Business law is the area of law that governs commercial enterprise and trade. Business law encompasses a large range of legal matters, ranging from business formation and contract disputes to business litigation and corporate law. The laws regulating these areas cover a wide spectrum and are often complex.
Legally, a business is referred to as a business entity. Depending on its legal organization, business entities can have different forms. This legal structure is important in determining the taxation of the entity, who’s liable within the entity, and how managerial control within the entity is defined, among others. When creating a business, to determine which entity is best it is key for entrepreneurs to understand the differences between each form.
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Nearly all business transactions and agreements are formed by contracts. Business transactions refer to any transfer of goods or services, made legal by an agreed upon contract between two or more parties. Goods can range from wholesale supplies and investment securities, while services range from physical therapy to travel agencies. Business transaction law is generally not regulated by the federal government, so most states have adopted the Uniform Commercial Code, which regulates nearly all aspects of business transactions, including contracts.
It is usually important to create a contract when conducting business transactions, although it is not necessary for a written contract to exist. A contract exists when two or more parties agree on fundamental terms, with the intention of entering a legally binding contract. It is a smart idea to put contracts into writing to avoid the potential problems that exist with oral agreements. The contract should state that there is an agreement of exchange, what the exchange entails, and important provisions which relate to the transaction such as duration and termination.
To be successful in operating a business, large-scale entrepreneurs and small business owners alike must understand the law that governs business transactions.
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Business litigation refers to the legal conduct performed before, during, and after a business-related lawsuit. This includes the trial itself, and is often very long and complex. A plaintiff initiates the lawsuit, and seeks a legal remedy against the defendant. A court decision finding the defendant liable usually results in monetary compensation for the plaintiff or an injunction. When an injunction is granted, the defendant must perform (or not perform) a certain action that the court specifies.
Business litigation is a very extensive area of the law. Contract disputes, investment fraud, monopoly claims, liability issues, and class-action suits are just some of the different issues that business litigation incorporates. Oftentimes lawsuits are either internal (between owners), or between two different businesses.
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