Business law includes a complex web of state, federal and municipal statutes. These laws work together to ensure predictability and fairness. They also encourage competition by protecting property rights. Regardless whether a business transaction involves the sale of a horse or a complicated multi-million-dollar movie deal, the law provides a way for everyone to understand their duties and obligations.
Contract law is a broad field that governs the conduct of business in many areas including contract drafting, assignment of rights, transactions, delegation of duties, what agreements have to be in writing, conditions to a contract, breach and remedies. The Uniform Commercial Code (UCC) is an important area of contract law that governs the sale of goods. Typical contract issues include whether an enforceable contract exists and whether a party has breached their contractual duties. The law governing contracts tries to ensure that each party to a contract understands what is expected of them and that there is a legal remedy if problems arise.
In addition to sales, non-competition agreements and non-disclosure agreements fall within the body of contract law.
Intellectual property law includes patents and trademarks. Just as real property law is concerned with rights relating to a piece of property, intellectual property is concerned with rights relating to products of the mind.
Acquiring patent rights is an important strategy for many tech companies because if they have the patent to an invention, they may exclude others from making and using that invention.
Acquiring trademark rights is important because it prevents product confusion among consumers.
Patent rights and trademarks rights can be licensed to another company. Such licensing rights are governed by contract law.
Corporate Law and Business Formation
Corporate law governs formation of corporate businesses. State corporate codes provide rules and regulations regarding articles of information, bylaws, boards of directors, and other elements involved in forming a corporation.
Generally, a corporation can be formed by sending a copy of the articles of incorporation and a small fee to the Secretary of State or the Department of State. State websites provide information about how to form a business and what is required.
Other parts of corporate law define what types of acts are ultra vires (outside the corporate purpose), duties of officers and directors, and grounds for corporate liability.
Corporate Law and Securities
Just as state laws govern the formation of corporations, federal laws govern the sale of corporate equities. Much of this law is derived from the Securities Act of 1933 and and the Securities Act of 1934. These laws govern the issuance of stock. They prevent insider trader and manipulation of stock prices.
Others Laws Regarding Business
Depending upon the type of business, many other laws may be relevant to your business. For example, municipal health codes may apply to the sale of food. Federal Department of Transportation codes may govern the transportation of hazardous chemicals used in a variety of businesses. Federal Occupation and Safety Laws protect the workers in your business. Tax codes govern whether you charge tax for your product, and in turn, whether you can be taxed.
If you own a business, make sure you have an attorney and an accountant that you trust to help you navigate the laws and regulations relevant to your industry.
Shelly Morgan has been writing and editing for over 25 years for various medical and scientific publications. Although she began her professional career in pharmacological research, Morgan turned to patent law where she specialized in prosecuting patents for medical devices. She also writes about renal disease and hypertension for several nonprofits aimed at educating and supporting kidney patients.