Business law is a complex area of law that covers many aspects of commercial dealings such as contracts, torts, intellectual property, securities, and employment law. A business lawyer can assist with formation, document review, drafting, negotiation, and litigation. This overview will explore various types of business organizations, contracts, and dispute prevention methods. Building a relationship with Schroon Law PLLC can benefit and inspire success for your business.

Types of Business Organizations: One of the first decisions that a business owner must make is the type of business organization to form. There are advantages and disadvantages to each of these business types. The most common types of business organizations in the United States are the following:

• Sole Proprietorship: Owned and operated by one person, the simplest and easiest to form. The owner is personally liable for all debts and obligations of the business, and the business income is reported on the owner's personal tax return.
• Partnership: Owned by two or more people, with partners sharing profits and losses. Partners are personally liable for debts and obligations, with general and limited partnership structures both possible.
• Limited Liability Company (LLC): A hybrid business organization that combines the liability protection of a corporation with the tax benefits of a partnership. The owners, called members, are not personally liable for the debts and obligations of the LLC.  The income and losses of the LLC are passed through to the members' personal tax returns.
• Corporation: A separate legal entity from its owners, known as shareholders. The shareholders elect a board of directors, which manages the business and appoints officers to run the day-to-day operations of the corporation. The corporation's income is taxed separately from the shareholders' personal income.

Contracts:  Contracts are a legally binding agreement between two or more parties that create an obligation to do or not do something. Contracts can be written or oral, but it is generally recommended that contracts be in writing to avoid misunderstandings and disputes as contracts can be a valuable tool for avoiding business disputes.  To be enforceable, a contract must contain four elements:

• Offer: a promise to do or not do something.
• Acceptance: the agreement to the terms of the offer.
• Consideration: the exchange of something of value.
• Mutual assent: the agreement of both parties to enter into the contract.

Dispute Prevention:  There are several ways to minimize the risk of becoming involved in a business dispute. These include:

• Drafting effective contracts: Ensuring you have effective, legally binding, contracts in place is one of the best ways to avoid future disputes.
• Seeking advice early: If you are unsure about how to approach a complex issue or have a feeling that something is not right, seek advice from a business attorney straight away.
• Documenting everything: It is essential to keep written records of important documents or events in case a dispute arises. A business litigation attorney can assist you with developing a good document retention strategy and system.

Conclusion:  The success of your business depends on its legal foundation, whether that's in the formation of the business or the contracts implemented by the business. Enduring compliance with laws and ongoing legal counsel should also be part of any strategic business plan. Seek legal advice today to ensure your business is on the right legal footing.

Small Business Law:

    - LLCs

    - Commercial Contracts

    - Asset Transactions

    - General Business Law

 

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