Corporate law

Introduction.

Corporate law refers to the regulations and legal standards that govern the conduct of people during the formation of corporations and businesses.[1] These also refer to the regulations that govern how corporations and businesses carry out their operations such as the way a corporation or business is formed, who can form a corporation, which business can be carried out and what rights the owners exercise. Corporate law also stipulates how such corporations can be terminated and the consequences. An interested person can visit a law firm near them and consult a corporate lawyer or legal assistant to understand more about corporate law.

 

Important terms.

  1. Corporate legislation

These refer to different Acts and regulations that are specially drafted to regulate and guide persons and corporates. Each country and jurisdiction has its corporate legislation that governs the operations of corporations within their territory. These legislations are unique and sometimes may differ from common business law or administrative legislation. It is advisable that persons interested in forming a corporation should first familiarize themselves with corporate regulations within their country or the country where the corporation will be situated. Alternatively, a visit to a corporate lawyer will even be of greater assistance.

 

  1. A corporation.

This is a very important item when seeking to understand corporate law. A corporation is a legal business entity where the business and the business owner are two distinct legal bodies.[2] The corporation enjoys legal rights and privileges of a legal person, meaning that it can be sued or sue in its capacity among other such privileges.

 

  1. Composition of corporations.

Corporations are owned by shareholders who own part of the business through buying shares. The shareholders are often persons who share the same business and investment interest but do not have the capital required to venture into the interest by themselves. These persons come together and buy shares in the business, which is used as the capital to run the business. The shareholders do not individually run the business operation of the corporation, as they elect a board of independent members who make all the investment decisions on their behalf.

 

  1. Board of directors.

This refers to a group of people who are elected by the shareholders in any particular corporation. The board of directors is mandated with making management, investment, and financial decisions on behalf of the shareholders.[3] They are expected to exercise these duties with the best interest of the shareholders in mind.

 

  1. Termination of a corporation.

Once a corporation has achieved the objectives of the shareholders, they may choose to terminate its existence. The shareholders may choose to liquidate or dissolve the corporation.[4] The corporation or a court may appoint a liquidator who assesses the value of the corporation and sells the corporations assets, and the proceeds are then divided among the shareholders with a priority of the number of shares one had.

 

Conclusion.

Corporate laws are essential for the smooth running of corporations in any given jurisdiction. Persons need to understand the particular corporate laws in their region before they start a corporate body. Corporate lawyers or legal assistance will be of great help in assisting with all the necessary legal knowledge of corporate law.

 

References.

“Board of Directors” Investing Answers (2019)

Jackie Lohrey, “Rules and Regulations for Liquidation of a Corporation” Chron (2019)

“What is Corporate Law?” Findlaw (2019)

Will Kenton, “Corporation” Investopedia (May 2018)

[1] “What is Corporate Law?” Findlaw (2019)  https://hirealawyer.findlaw.com/choosing-the-right-lawyer/corporate-law.html

[2] Will Kenton, “Corporation” Investopedia (May 2018) https://www.investopedia.com/terms/c/corporation.asp

[3] “Board of Directors” Investing Answers (2019) https://investinganswers.com/dictionary/b/board-directors

[4] Jackie Lohrey, “Rules and Regulations for Liquidation of a Corporation” Chron (2019) https://smallbusiness.chron.com/rules-regulations-liquidation-corporation-78601.html

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