Decoding Earthly Regulations: A Galactic Guide to California Business Law

This week’s iCollege theme is to analyze culture using an alien intelligence or species. In that spirit, a well-known definition of business law and the legal environment is a set of enforced rules that regulate commercial relationships. Surely, if aliens were to interpret our meaning of “business law,” their researchers would find it perplexing. So, how would aliens view what we call “California’s business regulations?” Would they be confused? California is a state rich with culture. California business law and legal environment stands out in the areas of regulation and taxation. Mainly, the unique aspects of California business law and legal environment revolve around how regulations and taxes can affect the average civilian versus how regulations and taxes affect business. If aliens were to be intrigued by what humans find intriguing about california business law and legal environment, they would want to know just what laws there are that regulate and tax businesses. Regulatory laws are laws that require certain things from businesses. For example, if a business sells its products over the internet, california businesses must collect sales tax and remit the collected tax to the state on a quarterly basis. They must also follow strict guidelines on how there product is advertised and packaged. Furthermore, they are required to hold permits and licenses to operate. Tax laws are exactly what they sound like. Tax laws lay out the requirements on how and when to pay taxes, as well as the types of taxes an entity is liable for. For example, if your business exceeds $500,000 in gross receipts, you are liable for the 1.5% franchise tax. However, you may jump into the 8.84% corporate income tax bracket if your business grows to $250,000,000 in gross receipts. In order get a better grip on what elements play into the laws that regulate and tax businesses, aliens would have to take a closer look at the basic economic structure of California. By definition, California is a term jurisdiction. A term jurisdiction is an area whose laws apply to all persons within the territory regardless of the laws of the jurisdiction in which they are physically located. For example, assuming no other facts, if a negative impact to a person’s business occurs, a California business will be subject to the laws and regulations in California even if the event which caused the negative impact occurred outside of California’s jurisdiction; this may happen if the party impacted by the event is actually located outside of California, or if that person may not have been physically present when the event occurred. Because of California’s reliance on term jurisdiction, many businesses are financially impacted by California laws because they are headquartered in California but may not bother with laws or regulations in California that might give them tax breaks or even allow them to operate. For example, experts say that if Google were headquartered in Delaware, it would have saved about $3.1 billion in taxes last year. And, although corporations are not allowed to operate under any other corporation’s name, a few states allow companies to register to do business under a name that may not reflect the actual business controllers and yet pass the benefit of doing business in that state onto those businesses. When measuring labor laws, aliens would be fascinated to know that California is one of only four states that require employers pay severance to employees who were laid off. Severance pay is calculated according to a panel of factors which consider expenditures directly related to losing employment as well as factors that may indirectly cause a loss of fortune, such as increased travel expenses. Of course, all these laws are regulated by the state and federal governments, so aliens would also have to take a look at California’s relationship with the rest of the union to get a true picture of what businesses are subject to. Many California business owners, for example, would be irritated to know that of the business tax credits available to them, California has some of the lowest monetary allowances when compared to what other states offer to their companies; this is the case even though a large number of California funded programs are larger than many other state programs targeted to stimulate business and job growth. Lastly, if the aliens were still puzzled by the uniquely complex nature of California business laws, they could consult with Why Are California Laws So Complicated? which provides simple explanations for what might seem like arcane and incomprehensible prose when viewed collectively. It’s only fitting that this article ends with the exploring the human’s own thoughts on how california business law and legal environment fits into the grand scheme of our time, when we are making strides toward interplanetary exploration and beyond: California has the most complete treatment of California laws pertaining to businesses. It provides examples and covers every aspect you may encounter in a business operation that spans various states and international borders.