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Business and commercial law involves the regulations that business and commercial entities must follow. This includes the required procedures in the formation of a business, the fiduciary duties that directors, officers, and shareholders are bound to, and the instrumental laws that guide the day-to-day activities of business and commercial entities. Formation of a business or commercial entity When most individuals think of the formation of a business, they first think of a large corporation. Although corporations dominate in the commercial scene, most businesses are not classified as corporations. The most intimate business is a sole proprietorship. This business is maintained by a single individual and does not have to be formed under statutory law. The advantage of a sole proprietorship is that there is no paperwork to be filed with the state in which it operates its business; however, the downside includes the individual maintaining full personal liability of the business. Commercial entities that are interested in obtaining limited liability must file with the state where they will be primarily conducting business. At the time of registration, the business must declare what type of entity is being formed. There are several types of entities and each varies as to the level of liability and tax treatment provided for the directors and officers. Examples of business entities include partnerships, limited liability companies, and close corporations. Continued... By Delinda Tamagni