Business Case Law

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Securities

Securities law regulates financial markets and fair trading in the market. It protects all participants in a market from abuse of information or power. The law requires certain disclosures to help people make informed decisions when buying and selling financial securities such as stocks, bonds and commodities. It consists of: 1) Rules requiring fair dealing by firms and individuals; 2) Rules prohibiting manipulative practices and other abusive conduct (e.g., insider trading, illegal short-term flipping); 3) Market-oriented securities regulation, which seeks to increase market transparency and liquidity in order to lower information asymmetry between buyers and sellers; 4) Fraud-oriented securities regulation, which prohibits false or misleading statements about the characteristics of the product being offered; 5) Systemic risk regulation, such as capital requirements for intermediaries whose failure could generate severe negative externalities. The preamble to the United States' 1933 Securities Act said that its objective was "to restore investor confidence in the securities markets", a goal that has become part of a continuing debate about how securities regulation should be structured.

Intellectual Property

Intellectual Property is a term referring to creations of the mind, which are given certain legally recognized rights. These include inventions, music, literature, dramatic works, film and television material, artistic works, designs or computer software. The most important intellectual property rights are trademarks, patents, copyrights, industrial design rights and trade secrets. There are significant differences between these legal categories. Copyright law protects artistic and literary works (fixed in a material form) but does not generally protect ideas, concepts or methods of working. Trademark law protects a particular logo or emblem used by a company to distinguish its goods and services from others, but does not generally protect the ideas that form part of its products.

Bankruptcy

Bankruptcy law deals with federal or state laws which are designed to give debtors a fresh start by relieving them of their debts. These debts are typically financial in type, but there are other types as well. Congress may also pass bankruptcy laws which apply to only certain organizations, such as labor unions or corporations. Bankruptcy laws are enforced by the U.S. Trustee System, which is run by the Department of Justice under the United States government. Corporations can file for bankruptcy relief under either Chapter 7 or Chapter 11 of the Bankruptcy Code. The choice to pursue one chapter over the other is influenced by several factors, including whether or not the debtor desires to continue in business. Under both chapters, courts play an integral role in determining how assets are liquidated and distributed among creditors. The most important distinction between the two types of proceedings is that under Chapter 7, a trustee is appointed to sell all of the debtor's assets and use the resulting funds to pay off as many creditors as possible. By contrast, under Chapter 11, the business usually remains in control of its operations while developing a plan to reorganize its financial structure. Only if this plan fails will a trustee be appointed to liquidate the company's assets and distribute them among creditors. The vast majority of bankruptcy cases in the United States are Chapter 7 proceedings.

Tax

Corporate tax law is the area of law that deals with taxation of business entities. In the United States, this is an area of law that has been determined by Congress and the Supreme Court. There are two types of taxes: income tax and other taxes including employment tax, excise tax, gift tax, estate and inheritance taxes, customs duties, and property taxes. Income tax is charged at progressive rates that apply to all persons carrying on business in the country regardless of nationality or place of residence. The excise tax is a direct tax imposed on the manufacture, sale or use of commodities within a country. Property taxes are usually levied by states and local governments for the purpose of financing public healthcare and education, police departments, libraries, parks or roads. These taxes are sometimes considered as a business expenses since they can reduce the net profit after tax or increase it. Excise taxes, customs duties and property taxes may be based on market value of goods which is calculated as prevailing fair market price less ordinary trade discounts.

Antitrust

The United States is the only country in the world to give antitrust law such a prominent place in its Constitution, and has had some form of anti-monopoly legislation since 1791. US antitrust law (also known as competition law) forbids certain behavior by corporations that harms consumers and creates barriers for competitors. Two primary goals of U.S. antitrust laws are "consumer welfare" and "enhanced competition." The main statutes forming the current body of anti-trust law are Section 1 of the Sherman Act of 1890, the Clayton Act of 1914 and the Federal Trade Commission Act of 1914. These Acts, first, restrict the formation of cartels and prohibit other collusive practices regarded as being in restraint of trade. Second, they restrict the mergers and acquisitions of organizations which could substantially lessen competition. Third, they prohibit the creation of a monopoly and the abuse of monopoly power. The US Department of Justice is responsible for enforcement of US antitrust law, and may criminally prosecute cartel conduct that it believes violates Section 1 of the Sherman Act. Such prosecutions typically occur only if there has been a prior successful civil prosecution by the Federal Trade Commission, which has administrative responsibility for civil enforcement of the Sherman Act.

Contract & Tort

Contract law is a body of rules that, together with the common law of torts, comprise the rules governing agreements between individuals and commercial entities. Contract law regulates the formation, interpretation, performance, breach, termination and aftermath of contracts. As with other areas of law, contract law may be divided into subtopics, such as conveyancing and real estate, employment, insurance, international trade and commercial transactions. Tort law governs civil wrongs and personal injuries and generally provides civil remedies for the breach of another party's rights. A successful tort claimant, or "plaintiff", may be entitled to seek compensation from a "defendant" found liable for injury, loss or harm that has been suffered by the plaintiff due to an actionable wrong committed by that party. Because torts are considered harmful acts, unlike contracts, which are beneficial consensual arrangements, tort law imposes liability on parties who breach their duty of care. When a party is held liable for the conduct of another party, that other party may be described as a "negligent defendant" or "negligent tortfeasor". There are three significant differences between contracts and torts: 1) Contracts are created through explicit agreement, whereas torts can arise under tort law without any agreement between the parties involved. 2) Contracts are subject to certain conditions which must be met in order for them to take effect (e.g., offer, acceptance, consideration), however torts do not require any condition for them to come into effect. For example, if A walks into B's store and takes an item without paying for it, this would be theft (a tort) because there was no contract between A and B which required that A pay for the item before he could take it. 3) Contracts create a legally binding relationship between two or more parties, whereas torts can only result in liability when one party becomes responsible to another.

Regulatory

Regulatory law covers a wide variety of rules and statutes so that businesses, industries and federal agencies remain well-regulated. The main idea behind regulatory law is to establish codes that set forth basic guidelines for how a business or industry can function. In addition, these codes also cover employment directives and protocols as well as rules for public safety. At a high level, these regulations function as a mechanism to uphold the legal structure of a society by protecting citizens from harmful or dangerous activities that put them at risk. The other main purpose behind regulatory law is to ensure that businesses and other entities adhere to their guidelines in order to be allowed continued operation within a society. The reason for this is that governments possess the power to permit business and industry to operate, and it would obviously not be in their best interests if they permitted them to begin operations without issuing guidelines for how that entity should function. In addition, regulatory law covers a large amount of consumer protection laws which were put into place to ensure that contractors, retailers and other parties do not take advantage of the general public. Such organizations and agencies that enforce regulatory law include the Federal Communications Commission (FCC), the Federal Election Commission (FEC), the Environmental Protection Agency (EPA) or the Securities and Exchange Commission (SEC).




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