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Quick Overview Into Corporation

Quick Overview Into Corporation

 

 

There are a number of different business types that exist in the United States and abroad. A corporation is one of the most common business structures in the world. 


 


This type of business entity is formally organized and maintains a public charter. It is considered to be an independent legal entity, and therefore, a corporation possesses unique rights and responsibilities. Generally, a corporation will conduct some type of business. It may sell products or services to consumers. 


 


Corporations are extensive entities that involve not only employees and managers, but also shareholders and creditors. Investors will provide corporations with the funds necessary to establish and maintain the business. In turn, their investment will hopefully yield them a profit if the corporation is successful. A corporation can be organized in a variety of different ways. These businesses are regulated by corporate law.

 

All You Need To Know About Corporation

All You Need To Know About Corporation

What is a Corporation?

A corporation is a formal organization associated
with a publicly registered charter. Corporations are companies that are
typically large in size. A corporation’s business model entails the creation or
delivery of a specified product or service to a particular consumer base. The
majority of corporations are created to earn a profit for the owners, officers,
and shareholders (for public corporations) of the business.

A corporation is a separate legal entity. This
formation allows a corporation to possess its own privileges and distinct
liabilities. Corporations are a fundamental aspect of a capitalistic society
and a competitive market.
In exchange for a
unique service or product, a corporation will seek a profit through the
purchase of their goods or through the investment in stock or other forms of
equity.

Corporations are developed in accordance with
corporate law. The rules established through this breadth of law balance the
interests of the operators, shareholders, the consumer base, creditors, and all
employees associated with the corporation.

Corporations may be structured in a variety of
ways, but in most instances, a corporation will possess limited liability. If a
corporation goes insolvent, the brunt of the financial loss is transferred over
to the shareholders and employees of the entity. The shareholder’s investment
in the corporation decreases proportionately with the entity’s struggles and
the employees will suffer from cutbacks or mass layoffs.

All liabilities associated with the corporation’s
debts will be handled by the operators of the corporation. If the corporation
goes insolvent, the board of directors will be forced to fulfill their loan
requirements to the underlying creditors.

A corporation possesses a hierarchy. There are
employees who produce the particular good or service and a management team who
is responsible for upholding the financial aspects of the business model.

There are four core characteristics of a
corporation. All corporations possess: A legal personality, limited liability,
a centralized management team, and transferable shares.

A corporation may be structured in two distinct
forms: For-profit or not-for-profit entities. Most corporations develop a
profit-based model which will seek a profit (income outweighs liabilities)
through the delivery of a tangible item, good, or service. A not-for-profit
structure aims to produce a good or service that benefits society without
accruing profits for the corporation’s shareholders or officers.

Corporate Law Defined

Corporate law regulates and enforces laws on the
business models of corporations to ensure the delivery of moral and sound
business practices. Corporate law balances the legal implications and rights
for shareholders, creditors, employees, directors, and the consumer markets.

To carry out the regulations, the scope of law
attaches a legal personality to each corporation. Through the classification of
a “natural person” a corporation is liable to lawsuits and tax initiatives. In
essence, corporate law will treat a corporation as a human being. Corporate law
states that a corporation attaches a limited liability structure to the
shareholders of a business entity. As a result, if the company goes insolvent
the investors within the model will lose money in proportion to their initial
investment.

All corporations possess transferable shares. These
shares can be purchased or sold on listed exchanges. The control of the
business entity is placed in the hands of a board of directors.

Easy to Learn Overview of Acquisition

Easy to Learn Overview of Acquisition

What is an Acquisition?
Within the realm of both business and commercial activity, an Acquisition is defined as the acquirement of a preexisting business endeavor enacted by another preexisting business endeavor; in many cases, the Acquisition procedure is commonly referred to as a ‘Takeover’ – a takeover, similar to an Acquisition, can exist in a variety of methods:


Merger vs. Acquisition
Although both an Acquisition and a merger may result in the formation of a single company whereas there were once two or more companies, the innate classifications within the procedure vary between a merger and an Acquisition:
A merger takes place when 2 or more companies decide – in a mutual fashion – to combine their respective businesses into a single unit; in many cases, the administrative structure subsequent to a merger includes leadership shared from both preexisting companies
An Acquisition takes place in the event that a single company absorbs 1 or more companies; the decision to partake in an Acquisition may vary between forced and consensual – furthermore, subsequent to an Acquisition, the administrative duties are typically undertaken by the company responsible for the initial Acquisition


