Category: Business

Basics of Business Law

BusinessLegal

Conduct of business in the twenty first century is very much different from that in the past. And hence the legal landscape too has changed. Here is some basic understanding of the most important law i.e. company law. Company laws are one of the most common and also the most important law that has to be understood by anyone interested in setting up a new business. The new company or the entity has to be formed as per the local prevailing company or corporate laws. Most company laws across countries classify company into 4-5 basic types or classes.

Limited company is the most popular type of company. Companies under this class are owned by one or more shareholders who own a share or shares in the company. Their profits and liability too is limited to the amount of shareholding in the company. If the number of shareholders is limited to usually less then 10, the company is further classified as private limited company. If shareholders exceed this number it becomes a public limited company. Usually public limited types of companies opt for raising capital from the masses by offering them their shares. Such companies then have to comply by various other laws too.

Charitable organizations which are professionally run can also be incorporated as companies. However, they come under a different class than the private and public limited companies. Instead of shareholders, they usually have trustees who together run the trust which in turn runs the charity. These companies are usually not for profits and have liabilities limited to those specified by the trustees during company formation. These companies also fall under different tax laws as compared to pubic limited companies or partnership entities.

Small starts up firms also start as Partnership firms. The owners of the company are termed as the partners of the company. They share profit and losses in proportion to their investment in the company. As compared to the public listed company, partners have to bear higher liabilities in case of insolvency. The amount of liability is usually unlimited. But partnership firms also get a different tax treatment as compared to limited companies.

In countries like China, partnerships are further classified as general partnership or limited partnerships. The latter type can have partners who have limited liabilities and are called as limited partners.

Proprietary firms are the simplest form of company and ideal to start a new business for individuals. These companies have little different identity than the individual owner himself or herself. All profits, losses, assets and liabilities belong to the proprietor. These companies are easy to operate and also are at ease when it comes to compliance under various laws and regulations. Often individuals open limited companies when their proprietor companies are doing well and need more capital for expansion. Most governments offer various incentives to proprietary firms in order to encourage individuals.

What You Need To Know About Law Firm

BusinessLegal

Factors in setting law firm goals and objectives are different from objectives and goals for any commercial or industrial enterprise. This is so because of the difference in the nature of the services rendered by the two. There are certain characteristics of law firms, other than the well-known differences between industrial enterprises and professional organizations, which can be set and defined to come up with a model for the organization. Basically, the process of planning and setting goals involves building a model to serve as the development guide for the firm and determination of the way to achieve the goals and the time it will take. There are a number of characteristics of a model which are the factors that affect setting of goals and objectives in a law firm. Throughout this article, the various factors that affect the setting up of goals and objectives in a law firm will be discussed.

Size

According to many lawyers, size is the status in the legal community, prestigious clients, the ability to handle more interesting as well as complex legal work and stability. In most case, these are accompanied by other characteristics like minimal opportunity for significant participation in management, impersonal atmosphere; need to follow the policies and procedures that are already in place and little direct contact with clients which are not attractive to some lawyers. Generally, lawyers in larger firms earn more as compared to those in smaller firms. This is because the large firms attract the large corporate clientele who pay higher rates. As a result, if the model objective is to be a considerably larger firm than the current firm size, a top notch litigation department should be emphasized.

Ownership

Ownership is one of the factors in setting law firm goals and objectives that should be considered keenly. Maintaining high partners to associates ratio in a law firm is a key factor in increasing the income of the partners. The associates actually are the ones that make profits for the partners and that is why the ratio of partners to associates in large firms is always between a third and two thirds of the lawyers. This ratio is mainly affected by: the turnover of associates, the general growth of the firm and the time required to become a partner. For instance in a firm where the rate of turnover of associates is high, the average time needed for an associate to become a partners is six months, there will be a phenomenal growth rate in order to maintain a low partners to associates ratio.

Type of law and client

The type of client and the type of law are two closely related factors that have to be looked at when setting the goals and objectives of a law firm. The large firms normally serve the professionals, the affluent and the corporate clients. These firms increase expertise in legal areas corresponding to their clients’ needs. On top of the regular law areas which include: tax, general corporate, real estate, probate and litigation, some firms are developing distinct specialties either by industry or by function. Some areas of specialization are: labour law, banking natural resources and health care. Each of the factors in setting law firm goals and objectives explained above should be considered carefully by the law firms during their planning. Planning should be based on the current strengths and weaknesses of a firm. Other external factors like competition and the local economy should also be considered.

December 2018
M T W T F S S
« Jul    
 12
3456789
10111213141516
17181920212223
24252627282930
31  
Ad
Ad

Categories

Ad