It is a good thing that you are planning to open a new business. And you are planning to expand your current business, but do you realize some laws govern your intentions? Maybe not, but do not worry you have landed at just the right place.
Business law is a broad area of law. In a nutshell, business law is the doctrine that helps a business owner in understanding how to form and run a business. Activities such as starting a business, buying an existing business, managing the business, and closing or selling off the business are covered under business law. Let us discuss them briefly here.
Forming a business
This is the first and foremost part of a business. This is where a business owner decided what type of business they want to set. It could be a sole proprietorship, it could be a partnership or it could be a corporation.
Whatever type of business is decided, there are laws that govern its formation. These laws let a business owner know the prerequisites of forming a business. Most of the time business owners hire business lawyers for these activities. These business lawyers are the ones who guide and advise the business owner according to the prevailing laws of the state or country. It involves matters of formation, liability, taxation and human capital.
Furthermore, what will you name your business? Now here is something you need to understand that keeping the same name as someone else can land you in trouble according to the law. Claiming something that you are not is another thing. That a business owner must not do as it can land the business in turmoil. Business lawyers are usually well versed in handling such situations.
Buying a business:
Let us just say you intend on buying an existing business. Well, we say it is a good idea, why waste energy in forming a business when you can buy one. Right? What a business owner must understand is that while forming a business is somewhat a tough task, buying an existing business has its loopholes. A good business lawyer will understand all of this and will make life easy for the business owner.
Contracts with the property owner, vendors, equipment providers and employees are the ones who need attention when buying an existing business. Business law advises the business owner of the potential risk, if any, for such a transaction. A business lawyer must consider all existing contracts made between the former owner and the stakeholders. A business lawyer should carefully construct new contracts, keeping the interest of both parties safeguarded.
Managing a business:
Now that you have formed a business or bought an existing business, you have the task of managing it. Management is not just related to the daily operations of the business, It also involves financial management, human management, administrative management, vendor management and most importantly the customer management.
Laws that govern business law provides detail for the management of the business as well. A good business lawyer will be well versed in understanding all of them and can guide the business owner accordingly.
Closing or selling off a business:
Yes, there comes a time when business owners intend to sell or close their businesses. They may sell their business in profit after successfully running it and making good profits or they can close it off due to unavoidable reasons. In both cases, there are laws under the doctrine of business law that governs such an activity.
A business owner must clear all their pending responsibilities before they decide to sell or close the business. On multiple occasions when business owners are in the process of selling or closing their business, they hire the services of a business lawyer. These business lawyers help the business owner in making the right decision on how to sell or close the business and avoid any future litigation that may arise against them.
A business must be carried out by the law of the state or country. Following the laws for business will ensure that the business owner is safe from all kinds of litigations that may arise in the future due to malpractice.
Disclaimer:An attorney/lawyer shall be consulted when making a decision for your legal needs. Rules and laws described in this blog shall only be used as a source of information. That cannot be contested in a court of law, neither can be used as legal advise.