Business law, or commercial law, is the term for the laws that govern commercial entities and commercial transactions. For example, if an individual wanted to start a shoe company today, business laws would dictate how to organize their company and register their company. It also includes laws regarding how to pay their employees and legally ship their merchandise to consumers overseas.
Business laws apply to many different aspects of a business. These laws will vary based on the type of business, such as private and public and/or for profit and non-profit, the structure of the business, such as corporations and general partnerships, and by jurisdiction.
What are the Different Types of Business Law?
As noted above, there are many different types of business laws that govern many aspects of a business. For example, if a business needs to determine how to pay its employees, provide employee work benefits, and/or arrange employee work schedules, these issues would be governed by a specific subcategory of business law, called employment law.
If a business owner is just starting out and needs to register as well as set up their business, business laws including statues that govern business formation and structure, state tax laws, and the Federal Tax Code would apply. If a business owner registers intellectual property, such as copyrights and/or trademarks of the business, both federal and state laws would apply.
A large portion of business laws involve commercial and contract law. Commercial and contract law governs issues such as business deals, sales transactions, and employee non-disclosure agreements. Due to the numerous aspects that contract law regulates in business, this is arguably the most important area of business law.
Contract law regulates many aspects of a business, including:
- Merging with another business;
- Forming an agreement with a distributor to sell products; and/or
- Providing a service to customers.
Business law includes federal, state, and local regulations. There are numerous specialized subcategories that govern businesses. These subcategories may apply to both individuals and business entities.
Business law subcategories may include:
- Business formation and/or dissolution;
- Commercial law;
- Contract law;
- Securities law;
- Intellectual property law;
- Antitrust and white collar law;
- Corporate law;
- Bankruptcy law;
- Employment law;
- International business law; and
- Tax law.
There are subcategories within each of these subcategories of business law. In many cases, more than one type of law will apply to a business issue. Due to the intricacies of the numerous business laws, it is important to consult with a local business attorney for advice and to discuss any concerns.
What is Business Formation and Why Does it Matter?
When an individual decides they want to open a business, they must first determine what type of business structure they want to use when registering their business. An individual may choose from numerous business formations, such as a corporation, a limited liability company, LLC, or a general partnership.
Which business structure a business owner chooses may have a significant impact on the future of the company. The way in which a business is formed will dictate issues such as:
- The amount of funds the business can receive from investors;
- How many individuals can sit on a board;
- Who is liable for debts and/or liabilities of the business; and
- How the business will be taxed.
Some business formations also provide rules regarding the operation of the company. For example, a limited partnership, must include at least one partner serving as a general partner, or business manager, to the entire partnership, as well as one limited partner in order to exist as a valid limited partnership.
What are Common Business Law Disputes in Colorado?
There are many ways in which a dispute may arise during the court of running a business. There are, however, some business disputes that are more common than others. For example, business partners may disagree over how to manage the business. When business partners disagree, something as simple as a product color may end up in a lawsuit.
Another common dispute that arises in a business is when a third-party supplier and the business disagree over goods that were shipped and/or the price of the goods. In most cases, these types of disputes are governed by commercial and/or contract law. Typically, the parties can refer to their contract to settle their conflict.
A business can also have a dispute with a customer. For example, a customer may claim that an item arrived damaged and may cite the business’ guarantee and/or warranty regarding the product to obtain a refund.
While most businesses faced with this scenario would send the customer a replacement item to resolve the issue, the customer may decide to take a business to court. Some customer issues can be resolved by referencing the business’ return policy, while other issues can get more complicated.
For example, if a customer purchases an item that includes an express and/or implied warranty and the business breaches the warranty, the customer may sue the business for sending a defective product. In this case, both commercial laws and state product liability laws would apply.
A business may have a dispute regarding intellectual property, such as copyrights, patents, and trademarks. A common issue that arises with a business is stealing trade secrets. If a competing company steals and/or an employee shares a trade secret, for example, a secret formula that belongs to the business, the business may sue for damages. Both contract laws and intellectual property laws would apply in this type of dispute.
Does Colorado Have Any Unique or Special Business Laws?
Every state has different laws regarding businesses and business litigation. Colorado has antitrust laws and deceptive trade practices laws. Pursuant to the Unfair Practices Act, 6-2-111, private business lawsuits are permitted and the attorney general may bring an action on behalf of the state of Colorado.
Deceptive trade practices include blatant acts of fraud, tampering, and/or lying. There are several actions that are prohibited under Colorado’s deceptive trade practice laws. False advertising is not permitted. Class action lawsuits are permitted. The following parties may bring a lawsuit.
- The Colorado Attorney General;
- A private citizen that has suffered actual damages; and/or
- Any district attorney, such as the district attorney for an individual’s local county.
Should I Consult a Colorado Lawyer for Questions about Business Law?
Yes, it is essential to have the help of a Colorado business lawyer for any issues regarding business law in Colorado. As discussed above, business law and business disputes may be complex. They may include many different subcategories of business law. Additionally, not every dispute will have a straight forward resolution.
In most cases, it is best to have an attorney’s help from the start when opening a business. A lawyer can provide advice regarding the best way to structure your new business and how to protect your intellectual property rights. You should also seek the help of an attorney if you are dissolving your company.
If you are being sued by another party and/or need to appear in court, a lawyer is an invaluable asset. A lawyer can help you navigate the legal system as well as ensure your business is complying with local, state, and federal laws. Your lawyer will also represent you during any court appearances.
If you reside in Colorado, you should consult with a local attorney to determine what steps may be required to resolve your business dispute. A local Colorado attorney will be aware of what Colorado specific business litigation laws will apply to your case, as well as any statutes of limitations, and caps on damages awards.
