What is the Difference Between Corporate and Business Law?

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  • Written By: Christopher John
  • Edited By: Lauren Fritsky
  • Last Modified Date: 16 February 2020
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The difference between corporate and business law is that corporate law is a body of law focusing on how corporate entities are formed and managed. Business law is a general category that covers several areas of law such as employment law, contracts, taxes, and commercial transactions. All these areas affect business and business entities. Examples of business entities may include partnerships, limited liability companies (LLC), and sole proprietorships. Corporate and business law relate because a corporation is a type of business entity.

To understand the difference between corporate and business law, it helps to look at each category separately. Corporate law concerns the operations of a corporation, the duties of its management, the rights of shareholders, and other problems that apply mainly to corporations. Laws treat a corporation as a separate entity from its owners. A corporation has various powers such as entering contracts, filing a lawsuit, or getting sued. The owners of a corporation are shareholders and they have certain rights under corporate law.


For example, the directors and management of a corporation decide whether to authorize a corporation to make a distribution of dividends to its owners. A dividend is a share of profits that a corporation provides to its shareholders. The owners or shareholders of a corporation have the right to receive dividends. If the corporation does not authorize a dividend, the owners have the right to sue the corporation. A student studying corporate law would learn about the laws affecting this type of issue.

In contrast, business law includes several areas of law. For instance, a person studying business law would likely learn how employment law affects all types of business entities. Employment law concerns business practices such as hiring people, firing employees, and how a business entity must treat its employees. A business that does not follow these laws may end up in court defending against a lawsuit.

Business law also includes tax law. Business entities have to pay taxes like any ordinary person. So, a student in business law would learn about the tax obligations and tax advantages of the various types of business structures.

One way to understand the difference between corporate and business law is by seeing that business is an activity. It involves the selling and buying of goods and services, manufacturing, distribution, and a vast array of other activities. In contrast, corporate law is concerned with the activities of a corporation only.


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Post 2

Drentel - In general, business lawyers deal with a wider area of the law practice than corporate lawyers, but they sometimes play in the same ballpark. Actually, people who train in business law and earn a degree and license to practice sometimes decide to focus their talents in a smaller arena such as corporation law.

If a lawyer can get a job at a large corporation, he or she the potential to earn a high salary, which makes corporate law more attractive than small business law for many people.

Post 1

While I have used the services of law firms to help with business issues, I didn't know there was a difference between a business and corporate lawyer before reading this article.

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