Corporate law is the law of business or companies. Business organization’s law is a derivative of England’s common law even though it has evolved during the past century.
Most recognized and addressed forms of common law in most countries are:
Limited company
Corporation
Not for profit corporation
Unlimited company
Limited partnership
Partnership
Sole proprietorship
Limited liability partnership
Among the largest of companies are those which are listed on the stock exchanges throughout the world and even the single individual or sole trader has the ability to incorporate themselves, thus limiting their liability to carry on a business. Each law pertains to the country in which the company conducts its business.
Statutory forms of business, proprietary limited companies are formed in several countries such as Australia. And many countries forms of business are unique to that country and its laws. Limited liability limited partnership or LLLC companies as well as Limited liability partnerships which are also known as LLC are noted to be business conducted in the United States.
Dominant business enterprises go by corporate law in conducting their business. This type of law is intended for the study of how directors, shareholders, employees, creditors, and others who have a stake in the success of that business such as consumers and the community conduct themselves under the rules and guidelines of firms in which business is conducted. This law is part of business associations or company’s law which can include partnerships or even trusts or pension funds.
Among the purposes of laws of the corporation are the creation of laws and bylaws aimed at the purpose of protecting companies and businesses from outside interference as well as protection from themselves. Bylaws of a corporation state how the business is to be conducted and additionally set out the powers and rights of directors, shareholders, and officers of the corporation. And while shareholders don’t own the corporation, they do own shares of it and so have a vote in how that business or corporation is run.
While legally a corporation is owned by the shareholders and under the control of the directors, those directors are obligated to perform in the best interest of those shareholders and their investment in the company. They must concentrate on that business exclusively.
While a corporation is conducted like a dictatorship there is no dictator as neither the directors nor the shareholders have the responsibility or control of the company in regards to its purpose and its actions. Corporate social responsibility is the most commonly used and most popular ideology through which companies claim they’re good for society as well as the environment today.
Corporations have key legal aspects or features and as such are considered separate legal personalities which may otherwise be identified as artificial persons or a personhood, this being established in 1895 in an English law case involving the House of Lords. This separate legal personality allows many corporations or corporate groups to be quite flexible with their relationship to tax plans and additionally, overseas operations conducted for the benefit of the corporation.
The United Kingdom, the United States, and most Commonwealth countries have a single board of directors and corporate law is the rule with shareholders playing a large part in the overall conduct of business.