Business law, also known as commercial law, is a broad area of law that regulates various aspects of a business. This may include business topics, such as how to form or dissolve a business, or more general regulations that a business may be subjected to like laws concerning taxes, insurance, intellectual property, bankruptcy, and even environmental.
The laws that apply to most businesses will vary according to state, federal statutes, the type of business it is (e.g., private or public), the purpose of the business (i.e., what do they do or sell?), and numerous other factors that will depend on an individual basis.
Given the vast amount of legal knowledge that is necessary to ensure that a business is compliant with every relevant law, it makes sense that there are different types of lawyers to handle any legally-related business issues that may occur.
In general, there are two main categories of business attorneys. The first are known as transactional lawyers. Transactional lawyers usually manage legal issues that pertain to a business’s daily operations. Their job may involve drafting and reviewing contracts, assisting with employee and labor issues, or merging and acquiring businesses.
Transactional lawyers do not normally represent a business in court. Instead, the second category of business attorneys handles in-court matters. They are known as litigation lawyers. They are the ones who will represent a business in court if they get sued, or alternatively, bring a lawsuit against an outside party.
Depending on the size of the business, sometimes a lawyer may serve as both a transactional and litigation lawyer. In addition, if it is a large corporation, they may hire individual lawyers who specialize in specific areas of law, such as intellectual property attorneys, employment lawyers, or tax lawyers.
Many of the businesses started in Maryland are considered small businesses. Maryland defines a small business as a business that has less than 500 employees.
The first step to starting a new business in Maryland is to select the most appropriate business structure. Although there are many forms of business structures, the four most common forms selected in Maryland are a corporation, partnership, limited liability company, and a sole proprietorship.
Some of these business structures will require certain legal forms to be filed with the state. Others will have no legal requirements, but will still require businesses to comply with any local licensing and taxation laws.
Next, a name should be selected for the business and it must be registered with the state. There are four categories of names that offer different levels of protection to a business owner, but not all of them are required and may depend on the type of business being run.
Generally, these include the name of the business, any relevant trademarks, a “doing business as” designation, and a domain name to protect a website related to the business.
After the above items have been registered, then the business owner should apply immediately for federal and state tax identification numbers. This is important because they are necessary in order to pay workers, file taxes, and to remain compliant with both state and federal tax laws.
If the business requires a license or permit to run it, such as a liquor license for a bar, then the owner should check what types of licenses or permits their business specifically requires and apply for them. Without these, the business will not be able to legally operate.
While Maryland suggests that a business owner opens a business bank account to ensure legal compliance, this is not a necessary step to starting a small business. It is strongly recommended though.
Lastly, although this also is not required, it may be a good idea to obtain business insurance to protect against financial risks or loss.
Contracts are very important in the world of business. They can be used to define things, such as conditions of sales agreements, the terms of a person’s employment, and even the consequences of revealing a company’s trade secret.
In general, a contract is a legally binding agreement made between two or more competent parties that describe certain obligations that the parties have to each other and can be enforced through the legal system. The laws for contracts may vary depending on the laws of each state.
As is the case for most states, Maryland requires the basic elements of what constitutes a contract. In addition to these basic requirements, there are also specific statutes pertaining to contracts that only apply under the laws of Maryland state. Some of these include:
- The Maryland Service Contract and Consumer Products Guaranty Act: This Act provides a set of criteria that Maryland contractors and consumers have to follow whenever a contract mentions a guaranty or service as part of the agreement. It is intended to cover goods or services used for personal, family, or household purposes that cost $10 or more.
- The Door to Door Sales Act: This Act provides the citizens of Maryland a right to cancel contracts that resulted from door to door solicitations for up to three days. In other words, if someone sold you something at your house, then you have up until three days to cancel the contract.
- “Right to Work”: Maryland is not a “right to work” state, meaning workers who join a union may negotiate with their employers to include a term in their contract that requires all employees to pay their union dues. In contrast, “right to work” states generally do not allow union members to negotiate for mandatory union dues in their contracts.
- Maryland Uniform Trade Secrets Act: This act permits an employer to bring a tort action against a former employee who reveals a business’s confidential information.
Contract breaches can cause many issues for businesses. In general, a breach of contract occurs when one of the parties to a contract fails to fulfill the obligations outlined by the contract.
In Maryland, the Statute of Limitations for filing a breach of contract lawsuit is three years with some exceptions. While the parties can opt to resolve the matter using an alternative dispute resolution method (e.g., arbitration or mediation), it may still require the assistance of a court if the parties cannot find a reasonable solution together.
If a breach of contract dispute has to be decided by the court, then the party bringing the dispute must file in the appropriate court. For a contract dispute that is less than $5,000 and is for money damages only (i.e., not performance of a service or for return of property), then the party must file in the Small Claims Court division of the District Court of Maryland.
In contrast, if the contract disputes involves a claim between $5,000 and $30,000, then the case can be filed in either the District Court or the Circuit Court. Claims that involve more than $30,000, however, must be filed in the Circuit Court. These courts can hear cases that involve requests for both money and property remedies.
Generally speaking, Small Claims Court is much less formal than the environment of the District or Circuit courts. Also, Small Claims Court has procedures that have been simplified to make matters move more quickly and efficiently. Lawsuits argued in the District or Circuit Courts have much more formal requirements and the traditional rules of evidence will apply.
Matters involving business laws can be very complex. For one, they usually involve issues that are governed by different areas of law. To make matters even more complicated, business laws vary from state to state. Thus, if you have any questions or concerns regarding a business law matter, then you should consult an experienced business lawyer in your state.
Whether you are starting, merging, or dissolving your business, it is a good idea to hire a Maryland business lawyer for help. As discussed above, there are generally many different types of laws and regulations that apply when running a business; each of which has requirements that are specific to Maryland state.
Hiring a local Maryland business lawyer will help to ensure that you and your business are compliant with all state laws, that any documents related to your matter are enforceable, and that you have followed the proper state procedures for all relevant matters.
Additionally, if your business is involved in a lawsuit or wants to bring an action for one against another party, then you should definitely consider contacting a Maryland business lawyer for assistance.
A Maryland business attorney who specializes in litigation will have knowledge regarding both business law matters, as well as the general proper legal requirements and procedures that apply to the state courts of Maryland.
Regardless of whether you are seeking a transaction or litigation business lawyer, if the issue involves business law and you are located in the state of Maryland, it is in your best interest to hire a local Maryland attorney for all of the above reasons.