What We Mean By Business Law

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 business law.

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.