Corporate Law

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A Corporate Law is a branch of law that concentrates on the legal governance, legal rights, and legal conduct of corporations, as well as their corporation stakeholders, and the activities integral to their lifecycle.

References

2023

  • (Wikipedia, 2023) ⇒ https://en.wikipedia.org/wiki/Category:Business_law Retrieved:2023-8-3.
    • Business law consists of many different areas taught in the law school and business school

      curricula, including: Contracts, the law of Corporations and other Business Organizations, Securities Law, Intellectual Property, Antitrust, Secured Transactions, Commercial Paper, Income Tax, Pensions & Benefits, Trusts & Estates, Immigration Law, Labor Law, Employment Law and Bankruptcy. It is a branch of law that examines topics that impact the operation of a business.

2023

  • (Wikipedia, 2023) ⇒ https://en.wikipedia.org/wiki/Corporate_law#Overview Retrieved:2023-8-3.
    • Academics identify four legal characteristics universal to business enterprises. These are:
    • Widely available and user-friendly corporate law enables business participants to possess these four legal characteristics and thus transact as businesses. Thus, corporate law is a response to three endemic opportunism: conflicts between managers and shareholders, between controlling and non-controlling shareholders; and between shareholders and other contractual counterparts (including creditors and employees).

      A corporation may accurately be called a company; however, a company should not necessarily be called a corporation, which has distinct characteristics. In the United States, a company may or may not be a separate legal entity, and is often used synonymous with "firm" or "business." According to Black's Law Dictionary, in America a company means "a corporation — or, less commonly, an association, partnership or union — that carries on industrial enterprise." [3] Other types of business associations can include partnerships (in the UK governed by the Partnership Act 1890), or trusts (Such as a pension fund), or companies limited by guarantee (like some community organizations or charities). Corporate law deals with companies that are incorporated or registered under the corporate or company law of a sovereign state or their sub-national states. The defining feature of a corporation is its legal independence from the shareholders that own it. Under corporate law, corporations of all sizes have separate legal personality, with limited or unlimited liability for its shareholders. 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. Shareholders' losses, in the event of liquidation, are limited to their stake in the corporation, and they are not liable for any remaining debts owed to the corporation's creditors. This rule is called limited liability, and it is why the names of corporations end with "Ltd." or some variant such as "Inc." or "plc." Under almost all legal systemscorporations have much the same legal rights and obligations as individuals. In some jurisdictions, this extends to allow corporations to exercise human rights against real individuals and the state, [4] and they may be responsible for human rights violations. [5] Just as they are "born" into existence through its members obtaining a certificate of incorporation, they can "die" when they lose money into insolvency. Corporations can even be convicted of criminal offences, such as corporate fraud and corporate manslaughter. [6]

  1. ↑ John Armour, Henry Hansmann, Reinier Kraakman, Mariana Pargendler "What is Corporate Law?" in The Anatomy of Corporate Law: A Comparative and Functional Approach(Eds Reinier Kraakman, John Armour, Paul Davies, Luca Enriques, Henry Hansmann, Gerard Hertig, Klaus Hopt, Hideki Kanda, Mariana Pargendler, Wolf-Georg Ringe, and Edward Rock, Oxford University Press 2017)1.1
  2. ↑ RC Clark, Corporate Law (Aspen 1986) 2; H Hansmann et al., Anatomy of Corporate Law (2004) ch 1 set out similar criteria, and in addition state modern companies involve shareholder ownership. However this latter feature is not the case in many European jurisdictions, where employees participate in their companies.
  3. ↑ Black's Law Dictionary, 8th edition (2004),
  4. ↑ e.g. South African Constitution Art.8, especially Art.(4)
  5. ↑ Phillip I. Blumberg, The Multinational Challenge to Corporation Law: The Search for a New Corporate Personality, (1993) has a very good discussion of the controversial nature of additional rights being granted to corporations.
  6. ↑ e.g. Corporate Manslaughter and Corporate Homicide Act 2007

2021

  • (Wikipedia, 2021) ⇒ https://en.wikipedia.org/wiki/corporate_law Retrieved:2021-2-16.
    • Corporate law (also known as business law or enterprise law or sometimes company law) is the body of law governing the rights, relations, and conduct of persons, companies, organizations and businesses. The term refers to the legal practice of law relating to corporations, or to the theory of corporations. Corporate law often describes the law relating to matters which derive directly from the life-cycle of a corporation.[1] It thus encompasses the formation, funding, governance, and death of a corporation.

