What Is Business Law?

Business law is sometimes called mercantile law or commercial law and refers to the laws that govern the dealings between people and commercial matters.

There are two distinct areas of business law; the regulation of commercial entities through laws of partnership, company, bankruptcy, and agency, and the second is regulation of commercial transactions through the laws of contract.

The history of these types of laws dates back several centuries and can be seen in the peace guilds where members would pledge to stand by each other for protection.

A lot of business law involves trying to prevent problems that can hurt the business or cause legal disputes. Business law may include any of the following:

Business Formation

Business law starts with setting up a business.

In the eyes of the law, each business is its own legal entity.

Starting a new business typically starts with filing the paperwork that makes the business formally exist in the government’s eyes.

Many types of business entities are similar throughout the country.

However, the exact entities that a new business can choose from vary by state.

The process to file the paperwork to establish the business also varies from state to state.

Business lawyers help decision-makers weigh the pros and cons of each entity when they’re starting a business.

They help educate the business founders in the law in order to help them choose the entity that’s in their best interests.

Then, they help them file the paperwork to formally start the business.

Employment Considerations

Once a business is up and running, they might need employees.

Businesses need legal advice to help them understand how to hire and fire employees.

They need to know how to handle employee disputes and discipline.

Businesses need to know what they need to offer employees in terms of pay and benefits.

There are also mandatory payroll taxes and deductions.

Business lawyers educate their clients on the rules and best practices for managing employees.

Immigration Law

Business law and immigration law often intersect.

Businesses may want employees from other countries.

They may want international employees on a full-time basis, they may need temporary workers, or they may need to bring in a worker just for a short period of time for a special event.

Knowing how to navigate federal immigration laws is an important aspect of business law that helps companies get the manpower they need to succeed.

Sales of Consumer Goods

Buying and selling isn’t as easy as it sounds.

There are regulations that govern how companies can make products and how they can sell them.

From working conditions in a factory to distribution requirements to price controls, there are all kinds of laws and rules that might regulate how a company makes and sells its products.

One of the most influential documents for business operations is the Uniform Commercial Code.

It’s a model code that outlines recommendations for commercial transactions.

It covers topics such as the statute of frauds, contracts, leases, sales, credit, bulk sales, and secured transactions.

Business lawyers help their clients identify the laws that a business needs to follow, and they help ensure the company’s compliance with the laws.

Contract Drafting and Negotiations

A lot of business has to do with preparing and negotiating contracts.

A contract can be anything from a lease agreement to a purchasing agreement to an agreement with a third-party vendor to sell a product.

A lot of contract law comes from common law.

Common law isn’t written down anywhere.

Instead, it’s principles of law and rules that have developed through the courts over time.

Lawyers in business law have to not only understand the elements of contract law from both statutes and common law, but they must also appreciate the nuances that might impact the enforcement of a contract.

They must work with their clients in order to skillfully negotiate and draft contracts that work to the client’s best interests.


Most businesses want to control a large share of the market.

They want to grow and expand.

Companies who want to increase their profits and their market share need to make sure that they go about it in legal ways.

Companies that employ deceptive or unfair practices in order to cut out competitors or avoid competition might find themselves the subject of allegations of anti-trust violations.

Business attorneys help their clients identify conduct that might amount to anti-trust before the behavior has the chance to create problems for the business.

Intellectual Property

When a business invents a new product, it needs to make sure it protects its ability to profit from its invention.

Making sure a business gets to exclusively keep and use its own products falls under intellectual property and copyright law.

Intellectual property is technical and complicated.

Lawyers need to have a scientific background in order to formally practice before the U.S. Patent and Trademark Office.

Intellectual property work is critical to helping companies profit from their novel work.

Similarly, copyright laws help companies profit from their creative work.

Business lawyers help companies register copyrights and enforce them.

This process is critical to making sure that a business retains control of its work in order to commercialize it for a profit.


Businesses pay taxes.

There are estimated taxes, employee taxes, and deductions to be aware of.

In addition to helping a business comply with tax requirements, a business lawyer helps their client take legal steps to minimize their tax burden.

They may help the business apply for special tax forgiveness or waivers that might be available in a certain location or for certain industries.


Lawyers help businesses in both good times and bad.

When businesses go through financial difficulties, they need lawyers to help them determine their options.

Filing bankruptcy might be the only option or the best option for a struggling business.

Making the decision to file for bankruptcy is just the beginning.

There are many different types of bankruptcy filings available to businesses.

They have different requirements, and there might be a reason that a business should choose one type of filing over another.

Business lawyers can give their clients advice on the pros and cons of different actions.

Once the business makes a plan, lawyers can help the company complete the filing accurately and stay in compliance with the associated requirements.

Why Become a Business Lawyer?

Business law typically happens outside of a courtroom.

There may be a few hearings here or there before boards or regulatory committees to seek approvals.

However, there are very few long, hard days on the spot in an adversarial courtroom.

When conflicts occur, a company may not use its business lawyer to handle them.

Instead, they might refer the matter to a litigator with years of experience in a courtroom setting.

Because business law focuses on transactions, it’s a great choice for lawyers who don’t care for high-pressure courtroom situations.

With business law, a lawyer can have full and complete practice without ever setting foot in the courtroom for an adversarial proceeding.

Lawyers who pay attention to detail thrive in business law.

Helping a company make policy, complete a filing, make a contract, or come to terms on a business transaction often comes down to minute details.

Lawyers who can focus on details flourish in a business law setting.

In-house Counsel or Law Firm

Some attorneys work as employees of the companies they serve.

Large corporations tend to employ their own team of attorneys.

The word for these types of business lawyers is in-house counsel.

They help their companies with all aspects of business law as the company’s needs might require.

Other business lawyers run their own law firms.

They exist to serve businesses that may not be large enough to have their own in-house legal team.

A law firm might also serve businesses in a niche area of business law.

For example, a law firm might exist to help businesses only with intellectual property needs.

Another firm might help a business set up a corporate entity and file the appropriate documents with the state.

Michael Morales

About Michael Morales

Michael Morales is the Webmaster and Editor in Chief for Legalcareerpaths.com. With a strong background in Web Publishing and Internet Marketing, he currently works as an independent consultant. A former paramedic and ems educator, he enjoys punishing himself doing triathlons and endurance sports. Michael currently lives in sunny Northern California, home of the highest tax rates in the world.

6 Responses to What Is Business Law?

  1. Avatar
    Gabriel Peterson #

    Business law continually evolves to keep up with the changing business landscape and emerging technologies, making it a dynamic and ever-relevant field of study and practice.

  2. Avatar
    Hector Rivera #

    Understanding business law is crucial for entrepreneurs, executives, and legal professionals, as it guides the formation and operation of companies and ensures ethical and legal practices.

  3. Avatar
    Gary Weiner #

    This law is essential for protecting the rights and interests of businesses, as it provides the legal framework for negotiations, agreements, and dispute resolution.

  4. Avatar
    Cameron Spiller #

    This legal area encompasses a wide range of topics, including contracts, corporate governance, intellectual property, employment law, and regulatory compliance.

  5. Avatar
    William Newman #

    It also known as commercial law, it is a legal field that governs the activities and transactions in the business world.

  6. Avatar
    Ryan #

    Thanks for explaining the importance of contracts in business! Could you share some examples of common contract clauses to be aware of?

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