Have a better understanding of the corporate law
Posted on: 2017-03-13, by : Bonnie Vaught
Graphic image of people in a meeting

Corporate Law

Irrespective of which dealings you are involved in, there are two aspects of life that you must engage with; law and business. All transactions, as long as they are gainful, have an aspect of business in them while every deed done in a country must be categorized either in the legal or illegal section of the law. For better management and organization of business, corporations are formed to increase the profitability of shareholders. The corporate law are the rules that govern the corporations of a country. Corporations, being separate legal entities from their owners (shareholders) have their own legal rights, responsibilities and obligations to the government, society, and shareholders.


The corporate law thus regulates how the shareholders, directors, employees, creditors and all stakeholders in a corporation interact with one another within the confines of the law for their mutual benefit. To better understand a corporate law, one needs to understand what the term corporation means in the legal sense. A corporation is identified by the following characteristics:

1) Separate Legal Entity

A corporation is under the law an entity different from its shareholders and is subject to all rights, obligations and responsibility as any other entity. It is an artificial person.

2) Limited Liability

The personal liability of the shareholders is always limited to their shares’ value in the corporation, and thus, they are protected in the case of insolvency and/or bankruptcy.

3) Shares

If the corporation is a public company, its shares are tradable in the stock exchange and can be purchased by anyone who has the legal capacity to transact.

4) Delegated Management

The corporation’s board of directors delegates the daily management of the company to executives who are directly involved in its daily operations.

Corporate law advice the corporations on issues such as negotiations, drafting and reviewing that the contracts and any other agreement associated with the business. It may also be employed to manage labor, employment, property and liability issues of the corporations.

Delegated Management

Purpose of lawyers in terms of the corporate law

The primary purpose of corporate lawyers is to ensure that companies are in compliance with the laws of the state. Corporate law is an important part of the legal structure as well as the business sector. It ensures that all dealings of a corporation are in accordance with the legislation and statues of the land to prevent any party in the corporate structure from taking advantage of the other players thus at the end of the day everyone is protected.