Types of Acquisitions
The nature of an individual Acquisition may range in both process, as well as procedure; the following are some of the most common examples of Acquisitions that take place within the commercial market:
1. Vertical Acquisition: A Vertical Acquisition is defined as a variation of Acquisition that takes place between 2 companies or businesses that exist within what is perceived to be a similar industry. In the case of a Vertical Acquisition, the acquisitioned company is not considered to be replaced by the Acquisitioning company in as much as the Acquisitioned company is consider to operate within the realm of the Acquisitioning company.
2. Hostile Takeover: This type of Acquisition typically takes place in a non-consensual fashion on the part of the Acquisitioned Company; the notion of the term ‘hostile’ may suggest that the Acquisition was not enacted in an amicable fashion. As a result, a hostile takeover can serve as troubling for both the Acquisitioned company, as well as the Acquisitioning company as a result of potential sullied lines of communication, resentment, and unwilling participation.
Acquisition Legality
A primary jurisdiction within the scope of laws and legislation surrounding Acquisitions is latent within Antitrust and Competition Law. While the Sherman Antitrust Act is considered to be the initial piece of legislation addressing Antitrust Laws, the Clayton Antitrust Act is classified as being the foremost legislative stipulation with regard to the regulation and authorization of Acquisitions:
The Clayton Antitrust Act expresses that any or all companies or businesses must adhere to regulatory measures and oversight mandated by the Federal government of the United States; in order to avoid the presence – or potential – for monopolies over the commercial market, an individual Acquisition will be required to undergo judicial review
With regard to an individual Acquisition, legal stipulations expressed within the Clayton Antitrust Act surmise that individuals considered to be executives on the boards of businesses participatory in Acquisitions will be prohibited from assuming administrative responsibilities with regard to multiple companies existing within an identical industry

Understanding Monopolistic Competition

Understanding Monopolistic Competition

What is Monopolistic Competition?
Monopolistic Competition is a type of classification given to a specific commercial or economical market in which there exists a wide range of varying products and services whose respective pricing are not necessarily conducive to the likelihood of purchase. Within a Monopolistic Competition market, economic theorists suggest that the vast availability of differentiating products and services classified within a similar industry allow for additional measures undertaken with regard to marketing and advertising strategies with regard to the proliferation of sales.

An Example of Monopolistic Competition
With regard to modernity within the commercial and consumer market, Monopolistic Competition is not uncommon; the following is an example of Monopolistic Competition taking place on a daily basis on both domestic and global levels – the following example is fictitious and in no way attempts to resemble individual, specific, or copyrighted products:

Monopolistic Competition Market Strategies
The electronics market within the United States has boasted advancements in technology in tandem with developments in manufacturing allowing the consumer the ability to purchase a wide range of television systems. Within a Monopolistic Competition television market, both manufacturers and distributers alike are fully aware that there exists a variety of competition available; in order to maximize sales and optimize profits, the following fictitious electronic retailers – ‘Company A’ and ‘Company B’ – have undertaken different market strategies:
Due to the fact that Company A understands that the availability of television options available for consumer purchase within a Monopolistic Competition market, they have opted to include a variety of consumer reviews for – and awards won by – their products
Company B also understand that due to a Monopolistic Competition market, they must enact marketing measures that highlight them from the remainder of the television market; as a result, Company B opts to undertake a ‘Price Matching Promotion’ – this assures potential customers that Company B offers the lowest prices within the realm of a Monopolistic Competition market
As a result, both tactics allow the commercial navigation within a Monopolistic Competition with regard to any or all expressed legality and legislative stature; the intentional prevention or sabotage of prosperity is considered to be a direct violation of Antitrust Laws


