Financial Policy for Small Businesses in the United States
The United States of America is a largely capitalist economy, where businesses large and small have great opportunity to flourish and make a profit in a fair market. To make sure businesses of all sizes stay in check, however, the US government does keep strict regulations in place.
Financial business law, one of my areas of expertise, is often the subject of much debate in capitalist conversations. In particular, there is frequent discussion of antitrust laws and bankruptcy regulations that can affect the lifespan and operation of small businesses.
A business trust, while benign by definition, can become highly problematic when an already-large business uses its sheer size and financial power to crowd out competition and absorb small businesses into its own network. Antitrust laws were put in place by the United States government in the early 20th century, to help ensure a fair market.
Free competition in the United States marketplace is what keeps businesses healthy and allows consumers to have power over the products and services they receive. If a consumer is able to choose between products offered by one business or another, that’s an incentive for all businesses to keep providing high quality products at a fair price, and to consistently improve and innovate over time to keep up with consumer demand.
Antitrust laws are what have helped the small businesses of America remain alive and well. For example, if Wal-Mart were allowed to use its sheer size and reach to expand unchecked, they’d probably be the only company left in the whole country! And then what would prevent them from raising their prices to take advantage of a consumer base that has no other choices left?
Bankruptcy laws exist to prevent small business owners, investors, and creditors from losing everything if a business goes under. There are a few different types of bankruptcy that a business owner can file, depending on whether they are the sole proprietor, have no future expectation of assets, or perhaps are planning to restructure or repay debtors over time. If considering filing for bankruptcy, a business valuation can help a business owner understand the value of their business and how it will affect their financial future.
Whether you’re a current or prospective business owner, going into business and financial law, or looking to personally invest in a small business, these are important introductory areas of business law and regulation that you’ll need to be fluent in. As an experienced hand in money and business, I encourage all business participants to do their legal research before entering any agreements or making financial decisions.