Corporate law is that branch of law saddled with regulating businesses, traders and consumers behaviour. In much more simpler terms, they are rules and regulations that merchants as well as others engaged in trade, commerce and sales must abide by.
Typically, it is a broad aspect of law that offers representation legally, to a wide variety of legal services handling commercial disputes and corporate law issues. Thus, it interacts with other branches or areas of law such as safety regulations, food, environmental governance and real estate.
Related: Meaning and nature of commercial law
THE NATURE OF CORPORATE LAW
From the above definition given about corporate law, one can tell that it’s an integral part of life. It has always been difficult to precisely define but based on the systems of common law, there is no much difference between corporate law and civil law.
In the common law system, it has been seen as a part of civil law as it has been defined as all portion of the law solely concerned with trade, business and commerce as earlier stated.
Since corporate law determines the rights and duties of all parties involved in commerce and trade, it is quite important to know the corporate law exactly needed to successfully operate a business.
Types of corporate law
This kind of law basically governs leases. Leases are contracts between a lessor and a lessee and it is usually done for the use of a property. The property can be leased for any purpose and can be used for any length of time.
Contract laws are rules and regulations that guide and govern contracts. It’s an agreement between two parties or more which creates a legal obligation. They can either be oral or written and also implied or expressed.
This kind of law is concerned with governing the sale of goods. The body responsible for this is the Uniform Commercial Code (UCC). It is a set of statuses that has grown to be adopted across different states. Apart from the sale of goods, the UCC also governs leases as well as other commercial transactions.
Intellectual property law
This law protects intellectual property like copyrights, patents and trademarks. The intellectual property law is designed to protect the creators of intellectual property from having their work copied or worse, stolen.
Consumer protection law
This law protects consumers from deceptive or unfair business practices. Usually, these laws are enforced by federal and state agencies like SEC ( Securities and Exchange Commission).
In order to avoid complexities, most countries have their comprehensive practice guidance and information in civil codes. These codes also reflect enforceable laws presently.
It is important to remember that laws never exist without any form of connection. Just like other areas in law, corporate law intersects with other practices.
COMMON SOURCES OF CORPORATE LAW
LAWS- This is pretty much the foundation of corporate law. Primarily, it is governed by statuses enacted by the legislative arm of government.
CONTRACTS- Commerce cannot exist without transactions, goods and services and they are usually provided according to the terms of contract between businesses. Contracts can be referred to as the basis of corporate law.
REGULATIONS- This is one of the most common sources of corporate law. It is regulated being regulated by administrative agencies.
CUSTOMS- Customs are defined as the unwritten code of conduct governing businesses and their dealings. Corporate law is highly influenced by customs.
UCC- The most important source of corporate law is the UCC especially in the US. Originally, it was promulgated in 1952 and it has been going through several amendments since then. It applies to all forms of commercial transactions and loans, sales and leases are not excluded.
HOW IMPORTANT IS CORPORATE LAW?
At this point in the world, we are in what is termed “litigious times” where an agreement can’t rely solely on head nods or handshakes. We’ve passed that stage a long time ago.
When it comes to businesses, corporate law plays a major role in enabling fair practices to parties under a contract. It safeguards shareholder rights and also provides compensation to parties affected when business deals go wrong. Wholesomely, it provides a framework for diverse business formations.
HOW DOES CORPORATE LAW AFFECT THE DAILY LIVES OF PEOPLE?
From birth to death, laws will always guide the actions and inactions of every individual. It started centuries ago and will continue to be that way.
Imagine a little scenario of how you live daily. You get up from bed in the morning and hit the bathroom for a shower, the law of contracts is at work governing the sale of the bed you slept on and also the service agreement between you and your water provider.
After a quick bath, you dress up and pick out a pair of nice shoes for yourself. The law of contract still binds the shoes ensuring there is a warranty for them.
You might not know it but you find corporate law in almost every aspect of your live. You’ll probably only notice when things go wrong and you find the need to hire a lawyer.
WHAT DO CONSUMERS STAND TO GAIN FROM COMNMERCIAL LAW?
The most fundamental aspect of corporate law is consumer protection. You should have read about it if you have been following up on this article till now.
According to statistics, families in the US spend a total of $61,334 yearly. The money is spend on majorly food, housing, healthcare and transport.
With such large amount on transactions, there is no way that disputes wouldn’t arise and in situations like that, corporate law would be needed to resolve them.
If you think about the amount of transactions you are involved in on a daily basis, you’d ensure you are not oblivious to your obligations and rights under corporate law.
Corporate law will always remain a complex area of the law that is ever changing. Whether you’re a business owner or not, the best thing you can do for yourself is understand the basis of corporate law so your rights and interests can be protected.