Business Legal Services in the United States

Federal law governs a defined list of subjects: patents and copyright, federal trademark registration, securities, antitrust, bankruptcy, immigration and interstate commerce. Almost everything shaping a company's daily life belongs to the states — all fifty, plus the District of Columbia. Contract interpretation, corporate governance, employment, property, negligence and consumer protection are state matters, and they differ in substance, not merely in wording. A limitation-of-liability clause enforced as written in Texas may be narrowed in California; a non-compete that is routine in Florida is void in California. The system is a common law one. Statutes matter, but so does precedent: appellate decisions bind lower courts in the same jurisdiction under *stare decisis*, and much of the operative law sits in judicial opinions rather than a code. Louisiana, with its civil-law heritage, is a partial exception. Entering the US therefore means four deliberate choices — where to incorporate, where to register as a foreign entity, whose law governs your contracts, and which forum hears disputes — applied consistently across every agreement you sign.

Where you incorporate is a legal decision, not an address. Delaware remains the default for companies expecting outside investment: • The Delaware General Corporation Law (DGCL) is the most heavily litigated and therefore the most predictable corporate statute in the country. • The Court of Chancery hears corporate disputes without juries. Its judges do corporate law full time, write detailed opinions and move quickly on injunctions and deal litigation; appeals go to the Delaware Supreme Court. • Deep case law on director duties, mergers and stockholder remedies lets counsel predict the likely answer before you litigate. • US investors and acquirers expect Delaware documents, which removes friction from financing rounds. That dominance is no longer unquestioned: recent DGCL amendments and some high-profile reincorporations to Texas and Nevada have opened a genuine debate, and Texas now runs specialised business courts. Incorporating in Delaware exempts you from nothing else. Wherever you have employees, premises, inventory or sustained activity you must qualify as a foreign entity, appoint a registered agent, and file in that state.

Two vehicles dominate. The C-corporation is the standard for companies raising institutional capital: a familiar board-and-stockholder structure, transferable shares, multiple classes and option plans, taxed at entity level. The LLC combines limited liability with extreme contractual flexibility, is governed almost entirely by its operating agreement, and is by default a pass-through for US tax — treatment a foreign parent must settle before formation. Both shield owners from company debts, but the shield is not absolute. Courts will pierce the corporate veil where the entity has been run as an extension of its owner. The factors vary by state but recur: 1. Commingling of company and personal or parent-company funds 2. Inadequate capitalisation for the business actually conducted 3. Failure to observe formalities — no minutes, no resolutions, no separate accounts 4. Use of the entity to commit a fraud or evade an obligation Delaware sets a demanding standard and pierces rarely; other states are markedly more willing. The defence is unglamorous: separate accounts, real capital, signed intercompany agreements and contemporaneous records.

Charter documents create the entity; the stockholders' agreement or LLC operating agreement decides how the owners live together. US courts generally enforce them as written, so the drafting carries real weight. Typical stockholders' agreement provisions: • Transfer restrictions, rights of first refusal and co-sale rights • Drag-along and tag-along rights, so a majority sale is not blocked and a minority is not stranded • Board composition and investor seats • Protective provisions — decisions requiring investor consent • Founder vesting and repurchase rights on departure In an LLC operating agreement the document does even more work. Delaware's LLC Act is built on freedom of contract: members may expand, restrict or largely eliminate fiduciary duties, define distributions and capital calls, and choose member-managed or manager-managed governance. The one duty that cannot be contracted away is the implied covenant of good faith and fair dealing. Whatever the agreement omits, statutory defaults supply — and those defaults rarely match what the parties assumed.

Contracts for the sale of goods are governed by Article 2 of the Uniform Commercial Code, adopted in some form by essentially every state (Louisiana is the notable holdout on Article 2). Article 9 governs secured transactions and the UCC-1 filings that perfect a security interest. Points that regularly surprise European counterparties: • The UCC fills gaps: where your contract is silent on price, delivery or remedies, the statute supplies terms you never negotiated. • It implies warranties of merchantability and of fitness for a particular purpose, disclaimable only in conspicuous language following the statutory formula. • Under the battle of the forms rule, exchanged purchase orders and acknowledgements can form a contract on terms neither side intended. • Sales of goods above a modest value must be evidenced in writing. Choice-of-law and choice-of-forum clauses are the cheapest risk control available. US courts generally enforce them where the chosen state has a reasonable relationship to the deal, and both New York and Delaware let sophisticated parties select their law for large commercial contracts regardless of connection. Pair governing law with an unambiguous forum clause — exclusive jurisdiction or arbitration, never both.

