What Is The Legality Of A Company?

This essay will explain the concepts of separate personality and limited liability and their significance in company law. The principle of separate personality is defined in the Companies Act 2006(CA) ; “subscribers to the memorandum, together with such other persons as may from time to time become members of the company are a body corporate by the name contained in memorandum.” This essentially means that a company is a separate legal personality to its members and therefore can itself be sued and enter into contracts. This theory was birthed into company law through the case of Salomon v Salomon and Co LTD 1872. This case involved a company entering liquidation and the unsecured creditors not being able to claim assets to compensate them. The issue in this case was whether Mr Salomon owed the money or the company did. In the end, the House of Lords held that the company was not an agent of Mr Salomon and so the debts were that of the company thus creating the “corporate Veil” .

A Multinational Corporation can be defined as enterprises which own or control production or service facilities outside the country in which they are based (definition by the UN; Czinkota, 1992; page 298). Inditex can be classified as a multinational since they offer their services in 800 outlets in 25 countries all over the world, although the production is done in Spain, its home country. It also follows some of the appropriate strategies to trade abroad

A very direct consequence which arises with the concept of separate legal identity of a corporation is the misuse of it by people. In reality a company is nothing but an association of persons, who are its beneficiaries, governed by the

When U.S business are thinking about going abroad, they need to be aware of the other country’s laws and regulations. “All businesses must, of course, follow the laws of the countries in which they are physically present and operating. Businesses may also be required, even in their foreign operations, to continue to follow certain laws of their home country. Also, businesses operating across national borders will also be subject to international law (Tony McAdams, 2014)”.

Based on the case scenario, Doris, Betty, and Charlie formed a company called Bechdo Pty Ltd. The three members are the directors and Betty who is major shareholder holds 40% followed by Charlie and Doris who hold 20% each while the 20% is held by the rest. Based on the company constitution, a managing director has capacity to enter into a contract o behalf of the company up to a maximum of $100,000. Moreover, he/she can enter into contracts to the value of $900,000 upon getting consent for the board of directors. In this case, Bechdo Pty Ltd operates without a managing director since none was elected. The major issue is that Betty being the majority shareholder went ahead and entered into contract with BB Ltd, Jillo Pty Ltd, and

Governments might change or new political parties might be elected, but the concern of the multinational corporation is the continuity of the set of rules or codes of behavior and the continuation of the rule of law—regardless of which government is in power.

The Corporate personhood, a universal legal model, grants corporations genuine rights and responsibilities similar to those of individual citizens. This concept proved useful in American jurisprudence in that it simplified one’s interactions with huge conglomerates. Citing the Fourteenth Amendment of the constitution, the term corporate personhood served to consider corporations similar to individuals. In that vane, corporate entities like individuals could join contracts as a single unit, corporate entities like individuals could be named in civil lawsuits as a single group and corporate entities like individuals could make decisions that would hold the enterprise responsible as a single entity even though the decisions were

A corporation is distinguished by reference to different kinds of things which the law selects for personification. The individuals forming the corpus of corporation are called its members. The juristic personality of corporations pre-supposes the existence of three conditions :

(a) The legal issue is can Delusions of Grandeur Ltd increases the dividend rate for preference shareholders from 7 per cent to 10 per cent immediately?

The rapid pace of Globalization has led to a change in the global economy during the past several decades; it is believe that factors such as trade liberalisation, access to cheaper labour and resources, similarity of consumer demand around the world, and advances in technology and communication has widened the market of consumption, investment as well as production on a global scale. These globalization driven factors created new challenges and global competition for businesses around the world thus as a response many companies decided to expand their operation across national borders in order to be competitive. A company that operates their business in at least one country other than its country is called Multinational

The concept of a company being a separate legal entity is the most striking illustration in separating the company from its owners. A paramount principle of corporate law is that no shareholder or member of a company is made liable for the obligations incurred by such incorporations A company is different from its members in the eyes of law. In continuations to this the opposite also holds true in the sense that neither can the company be held liable for the acts of its members. It is a fundamental distinction that a company is distinct from its members.

The legal entity system has profoundly affected the process of human economic and social development. Needless to say, the connotation of the legal entity system is very rich, and that the company has an independent personality and shareholders bear the limited liability is the two basic features (Tweedale, G., Flynn, L., 2007). Of course, the company 's independent personality is based on the separation of corporate property and shareholder property. Under this circumstance, the company shall enjoy their rights, fulfil obligations, and independently bear civil liability in its own name (L.C.B., 1992). However, with the development of commodity economy, and the deepening and extensive use of the legal entity system, the

This essay’s thesis is that there is currently a lack legal apparatuses that can be used to hold transnational corporations liable for human rights violations; specifically violation of labour rights. This paper seeks to discuss various legal instruments that are applicable to transnational corporations and human rights violations. It will also provide theoretical framework for understanding the nature of human rights and legal framework of labour laws. This essay will address the following questions: What is the legal status of transnational corporations? How can current legal apparatuses be used to hold transnational corporations accountable for human rights violations? This essay will also consider the case of human right violations by Nike Corporation in order to show that external pressures can produce development and accountability.

Company law (also be referred to as the law of business associations) can be described as the field of law concerned with the daily running of companies as well as business organizations. It entails partnerships, corporations as well as some of the associations that always deal in economic or charitable activity. Corporations are the highly prominent kinds of companies, they have separate legal personality and its investors have limited liability for whichever losses that occur in the company that is governed by corporate law. Companies that are widely spread with great monopoly are always listed publicly on the stock exchanges in all part of the world. Depending on the form, single individuals who are referred to as sole traders also have the opportunity to incorporate themselves and limit their ability so that they have the chance of continuing with the business. These various forms of companies rely on the particular law of their countries or the country of its location.

Corporation origin from the Latin word Corpus which means body. It is formed by a group of people and has separate rights and liability from those individual. In any means, corporation exists independently from its owner and this principle is called the doctrine of separate personality. Doctrine of separate personality is the basic and fundamental principle in a Company Law. This principle outline the legal relationship between company and its members. Company’s assets belong to the company not the shareholders as assets are the equity for creditors. Company must use up all its assets to pay off the creditors if it became insolvent. The same applies to the corporation’s debts. For limited liabilities company, the shareholder liability is limited which means that the shareholder is restricted to the number of shares they paid and not personally liable for the corporation’s debts. If the company does not have enough equity to pay off debts, the creditors cannot come after the shareholders. However, limited liability company can be very powerful when in hands who do fraud and on defeating creditors’ claims. Courts then can ignore the doctrine for exception cases and lifting the corporate veil. Lifting the corporate veil is a situation where courts put aside limited liability and hold a corporation’s shareholders or directors personally liable for the corporation’s debts.