When it comes to planning a business, there may be many questions regarding business law, definitions and structures. Business law can include codes, rules, statutes or regulations that aim to govern relationships. In addition, business law is used to provide a legal outline for business management standards and conduct. The concept of business law can cover areas such as contracts, organization, information, planning, mergers, negotiations, divestitures and acquisitions.
What is a Limited Liability Company? (LLC)
This is a kind of business that combines pass-through taxation of proprietorship with a limited corporation liability. The LLC can be taxed as if it were like a sole proprietor, which has to report losses and gains on personal tax returns (as an LLC is not considered a separate entity). If an LLC owner commits a personal act which is illegal or negligent, then that owner can be held liable.
What is the Definition of a Corporation?
A corporation is defined as an independent entity company. A corporation is separate from any person who controls, owns or manages the company. Tax law views these corporations as pseudo-person that can enter contracts, be taxed, and can acquire gains and losses. A corporation can shelter any persons who control, own or manage the company from liability. If a corporation draws a judgement against self, any personal assets of owners are protected.
What is a Non-Profit Organization?
Non-profit organizations are tax-exempt. In order to become a non-profit, a corporation must be structured in a way that benefits a group of people or individuals, benefits the overall public or benefits members. A non-profit can accumulate profits, but obtaining earnings cannot be their sole motivation.
Do I Need a Statutory Agent?
If you are a business owner, you should seek a registered or statutory agent who will be assigned to receive a service of process. A service of process occurs when a company receives notice they are part of a legal action. By appointing an agent to handle this, the claim process can move forward in the court system.
What is the Difference Between Trademark, Copyright and Patent?
The definitions of these three categories are described as follows:
- Trademark: created to protect phrases, words and logos that a company uses for products and goods; which is a way to identify separately from other companies. This prevents other companies to use similar marketing or identification content in order to sell their products.
- Patent: a grant of property right and protection to an inventor from the Patent and Trademark Office. On average, a patent is useful for twenty years after the date of application.
- Copyright: helps protects the original works of an author, however does not protect subject matter such like a patent or trademark can. A copyright can protect pictures or descriptions, but cannot prohibit another party from making a product similar to the original inventor.
What Permits, Registrations or Licences Does a Business Need?
Depending on the area of business, there are different documents that need to be completed in order to operate a business.
- Sales Tax License
- Sellers Permit
- Zoning Permit
- Employer Identification Number (EIN)
- Health Department Permit
If you have questions, be sure to talk to a top business formation lawyer Folsom CA recommends.
Thanks to our friends and contributors from Yee Law Group for their insight into business law.