Business & the Law

Introduction Local, state, and federal governments establish laws that regulate business. Business doesn’t comply? Legal consequences—pay fines, lose a license, go to jail. Effective managers/owners know the laws that regulate their industry and are aware of changes to laws affecting them.

Corporate Law Sole Proprietorship-simple to start, need to follow state and local licensing and zoning regulations. Partnership-Uniform Partnership Act governs. 2+ persons. Corporation-comply with more federal and state laws, must register with the state, pay more taxes.

Tax Law Amount of tax paid varies with the type of ownership Income tax-tax levied against business profits Property tax-tax levied against property, land, and buildings owned by businesses Withholding federal/state tax-businesses collect taxes from workers and send in to the government, penalties for non-compliance

Intellectual Property Law Protect businesses Patent-applies to new products/inventions, issued by federal government, gives inventors exclusive rights to make, use, and sell for 17 years Trademark-word, name, or slogan used to identify a business, apply to fed gov’t, good for 10 years Copyrights-protection given to creative work, lasts for the holder’s life + 70 years

Consumer Law Protects all of us, when we are in the role of consumer FTC-governs sales Other agencies-protect specific products (such as FDA) State of Wisconsin has its own department of consumer protection

Commercial Law Regulates contracts and other business dealings. Laws regulate how contracts are put together, how they are carried out, and how they can be broken. If you sign a contract, you are legally bound to carry out the terms of the contract. Be careful; read the fine print. Contracts for more than $500 must be in writing. Offer and acceptance, consideration, legal, capacity

Licensing & Zoning Laws State and local governments pass zoning laws that regulate who can operate a business and where it can be set up Some businesses require a license; they can be taken away if a business doesn’t follow the rules Businesses must operate in commercial zones, not residential

Employment Laws Created to help the employee and to regulate the relationship between employer and worker EEO: age discrimination, civil rights, disabilities OSHA: safety Wage-hour laws: child labor, minimum wage (Fair Labor Standards Act) Benefits laws: SS, worker’s comp, unemployment insurance, family/medical leave Labor relations laws: unions