Corporate vs. Commercial Law: What’s the Difference?
Is Corporate and Commercial Law the Same?
The world of business is organized by both corporate and commercial law. While both types of law work to provide structure and consistency to business operations, corporate and commercial law are distinct.
What is the Difference Between Corporate and Commercial Law?
So, what is the difference? Corporate law is primarily concerned with the daily operations of the company, while commercial law involves matters beyond the daily operations of a business.
Corporate Law
Corporate law is all about corporations – the artificial entities created by statute which the law treats as a legal person. Corporations can acquire rights and property, assume legal obligations, and sue or be sued. So, corporate law governs the procedures related to structuring the corporation, such as:
Forming a corporation;
Making changes to the corporation;
Raising capital;
Distributing profits;
Determining the relationship of the corporation and those who hold an interest in it;
Governing exercise of its powers; and
Winding up and liquidating a corporation.
Because corporate law deals with procedures that govern and regulate the business from start to finish, corporate law has a direct impact on the business and economy.
Commercial Law
Commercial law is all about transactions, such as the sale and distribution of goods or the purchase or sale of a business. This type of law functions to oversee business and business exchanges, including:
Employment contracts;
Franchising;
Financing;
Leasing property; and
Litigating disputes.
Commercial law applies to contract and property law principles to commercial issues. As such, commercial law intersects with many other types of law from franchising to intellectual property to labour law. In this way, commercial law is broad in scope, unlike corporate law which focuses more narrowly on companies.
Due to the overlap and typical confusion between corporate and commercial law, it is wise to obtain legal advice about your business needs. To ensure your business needs are met, book a free consultation with us.
