ownership is divisible based on the value of the organization’s assets. Corporations can be publicly or privately traded.
• S-corporation – are corporations with 75 or fewer shareholders and are approved by the Internal Revenue Service to pay the taxes required of a partnership. They have the same standing in civil matters as well.
• Limited liability corporation – Shareholders of these corporations can only lose their investment, no more than what was invested at the time of initiation of bankruptcy. General partners within a limited liability corporation are responsible for the any of remaining debts of an LLC after the corporation has filed bankruptcy. The rights of a third party to make a claim against the organization cannot be rendered immune by contract.
• Non-profit organization/corporation – These organizations are approved by the internal revenue service to allow donors to give tax deductible donations to the organization. Non-profits have similar standing in civil disputes that other types of corporation do. They are legally obligated to abstain from turning a profit.
Permits and Licensing
Licenses, permits, fees must also be collected to open and operated a business. Regulations vary by industry, state, and locality; therefore, it is crucial to know the laws of the area in which the business is located.
Labor
Business owners must also comply with finance and tax laws according to federal, state, and local laws and statutes. Business owners must also comply with local labor laws to ensure that the safety, civil and human rights are not infringed upon the employees of a business. Labor laws also apply to giving employees benefits, wages, hourly limitations, discrimination, harassment, unions, hiring and terminating employees. Serious consequences may result from legal mismanagement, if there is any doubt as to the legality of any action, consult a lawyer before the act is committed.
Environmental
If the business that is owned or operated has any kind of environmental consequences, chances are that there is some environmental regulations regarding that particular aspect of the industry. Consult a lawyer on the local, state, and federal regulations that may concern the environmental aspects of business operation.
Advertising and Marketing
Companies that seek to advertise to the public the goods and services offered by a business are obligated to avoid making any claims that are false or otherwise misguiding to those who are paying for goods and services provided for consumers. Advertising claims must be true. Contests, sweepstakes, and other marketing tools are also subject to local, state, and federal regulations.
Intellectual Property
Intellectual property law is a type of business law whose purpose is to give intangible ideas and tangible objects the legal traits of property. Intellectual property law regulates the marketplace of ideas and ensures competition through enforcing that each businesses’ product is unique in some way. In essence, individuals and businesses have a right to legally protect their trade secrets and inventions, and innovations. People who copy an idea or product without giving proper credit to the patent, trademarks, copyrighted, and trade secrets are subject to lawsuit in violation of intellectual property law. Business lawyers specialized in intellectual property are able to provide advice in regards to the issue of intellectual property.
Patent
A patent is an exclusive right to the benefits of an invention or improvement issued by the United States Patent Office for a period of time given that no invention or improvement already exists. Patent law is connected to business law; there are, however, lawyers who specialize in patent law.
Trademark
Trademarks are distinctive designs, images, or wording (or combination of the three) that is affixed to goods for sale for the purpose of identifying the source of a given product. Trademarks are legally protected brand or logo, not all brands are trademarked but unwarranted replication of a trademarked image, images or word, or words is a violation of the law.
Copyright
The exclusive right of the author or creator of a literary or artistic property. Business law protects the intellectual property rights of artists and creative people. This law specifically applies to the production of music, videos, books, and movies. Digital forms of media are also covered by existing copyright law.
Trade Secrets
Businesses are also legally protected from commercial espionage. A trade secret is any information of value that is worth keeping a secret within a corporation. State law protects against disgruntled ex-employees, sabotage by current employees, or simple carelessness about the risk and possible protections of your trade secrets. Protection for trade secrets does not expire, as it does for copyright. Laws against the sharing of trade secrets lasts as long as the owner of the information keeps the information a secret.
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