The creation and execution of businesses are governed by a set of laws in the US that directly or indirectly impact their profitability and sustainability. These laws impact newly created and existing businesses and regulate business transactions and relationships with other entities in the economic ecosystem. Various legal procedures come into picture when starting a business that requires the advice and guidance of a legal expert. Legal procedures impact the following aspects of a business:
Business laws come into action right at the very outset of starting and setting up a business. In this initial phase, business owners are required to file paperwork and declare the formation of a new entity. This phase is extremely important for business owners who legally enlist their company as a separate entity and shield themselves from personal liabilities for business-related incidents. There are quite a few business entities described under the US legislation, some of the most common types are:
The availability of these categories varies from state to state and the filing and documentation process to enlist a company also depends on the state. Enlisting the company under one of these categories depends on an array of factors that should be analyzed in detail.
Another crucial aspect of operating a business and ensuring the avoidance of litigation filing and legal procedures is the drafting of internal agreements. When multiple parties hold a stake in the business, it is essential that the co-owners sign a legally binding agreement that defines the division of profits and losses, ownership rights, the weightage a particular party in decision making and other important aspects that are required to seamlessly run a business. These agreements are drafted depending on the type of enlisting the business is registered under.
Most businesses require employees to operate. However, the hiring and firing of employees is regulated under business laws. Businesses need to ensure that these rules are followed and the regulations regarding employee salaries and benefits are met. Business laws also define the deductions and taxations on employee payrolls which must be ensured.
If a business is selling and buying consumer goods, it needs to keep up with certain guidelines and regulations to function and operate legally. These laws govern what are the required standards to run a factory to what could be the maximum price to sell a specific product in a category. The Uniform Commercial Code, a model code outlining the guidelines to be followed for commercial transactions, encompasses regulations on the various topics that businesses need to follow and emulate in their practices.
Contracts are an essential element of operating businesses and are required at different stages. From leasing of land to acquiring a smaller business or investing in a start-up, everything requires drafting contracts. These contracts are derived from common law, an unwritten guideline that has developed after years of court hearings, and state statutes. Businesses need to identify the elements of state statutes and common law required for drafting these contracts and couple it with enforcement legislations to make contracts effective.
Besides contracts, business deals can involve the evaluation of complex laws and regulations that can impact its profitability and sustainability. Negotiating deals by overlooking these laws can result in businesses incurring huge losses.
If a business is looking to grow, expand, or gain a major share of a market with an acquisition, it should ensure it uses legal ways to do so. Anti-trust regulations and laws are in place to check any business from using unfair or illegal trade practices to wipe out competition and gain a monopoly of a market. Even if a business, unknowingly fails to comply with these regulations it can be subjected to allegations of anti-trust.
Some companies rely on innovative inventions and creative work to generate revenue and profitability. To ensure no other party benefits or misuses the intellectual property businesses are required to patent and copyright their inventions and creative work under the intellectual property and copyright law. These procedures ensure that a business retains control over its invention or work and can monetize it for profit.
Business laws in the US also make it mandatory for businesses to file taxes. There are a lot of state-based, federal, and industry-based provisions that businesses can utilize to reduce their tax burden by obtaining waivers and exemptions.
Bankruptcies can help businesses figure their way out of bad times and continue operations or get out of terrible financial debt. Businesses can file bankruptcies under various chapters defined in the US constitution depending on their need and plan of action.
Hiring a business lawyer is advisable for owners of small, medium, and large businesses. Here is how a business lawyer can help:
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