What Is Business & Corporate Law?
A deep and complex area of law to suit the many needs of today's business world
on April 21, 2022
Updated on February 1, 2023
Businesses and corporations have a wide variety of legal needs throughout their existence, from assistance with entity formation to matters concerning employment law, regulatory compliance, mergers and acquisitions, and dispute resolution. It is essential for small business owners, members, and shareholders at larger companies and corporations to clearly understand the legal issues involved in managing a business and how a corporate lawyer provides assistance.
Many different laws affect businesses and corporations at the state and federal levels. States have their own requirements for types of business registration and annual reports, while federal laws govern many requirements affecting public and large companies. Given the complexity of business and corporate law, working with an experienced business and corporate law attorney on any legal matters impacting your company is essential.
Business & Corporate Law – What You Need to Know
- Business and corporate law is a broad term that includes many different areas of the law, including contract law, employment law, intellectual property law, securities law, and litigation.
- Attorneys in this space provide a wide range of services, including the early phases of determining the type of business structure; articles of incorporation; bylaws and internal affairs; corporate finance and tax law matters; assisting with business dissolution and liquidation; and including sales and mergers.
- There are many different types of business structures to choose from, and it’s essential to determine which business structure best fits the needs of an individual business owner or a team planning to start a new business.
- Businesses require legal counsel, but there are different ways in which companies can hire corporate attorneys.
An Overview of Business & Corporate Law
Business and corporate law concerns the formation, day-to-day running, and dissolution of various types of businesses entities. Business owners, partners, shareholders, and members face many legal issues and inquiries in running a business. Indeed, business and corporate law is a broad term that includes many different areas of the law, such as contract law, employment law, intellectual property law, securities law, and litigation. Business and corporate lawyers provide a wide range of services to companies at various stages of the business, from the early phases of determining which type of business structure to select for an entity to handling disputes to assisting with business dissolution, including sales and mergers.
It is crucial for anyone considering a new business or startup, currently running a business or involved in a business enterprise, or considering a merger or business sale to seek counsel from an experienced business and corporate lawyer. A business attorney can assess any issue or legal matter affecting your business and provide you with guidance and options.
Entrepreneurs and others with new business ideas will need to determine what type of business structure best suits their needs when forming a new entity. There are many different types of business structures to choose from. It will be essential to determine which legal entity type best fits the needs of an individual business owner or a team planning to start a new business.
Different types of businesses provide various types of liability protection for owners, from no liability protection at all in a sole proprietorship to the highest level of liability protection with a corporation. Taxation also works differently in different business structures, with some types of entities having pass-through taxation while others are taxed as separate entities altogether. Various types of businesses also have additional registration requirements under state law and different kinds of reporting requirements under both state and federal law.
In general, the following are the types of business structures from which a person or group can typically choose:
- Sole proprietorship;
- Partnership, including a limited partnership (LP);
- Limited liability company (LLC);
- Corporation, including S-corp and C-corp; and
- Nonprofit corporation.
Mergers & Acquisitions
Business owners might seek to expand their companies by acquiring other businesses, while smaller companies might agree to an offer of a merger. Mergers and acquisitions (often known as M&As) are complex, and it is vital to have a business law attorney who can assist with the range of state law matters of any proposed merger or acquisition.
Regulatory compliance refers to the general requirement that businesses comply with state and federal laws while operating. The specific rules and regulations with which a business must comply will depend upon various factors, including the business structure, the industry of the company, the size of the business, whether the business is public or private, and numerous other factors. Federal laws that may be applicable include but are not limited to:
- Title VII of the Civil Rights Act of 1964
- Americans with Disabilities Act of 1990 (ADA)
- Fair Labor Standards Act (FLSA)
- Family and Medical Leave Act (FMLA)
- Employee Retirement Income Security Act (ERISA)
- U.S. Securities and Exchange Act of 1934
- Occupational Safety and Health Administration (OSHA) regulations
- Worker Adjustment and Retraining Notification (WARN) Act of 1993
In addition to federal, there are state-specific laws with which different types of businesses are also required to comply.
Employment Law Issues
Various employment law issues can arise while running a business, including best practices concerning hiring, promoting, terminating, creating employee policies and handbooks, and preventing workplace discrimination claims.
Drafting, Reviewing, and Negotiating Contracts
Contract law is a significant part of every type of business, and it is vital to have an experienced attorney who can draft, review, and negotiate any contract terms. In running a business, contracts must be created for employment relationships, service agreements, purchases and sales of goods, client relationships, and more. Corporate and business law attorneys not only draft, negotiate, and review contracts, but they can also assist businesses when the business faces a loss due to a breach of contract by another party or when a business is accused of a breach of contract.
Different states have their own laws pertaining to what must be included in certain types of contracts for those agreements to be valid, so it is critical to seek advice from a business law attorney with experience handling business and corporate law matters in your state.
Business and corporate lawyers also assist clients with dispute resolution matters in many different forms, including information negotiations and alternative dispute resolution (ADR) options such as mediation or arbitration and litigation when necessary.
Outside General Counsel
Businesses require legal counsel, but there are different ways in which companies can hire corporate attorneys. Some businesses, mainly medium-sized and large business corporations, will employ in-house counsel to represent them on various legal issues. A lawyer who serves as in-house counsel is an employee of the business and must receive all benefits and privileges of employment. Smaller companies can benefit from hiring outside general counsel.
Outside counsel can provide legal advice and services on an as-needed basis, saving smaller businesses money while allowing them to have experienced representation on various business law issues.
Common Business and Corporate Law Questions
If you plan to start a business or face a legal issue in your current business, you should seek advice from business and corporate lawyers who can assist you. When you are preparing to meet with a business or corporate law firm, you should be prepared to ask the attorneys any questions you have. The following are common questions about business and corporate law, from entity formation to business dissolution:
- What is the best structure for my business based on my individual preferences concerning taxation and liability protection?
- What state and federal laws apply to my business as far as regulatory compliance goes?
- Am I required to have a board of directors and bylaws for my business?
- What types of contracts require negotiation and review, and how can I be sure that a court will uphold the terms of an agreement in the event of a breach of contract?
- How can I protect my business against lawsuits, such as breach of contract or employment discrimination claims?
- What state and federal employment laws do I need to consider when I am hiring employees and drafting an employee handbook?
- Should I hire in-house counsel, or is outside general counsel sufficient for my business’s needs?
- What is a fiduciary duty, and to whom do they apply?
- What are the rights of shareholders in a business corporation?
Finding the Right Attorney for Your Needs
It is essential to approach the right type of attorney—someone who can advise on business entities and company law and shield you from personal liability in your business endeavors. To do so, you can visit the Super Lawyers directory and use the search box to find a lawyer based on your legal issue or location.
To help you get started, you may want to consider looking for a lawyer who practices business and corporate law.