Nobody downloaded yet

The Corporation as a Legal Entity - Coursework Example

Comments (0) Cite this document
The Corporation as a Legal Entity According to company law, it is recognized that a company is a separate legal entity from its owners and members and is treated as a complete ‘human being’ (Hicks, 2008). This precedent was established in Salomon V. Salomon (1897), and is currently the prevailing law concerning the actions of a company…
Download full paperFile format: .doc, available for editing
GRAB THE BEST PAPER98.2% of users find it useful
The Corporation as a Legal Entity
Read TextPreview

Extract of sample "The Corporation as a Legal Entity"

Download file to see previous pages The formation of an entity requires the input of different stakeholders, including the owners, the investors, and the directors and managers. At law, the corporation is a separate legal entity from all those people involved in its formation, and has it owns rights and liabilities. Therefore, it is evident that the corporation has its own rights and duties, separate from the directors and stakeholders in the company, who are usually separated from the corporation by a corporate veil. This means that a company can, in its own right, perform contracts, own assets, perform lawful actions, and be liable to the authority in its own name. This principle, called the Salomon Principle, was established in 1897 in the case of Salomon V. Salomon, which will be discussed in detail at a later stage in this paper. This principle was later affirmed by the House of Lords, which stated that the company is not an agent of the owners of the said company. This means that, in law, the company is an entirely separate being from the subscribers to its memorandum, and in law, is not an agent or trustee of the said subscribers. The Establishment of the Doctrine of Incorporation The doctrine of incorporation was firmly established by the House of Lords in Salomon V. ...
ted that, even though the company could be the same as it was before incorporation, with the same managers, same people sharing profits, it is still an entirely separate entity. The members are, therefore, not liable in any way for the company, except in instances as prescribed in the Companies Act 2006. In stressing this doctrine, the House legalized the usage of the corporation by individuals seeking to put a veil between themselves and their creditors. The effects of this decision are widespread, for example, in Foss V. Harbottle (1843), it was held that the corporation can sue and be sued in its separateness from the shareholders. The decision in Regal (Hastings) V. Gulliver (1942) also established that the other effect of the Salomon Principle was that the company has perpetual succession, and that the company can enter into contracts in its own name, separate from its shareholders. The fourth implication of the Salomon Principle is that the corporation has the sole right to acquire, possess and dispose of its own assets, which was decided in Macaura V. Northern Assurance Limited (1925). However, Lord MacNaughten’s ruling concerning the Salomon Principle was not a good decision, since it gives some parties unreasonable shield, which can be detrimental to the individuals dealing with the companies. The case established an important principle in company law, that of the independent existence of a registered company or corporation. The inflexible application of this principle can be detrimental to the persons dealing with the company, since the corporate veil is insecure. Piercing the Corporate Veil As previously stated, there are instances where courts are allowed to remove the corporate veil enjoyed by shareholders and apportion liability directly to the ...Download file to see next pagesRead More
Cite this document
  • APA
  • MLA
(“The Corporation as a Legal Entity Coursework Example | Topics and Well Written Essays - 1000 words”, n.d.)
The Corporation as a Legal Entity Coursework Example | Topics and Well Written Essays - 1000 words. Retrieved from
(The Corporation As a Legal Entity Coursework Example | Topics and Well Written Essays - 1000 Words)
The Corporation As a Legal Entity Coursework Example | Topics and Well Written Essays - 1000 Words.
“The Corporation As a Legal Entity Coursework Example | Topics and Well Written Essays - 1000 Words”, n.d.
  • Cited: 0 times
Comments (0)
Click to create a comment or rate a document

CHECK THESE SAMPLES OF The Corporation as a Legal Entity

Business entity paper

...? (Assignment) Business Entity My plan is to open a new showroom d ‘JBR Collections’ in the Los Angels of USA. The showroom will deal in locally produced and imported wristwatches, wall clocks and time pieces to the elite, upper, and middle class people of the city. The showroom will be offering premium quality products at affordable prices, and the showroom will stress on quality and affordability. My decision to join the watch sales is purely based on a thorough market research. As per the reports of Dobrian, named ‘High-end and popularly priced watches create uptick in sales’ dated 1 January 2007, the watch sales will continue to increase. In addition, it is pointed out that America is an emerging market for high-end...
4 Pages(1000 words)Essay