Monopolistic Competition and Consumer Law
With regard to a Monopolistic Competition market in conjunction with the precepts and tenets latent within Consumer Law, the notion of a Monopolistic Competition market is widely-considered to be an advantage for the bulk of consumers; in contrast to preexisting monopolies, which limited the commercial activities undertaken by prospective consumers, a Monopolistic Competition market allows for a multitude of purchase options available for public consumption:
Many economy theorists maintain that the development of a Monopolistic Competition market promotes the competition between retailers and businesses alike in order to solidify profits and optimize sales; as a result, the responsibility within a Monopolistic Competition market relies on the business to solidify profit in lieu of a preexisting limit of availability serving as a facilitator for profit
A secondary tenet within Competition Law with regard to a Monopolistic Competition market is a decreased opportunity for competing businesses to directly affect each other’s’ viability and financial success

Easiest Way to Understand the Sherman Antitrust Act

Easiest Way to Understand the Sherman Antitrust Act

What is the Sherman Antitrust Act?

The Sherman Antitrust Act was a legislative Act that was passed in 1890, which was proposed by Ohio Senator John Sherman. The precepts of the Sherman Antitrust Act enacted what is considered to be the foremost structural procedure addressing fair and ethical practices within business and commercial activity.

At the close of the 19th century, legislatures and lobbyists alike – such as John Sherman – had begun to notice that industry conglomerates were operating in a manner presumed to be antithetical to the general and public commercial prosperity within the commercial market in the United States of America; the passing of the Sherman Antitrust Act prompted the enforcement of regulatory standards and preventative measures with the regard to imposed limitations of businesses and subsequent market monopolies.

The History of the Sherman Antitrust Act

The event that is considered to have prompted the passing of the Sherman Antitrust Act is defined as the commercial practices undertaken by the Standard Oil Company, which was a conglomerate commercial operation owned and operated by john D. Rockefeller; the practices undertaken by the Standard Oil Company – in tandem with the presumed repercussions resulting from them facilitated the passing of the Sherman Antitrust Act:

The Beginnings of the Standard Oil Company

With the hope of assuming a totalitarian agency over the oil industry within the United States of America, the executives of the Standard Oil Company – under the direction of John D. Rockefeller – proceeded to undertake mass purchases of competing oil companies. The alleged methodology attributed to these purchases was believed to facilitate a national dominance of the oil market, as well as the ability to control both pricing and availability within the oil market.

The Development of Trusts

Upon the undertaking of the mass purchases of competing oil companies, the Standard Oil company attempted to mask the impending monopoly by allowing the companies purchased to retain their original names; this resulted in an inconspicuous dominance of the oil market within the eyes of the American public – although individuals assumed that they were purchasing oil from a company other than the Standard Oil Company, in reality they were patronizing the Standard Oil Company.

The Passing of the Sherman Antitrust Act

Subsequent to the development of this monopoly, legislatures and lobbyists had begun to notice that the Standard Oil Company had lowered its prices of oil so much so that competing oil companies were unable to match the pricing of Standard Oil; due to Rockefeller’s Standard Oil Company ownership of a multitude of oil companies, the availability of oil supply – and its corollary pricing – was in the control of a single entity. The Sherman Antitrust Act prohibited the establishment of trusts of these natures in order to enact discreet monopolies.

The Sherman Antitrust Act and the Constitution of the United States

A primary tenet of the Sherman Antitrust Act was to ensure the viability of the free market and economic ethics latent within the United States’ Commercial system; the dominance of a single entity in the form of Standard Oil was perceived to be a constitutional violation of the prosperity and livelihood of the general American Public.

Antitrust Laws Facts You Must Read

Antitrust Laws Facts You Must Read

What are Antitrust Laws?

Antitrust Laws, which are commonly referred to as ‘Competition Laws’, were enacted in order to maintain a regulatory process with regard to the operations undertaken by both commercial and business endeavors within the free market existing within the United States of America.

The United States undertook a capitalistic economy as states within the Constitution of the United States under Article 1, which states that individual citizens of the United States were entitled to ‘Life, Liberty, and the Pursuit of Happiness’ within the boundaries of any or all expressed legality and ethics. As a result, commercial and business endeavors in existence that provide the inability for their respective competing businesses to do so are typically considered to be in direct violation of Antitrust Laws.

