Whether you’re starting a new business as an entrepreneur or you’re a seasoned business owner ready to expand, sell, or merge your enterprise, having a strong understanding of your own state’s business laws and regulations are vital to your firm’s success. Business law is the field of legal practice that deals with these laws and regulations, and the business law team at Hertz Schram PC has been helping both new and veteran business owners navigate state-specific business laws and regulations for years, helping them achieve continued success in the business sector.
Having an understanding of state business law is crucial as violation of these laws and regulations can result in fines, other financial penalties, legal action taken against your firm by another entity, or even jail time depending on the severity of violation. Business law can be an often complex legal landscape, having it make sense that many small, medium and large size firms pay such close attention to legal compliance and take the time to build strong legal departments that focus specifically on this area of the law.
Hertz Schram PC is dedicated to helping businesses of all sizes navigate their own state’s legal landscape, making for confident operations and long-term success in their industries.
What is Business Law?
Business law refers to the many different laws and regulations that pertain to the starting, purchasing, merging, operating or closing of a business entity. These laws are the guidelines by which businesses must follow in their operations from the birth of their organization onward, and all business owners, whether new entrepreneurs or veteran business owners, must have a general understanding of these laws to be compliant and successful within their industries. To gain the best possible understanding of these laws, business owners should seek the guidance of experienced business attorneys who specialize in this area of the law, and who have also helped many different businesses in the past navigate business law to operate successfully.
It’s important to note that there are both federal business laws and state-specific business laws; one of the best examples of this are incorporation laws and guidelines, meaning the initial starting of a business entity, with different states having different laws that govern this process. In addition to laws surrounding business incorporation, expansion, merging, and closing, there are also regulations that pertain to business administration and operations. Our highly experienced team at Hertz Schram PC has decades of combined experience helping firms of all sizes navigate these state-specific laws to make the best possible decisions for their business and employees.
What is Commercial Law?
Commercial law is an area of business law that pertains to general commerce and the sale of goods and services. Put simply, this is the area of the law that encompasses business transactions. One of the most common examples of transactions that are affected by commercial law would be the sale of a business or the sale of multiple assets associated with your business. If you were in the process of selling your business, you would always want to speak with a business attorney who is experienced in business acquisitions and sales, and who can help guide you on the commercial business laws that are specific to your state.
Business and Commercial Licensing
Operating and business inherently means that there are laws and regulations that pertain to the running and operation of your business; no matter what state or industry you are in, there are always laws and regulations that pertain to your industry or area of business operations. Within business and commercial law, there are a multitude of regulations, licenses, compliance statutes, and requirements for business owners and operators, both at the federal and state level. Between federal and state regulations and guidelines, there can even be slight overlaps in policy in these two areas of the law, and each state has its own set of laws and regulations pertaining to business ownership and operations, with federal regulations applying to all states.
Certain businesses inherently fall under the umbrella of federal business regulation, such as companies that sell alcohol or tobacco, who would need to obtain licenses from the appropriate federal bureau. Or, companies engaged in pharmaceutical products would need to have an understanding of the laws set forth by the FDA pertaining to the development and sale of pharmaceuticals.
Starting a Business
Laws pertaining to new businesses make up one of the largest areas of business law, with there being different laws that govern different types of business entities. These laws also very by state, with each state having its own set of laws pertaining to the establishment of new business entities and corporations. These different types of entities include sole proprietorships, partnerships, corporations, limited partnerships, and limited liability companies. In general, entity formation is governed by individual states, and federal regulations apply to business income and taxation.
The first step in incorporating your new business is to choose the type of entity that you will create – you will also need to choose a name for your business, which will be the legal name of the entity. You will also want to make sure that the name is available in whichever state you are incorporating the business in. This is a matter of trademark availability. All business assets of this organization pertaining to intellectual property (IP), trademarks, and copyrights are all governed by copyright law, which are all governed by federal regulations. New business owners will also need to see if their business will require any special licenses or permits associated with their industry, which are generally state or local license. Most of these will be at the state and local level, but there are some types of permits that are obtained at the federal level, depending on which industry you operate in.
Laws applying to the buying or selling of existing business are another main area of business law, and are a key area in which business buyers and sellers will seek out legal council to walk them through the sales and acquisition process. Buying a business is and can be a long process, with many different areas of law coming into play depending on the type of business that is being purchased. For example, you may be purchasing an existing business that owns real estate as business assets; this would then tie into real estate law. You may then also be purchasing equipment or physical assets associated with the existing business – this would then tie into property laws. If the existing business has employees, which is more than likely would, this would then tie into employment law, as well as contract law for existing and new employees. The high-level umbrella of business laws that pertain to the buying and selling of business are referred to as mergers and acquisitions.
In addition to starting, selling, and buying businesses, there are then laws and regulations associated with actually running a business, and business management and operations. The laws are often overseen adn enforced by specific government agencies, and oversee different legal and business areas such as benefits, discrimination laws, wrongful termination, and taxes. Business engaged in physical commerce, or the selling of physical goods and products, are bound by the Uniform Commercial Code (UCC), which generally governs sales. When it comes to the area of debt and business being unable to pay for products they buy, debt collection is typically performed a the federal level. Torts are then the area of law that encompasses wrongdoing on behalf of a business, which is a vast area of the law that is enforced at the state level. Faulty products and liability cases, for example, are torts, and are not federal crimes.
Closing a Business
Unfortunately, some businesses may have to cease operations due to operating failures, downturns in their respective markets, executive disputes, or other reasons. When this happens, it’s important to note that there are many laws that oversee the closing of business entities and business operations, such as the cencellations of licenses and permits, debt, laws pertaining to business assets and property, and laws related to real estate owned by businesses, all of which may fall under different areas of the law that are enforced at the state and federal level.
A legal area that is often discussed alongside the closing of businesses is the area of bankruptcy law, which is vast area of federal law. Bankruptcy is a set of circumstances in which a court or legal body decides that a business is unable to repay debts, and efforts are made to liquide assets in order to repay these debts. Business file either chapter 7 or chapter 11 bankruptcy, both of which can be complex legal processes. During the business bankruptcy process, courts determine the paying back of debts and which business assets are liquidated in order to pay back thede debts. Hertz Schram has extensive experience in helping firms navigate the bankruptcy process and making for the best possible outcome for shareholders.