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What is business law?
Common legal questions for new business owners
Defining business
In a broad sense, any entity that strives to make a profit is a business. This encompasses solo ventures as well as mammoth corporations. Your business is likely to start as a small business, but constitutes a small business varies from industry to industry. The US Small Business Administration defines size standards for each industry that sets limits on factors like the number of employees a business can hire and what sort of profit it can take in before it no longer qualifies as a small business.
Types of business entities
Not all businesses must abide by the same regulations. The type of business structure you chose to set up will have a large impact on how you file taxes as well as on the documents you need to file to remain compliant with local laws.
If you are the only owner of an unincorporated business, the business is a sole proprietorship. This commonly applies to small operations such as online Etsy shops.
In a business partnership, you share business responsibilities with one or more partners.
There are three types of corporations: S Corporations, C Corporations, and LLC. Each of these establishes a corporate veil between the business operators and the business itself. This means that, if your business is a corporation, you are less likely to lose personal assets if the business gets into financial trouble. If you start your business as a sole proprietorship, you may eventually choose to turn it into an LLC.
Types of laws that relate to business
When starting a business, there a several areas of the law to be familiar with:
Employment laws that specify details about how to treating employees and providing benefits. A contract lawyer can write or review your business’s employment documents to ensure their validity in the event of a labor-related dispute.
Intellectual property law covers what’s unique to your business, like your trademarks, patents, and copyrights.
Environmental laws for any business that handles toxic materials.
Tax laws that are relevant to your specific type of business.
Zoning laws that regulate what kinds of sizes of businesses may operate in certain areas, including any necessary licenses or permits
Business laws between states
The process of establishing your business varies from state to state. For example, different states may have different regulations for how to set up a corporation or LLC. A local business attorney can familiarize you with state laws and help you fill out all the necessary paperwork to get your business off to a healthy start.