Corporations in law. A corporation under Company law or corporate law is specifically referred to as a "legal person"- as a subject of rights and duties that is capable of owning real property, entering into contracts, and having the ability to sue and b

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A corporation under Company law or corporate law is specifically referred to as a "legal person"- as a subject of rights and duties that is capable of owning real property, entering into contracts, and having the ability to sue and be sued in its own name. In other words, a corporation is a juristic person that in most instances is legally treated as a person, and empowered with the attributes to own its own property, execute contracts, as well as ability to sue and be sued.

One of the main motivations for forming a corporation or company is the limited liability it offers its shareholders. By this doctrine (limited liability), a shareholder can only lose only what he or she has contributed as shares to the corporate entity and nothing more.

Nevertheless, there is a major exception to the general concept of limited liability. There are certain circumstances in which courts will have to look through the corporation, that is, lift the veil of incorporation, otherwise known as piercing the veil, and hold the shareholders of the company directly and personally liable for the obligations of the corporation.

The veil doctrine is invoked when shareholders blur the distinction between the corporation and the shareholders. It is worthy of note that although a separate legal entity, a company or corporation can only act through human agents that compose it. As a result, there are two main ways through which a company becomes liable in company or corporate law to wit: through direct liability (for direct infringement) and through secondary liability (for acts of its human agents acting in the course of their employment).

The doctrine of piercing the corporate veil varies from country to country. In the opinion of two Corporate law scholars, apparently, there is a general consensus that the whole area of limited liability, and conversely of piercing the corporate veil, is among the most confusing in corporate law.


Company is an association of a number of individuals for the purpose of carrying on some legitimate business. Generally, company is a form of organization.Organization engaged in business as a proprietorship, partnership, corporation, or other form of enterprise. Originally, a firm made up of a group of people as distinguished from a sole proprietorship. However, since little proprietorship owes their existence exclusively to one person, the term now applies to proprietorships as well.


Shareholder is an owner of shares in a company. Due to the principle of separate legal personality, a shareholder does not own any assets of a company, but rather own shares. The relationship between the shareholders and the company and the rights of shareholders are regulated by the articles of association of the company. The majority of shareholders usually control the company, however exceptions exist for protection of minority shareholders where the majority act oppressively or cause detriment to the minority, or use powers granted in the articles for their personal benefit.

Board of Directors

Directors are the members of a board of directors. Directors must be individuals. Directors can be owners, managers, or any other individual elected by the owners of the business entity. Directors who are owners and/or managers are sometimes referred to as inside directors, insiders or interested directors. Directors who are managers are sometimes referred to as executive directors. Directors who are not owners or managers are sometimes referred to as outside directors, outsiders, disinterested directors, independent directors, or non-executive directors
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The Concept of Limited Liability

The main idea behind that the legal personality of a company is separate from that of it's members. The most important ingredient that flows from the separate legal personality clause is that of limited liability. It is aimed at giving investors minimum insurance in their business over their own private lives. Thus, the most a member in the company can lose is the amount paid for the shares themselves and thus the value of his/her investment. Thus, creditors who have claims against the company may look only to the corporate assets for ...

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