As promised, we have returned with a detailed article about the differences between commercial and business lawyers….enjoy the read
Although both commercial and business law appears to be similar, these are actually two related but distinct areas. The primary difference between a commercial and a business lawyer is that commercial lawyers work in how a corporation is administered and managed. A business lawyer, in contrast, works in the practice areas related to a business such as employment, contract, tax, and transaction law. This means that a commercial lawyer could be considered to be working in a subset of business law.
Understanding These Terms
Although this definition appears to be fairly straightforward, getting into the specifics often brings up areas of confusion. Additionally, the way that these terms are used often varies from firm to firm. To give another way of understanding the difference between business law is dedicated to mergers, acquisitions, and other transactions that will affect the life cycle of the business. Commercial law is designed to provide a legal structure in which the business is conducted. it governs a wide range of areas including securities, contracts, litigation, franchising, and zoning. With this definition though, it’s important to understand that these areas of law are not completely distinct. Lawyers who work in business may find that their work overlaps in certain areas with lawyers in commercial law. One example is that both areas involve aspects of contracts.
It may be beneficial to take a look at each law practice separately. When you need help related to management duties, shareholder rights, corporate operations, and other operations that are associated with businesses, then you are in the market for a commercial lawyer. In the United States today, a company is a legal business entity that is separate from its owners. This means that a commercial business can enter a contract, file a lawsuit, or be used. The actual owners of a commercial business are its shareholders.
In the case where a corporation has excessive profit, the management and the directors can work with their lawyers to distribute these funds to the shareholders. Additionally, the owners and shareholders are allowed to sue the corporation if the funds are not delivered. Negotiating these disagreements falls under the area of commercial law. Additionally, capital increases and liquidation are going to be in this category. Other common areas of practice include shareholder agreements, investor agreements, and taxation as well as the distribution of corporate assets.
These professionals are involved in the particulars of how workers are affected by employment law. They can work in all areas of employment such as hiring and firing practices, maintaining a safe workplace, and more. Any businesses that do not follow these regulations may need to use their lawyers to defend them.
Another essential area where they practice is tax law. This means that a business lawyer will usually be well-versed in the advantages as well as the obligations that are associated with various types of businesses today. They may have to get involved in any type of product defect or delay in delivery. They work to negotiate interactions between businesses between a business and any number of third parties such as suppliers, vendors, and customers. This can include but is not limited to reselling, licensing, and terms and conditions.
When considering the difference between these two areas of practice, think about the business law being related to activities while corporate law is more about the entity itself. This may help to determine which area any specific issue will fall.
This area of the law is characterized by state and federal regulations that drive the various ways that a business is set up and operated. The regulations broadly oversee a wide range of issues and hold businesses highly accountable. With so much regulation, it’s not a surprise that companies use experts to act as their own watchdogs and manage these areas. When legal problems arise, there are several common areas.
Whistleblower cases – these call under business litigation. If an employee exposes an employer’s activities that may be illegal, inappropriate, or unethical, and then is mistreated, this would fall under the business law, regardless of the type of business.
Partnership Disputes – This type of legal entanglement usually occurs between partners who may have started a business and now want to part ways. Legal representation in this dispute is in the business area of law.
Breach of Fiduciary Duty – this is often linked with an organisation’s requirements to their stockholders. Business law will be used to guide any disputes between the actions of the executives and the shareholders.
Breach of Contract – this is a fairly common problem in business. It deals with business agreements, often between two businesses or a business and its customer when an agreement was not honoured.
In contrast, the laws that govern commercial law are set and run by the Uniform Commercial Unit. This is an area that controls sales and purchases of good in the United States. Each state uses the document to guide their own laws, although they also have the right to modify them. The commercial laws are more concerned with the goods and services in the market. Many legal issues will come from elements of commercial law. These are a few of the areas that are governed by commercial law.
Property Rights – this is a term that is involved with ownership over tangible and intangible items. Intellectual property disputes would use commercial law.
Employee Rights – agreements between employees and their company of hire usually fall under commercial law.
Understanding the Difference
Even with this description of individual activities for both areas, it remains fairly tricky to make a clear distinction between both fields. Remember that the regulating bodies are different and typically law firms will offer both disciplines with lawyers that may work in both areas. This means that you may seek out a commercial law firm and find that they also can provide business law services as well. In fact, this is incredibly common. The common factor in both fields is that they are both reliant upon experienced and knowledgeable legal counsel.