When talking with a corporate lawyer for the first time, it's not unusual for a potential client to wonder what makes the job distinct from other fields. Here are three things you should know about the nature of corporate law.
It's an Umbrella
A corporate lawyer is usually someone who acts as an umbrella for the many, many issues that business, especially stock-holding and publicly traded companies, encounter. This means they deal with concerns related to securities law, contracts, fraud, transactions, and a host of other issues. Unsurprisingly, a lot of attorneys elect to specialize in just one of these fields, and it's not uncommon for a corporate lawyer to refer a client to another attorney who has more specialized training when a problem gets very granular.
Conversely, most people would prefer to have a one-stop shop for all their answers. That's where a lawyer in corporate practice provides.
Do You Need a Corporate Lawyer?
Generally speaking, this type of attorney works with businesses that have legal exposure due to regulations from the Securities and Exchange Commission. That's not to say another type of business might not benefit from their expertise, but for someone who's running a single restaurant, for example, going with a corporate attorney would probably be overkill. They should instead engage the services of a business lawyer.
How do you know whether you might need a corporate lawyer? First, any company that issues shares of stock definitely does. The same goes if you issue any type of securities, such as bonds to raise money. If your company is putting out contracts and notes that are secured by its good faith and purchased by the public or shareholders, then you are absolutely subject to compliance with SEC regulations.
What Does SEC Compliance Mean?
The Securities and Exchange commission was formed in the 1930s in the wake of the collapse of the stock market at the beginning of the Great Depression. It exists in large part because insiders with knowledge of the pending collapse of the market dumped their holdings onto an unsuspecting public.
Simply put, being a public business or a shareholding enterprise means you have to submit regular reports to the government about the state of your enterprise. These reports are then made available to the public so they can make fully informed decisions about buying, selling, and holding your securities. Fortunately, these reports are often drivers of investment so you should see this process as a net positive.
