Business and Employment Law
Business organizations
Business forms include sole proprietorships (unlimited personal liability), partnerships (general partners liable; limited partners not), limited liability companies (members shielded, flexible management), and corporations (separate legal personality, limited shareholder liability, board governance). Key doctrines: piercing the corporate veil (fraud or undercapitalization), fiduciary duties of directors (care, loyalty), and agency (principal bound by agent's authorized acts).
Employment
Employment law covers contracts of employment, at-will employment (terminable for any lawful reason), wrongful dismissal, discrimination (protected characteristics), harassment, wage and hour rules, workplace safety, and workers' compensation. Independent contractors differ from employees for tax and liability purposes. Non-compete and confidentiality clauses must be reasonable in scope, duration, and geography. Collective bargaining and union rights may apply.
Traps
- Assuming shareholders are always liable for corporate debts.
- Confusing employees with independent contractors.
- Treating at-will employment as permitting termination for discriminatory or retaliatory reasons.
- Missing that non-competes may be unenforceable if overbroad.
- Overlooking fiduciary duties in close corporations.
Rule of thumb
Identify the business form first (liability follows form), then the relationship (employee vs. contractor), then the governing statute.
Worked example
A sole proprietor hires an employee who injures a customer. The proprietor is personally liable for the employee's torts committed in the course of employment, while a corporation would generally shield shareholders absent veil piercing.