      While the minute nature of corporate governance as personified by share ownership, capital market, and business culture rules differ, similar legal characteristics - and legal problems - exist across many jurisdictions. Corporate law regulates how corporations, investors, shareholders, directors, employees, creditors, and other stakeholders such as consumers, the community, and the environment interact with one another. Whilst the term company or business law is colloquially used interchangeably with corporate law, business law often refers to wider concepts of commercial law, that is, the law relating to commercial or business related purposes and activities. In some cases, this may include matters relating to corporate governance or financial law. When used as a substitute for corporate law, business law means the law relating to the business corporation (or business enterprises), including such activity as raising capital, company formation, and registration with the government.

  1. ↑ John Armour, Henry Hansmann, Reinier Kraakman, Mariana Pargendler "What is Corporate Law?" in The Anatomy of Corporate Law: A Comparative and Functional Approach(Eds Reinier Kraakman, John Armour, Paul Davies, Luca Enriques, Henry Hansmann, Gerard Hertig, Klaus Hopt, Hideki Kanda, Mariana Pargendler, Wolf-Georg Ringe, and Edward Rock, Oxford University Press 2017)1.1

2020

  • (LCP, 2020) ⇒ https://legalcareerpath.com/what-is-corporate-law/
    • QUOTE: There are five principles that are common to corporate law:
      1. 1. Legal personality

        Corporation owners pool their resources into a separate entity. That entity can use the assets and sell them. Creditors can’t easily take the assets back. Instead, they form their own entity that acts on its own.

      2. 2. Limited liability

        When a corporation gets sued, it’s only the corporation’s assets that are on the line. The plaintiff can’t go after the personal assets of the corporation’s owners. A corporation’s limited liability allows owners to take risks and diversify their investments.

      3. 3. Transferrable shares

        If an owner decides they no longer want a share in the corporation, the corporation doesn’t have to shut down. One of the unique features of a corporation is that owners can transfer shares without the same difficulties and hassles that come with transferring ownership of a partnership. There can be limits on how shareholders transfer ownership, but the fact that ownership can be transferred allows the corporation to go on when owners want to make changes.

      4. 4. Delegated management

        Corporations have a defined structure for how they conduct their affairs. There’s a board of directors and officers. These groups share and split decision-making authority. Board members hire and monitor officers. They also ratify their major decisions. The shareholders elect the board.

        Officers handle the day to day operation of the company. They’re the leaders for conducting transactions and making the business run each day. With a defined leadership structure, parties that do business with the corporation have the assurances that actions of officers and the board of directors are legally binding on the corporation.

      5. 5. Investor ownership

        Owners have a say in making decisions for the corporation, but they don’t directly run the company. Investors also have the right to the corporation’s profits. Usually, an owner has decision-making authority and profit sharing in proportion to their ownership interest. Owners typically vote to elect board members.

2004

  • (Hansmann & Kraakman, 2004) ⇒ H. Hansmann, and R. Kraakman. (2004). "What is corporate law?”. In: Yale Law & Economics Research. Available at: papers.ssrn.com.
    • QUOTE: “… The corporate form provides a framework for businesses to operate efficiently, minimizing agency problems and facilitating trade and growth …”
    • NOTE: Discusses how the corporate form offers a structure that allows businesses to function efficiently, mitigating agency problems and promoting trade and growth.

1996

1990

  • (Millon, 1990) ⇒ D. Millon. (1990). “Redefining corporate law”. In: Ind. L. Rev. Available at: HeinOnline.
    • QUOTE: “… The evolution of corporate law and its impact on business strategies and societal expectations is examined, challenging conventional notions …”
    • NOTE: Examines the progression of corporate law and its influence on business strategies and societal anticipations, questioning standard beliefs.

1958

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