Business and corporate law are also known as commercial and corporate law, respectively. Both forms of law govern business and commercial transactions as well as the internal rules of business enterprises. Business law refers to laws involving contracts, sales, securities, agency, and employment law among many others. Corporate law, on the other hand, studies the relationship between business and consumers under the company’s internal rules. Both provide a legal entity that regulates all business and corporate transactions both privately and publicly.
Business law refers to the laws that apply to business entities such as partnerships and corporations. It is used as a reference when setting up a business whether large or small – from sole proprietorships to corporations. Business laws define how different businesses can be regulated, how taxes apply to them, registration, documentation and requirements; defines various business-related terms, creates by-laws, and organizational articles among many others. It also provides a regulatory scheme of how trades should be conducted.
Business law is applied to all business sectors such as automotive, estate planning, health, law, intellectual property, litigation, employment and labor, business and business & corporate restructuring. It governs all business and commercial transactions both private and public. Business law also covers other business matters such as starting, selling or buying another business, managing a business, dealing with employees and contracts to name a few.
Corporate law, on the other hand, involves the same laws and processes under business law but has 5 defining characteristics which include:
- separate legal personality from the corporation
- limited liability of shareholders
- transferable shares
- delegated management
- investor ownership
These all apply mostly to publicly owned companies. Company law is applied to protect the rights of the company and shareholders especially if the company fails or gets involved in legal problems. Company law can be traced back to medieval times when medieval trade unions were formed but not for mutual benefit. It was during this period that various forms of business such as partnerships were developed.
Corporate law covers corporate governance which includes the constitution of the company, balance of power, corporate personality, capacities and powers, duties of directors, and corporate litigation. All of these are very important for the application of corporate law. Apart from that, it also involves how stocks, liquidations and transactions should be handled as well as in the case of corporate crimes, mergers, acquisitions and corporate bankruptcies.
Both business & corporate law involve the details, rules and regulations involved in setting up a business, choosing a legal structure, recruiting & hiring, financing, paying taxes, dealing with consumers and shareholders, solving problems, dealing with business and corporate crimes, and regulating all aspects involving commercial and corporate regulations.
