Business law is a wide-ranging subject covering all of the legal requirements a company must follow throughout its life-cycle. This may include laws and regulations governing business formation, funding, and ongoing operations and corporate governance. Ensuring compliance with all applicable laws is an important component of business risk management, and these laws may also shape business strategy.
Sometimes, business law is used interchangeably with corporate law, which focuses primarily on the legal structures, governance, and fundraising of businesses. There are different advantages and disadvantages to consider when establishing a business as a limited liability company (LLC) or a corporation (Inc), for example. Similarly, companies must consider legal ramifications when deciding on a financing strategy; for instance, going public with an initial public offering (IPO) has many requirements governing shareholder obligations and accounting disclosures.
More broadly, business law may encompass many aspects of commercial law that governs ongoing operations such as business transactions and how companies interact with their customers. This may include contract law, intellectual property law, environmental regulations, privacy compliance, and other types of consumer protections. Violating any of these legal obligations can expose a company to significant costs from fines and other legal penalties as well as reputational damage, making awareness and adherence of them essential.‎