While corporate law stands behind the formation, management, and dissolution of corporations, the corporate law attorney advises businesses on different legal issues, including starting a business, handling mergers and acquisitions, and managing other legal cases that can float to the surface on a daily basis, one of them being the company’s accordance with the relevant law.
Business law vs corporate law
Although the terms are frequently used synonymously, corporate law and business law have distinct functions. As we mentioned above, corporate law mainly focuses on business governance, structure, and compliance. Business law stands for business law and ethics that cover a wide range of activities, for example, commercial transactions, employment law, and various contract forms.
Entrepreneurs should be aware of this distinction when looking for legal advice that is customized to meet their unique requirements. Now let’s distinguish these laws separately.
The concept of corporate law
Formation, governance, and corporation regulations. These are the three law fields that the corporate law deals with. Here are the legal matters of these fields.
Corporate governance
The system of policies, procedures, and guidelines by which a company is managed and controlled is referred to as corporate governance. It is used to balance the interests of the business owners, management, customers, suppliers, financiers, the community, and everyone involved in its function.
- Duties of directors: The corporation’s management and the alignment of the company’s strategy with its objectives are the duties of directors. They are the ones who support the approval of major transactions, strategic planning, and budgets. Additionally, they adhere to the legal and regulatory compliance of the company.
- Duties of office workers: This refers to the staff that perform the corporation’s day-to-day operations, such as the CEO, CFO, or COO. They abide by the directives of the board and bear responsibility for the management and performance of the business.
- Shareholders: Shareholders control the business. They abide by the directives of the board and bear responsibility for the management and performance of the business. Shareholders’ interests are prioritized in corporate governance, and they are entitled to dividends and a portion of the company’s profits.
Corporate structure
Corporate structure is what defines the company’s structure, as in how it is organized, or how it works in both legal and operational departments. The company’s level of efficiency, tax obligations, and legal liability are all impacted by it. Here is a more detailed observation.
- The company launch: Before starting any company, it’s important to decide the type of the organization. It can be a C-corporation, S-corporation, or nonprofit. Then it’s time to decide the structure of the organization, such as divisions, departments, etc. Drafting the corporation’s bylaws and articles of incorporation, which define the objectives, policies, and procedures, is part of this.
- Mergers and Acquisitions (M&A): Companies are consolidated as part of M&A activity. An acquisition is when one company buys another, whereas a merger unites two businesses into one. Careful legal and financial planning is necessary for these transactions in order to maximize shareholder value and ensure regulatory compliance.
- Dissolutions: This is the process where the corporation is legally closed down. The causes of this can be various, including voluntary and involuntary, bankruptcy, failure to meet legal obligations, etc. To avoid future legal responsibilities, it is essential to adhere to the dissolution procedures.
Compliance, shareholder rights, fiduciary responsibilities, and other important aspects are included in the corporate structure as well. To put it another way, this is the essence of corporate law.
The concept of business law
As mentioned above, business law is more concentrated on the aspects of running a business, rather than the outside structure of it. Here are a few examples:
- Contracts: These mostly refer to written agreements between the business and other parties.
- Employment law: This one defines the relationship between employers and employees. The processes are hiring, firing, workplace safety, and employee rights.
- Commercial transactions: This is the process during which the business buys, sells, and leases goods and services.
There are also factors concerning intellectual property, business formation, taxation, and so on. In other words, business law covers many layers concerning the business’s smooth operation holding on to the business ethics.
What are the business ethics?
These are the moral principles and standards that help and guide the behavior of all the included parties in the world of business. While business law is all about the legal side of business activities, business ethics are what addresses what’s right and what’s wrong in business practices. Here are some important points.
- Integrity: This encourages honesty and strong moral principles referring to all the business activities related to the business.
- Accountability: This can be described as being accountable and holding for one’s actions and their impact on the business growth and even the daily activities.
- Transparency: This is about open communications, where the business discloses all the relevant information to the stakeholders.
- Corporate social responsibilities: It’s the obligation and responsibility of the business to act in the best interests of their environments and societies.
The growth and changes of the business ethics are based on environmental changes, which can vary based on the area of the business’ activity.
Services offered by corporate law firms in Armenia
The law firms Armenia offers provide various services referring to entrepreneurship. Firstly, it’s the entity formation that helps the company choose the business structure. Here is a more detailed observation of the corporate services in Armenia.
- Local business registration
- Intellectual property protection
- Corporate governance
- Foreign investment
Conclusion
Corporate law is an essential part of the business environment because it gives businesses the legal foundation they need to run efficiently and morally. Corporate law firms provide a wide range of services that are specifically tailored to meet the needs of their clients, and entrepreneurs in Armenia can greatly benefit from their expertise. Business owners can confidently handle the challenges of launching and operating a company by knowing the differences between corporate and business law and utilizing the assistance of legal experts.