Nobody downloaded yet

Separate Legal Personality and Limited Liability - Term Paper Example

Comments (0) Cite this document
Summary
The paper 'Separate Legal Personality and Limited Liability' focuses on a Company that can be considered as a legal person and laws associated with an individual can be applied to the company as well. It is not possible to formulate laws for the functioning of a company by considering it…
Download full paperFile format: .doc, available for editing
GRAB THE BEST PAPER95.5% of users find it useful
Separate Legal Personality and Limited Liability
Read TextPreview

Extract of sample "Separate Legal Personality and Limited Liability"

Download file to see previous pages Even in America itself, it is not possible for a company to function with a unique law in different states. In other words, companies need to function with respect to the laws prevailing in the location where they operate.
Separate legal personality and limited liability are two common terms associated with the company law. Wiss (2010) describes separate legal personality as an incorporated company, “united or combined into an organized body” having rights and liabilities. In her opinion, a company is a fictitious person who can enter into contracts, own property and even commit crimes. At the same time when a private company limited by shares, the creditors deal with the company, not with the individuals and it can be termed as a limited liability company. In such cases, if the company becomes bankrupt, the creditors or the investors do not get paid regardless of the personal financial capabilities of its members (Wiss 2010). Separate legal personality and limited liability are two advantages of corporate status. But under certain circumstances, these advantages will become invalid and this paper briefly explains such circumstances in which separate legal personality and limited liability will become invalid.
It is not possible for a company to take undue advantages in the name of limited liability or separate legal personality. Corporate law has mainly identified seven instances in which the corporate veil (law that protects the members or founders of a company in case a problem arises) can be lifted; fraud, agency, trust, group enterprise, tort enemy character, tax (Sadhu, n. d)
Richard Wachman (2005) has mentioned that fraud is costing British business £72 billion a year, 6% of the annual revenue of British businesses (Wachman, 2005). The recent corporate scandals involving Enron, WorldCom, Parmalat, and Refco, have not taught any lessons to the authorities or the investors. Fraud can attain many forms; some companies may overstate their profits, some other companies may transfer the corporate asset to overseas or offshore accounts, money laundering, etc. ...Download file to see next pagesRead More
Cite this document
  • APA
  • MLA
  • CHICAGO
(Separate Legal Personality and Limited Liability Term Paper, n.d.)
Separate Legal Personality and Limited Liability Term Paper. Retrieved from https://studentshare.org/business/1561902-business-law-report
(Separate Legal Personality and Limited Liability Term Paper)
Separate Legal Personality and Limited Liability Term Paper. https://studentshare.org/business/1561902-business-law-report.
“Separate Legal Personality and Limited Liability Term Paper”, n.d. https://studentshare.org/business/1561902-business-law-report.
  • Cited: 0 times
Comments (0)
Click to create a comment or rate a document

CHECK THESE SAMPLES OF Separate Legal Personality and Limited Liability

Limited Liability and Partnership Corporation

...capital initially. Limited Liability Company is a new form of business organizations and most people simply do not understand it well enough yet. This fact does not allow a limited liability company to gauge loans or investments easily as most lenders seek personal assurances in case of default which defeats the purpose of LLC. 2) Managerial Difficulties: - This new form of the business organization is understood by most stakeholders involved initially which results in managerial difficulties in determining the chain of command to people within and outside the organization. Creditors are reluctant to lend as they do not quite understand who is...
3 Pages(750 words)Essay

Limited Liability Partnership

...in that the partnerships are treated as separate legal entities from their owners. This means that the partners cannot be sued individually for the liabilities resulting from the partnership. This means as limited liability partners, we are obliged to take responsibility of the partnership business through proper management. Furthermore, limited liability partnerships and their members are treated as distinct and separate from each other (Bouchoux 34). These depicts that a partner will be accountable for the duties bequeathed upon them by the partnership. Additionally, partners in this form of business...
3 Pages(750 words)Essay

