As the owner of a business, regardless of size, it is important that you have a basic understanding of business law in order to protect the business you’ve worked hard to establish and to protect your personal assets. While it is always advisable to hire a lawyer to assist with the legal framework and foundation of your business, it is also important that you have a general understanding of the legal aspects involved with running a business.
One aspect of business law that impedes many newcomers to the business world is the sheer amount of legalese, or legal terms, that they will have to become familiar with. Here are eight legal terms that every business owner should know.
Assets
Assets include property of all kinds, whether real and personal, tangible and intangible. These are the core of what makes your business viable and valuable.
Intellectual Property
Part of those intangible assets include various forms of intellectual property, whether it is a brand, product name, or even designs or schematics. This intellectual property can and should be protected by patents, copyrights, or trademarks.
Bankruptcy
This is hopefully not a term you’ll need to use as a business owner, but bankruptcy is a legal procedure for dealing with debt problems that applies not only to individuals, but also businesses.
Contract
Contracts are a legal agreement between two or more people that creates an obligation to either do something or not to do a particular thing, such as in the case of non-disclosure agreements.
Breach
The failure to perform a legal obligation, often in the context of contracts and when one party has a breach of contract.
Equity
Equity is the value of a debtor’s interest in property that remains after liens and other creditors’ interests are considered. This is how much money you have in property after debts have been considered.
Tort
Tort law handles a civil, not criminal, wrong, primarily dealing with a negligent or intentional injury against a person or property, with the exception of breach of contract. This is where product liability claims, property injury claims, and numerous other cases that impact businesses will arise.
LLC
LLC stands for Limited Liability Corporation, which is one of many different ways to structure your business. There is also sole-proprietorship, C-corp, S-corp and others. Properly structuring your business has important implications for taxes and liability.
Business Law
Those are eight important legal terms that every business owner should have a general familiarity with, but that only scratches the surface of the world of business law. There are a myriad of terms and concepts ranging from contract law, finance, liability, and other regulations ranging from zoning issues, health codes, and employment laws, which can make it tough to wrap your head around it all.
Many small businesses are reluctant to hire a lawyer so they can save their capital for other business expenses, and only turn to a lawyer once they have found themselves in a crisis situation. In many cases, these types of situations could have been avoided with prevention and working with a business law expert who would have provided guidance in terms of pitfalls, legal liabilities, intellectual property, and beyond.
Having access to the insight and perspective of a business attorney with years of experience across a wide range of industries can be a tremendous asset to any business. Anyone who is considering starting a business or currently operating their business without legal counsel should discuss their situation and business plans with an experienced attorney as soon as possible.
The team at Fears Nachawati has helped small businesses and Fortune 500 companies on a wide-range of legal matters within the state of Texas and beyond. Our dedicated team is standing by and ready to help you get your business off the ground or take it to the next level. Don’t wait until you’re facing legal troubles, contact our team today for a free, no-obligation legal consultation to discuss what we can do for you and your business.
Schedule a case evaluation with a member of our team by calling at (866) 705-7584, or by visiting the offices of Fears Nachawati located throughout the great state of Texas, including in Houston, Dallas, Austin, Fort Worth, and San Antonio.