What is Corporate Law?

What is Corporate Law?

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Created By Admin Last Updated Tue, 08-Dec-2020

Corporate Law the body of laws, rules, regulations and practices that govern the formation and operation of the corporation. It’s the body of law that regulates legal entities that exist to conduct business. The law touch on the rights and obligations of all of the people attached forming, owning, operating and managing a corporation.
What is a corporation?
A corporation may be a legal entity that exist to conduct business. It’s a separate legal entity from the those who make it. A corporation can conduct business in its own name similar to anyone can. When someone owns part of a corporation, their liability is limited to their owners within the corporation. They can’t lose over their investment within the corporation.
The major characteristics of corporate law

There are five principles that are common to corporate law:

Legal personality
Corporation owners pool their resources inti a separate entity. That entity can use the assets and sell them. Creditors can’t easily take the assets back. Instead, they from their own entity that acts on its own.

Limited liability
When a corporation get sued, it’s only the corporation’s assets that are on the line. The plaintiff can’t chase the private assets of the corporation’s owners. A corporation’s limited liability allows owners to require risks and diversify their investments.

Transferrable Shares
If an owner decides they no longer need a share within the corporation, the corporation doesn’t have to shut down. one of the unique features of a corporation is that owners can transfer shares without identical difficulties and hassles that include transferring ownership of a partnership. There are often limits on how shareholders transfer ownership, but the actual fact that ownership will be transferred allows the corporation to travel on when owners want to form changes.

Delegated management
Corporations have an outlined structure for a way they conduct their affairs. There’s a board of directors and officers. These groups share and split decision-making authority. Board members hire and monitor officers. They also ratify their major decision. The shareholders elect the board.
Officers handle the day to day operation of the corporate. They're the leaders for conducting transactions and making the business run daily. With an outlined leadership structure, parties that do business with the corporation have the assurances that actions of officers and therefore the board of directors are legally binding on the corporation.

Investor ownership
Owners have a say in making a decision for the corporation, but they don’t directly run the company. Investors even have the right to the corporation’s profits. Usually, an owner has decision- making authority and profit-sharing in proportion to their ownership interest. Owners typically vote to elect board members.