Corporate Law

Corporate law (also “company” or “corporations” law) is the study of how shareholders, directors, employees, creditors, and other stakeholders such as consumers, the community and the environment interact with one another. Corporate law is applicable to other forms of business associations such as partnerships, limited liability companies, etc. Under corporate law, corporations of all sizes have separate legal personality, with limited liability or unlimited liability, for their shareholders.

Some areas impacted by corporate law are trusts (such as pension funds), or companies limited by guarantee (such as some universities or charities). Shareholders control the company through a board of directors which, in turn, typically delegates control of the corporation’s day to day operations to a full-time executive. Corporate law deals with firms that are incorporated or registered under the corporate or company law of a sovereign state or their subnational states.

The four defining characteristics of the modern corporation are:[1]

•Separate Legal Personality of the corporation (access to tort and contract law in a manner
similar to a person)

•Limited Liability of the shareholders (a shareholder’s personal liability is limited to the
value of their shares in the corporation)

•Shares (if the corporation is a public company, the shares are traded on a stock exchange,
such as the London Stock Exchange, New York Stock Exchange, Euronext in Paris or
BM&F Bovespa in Sao Paulo)

•Delegated Management; the board of directors delegates day-to-day management of the
company to executives

Corporate law is often divided into corporate governance (which concerns the various power relations within a corporation) and corporate finance (which concerns the rules on how capital is used).

*Reference Source:


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