The History of Antitrust Laws

The first recorded mention of Antitrust Laws, which regulated implicit fairness and ethics latent within commercial activities, has been mentioned as the ‘Lex Julia de Annona’, which existed within Roman Law dating back to 50 B.C. With regard to Antitrust Laws – although the notion of a ‘Trust’ or ‘Monopoly’ had yet to be officiated – the Lex Julia de Annona expressed that any individual attempting to destroy incoming vessels carrying cargo with the attempt to sabotage competing commercial endeavors would be prosecuted. Historians and economists both credit the passing of this law is considered to be the first incarnation of Antitrust Laws enacted  in order to retain fairness within the public and free commercial market.

The Goals of Antitrust Laws

Upon first glance, the goal(s) expressed by Antitrust Laws may seem to merely protect the stasis of the economy; however, many people consider the instatement of Antitrust Laws to serve a much more communal and Constitutional purpose – this purpose is defined as the protection of the consumer:

Consumer Laws and Antitrust Laws

In tandem with the passing of his legislative Act, which was titled the Sherman Antitrust Act, John Sherman expressed that the primary goal of the Act itself was not to protect the economy; in contrast, he stated in 1890 that the primary goal of the Sherman Antitrust Act was to protect the American consumer from the economy – as a result, the argument can be brought from that Antitrust Laws are in direct correlation to consumer laws. The following are some examples of negative repercussions presumed to affect the consumer as a result of the direct violation of Antitrust Laws:

Predatory Pricing is the drastic and unethical inflation of pricing for goods and services do to either a monopoly or limited availability; in cases in which products or serves are provided exclusively by single commercial endeavor, this allows them the prospect of exploiting the absence of competition through elevated pricing

Discriminatory Pricing is defined as the fluctuation of the pricing of identical products or services with regard to different retailers and buyers; this is considered to be highly-unethical as the discrimination in set pricing can directly affect the prosperity and success of a business or commercial endeavor –such conspiratorial activity within the commercial market is deemed to be in direct violation of Antitrust Laws.

Clayton Antitrust Act In Depth

Clayton Antitrust Act In Depth

What is the Clayton Antitrust Act?
The Clayton Antitrust Act is a legislative act that was passed in the year 1914 by Alabama Senator Henry De Lamar Clayton. The passing of the Clayton Antitrust Act was considered to be prompted by a variety of catalysts, which included the monopolization of commercial markets, unethical commercial-pricing strategies, consumer protection, employee protection, and the presumed vagueness within the Sherman Antitrust Act of 1890 – considered to be the precursor to the Clayton Antitrust Act.
In contrast to the Sherman Antitrust Act, which primarily addressed both the formation and regulation of trusts, the Clayton Antitrust Act primarily concerned itself with market strategies, commercial pricing ethics, and the protection of the citizens of the United States from predatory and exploitative measures undertaken by businesses.

Clayton Antitrust Act vs. Sherman Antitrust Act
As previously stated, the Sherman Antitrust Act is considered to be the foremost piece of legislature enacted in order to establish regulatory measures with regard to the commercial operation of business and commerce within the United States. The passing of the Clayton Antitrust Act was undertaken not only to expand upon statutes expressed by the Sherman Antitrust Act, but also specify market activity existing outside of the strict formation of trusts:

Sherman Antitrust Act

The Sherman Antitrust Act was passed in direct to response to the activity of the Standard Oil Company, which was an oil conglomerate owned and operated by John D. Rockefeller.
Standard Oil undertook a commercial endeavor that enacted a market strategy consisting of the mass purchase of competing oil companies – an act believed to allow Standard Oil to assume agency over not only the supply, but of the pricing structure within the oil industry. As these mass purchases continued, Standard Oil began to lower its prices, which resulted in the insolvency of competing oil companies who could compete neither with Standard Oil’s pricing, not their agency of the oil market.


