Austin TX Business Law Blog

Those in the business world, owners, entrepreneurs, and employees, should have a basic understanding of business law as this are of the law obviously can have a big impact on their lives and livelihood. Here, we’ll take a look at some business law basics to get a better understand of what this robust area of the law entails and how it impacts those at varying levels in the business world.

Basics of Business Law

First thing is first, business formation is a key aspect of business law and it can be difficult to wade through. There are a number of different types of business entities and each have their own set of liability, taxation, and other issues that can have powerful ramifications for a business and those involved in a business. Entrepreneurs looking to establish a business should familiarize themselves with the various types of business entities and what types may best suit their needs.
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Owning and operating a business is taxing. There is always something to do and there are always things on that seemingly never ending to-do list that keeping getting pushed to the next day or the day after and so on and so forth. This means that even when everything is going smoothly for your business, there never seems to be enough time. Throw a business dispute in there and it becomes the proverbial wrench in the operation. The fact is most businesses can be seriously impacted by a dispute arising.
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There is no way around it, starting a new business is tough. It does, however, come with big potential rewards. You have the opportunity to be your own boss and build something from the ground up. Business start-up leaders pour their hearts, souls, time, and money into these ventures and the payoffs can be significant on a number of levels. Before launching your business start-up, you would be well served to confront and tackle some of those top challenges that all business start-ups seem to be facing these days.
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As a legal entity, a corporation will exist indefinitely unless steps are taken to formally end its existence. The corporation must be dissolved. Without going through the formal dissolution process, the corporation will continue to exist as a legal entity which comes with reporting requirements and other obligations.
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A non-compete agreement is a restrictive covenant that is often included in certain employment agreements. The non-compete agreement looks to put restrictions on an employee’s activities once the employment relationship has ended. While non-compete agreements can serve legitimate business interests, many states are highly sensitive to them as they are suspicious of any restriction on a person’s ability to seek gainful employment after a certain employment relationship has ended. As such, in some areas, a non-compete agreement may be found invalid. This is true in Texas.
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Texas is one of the most business-friendly states and offers a number of cities where the cost of living is lower than in other parts of the country. As such, small and mid-sized businesses have been flocking to the state. With these benefits and no state income tax, many are realizing that the move can be well worth it.
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Using the digital space for one reason or another is becoming an essential part of more and more businesses every day. Everything from business accounts to personal data is stored digitally. Unfortunately, personal data is held at a premium and worth seeking to exploit by many. With many out there looking to poach private personal data for profit, businesses need to take cyber security seriously or reap some pretty serious legal and business consequences. Steps to put preventative measures in place to guard against cyber attacks on your business can be well worth it.
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There are a lot of legal documents that can be used in a business, but are not necessarily mandatory. Nonetheless, they can be critical to streamlining operations, protecting business interests, and promoting a successful future for the business as a whole. One such legal document is a pre-incorporation agreement. As one of the most complex business structures, corporations reap many benefits of such a formation such as liability protection for its owner. The corporate structure, however, can be complicated and difficult to manage all of its requirements.
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Over the course of running a business, it is likely that you will need or encounter a service contract at one point or another. If you provide a service to your clients or customers, your service contract will detail the terms and conditions of those services you are to provide them with. You may also need a service contract in place if your business needs to retain someone like a freelancer or temporary worker.
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There are many business legal tools and agreements that may not be required, but can still be critical to the longevity of your business. A buy-sell agreement is one such item. A buy-sell agreement can protect business partners in the event that there is an impending change in leadership, like when one partner passes away or chooses to leave the business. This can mark a make or break time for a business. Weathering leadership transitions can be essential to the ongoing success and growth of a business.

Contracts are an integral and unavoidable part of doing business. As such, it is critical that business owners have at least a basic understanding of what goes into creating a strong business contract and what can happen when a contractual relationship does not work out. For example, knowing about what constitutes a material breach of contract can be invaluable to a business owner. A material breach is one that goes to the heart of a contract between two parties. It is one that renders the contract irreparably broken and one that essentially disregards the whole purpose behind establishing the contract in the first place.
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