Business Law Basics

Starting, opening, and operating a business entails overcoming a variety of legal and financial hurdles. Things a new entrepreneur might not even be aware of until he/she is in the thick of things. Choosing a name for your new business, drawing up simple business plans, setting up legal and operational structures, protecting your intellectual property, hiring and providing for a staff, and that is just the tip of the personal business iceberg. A qualified business law attorney can help guide you through the turbulent and murky waters of business law and help you reach your business goals. Business law governs and regulates how small and large businesses conduct their trade and services, handle and treat their employees, and administer and track their finances. Business law also sets standards of competition and antitrust, licenses and permits, patents, trademarks and copyright, and other business concerns and stipulations.

Impact of Small Businesses on the Economy

According to the U.S. Small Business Administration (SBA), approximately 65% of Americans think that starting small business companies have a positive impact on the nation's economy. The administration also reports that 53 percent of small businesses in the U.S. are home-based businesses. The agency hails the Home Office Deduction Simplification Act because it encourages Federal agencies to minimize the regulatory and tax burden on small business.

Types of Business Structures

Before you start a business, you have to decide what form of business entity you would like to create because that will determine the amount of regulatory procedures you will have to file. Your business structure will also affect your taxes and the personal liability of you and your business.

Common business structures defined by the SBA include:

• Sole Proprietorship - A business owned and managed by one individual who is personally liable for all business debts and obligations.
• Partnership - Two or more people share ownership of a single business.
• Corporation - A legal entity owned by shareholders.
• S Corporation - A special type of corporation created through a tax election. An eligible domestic corporation can avoid double taxation (once to the shareholders and again to the corporation) by electing to be an S corporation.
• Limited Liability Company (LLC) - A relatively new, hybrid-type of legal structure that provides the limited liability features of a corporation and the tax efficiencies and operational flexibility of a partnership
• Non-Profit - An organization engaged in activities of public or private interest that are motivated by making a profit. Some non-profits are exempt from paying federal taxes.
• Cooperative - A business or organization owned by and operated for the benefit of those using its services. Cooperatives are not legal structures.

If the business you would like to establish is a corporation, non profit corporation, limited liability company LLC, limited liability partnership (LLP), or limited partnership you will have to register your business and file business structure specific documentation with your state government. However, if your business is a sole proprietorship you will not have to register your business with your state. Sole proprietorships are required to use the name of the owner as the business name in many states.

Issues and topics related to Business Law include:

• Registering a business
• Executing the business plan
• Coordinating employees
• Managing finances
• Paying taxes

For more information about starting a small business, and how best to set it up, consult with a business attorney.