Business and corporate laws are also specifically known as commercial and company laws. Both forms of law govern business and commercial transactions as well as the internal rules of business firms. Business laws refer to the laws involving contracts, sales, commercial paper, agency, and employment law among many others. Corporate law, on the other hand, studies the relationship between businesses and consumers under the internal rules of the firm. Both provide the bodies of law that govern all business and corporate transactions whether in private or public.
Business law reflects to the laws which are applied to business entities such as partnerships and corporations. These are used as reference when putting up businesses either big or small – from sole proprietorship to corporation. Business laws specify how different business can be set up, how taxes apply to them, registrations, documents and requirements; Define different terms relating to business, making by-laws, and articles of organization among many others. These also provide the regulatory schemes on how commerce should be conducted.
Business law is applied to all sectors of businesses such as automotive, estate planning, health, law, intellectual property, litigation, employment and labor, business restructuring and business & corporate. It governs all business and commercial transactions whether private or public. Business law covers covers other business issues such as starting, selling or buying other businesses, managing the business, dealing with employees and contracts to name a few.
Corporate law, on the other hand, involve the same laws and processes under business laws but have 5 defining characteristics which include:
- Separate legal personality of the corporation
- Limited liability of the shareholders
- Transferrable shares
- Delegated management
- Investor ownership
These are all applicable largely for corporations which are publicly owned. Corporate law is applied to protect both company and shareholders' rights especially if the corporation fails or is involved in legal matters. Corporate law can be traced back to the middle ages when medieval guilds were formed but not for common profit. It was also during this time that different forms of businesses such as partnership were developed.
Corporate law covers corporate governance that includes the corporate constitution, balance of power, corporate personality, capacity and powers, director's duties, and corporate litigation. All of these are vital for the application of corporate laws. In addition, this also involves how shares, liquidity and transactions should be handled as well in cases of corporate crimes, mergers, acquisitions and insolvency of the company.
Both business & corporate laws involve the details, rules and regulations involved in setting up businesses, choosing legal structures, recruiting & hiring, financing, paying of taxes, dealing with consumers and shareholders, solving issues, dealing with business and corporate crimes, and regulating All aspects incorporating commercial and corporation by-laws.