Limited Liability Company in Qatar

...from personal liabilities arising from debt or liabilities of the company (Martin, 2010). An LLC implies that the company has not more than fifty and not less than two partners (Commercial Companies Law, 2002). The partners are not answerable for anything other than their individual shares in the company’s capital and their shares do not represent transferable cheques. LLC is the most common form of business organisations in Qatar (“Business Setup in Qatar”, 2008). 1.1. Limitations and Rules Enforced on LLC Companies 1.1.1. Partners and shares Basically, LLCs do not have any issued shares (Silkenat, Aresty and Klosek, 2009). It is imperative that an LLC should have one...
6 Pages(1500 words)Essay

Limited Liability Partnership

...of its being wound up as is provided for by virtue of this Act. Accordingly, except as far as otherwise provided by this Act or any other enactment, the law relating to partnerships does not apply to a limited liability partnership. The Schedule (which makes provision about the names and registered offices of limited liability partnerships) has effect (http://www.opsi.gov.uk/acts/acts2000). The LLP Act 2000 was implemented on April 6, 2001. The purpose of this is to introduce a new form of legal entity known as Limited Liability Partnership (LLP). This will help resolve the difficulties arising in the traditional...
4 Pages(1000 words)Essay

Limited Liability Partnerships

...as a legal entity where limited liability exists, this was not so in the case of partnerships, which were not legal entities and thereby made partners legally liable for all the firm's debts. The Limited Liability Partnership has the following features (a) it has a separate legal personality (b) liabilities of individual members are limited to the amount they agree to pay in the event of an insolvency (c) partners are expected to adhere to the duties and obligations currently imposed upon Directors of Companies (d) the LLP is not...
5 Pages(1250 words)Essay

Limited Liability Partnership

...and that they cannot be relieved of their this responsibility on the defense ground that they are not responsible for the actions of others conducting business along with them. In a general format of partnership business it is a legal practice that all partners have unlimited liabilities with respect to their business debts and if one person is declared insolvent then the other partners are bound by law to pay for his debts, loans and liabilities from their own personal assets and property. Limited liability on the other hand is not the same as other partnership concerns; it differs a lot in the...
9 Pages(2250 words)Essay

Legal Personality and Limited Liability

...Running Head: LEGAL PERSONALITY AND LIMITED LIABILITY Legal Personality and Limited Liability College Below follows a group works assignment in which we are deemed to discuss the circumstances under which the veil of incorporation can be lifted by a court. The importance of group work compared to individual work as well as the benefits that are associated with presentation are also discussed. Our group met three times to discuss the topic. A veil of incorporation law helps to protect the founders and members of a company once a problem arises. Legal personality and...
4 Pages(1000 words)Essay

Limited Liability Corporation and Limited Liability Partnership Paper

...protection to a partners own negligence or incompetence or to the partners involvement in supervising wrongful conduct. Other states provide broad protection, including protection against contractual claims brought by the partnerships creditors. It further provided, however, that a partner was personally liable to the partnership and copartners for any breach of duty, and also allowed a creditor or other claimant to pierce the limited liability shield of a partner in the same way a claimant may pierce the corporate veil of a corporation and personally sue an individual member of the corporation.” (www.wisegeek.com, 2009) Limited...
4 Pages(1000 words)Essay

Establishment of Limited Liability Company

.... Small Business Administration (2013b). This government authority sanctions loans for developing new and revamping old business in technology sector. In addition to that, a personal line of credit will be acquired with a fixed limit which will renew on payment of old debt. With virtual existence arise several threats to our intellectual property. Therefore, no images will be downloadable from the website and will also have digital mark. Trademarks are extended to all the states therefore legal protection will be available. Other internal practices will be duly followed to protect our creative property. Business after Five Years After five years, our event management firm has been...
6 Pages(1500 words)Essay

Liability Issues - Limited Liability Company

...entities that can be formed and utilised to maintain the original legal expectations and focus of the founders of the entities. In this case though, it appears that the “sole trader” concept is not appropriate to these three individuals. This is because the sole trader is an individual who sets up an entity. Thus, whatever entity they set up will not be a sole trader. Thus, it could either be a limited liability company or a business partnership. A limited liability company is one in which the three individuals can form by pooling their resources in the form of acquiring shares in the company to be formed. The acquisition of shares creates a...
6 Pages(1500 words)Essay
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.

Let us find you another Term Paper on topic Separate Legal Personality and Limited Liability for FREE!

Contact Us