United States Business Law: Every Startup Founders Need to Know
| 3 minutes read
Every country has its different business laws and the founders need to follow and operate their business under the rule set by the government in that country. Today we are going to cover the business law of the United States for every startup founder or those entrepreneurs who want to run a business in the United States. The United States is one of the best places to start a startup because the government helps and develops a suitable environment for business.
There are a variety of disciplines within the field of business law; some of these include tax law, intellectual property law, bankruptcy law, employment law, real estate law, etc.
Some of the crucial business laws are:
Navigating Complex Transactions
Preventive Measures to Avoid Litigation
Signing Legal Counsel
Business formation includes the steps of a new business that follows business laws. In this area, a mutual request for business law attorneys encompasses the preparation and filing of documentation surrounding the formation of a new entity. Some clients may need additional assistance, such as selecting the type of business entity that is an outstanding fit for their business. There are few types of business entities to choose from, and the appropriate type is dependent upon a variety of factors. The most common entity types include:
- Sole Proprietorship
- Limited Partnership
- General Partnership
- Limited Liability Limited Partnership (LLLP)
- Limited Liability Partnership (LLP)
- Nonprofit Corporation
- Limited Liability Company (LLC)
The determination of most business entities, except a sole proprietorship, is to protect the business owner from personal liability for incidents related to the business. A business law attorney can work with the business to fulfill this goal by setting up and further customizing the business entity to meet the particular requirements of the business.
Internal agreements are another responsibility a business law attorney may have during the establishment of a new startup. An internal agreement will need to be drafted to determine how the business will be managed. One example is an operating agreement for an LLC. An operating agreement governs how the profits and losses will be shared among the partners, how crucial business decisions will be implemented, and how ownership rights may be transferred. Due to the vivacious nature of this type of document, it must be drafted with caution.
Navigating Complex Transactions
Some business founders may be comfortable handling certain business transactions on their own. However, some more complicated transactions, such as internet commerce transactions or securities regulations, may be complicated without an attorney. When businesses are part of a heavily regulated industry, they generally rely on in-house counsel or contract attorneys to provide assistance or advice regarding recent legal developments within their industry that may influence their business. Generally, lawyers can provide some crucial and valuable insight into these transactions due to their legal training and background, as well as their objective nature. Attorneys may be more likely to realize issues overlooked by the business owners, since the business owners may be too emotionally invested.
Preemptive Measures to Avoid Litigation
Practicing attorneys in the field of business law are expected to be experts at constructing legal transactions that reduce a company’s exposure to litigation. There are specific rules and regulations for businesses in every country to follow before a dispute may occur, and by steering these laws effectively, an attorney can significantly reduce business expenses. An example of these preemptive measures is an attorney who is employed to draft customer agreements. Including specific requirements in a customer agreement, such as requiring customers to follow particular procedures for disputes or only allowing disputes to be submitted in the company’s home state, will increase the modest advantage of the company.
Hiring Legal Counsel
An important part of launching a new business or operating an existing business is to hire legal counsel. Success in many areas of business may rely greatly on the company’s ability to acquire proper legal advice. Business law attorneys can assist in multiple areas, including purchase agreements, mergers, and acquisitions.
Operating a business in the US requires rules and regulations, therefore with the above information, you can seek crucial information if you’re planning to start your business in the US. Apart from this, you can take legal advice from your advisor.