Business, also called commercial law, is an area of civil law dealing with the commercial activity of private and public organisations. The word business is usually applied to both public and private organisations. In most countries, business laws are separate and distinct from other types of laws, although there are instances where similar elements may overlap. There are two categories under which business laws are classified:
Intellectual Property Law: This is the area of civil law that protects the distinctive products or services of individuals and companies. One type of area of intellectual property law is that involving trademarks and patents. Another is that concerning corporate secrets or trade secrets. The main article in this area of civil law concerns the exclusive rights possessed by an individual or a company over its distinctive products or services. For instance, a trademark is a mark, or symbol, by which a company designs its products and allows others to distinguish themselves from the original.
Corporate Law: This is the area of civil law that governs the formation of a business entity. There are four categories under which corporate laws are classified: general partnership, limited liability company, corporation and sole proprietorship. A general partnership is a relationship between two or more people that exists for the duration of one partnership agreement. It incorporates two people into one entity, with one party generally responsible for the other party’s debts and obligations.
Limited Liability Company: This is a legal structure in which one person owns a particular asset and carries out all the activities related to it. Such assets may be used to carry on the main activities of the partnership, such as paying employees, managing finances and so on. However, in a limited liability company, only one partner is legally held liable for the actions of the other partner.
Private Companies: This is the way many businesses are conducted today. They are similar to partnerships, except they incorporate two separate legal entities, instead of one. Businesses are set up as a separate company in their own right, with each having their own board of directors and shareholders. These companies can be run by one or more people, who will still be regarded as the main executive officers. However, the true power in the business comes from its shareholders, who own most of the shares.
Dividends: A dividend is payment made by a corporation to its shareholders. Its shareholders usually receive a percentage of the company’s profits. This distribution is an obligation that each shareholder has to fulfill according to his or her best interests. However, when a company pays dividends to its private shareholders, they are not personally liable for their debts.