Corporate laws are also respectively known as company laws.
These govern business and commercial transactions as well as the
internal rules of business firms. Corporate law have 5 defining
characteristics which include:
- separate legal personality of the corporation
- limited liability of the shareholders
- transferrable shares
- delegated management
- investor ownership
These are all applied largely for corporations
which are publicly owned. Corporate law is applied to protect both
company and shareholders' rights especially if the corporation fails
or is involved in legal matters. Corporate law can be traced back
to the middle ages when medieval guilds were formed but not for
common profit. It was also during this time that different forms
of businesses such as partnership were developed.
Corporate law covers corporate governance that
includes the corporate constitution, balance of power, corporate
personality, capacity and powers, director's duties, and corporate
litigation. All of these are vital for the application of corporate
laws. In addition, this also involves how shares, liquidations and
dealings should be handled as well as in cases of corporate crimes,
mergers, acquisitions and insolvency of the company.
Corporate laws involve the details, rules and regulations
involved in setting up businesses, choosing legal structures, recruiting
& hiring, financing, paying of taxes, dealing with consumers
and shareholders, solving issues, dealing with business and corporate
crimes, and regulating all aspects involving commercial and corporation
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