Clayton Antitrust Act
Although the legality surrounding the establishment of trusts had been formulated within the Sherman Antitrust Act, peripheral commercial and business activities – including mergers acquisitions, pricing structures, labor unions, and unconstitutional commercial partnerships involving distribution – had not yet been addressed within a legal forum; the establishment of the Clayton Antitrust Act served as a definitive legal guide demonstrating legal procedure addressing circumstances believed to be absent within the Sherman Antitrust Act:
Price Discrimination, as defined within the Clayton Antitrust Act, is considered to be the unfair and biased pricing structure with regard to separate retailers purchasing an identical product; upon disallowing a uniform purchase price, unfair advantages may be allowed to privileged buyers
Price Fixing, as described by the Clayton Antitrust Act, is the conspiratorial activity undertaken by two or more entities within a single industry, which allows them to retain exclusivity within that industry – this can include 2 retailers elevating their prices in tandem in order to exploit the lack of availability on the commercial market
The Clayton Antitrust Act allowed for the formation of labor unions to take place without the classification of a monopoly or trust; this allowed for the added protection of the rights implicit within the American labor force

Learn All About Competition Law

Learn All About Competition Law

What is Competition Law?
 
 
Competition Law, which is considered to be analogous with ‘Antitrust Law’, is the legal field that deals with the regulation of the commercial market in order to prohibit any or all commercial practices considered to be unethical or in direct violation of a fair and free market economy. As its name states, the stipulations and legal statutes expressed within the realm of Competition Law administer regulations with regard to competing businesses within a commercial market; due to the Constitutional entitlement expressed allowing citizens of the United States the right to the pursuit of happiness and prosperity in accordance to legality and ethical operation, Competition Law serves to institute preventative measures disallowing unfair market practices that may stifle the prospect of free enterprise.
 
 
Competition Law Statutes and Legality
 
 
Within the History of Competition Law within the United States, there have been a wide variety of court cases and legal action that has taken place with regard to the investigation and review of specific commercial activity; this has resulted in the passing of 2 legislative Acts considered to be the foremost authority with regard to regulatory measures corollary to commercial and business activity:
 
 
Sherman Antitrust Act (1890)
 
 
1.Who Proposed the Act?
 
 
This Act was proposed by Ohio Senator John Sherman
 
 
2. What Prompted its Passing?
 
 
Upon the formation of the Standard Oil Company, which was a fuel provider conglomerate founded by John D. Rockefeller, John Sherman had noticed that not only Standard Oil, but also its Trust Corporations, had allowed it to retain a monopoly over the fuel and oil industry. Due to the fact that Standard Oil was cognizant of its public view, it had formed smaller ‘Trusts’, which while under the control of Standard Oil, was not made public. As a result, the tenets expressed within Competition Law did not appear to be broken directly, due to the fact that the formation of trusts served to provide the illusion of competition within the Oil industry.
 
 
3. What Does the Act state?
 
 
The Sherman Antitrust Act – which is considered to be the foremost piece of legislation within the realm of Competition Law – prohibits the formation of trusts and subsidiary corporations in order to mask the existence of an industry-wide monopoly. As a result of monopolies within the Oil Market as a result of Standard Oil’s monopoly, Standard Oil was allowed to fix the pricing of Oil without regard; this forced consumers to patronize Standard Oil regardless of the presumed fairness within pricing.
 
 
Clayton Antitrust Act (1914)
 
 
1. Who Proposed the Act?
 
 
This Act was proposed by Alabama Senator Henry De Lamar Clayton
 
 
2. What Prompted its Passing?
 
 
Although the Sherman Antitrust Act was considered to mandate and regulate existing Competition Law within the United States, Senator Clayton considered to the Act to be vague with regard to mergers, exclusive contracting, and the exclusivity within certain industries with regard to employment; Senator Clayton wished to regulate the a balance of power within any or all commercial and business endeavors.
 
 
3. What Does the Act State?
 
 
With regard to Competition Law, the Clayton Antitrust Act is considered to be the responsible for addressing perceived ambiguities and vagueness within the Sherman Antitrust Act; this act helped shape modern Competition Law by outlawing exclusive dealing,  predatory and discriminatory pricing, and the regulation of mergers and acquisitions.
 
 

Look into Corporate Law

Look into Corporate Law

What is Corporate Law?

