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 by-laws.

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