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Corporate Law is the branch of law that focuses on the rights, regulations and behavior of individuals, companies and business organizations. Corporate laws address issues that that are created by a corporation. It focuses on the establishment, finance, administration and dissolving of a corporation. A corporation is a legal entity created for conducting business. Corporations are created under the state law. It is seen as an entity that can take legal actions against an individual or organization. Likewise, an individual can also sue back the corporation. Its existence is separate from its owners, shareholders and investors.
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A corporation’s distinguishing feature is its independence from shareholders. Depending on the size, a corporation can have limited or unlimited liability to its shareholders under corporate law.
Every business enterprise exhibit four legal characteristics.
Corporate law helps corporations in exercising their rights. It also dictates the liabilities that a corporation shares and how to deal with them. It provides a separate legal identity to a business entity and ensures that a level of competence is maintained. It makes actions and business decisions of a company accountable by allowing legal proceedings in case of violations.
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Business entities attempt to avoid specific costs associated with operations. Corporate Laws are meant to ease the process of contributing investment capital, relationships and knowledge, which in turn, profits every member involved. Limited liability corporations are able to escape liabilities imposed by the agency law due to different legal mechanisms that the state provides. This help is given in lieu of the employment opportunities that the corporation provides to the state locals and the influence the state exhibits in overseeing the behavior and operation of the entity.
A corporate lawyer ensures that all rules and regulations set by the state are followed by the company to prevent violations.
Some of the other responsibilities include:
Limited companies are recognized widely throughout the world. Different countries have their own unique forms of business entity. Business organizations like cooperatives, credit unions and publicly owned enterprises share similar motives that can meet or exceed the profit maximization, which is crucial to business corporations.
There are various types of companies which can be legally formed such as:
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