Any business needs laws to set up standards, protect rights, resolve issues, and maintain order especially when operating with other businesses and customers. The absence of established laws can put the customers at risk in regards to the money they invest in a particular product or service. With the initiation of business law and commercial law, a set of rules are established that helps to safeguard the interests of the customers.
Moreover, this leads to fewer chances of frauds as customers will be aware of their rights against businesses. It also promotes ethical conduct which is beneficial to both the businesses and the end customers. Overall, such laws help organizations to provide better service. As they are obligated to maintain equilibrium to establish a sense of satisfaction among their clients.
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Business Law and Commercial Law: Everything You Need to Know
Business Law and Commercial Law in Depth
The Business law and commercial law are two sectors under the legal practice that are so similar that most of the time lawyers and attorneys who practice either of the two have vast knowledge on the other one too. Business law is tailored towards features of the business related to its formation, property disputes, and shareholder rights.
Also, Business law covers the issues related to product defects and any sort of delivery delays by vendors or suppliers. On the other hand, commercial law pivots around the sale and distribution of the products, and specific financial transactions.
Both the state and the federal law modulates the business law where the federal government mainly controls employment laws, investments, and environmental protections. While the states add onto these by imposing licensing essentials and forming rules to conduct business legally.
Commercial law is controlled by the Uniform Commercial Code (UCC). Which is a set of laws formed to create harmony in sales and other business transactions. Every state in the United States abide by the UCC laws. But each state is open to altering or adding certain changes to the laws to best fit the businesses in that particular state. While hiring a lawyer, it’s better if they are familiar with the UCC code of laws that have been set in the specific state.
Branches of Business Law or Commercial Law
Business law or commercial law is segregated to multiple laws and regulations catering to a specific element that is essential for a business to run legally.
Contract Law: It is a body of law that refers to the enforcement of agreements which both parties of the contract should follow through. It also provides a list of solutions that each party can opt for in case of a breach of contract. Besides, contract law sets out rules for smooth transactions among businesses, suppliers, and customers.
Property Law: This refers to laws that set regulations on the ownership of real property or personal property. It mainly consists of sale, rental, transfer, and lease of real estate or immovable property.
Corporate Law: Corporate law regulates the formation, administration, and closing of businesses. It also sets up rules for the election of directors, distribution of dividends, absolution of shares, and elimination of insider trading.
Tax Law: Tax law refers to the set of regulations on business transactions concerning direct or indirect taxes. Including capital gain, income, sales, and profit distribution taxes.
Intellectual Property Law: The focal point of intellectual property law is the combination of patents and copyrights.
Business Regulations: Business organizations, trade unions and factories have to follow certain regulations set by the government known as business regulations.
Uniform Commercial Code (UCC): UCC aims to form stability in business law across all the states in the US.
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What Is the Difference Between Business Law and Commercial Law?
Business law and commercial law are the same, except that the former focuses on various practices related to the business including taxes, contracts, and employment. While the latter mainly controls how businesses are managed. Commercial law can be considered as a subset of business law that provides a legal structure for businesses to follow.
However, both the terms are interchangeable in general. There’s one area that overlaps in case of business law and commercial law – aspects related to contracts.
Considerations While Hiring a Business or Commercial Lawyer
Every industry will face certain issues in terms of business or commercial lawyers at some point in their existence. A lawyer, who has experience with the sort of business your company performs, will be able to settle disputes and provide practical solutions at the time of difficulty while considering business ethics. Often, businesses do not hire a lawyer until a problem arises and there’s not much to be done to fix it.
Moreover, a lot of business owners try to settle the sale of goods without considering the legal requirements according to their state’s version of the Uniform Commercial Code. This is highly dangerous as it can cause cancellation of contracts, loss of profits, and legal penance upon being sued by the other party.
To avoid such mishaps, business owners should hire lawyers well in advance to discuss the legal obligations and laws before involving in an unethical decision that will cost them their business.
Business law and commercial law provides organizations a framework for ways to operate. As it holds all the necessary bodies accountable for their actions. (businesses, people, and the government). Without a set of laws to obey, there will be utter chaos creating a disorder for not just the companies, but its customers as well. Such laws help to ensure stability and consistency across all the stakeholders and the business itself.
With business law and commercial law in action, it is much easier for organizations to conduct business smoothly and act responsibly. Besides, a set of regulations and patterns to follow will benefit businesses not just on the daily but in the long term as well.
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