Many people think of and use these two terms interchangeably, and while they are related, there is actually a difference between the two.
To put it simply: business ethics are standards of behavior that businesses should uphold, whereas business law is a body of laws that businesses must follow. The former is the spirit of the law; the latter is the letter of the law.
Business attorneys can help you prevent your business from getting into legal problems and, should they arise, can defend and represent you in court.
Also known as commercial law, business law in the U.S. consists of standards, rules, and regulations concerning business activity. Outlined by the UCC (Uniform Commercial Code), business law applies to:
- Finance and collections,
- Banking and investments,
- Incorporation and corporate structure,
- Trade and commerce.
The enforcement of business law typically involves fines issued to a business that has violated a law. In order for any specific person in a business to be held accountable for a crime, it must be proven in court that they were the party responsible.
If a company knowingly sells faulty items but passes them off as legitimate, the business can be issued fines. However, it would have to be proven that a specific person in the company knew the items were faulty in order for that person to be held responsible.
In either case, a business attorney can give you legal representation.
The purpose of business ethics is to set standards by which people within the company should be upheld. While these standards are not required by law, it is in the best interest of a business that people hold to standards of honesty and integrity. This is important not only for the internal affairs of the business but also for its outward-facing appearance. People do business with, and purchase products and services from, businesses that they trust.
It’s always better to prevent a problem before it arises than to try and mitigate the damage once it does. A business attorney can offer legal advice to help you avoid legal problems from occurring – knowingly or unknowingly – throughout the course of your career as a business owner.
Common reasons one would be wise to hire a business attorney would be:
- During business and partnership formation – an attorney can help you decide on the best structure for your business.
- Taxes – paying taxes as a business owner is different than paying taxes as an employee; an attorney can make sure you have all of your bases covered.
- Hiring & firing – you can break a variety of anti-discrimination laws if you’re not careful.
- Buying & selling – when buying and selling companies, there are a lot of federal, state, and local laws you need to observe.
- Litigation – whether it’s a partnership dispute or a breach of fiduciary duty claim, you want a business attorney on your side.
- Government advocacy – a business attorney can advocate to government officials if certain regulations are holding you back from your business pursuits.