If you are in the business world, it is very likely that you have come across the terms “corporate law” and “commercial law”. While these terms are often confused, each of them addresses specific aspects of running and growing a business. In this article, we’ll explore the differences between these two areas of law and why they’re important to your business.
Corporate Law
Corporate law touches on everything related to the creation, organization and management of companies. For example, in Quebec, there are several forms of businesses that a person can choose from, such as the corporation, the general partnership, the limited partnership, etc. Corporate law governs the legal structure of companies, the relationships between shareholders, directors and officers, and the legal obligations that a corporation must comply with.
Commercial law
Commercial law, on the other hand, deals with commercial transactions between companies and the regulation of commercial activities. This includes drafting service or employment contracts, negotiating financing, as well as commercial disputes.
This area of law is concerned with everything related to sales contracts, relations with business partners, intellectual property, competition, as well as consumer protection.
Main differences
Although corporate law and commercial law are closely related, their objectives and areas of application differ. Corporate law is concerned with the structure and internal management of the company, while commercial law is mainly concerned with external relations, including commercial contracts and commercial transactions.
In other words, corporate law governs the internal organization of your business, and commercial law governs how you interact with other businesses or consumers.
Importance to businesses
These two branches of law play a fundamental role in the management and growth of a company. Corporate law allows you to set up a solid legal structure, which is crucial for the proper internal management of the company. For example, by clearly defining the roles of shareholders and managers, it helps to avoid internal conflicts and ensure effective management.
Commercial law, on the other hand, protects the interests of the company when interacting with other market participants. It oversees contracts and transactions, which makes it possible to secure business and reduce the risk of litigation.
Use cases
Let’s say an entrepreneur wants to start a new business. Corporate law will help them decide which legal form will be most advantageous for them (for example, a corporation or a partnership). Then, commercial law will intervene for the drafting of commercial partnership contracts, the negotiation of terms of sale, and the management of intellectual property rights related to the new activity.
Conclusion
In summary, while both corporate and commercial law are crucial to the proper functioning and growth of a business, each focuses on quite different aspects.
For any questions concerning these areas, it is a good idea to consult a lawyer in corporate law or commercial litigation. Whether it is for an internal management problem or a commercial contract issue, one of our corporate or commercial lawyers can provide you with personalized advice to ensure the sustainability of your business.
If you have any questions or would like legal advice tailored to your situation, please do not hesitate to contact us. To learn more about the services offered by Boavista Legal Services’ business lawyers, visit our business law page.
Disclaimer – This article is intended to inform and raise public awareness of legal issues. The legal information in this article is provided for informational purposes only and is likely to vary significantly over time and according to the precise facts of each situation. This article is not a substitute for a lawyer’s legal opinion and does not engage the liability of Boavista Legal Services Inc., its lawyers, articling students, employees, successors and subcontractors.