Corporate law is the field of law that is used to regulate and govern the most dominant kind of business models. Corporate law is the scope of law that studies the relationship between directors, employees, shareholders, creditors, and other entities such as consumers, or the broader community. 
Corporate law deals with big businesses, which possess a separate legal personality with limited or unlimited liability for its members and shareholders, who buy and sell their positions depending on the performance of the company. A separate legal personality is the defining characteristic of a non-human entity. The State or governing body regards the holder of this classification and subsequently regulates them as a normal human being. As a result, a big business as defined by corporate law, possesses a legal name and obtains rights, privileges, protections, responsibilities, and a liability under law, just as a natural person would.
Legal personality permits one or more natural person (in this case a corporation) to act as a single entity for legal purposes. In the majority of jurisdictions, a legal personality allows such a corporation or composite to be considered, by law, separate from its individual members or shareholders. As a result, the corporation under corporate law may sue, be sued, enter into contract, amass debts, and obtain ownership over property. Corporations with a legal personality may also be subject to specific legal obligations, such as the delivery of tax.
Corporate law will primarily deal with the underlying corporations who are registered under the company law of a sovereign state or their subnational states. To be considered a corporation, the entity must meet the following characteristics:
The Corporation must possess a separate legal personality;
The corporation possesses a limited liability in regards to its shareholders. If the company goes insolvent, they will owe the money subscribed in the shares;
The company must issues shares, typically on a stock exchange, to the general public and institutional traders;
The Corporation possesses a delegated management team. The control of the company is placed in the hands of an appointed board of directors.
Corporate Litigation

The members of the Board of Directors of a company possess rights against each other and against the workings of the company. These rights are established in a corporation’s Constitution. In relation to the exercise of these rights, a minority shareholder typically accepts this relationship. Because of their limited voting rights a shareholder cannot direct the control of the company and must follow majority rule.
Despite this relationship, all corporations who are recognized by law to possess the rights and responsibilities of actual people and can exercise human rights against individuals or state governments. Additionally, corporations may also be responsible for human rights violations. A corporation is born into existence through its membership obtaining a certificate of incorporation and they can die when they lose money and are forced into insolvency. Additionally, all corporations are susceptible to criminal charges, such as fraud and manslaughter. 

Understanding Corporate Law

Understanding Corporate Law

What is Corporate Law?
Corporate law is the regulatory framework for the most dominant kind of business organizations in the world; it is the study of how directors, employees, financers, shareholders and other stakeholders, such as the general population of consumers, the community and the environment interact with one another. Corporate law is a body of regulations, which aims to balance the interactions of the aforementioned entities; in essence, corporate law institutes such rules to ensure a proper code of conduct and set of behavioral relationships for a company and those affected by the organization’s business dealings. 
The term “corporation” is typically synonymous with large publicly-held companies; however, in the United States, a company may or may not be a separate legal entity—terms like “firms” or “businesses” are more commonly used. In most cases, a corporation may accurately be called a company, but a company should not necessarily be labeled as a corporation. The defining feature of a corporation, based on corporate law, is that it possesses legal independence from the people who create it. If a corporation fails, its employees will lose their jobs and its shareholders will lose their money—this chain of events disproportionately affects the corporation’s workers as opposed to the upper executives of the company. Furthermore, shareholders, who own a portion of the company, are not liable for any debts that remain owed to the corporation’s creditors. 
Corporate law, at its foundation, recognizes corporations as possessing the same rights and responsibilities as actual human beings. As a result of this classification, corporations are free to exercise their human rights against real individuals and the state, as well as be responsible for such violations. Furthermore, similar to human beings, a corporation—so long as they are “born” into existence through its members obtaining a certificate of incorporation—all corporations, according to corporate law, can “die” when they go insolvent. In addition to “living” and “dying”, a corporation can also be convicted of a criminal offense, such as manslaughter or fraud. 
How does Corporate Law Define a Business Structure?
The foundation of corporate law is found in the way the framework defines the modern corporation. Currently, the following four characteristics are used to elucidate and by law, define what a corporation is:
• According to corporate law, a corporation possesses a separate legal personality; all corporations possess the right to sue and are liable to be sued under its own name. In essence, corporate law treats companies as human beings
• All shareholders of corporations possess limited liability; if the corporation goes insolvent, the shareholders only owe the money that they subscribed for in shares. 
• A corporation will issue shares to the public and institutions through a stock exchange, such as the London Stock Exchange,  or marketplace
• All corporations, according to corporate law, possess a delegated management team where control over the company is placed in the hands of directors and executive officers
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