How Writing a Business Operation Agreement Can Protect Your Business

By James M Peterson

Some states may not require a company to have a business operation agreement, but the benefits from writing one far outweighs how a business can fare without it. For one, this operation agreement protects the company's limited liability status. This is especially important for those with only a single owner since without the formal agreement, the business might just appear to

be a sole proprietorship. For many businesses, having a formal written operating agreement lends credibility to their separate existence.

An operating agreement also allows a business to further define rules for itself in accordance to state laws. In some cases as well, though, the agreement can override default state rules that may not be favorable for a business. For instance, some states have implemented rules that require profits and losses to be equally divided among the company owners. This may be less than ideal if the owners of the company did not invest time and equal effort in establishing the business. Depending on what is needed, business owners should consult an attorney well-versed in business law to aid with the writing of the agreement so as one can properly define the rules that will best benefit the company.

In the writing of the agreement, certain issues must be addressed in the laying down of rules for a company. Depending on what the company needs, a few of the most common topics addressed by a business operation agreement are the members' percentage interests in the LLC, the members' voting powers, rights and responsibilities, how profit and losses will be allocated and how the company will be managed.

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Sole Proprietorship Business - 3 Drawbacks to Owning a Sole Proprietorship

By C. J. Harrison

There's a great freedom to owning your own business. Being a sole proprietorship let's you manage every single aspect of the business. However, with this freedom comes an enormous responsibility with just a touch of risk. With every advantage of owning a business there lays a disadvantage. There are several drawbacks to owning a sole proprietorship.

By being a sole owner of a business, you have responsibilities to your customers and employees. The risks involved with owning a business are shown below. If you are considering becoming a sole proprietorship, you may want to keep these in mind:

a. While you may have complete control over every decision made in the business, you are also held personally liable for any and all debts and/or obligations. This also means that you are responsible for any liabilities from employees of your company as well.

b. Finding investors for your business can be hard. For some reason, investors won't normally invest in sole proprietorships. This could be due to the fact that all responsibilities lie in the hands of one person rather than a group of people

c. All decisions will fall on the sole proprietor. Whether it is a simple choice to be made or a difficult one, the decisions must be made by the owner.

If you are considering owning a sole proprietorship, it is imperative that you understand both the benefits and the risks. Being 100% responsible for the business can be a huge risk and you must be ready for it. Once the risks are understood, it will be easy to get your business running successfully.

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Business Law - What You Need to Know

By Nicolas DAlleva

Business law is the body of law that governs business and commercial transactions. Also, known as commercial law, it is considered a part of Civil Law, and can be deal with issues in the both the private and public spheres of law. It encompasses anything in which money is transferred from manufacture and shipment of goods to corporate contracts and hiring practices.

Although many other countries have adopted civil codes or a unified system regarding Commercial Law, the United States, where it falls under the control of the United States Congress, does not officially have a unified system or code for Commercial Law.

The closest thing to a standard set of rules is the Uniform Commercial Code, which has been adopted parts of all 50 states, the District of Columbia, the Commonwealth of Puerto Rico, Guam, and the US Virgin Islands. Until every state adopts the code in full, the Uniform Commercial Code cannot be considered a national system. Until then Congress will solely control interstate trade, while the state police of each state will regulate trade within their respective state. The problem with the Uniform Commercial Code is it is not law itself, but merely suggestions of what states should adopt as Commercial Law. This was done so that states could make changes when adopting its "suggestions" as laws in an attempt to fit it within local regulations. To keep the code in touch with the business community and new American civil laws, there is a panel ranging from private and publicly traded company presidents to Supreme Court Judges. An example of a state choosing to not adopt all of the Uniform Commercial Code is Louisiana, which chose to adopt the document in its entirety, with the exception of Article 2, where it instead decided to continue tradition of using its own Civil Law in regard to the transaction of goods.

The two main facets of Business or Commercial Law are commercial transactions and more specifically the client/vender relationship and the general laws regarding proper practices within a business (ranging from employment to bankruptcy).

In regard to trade, commercial law describes the wide body of laws that govern business transactions. Most of these laws stem from suggestions from the Uniform Commercial Code (UCC). The UCC is divided into nine articles, covering a broad spectrum of issues that arise in commercial transactions. These articles govern all things related to transactions with specific emphasis on the following: sales of goods, leases of goods, negotiable instruments, bank deposits, fund transfers, letters of credit, bulk sales, warehouse receipts, bills of lading, investment Securities, and secured transactions. The one exception to the rule in which trade is regulated by laws stemming from the UCC is the issue of Maritime Trade, which is regulated by Admiral and Maritime Law. Basically Business Law covers everything from the buying of raw goods to the bank deposits after the final product is sold.

The second facet of Business Law, the lawful and proper running of a business, covers all things between transactions. This is with particular emphasis on employment practices and contracts. An example of Business Law regulation in regard to employment is the Occupation Safety and Health Act. This act, as its name implies, encompasses proper working conditions, benefits, and other things regarding the safety and health of employees in a business.

In conclusion, Business Law, in its two facets of running a business legally and making legal transactions, is a body of Civil codes and laws meant to govern commercial transactions and business. Commercial is anything in which money and or goods are transferred or exchanged. Although the United States does not have a Unified Business Law, the Uniform Commercial Code (UCC) has been partially adopted by all states and territories under its jurisdiction.

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Business Lawyer - Learn Why You Might Need One

By Abraham Avotina

You will find that nearly any company is better off with an attorney, which is why most companies have at least one on retainer for help at all times. Whether you are just starting out in your industry or have established your business already, you will find this kind of professional very useful. Find out what a business lawyer typically does for most companies.

Most businesses need contracts of various kinds, and a good attorney can draw them up for you easily. Rather than attempting to write your own and hope that they hold up in court, allow a business lawyer to construct or at least edit contracts that you will use at your company. This will ensure that if you ever encounter trouble in your company, you will be protected legally.

Some industries constantly need a good business lawyer, as there are various regulations and codes that must be adhered to. If you feel too busy to keep up with new laws that go into effect in your field, allow an attorney to keep you updated. For example, the building industry often has codes that must be adhered to, or you may face fines or even court cases. Avoid trouble by keeping someone around who will constantly remind you of any recent updates that might affect your company.

Sometimes things go wrong with clients or employees, and businesses get sued. Having an attorney may not prevent people from getting frustrated and threatening to sue, but it could reduce the chances of them actually going through it since they will know that they might not win. If they do go through with it, you will need a business lawyer more than ever, so it will be especially good to have one around. It is just smart to protect yourself from potential lawsuits brought on by angry clients or employees, especially since companies of any kind can face these issues.

Clearly, just about any company can benefit from having an attorney on hand to help at any time. It does not matter what field you are in or how successful you are, as most lawsuits and legal troubles are hard to predict. You can choose whether to retain legal help, which is advised for large companies, or just seek assistance when you need it. Either way, it is recommended that you get in touch with local lawyers to find out your options before you encounter legal trouble.

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