US employment rests on at-will employment: absent a contract saying otherwise, either party may end the relationship at any time, for any reason or none. Montana is the sole meaningful statutory exception. There is no European-style dismissal protection, no statutory redundancy regime and no works council. The exceptions are where the liability sits. A dismissal is unlawful if discriminatory or retaliatory. Federal law — Title VII, the ADA, the ADEA, enforced by the EEOC — prohibits discrimination on grounds including race, religion, sex, national origin, disability and age, generally above employee-count thresholds. Many states and cities go considerably further. Worker classification is the most expensive mistake foreign employers make. Treating someone as an independent contractor who is in substance an employee exposes you to back taxes, unpaid overtime, benefits and penalties. The IRS applies a common-law control test, the Department of Labor an economic-reality test, and California and several other states a stricter ABC test. Wage and hour duties come from the federal Fair Labor Standards Act and from state law, whichever favours the worker. Non-exempt staff earn overtime above forty hours a week; exemption turns on duties and on a salary threshold repeatedly revised and litigated. Many states set higher minimum wages and add meal breaks, paid sick leave and pay-transparency rules.

Trademarks. The US is unusual: rights flow from use in commerce, not registration alone. An unregistered user can hold enforceable common-law rights in its trading area, so clearance must look beyond the register. Federal registration at the USPTO remains strongly advisable — nationwide constructive rights, a basis for customs recordal, and the ® symbol. • File on actual use or on a bona fide intent to use; an intent-to-use application matures into registration only once use is proven. • Applicants domiciled outside the US must be represented by a US-licensed attorney. • Foreign applicants may rely on a home registration or the Madrid Protocol, but genuine use is still needed to keep a registration alive. • Maintenance filings fall due between the fifth and sixth year, and at each ten-year renewal. Patents. Since the America Invents Act the US is first-inventor-to-file. Utility patents run twenty years from filing; a provisional application secures a date for twelve months. The US grace period for an inventor's own prior disclosure has no broad European equivalent. Copyright. Protection is automatic on fixation, but registration with the US Copyright Office is a precondition to suing over a US work, and timely registration unlocks statutory damages and attorney's fees. Get work-made-for-hire and assignment wording right in every contractor agreement.

There is no single federal privacy law. Instead there is a sectoral layer — HIPAA for health data, GLBA for financial institutions, COPPA for children, FCRA for consumer reports — and over it a growing patchwork of state statutes. California leads with the CCPA as amended by the CPRA, enforced by a dedicated regulator, the California Privacy Protection Agency. It applies to businesses meeting revenue or data-volume thresholds and grants rights to know, delete, correct, opt out of the sale or sharing of personal information, and limit use of sensitive data; opt-out signals such as Global Privacy Control must be honoured. Around twenty states now have comparable comprehensive laws — similar in outline, not identical in scope or thresholds. Illinois' biometric statute carries a private right of action and has produced very large settlements. Advertising. The FTC polices unfair and deceptive practices. Claims must be substantiated before they are made, endorsements and influencer relationships must disclose material connections, and auto-renewal offers face both federal and aggressive state rules. Licensing. Food, supplements, cosmetics and devices (FDA), product safety (CPSC), radio-emitting equipment (FCC), alcohol, insurance, healthcare and money transmission all require sector or state permission.

US litigation exposure is structurally higher than in Europe, for systemic rather than cultural reasons: • Each side generally bears its own legal costs. With no broad loser-pays rule, a weak claim is cheap to bring and expensive to defeat. • Contingency fees let claimants sue without funding the case. • Discovery is wide-ranging; reviewing electronic documents is often the largest single cost in a case. • Juries decide most civil trials, including damages. • Punitive damages are available in some states for egregious conduct. • Class actions aggregate small individual claims into existential ones. Product liability follows from the same structure: a manufacturer or distributor can face strict liability for a manufacturing defect, a design defect or a failure to warn, without proof of negligence. US warnings and labelling are correspondingly more extensive, and supply contracts should address indemnities, recall responsibility and insurance explicitly. Arbitration is the main structural defence: under the Federal Arbitration Act, arbitration agreements — including class-action waivers in many contexts — are broadly enforceable, subject to statutory exceptions such as sexual harassment and assault claims. Insurance is the second defence and is not optional: commercial general liability, product liability, professional/E&O, D&O, employment practices liability, cyber, and state-mandated workers' compensation.