Business law covers a very wide variety of issues faced by businesses, individuals considering starting a business, consumers, employers, investors, and many others. Federal, state, and local laws may apply in your situation. Whether you are just starting out, considering a contract, facing a dispute, or trying to tackle any other business law issue, it is important that you consult with a business law attorney who is current on any local laws, and has experience with the type of business issue you are facing.
Areas of Business Law
The broad range of business law encompasses everything from how to legally hold a garage sale at your own home to the vast and intricate details of running a large, multi-national corporation. Some examples of issues and topics which fall under business law include:
- Starting a business and choosing a business structure
- Closing a business
- Contracts and forms
- Employment law
- Intellectual property
- Workers’ Compensation
- Banking and securities
- Liability and insurance
- Environmental regulations
- Interstate commerce
- Buying and selling a business
- Liquor licenses and other special licensing
- Health and safety inspections
- Finances, including obtaining and extending credit
- Debt collection
Choosing a Type of Business or Legal Structure
When starting a business, one of your first decisions is legal structure which you will use. This is a very important decision which determines both your responsibilities and the legal protections you will enjoy. However, as your business grows and evolves, you can change its legal structure or form.
A business law attorney can explain the advantages and disadvantages of all of your options and help you decide which business structure is the best fit for your situation. Your options include:
- Sole proprietorship (or DBA – “doing business as”)
- Limited liability company (LLC)
A sole proprietorship is the easiest and cheapest to establish, but it offers the least protection from liability and tax burden. A sole proprietorship has only one owner and requires little to no paperwork or licensing to get started. The downside is that you are the company. You are held personally responsible for any debts incurred by your business and any harm it causes. For tax purposes, your business’s income is treated as your personal income.
A partnership is not much more complicated to establish and it can spread out the liability, but typically does not provide protection from liability because each partner can be held fully liable when other partners are unable to pay.
Limited liability companies (LLCs) and corporations protect their owners from personal liability, or at least greatly minimize it, but they require more money and effort to start and to maintain. There are more rules to follow and more paperwork starting out and as you go along.
A corporation is the only business structure which fully separates your personal and business income taxes.