Business law is also known as Commercial law that governs, interprets and enforces the agreements regarding the exchange of money, property, products and services in the business. This type of law always deals with the issues that arise in public law and private law. It is an agreement between two or more persons or entities who promise to do something for the purpose of attaining any type of advantage (Bartoli & SPIER, 1965). Generally, the contracts are formed in the business when one person makes an offer, and another person accepts the offer by following the terms of the offer. Under the English Contract Law, the contracts which involve the large transactions and ‘sale of land’ always needs the witnesses and signatures (Flume, 2014).
Types of Business Entities
Different types of business entities are discussed as –
Sole Proprietorship - It is the simplest form of business entity. In a sole proprietorship, the business does not follow any formal plans and procedures. Further, the entity does not involve any separate tax forms. A sole proprietor can easily exchange its business and personal assets and follows a few formal accounting requirements.
Limited Liability company – In a Limited Liability Company (LLC), the members are not liable for the debts and liabilities of the company personally. LLP is a hybrid business entity that combines the partnership or sole proprietorship.
Limited liability Partnership – In a Limited Liability Partnership (LLP), all the partners have limited In this type of entity, one partner is not liable for another partner’s negligence and misconduct. LLP does not provide complete protection to all the parties.
Partnership – Partnership is a type of formal arrangement where two or more than two parties manage and operate the business in an efficient manner. In this business entity, the partners share the profits and losses equally. Along with this, all the parties share financial and legal liability of the partnership equally (Hunter & Perkins, 2012).
C Corporation – C Corporations are the companies that often use with their names such as – Coca Coal Inc. The benefits of these corporations are that it clearly divided the assets between corporate and personal business. Apart from the advantage, C Corporation increases the administrative expenses because of the complicated tax and accounting procedures.
S Corporation – These corporations meet the specific internal value and code requirements. S Corporation operates the same as the C Corporation but is taxed liked the Partnership entity. These corporations considered as a good vehicle for closely held and small corporations.
Types of Business Laws
Tax law – Tax law is very important in every business. Tax law covers direct and indirect taxes on business Apart from it, different taxes are income tax, sales tax, excise duty, profit distribution tax etc. Once the person generates sales in the business, he must file the returns and pay their business taxes. He must hire an accountant for gaining the knowledge about invoices, sales and giving payment to the vendors (Martindale, Koch & Karlinsky, 1992).
Employment law – The business should follow fair labor standards and Federal equal employment opportunity laws. The employees of the organization feel dissatisfied when the management of the organization does not pay to their employees properly. To ensure the safety of the employees, every organization follows the Occupational Health and Safety Administration (OSHA).
Business Formation law – The type of business entity whether it is a sole proprietorship or limited liability company, partnership is defined under this law. These entities have different legal implications and tax structures. When the organization decides their business entity, it should consult with an accountant and tax attorney.
Advertising and marketing law – An advertising and marketing law of the company involves CAN – SPAM act that regulates the commercial emails and gives an easy way to the persons who opt the email messages.
International sales law – In this law, every business owner can sell his products globally. Under this law, the business sells the services internationally. An International sales law involves a number of taxes, shipping and customs.
Privacy law – This law involves Data security and Data safety. The business gathers personal information from the customers for maintaining sound security in the business.
Healthcare law – Healthcare law is mainly applied in restaurants and fast food companies. These companies require permits from the healthcare department for starting their business. The business of fast food company can be shut down if the company does not follow the rules of healthcare properly. The business also has to follow the fire safety rules adequately (Gostin & Sridhar, 2014).
Finance law – If the business has any cash flow problems and there is any bankruptcy arising, then the business should have to follow the finance law for avoiding these problems.
License law – Every business needs to obtain a license in order to operate effectively. A business must have to obtain the correct type of license for operating the business effectively. Example – A fast food company needs a different license to operate in the country.
Bartoli, E., & SPIER, L. (1965). AN ANALYSIS OF LEGAL FORMS OF BUSINESS ORGANIZATION IN WESTERN GERMANY AND THE UNITED STATES. American Business Law Journal, 3(3), 287-309. doi: 10.1111/j.1744-1714.1965.tb01385.x
Flume, J. (2014). Law and Commerce: The Evolution of Codified Business Law in Europe. Comparative Legal History, 2(1), 45-83. doi: 10.5235/2049677x.2.1.45
Gostin, L., & Sridhar, D. (2014). Global Health and the Law. New England Journal Of Medicine, 370(18), 1732-1740. doi: 10.1056/nejmra1314094
Hunter, D., & Perkins, N. (2012). Partnership Working in Public Health: The Implications for Governance of a Systems Approach. Journal Of Health Services Research & Policy, 17(2_suppl), 45-52. doi: 10.1258/jhsrp.2012.011127
Martindale, B., Koch, B., & Karlinsky, S. (1992). Tax Law Complexity: The Impact of Style. Journal Of Business Communication, 29(4), 383-400. doi: 10.1177/002194369202900405