The term business law is sufficiently overbroad to encompass several different
subfields. In its most generic sense, business law refers to the legal
issues confronting businesses. However, businesses are no different than
individuals in many respects and therefore the legal issues confronting
them could be extensive. In order to help us divide this vast legal field,
it is best to divide business law into transactional business law and
business litigation. These two subfields are not necessarily exclusive and in many instances,
they overlap. Nonetheless, they are different business law fields.
Transactional business law refers to issues such as the legal formation
of a business entity, the manner by which a business entity is formed
- such as creating a Corporation as opposed to a Limited Liability Company.
Transactional business law also deals with business procedures such as
observing the formalities of corporate structure if a corporation is involved,
and managing risks. Drafting contracts, applying for patents, safeguarding
copyrighted materials and trade secrets are also examples of transactional
On the other hand, business litigation arises when two or more businesses
have a dispute and end up in court. It is during business litigation that
transactional business law comes into play. Usually, the side that has
spent a considerable amount of time and effort on transactional aspects
of business practice has a better chance of prevailing in business litigation.
Therefore, businesses that take transactional aspects of business seriously
and seek legal assistance in a timely manner will reap the rewards later
when a dispute arises.