What is Corporate Law and How It Differs from Business Law
Corporate law and business law have caused so much confusion that many people today are still unable to tell the difference between the two. Some significant differences exist between these two but a company lawyer can better explain the differences between them and guide you regarding the laws that apply to your business. Whereas corporate law looks at the legal aspects of business such as sale and distribution of goods and services, business law focuses on aspects affecting mergers and acquisitions and rights of shareholders. For companies that can afford, it is a wise decision to employ people with intensive and extensive knowledge of the two laws.
The Uniform Commercial Code (UCC) comprises the rules and regulations that govern corporate law and applies a model of laws to control the sale and purchase of goods in the U.S. UCC has been used by many states as a benchmark to guide the formulation of additional laws to better govern trade. Many states have modified the rules of UCC, which makes it very important to work with an attorney who has in-depth knowledge of corporate laws that apply to your state so that he or she can provide the guidance you need to make sound business decisions.
Therefore, corporate law embodies rules, regulations, laws, and practices that act to govern how corporations are formed and operated. The laws encompass the rights and obligations of the parties involved in the formation, ownership, operation, and management of such corporations. In this regard, a corporation is ideally a legal entity permitted to carry out business operations as a legal and separate entity from the owner. This means the owner of the corporation and the corporation itself are treated as two separate persons and can conduct business on behalf of themselves. When an individual owns a stake in a corporation, his or her liability is somewhat limited to that particular ownership and the person cannot lose more than the investment put forth.
How Corporate Law Differs from Business Law
While many people easily confuse the two, they have some distinct differences between them. To begin with, corporate law provides guidelines on the purchase and sale of products in the market, including product distribution. Corporate law has a significant impact on businesses. Many businesses get involved in legal battles revolving around the breach of critical aspects of corporate law. In contrast, business law employs a much broader perspective of business and its legal influence. Business law attorneys address legal matters in broader areas that include employment law, tax obligations, and contracts. This means business law is much broader than corporate law. Having a clear, in-depth understanding of both corporate and business law allows you to operate your business more effectively. However, you need a corporate law or business law attorney to break it down further so that you can know what each of these laws covers. One easy way to differentiate between the two is to remember that corporate law is concerned with how corporate entities are formed and managed whereas business law cover much broader areas of employment and commercial transactions. You should also understand that both have a significant impact on business entities.
While corporate law and business law can often be confusing, the two seem to have some notable differences between them. The major difference between them is that while corporate law deals with the formation and management of corporate entities, business law covers much broader aspects of rules, regulations, and practices surrounding commercial transactions, employment law, taxes, and contracts. Lawyers with vast experience in these laws can help you understand them better and how they apply to your business entity or corporation.