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.
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.