A Living Entity

...? A Living Entity First Affiliation Introduction Criminal justice is the field of government that involves people and institutions that are responsible for maintaining social control, mitigating criminal activities, and charging law offenders with sanctions, rehabilitation efforts, and penalties. The person that is accused of offense has protection provided for by law to ensure that the criminal justice personnel do not cross their mandate (Cohn, 1977). Some of the branches of the criminal justice system include the legislature that is responsible for creating laws for people to follow; the second branch of the criminal justice system is the adjudication that includes the courts responsible for punishing law offenders...
5 Pages(1250 words)Essay

Business Entity Regulations

...Business Law: Business Entity Regulations BUSINESS LAW: BUSINESS ENTITY REGULATIONS REAL E Titus Rock Manickam Order No. 286678 04 April 2009 BUSINESS LAW: BUSINESS ENTITY REGULATIONS REAL ESTATE Business Entity Regulations It is necessary to obtain a real estate license in order to engage in the business of estate agency in the State of California. California law requires the Secretary of State to determine that a proposed business entity name for corporation, limited liability company and limited partnership entity is not the same or too similar to a reserved name of an existing business...
2 Pages(500 words)Essay

Corporation As a Legal Entity

...Liquidation- Unsecured Creditors' Claim and Preference Creditors A-- Advice to the Liquidator: Corporation As a Legal Entity- The Case of Salomon v Salomon & Co. (1897) According to the Companies Act 1985 section 13.3, a corporation is to be identified as a "legal person" a "body corporate" having exactly the same rights as that of the human beings in terms of business. In most facets of the company law 1985, a corporation has even more rights than a human being. Hence, in the eyes of law, a company is a distinct body separate from its owners and directors. To carry this point forward, the case of Salomon v Salomon &...
5 Pages(1250 words)Case Study

Sports Club Entity Model

...Sports Club Entity Model Task 1: The various entities and their associations are decided on the basis of the case study description and based on some assumptions as follows: 1. Bookings are done by members for multiple courts 2. A member is bound to have a membership type which makes it 1:1 cardinality 3. A member has a relationship of 1:1 with subscription as they are bound to pay for continuation of their membership. 4. A member is to be enrolled with a coach. There are some members with no coaches. The cardinality among the various entities is a result of various assumptions made in practice. The entity relationship diagram focuses on the participation of...
8 Pages(2000 words)Essay

Business Entity Regulations Paper

...person. Apart from these mandatory factors, the entity also has to be registered for the state taxes and try and obtain businesses licenses and permits from the state as well as the local governments to function legally. Last but not the least, for the start-ups, guidance are provided to hire the employees at the first place. Address The office of the Kansas Corporation Commission has the following major branches: Topeka Offices Main Office is at 1500 SW Arrowhead Road, Topeka, KS 66604-4027. State Energy Office is at 1300 SW Arrowhead Road, Suite 100, Topeka, KS 66604-4074. Conservation Division (Oil & Gas Issues) Main Office is at Finney State Office Building, 130 S. Market, Room 2078,...
2 Pages(500 words)Essay

Business Entity Matrix Paper

...and comparison with other forms of business structures showed that I would be less secure in LLP, as compared with financial liabilities of a shareholder in a corporation (Mancuso, 2007). Still, I chose limited liability partnership after analyzing different aspects, benefits, and drawbacks of different business entities. Besides analysis of business structures, employees or workforce play a major role in the success and failure of any business entity. Thus, this paper will be attempting to discuss some of the benefits and drawbacks of hiring employees and the same for considering independent contractors that will provide a basis for the selection of sales workforce for the new business...
3 Pages(750 words)Essay

Business entity

...the limited partner’s family assets to pay for the liabilities of the limited partnership’s liabilities (Clifford, 2008). The best form of business for a small business is limited partnership. For a limited partnership, a small business can easily grow to become a big business when the most opportune moment comes. As the business profits continue, all the limited partnership’s partners can increase the store size, sell more product types, or up a new branch in another locality (Clifford, 2008). Analyzing the above information, many persons want to form a limited partnership. The limited partnership is tax exempt. The creditors can only get the general partners’ assets. Only the general partners can make partnership decisions. ...
1 Pages(250 words)Essay

Business entity part 2

...Business Entity Task Introduction Long term financial goals are the goals that a corporation sets to achieve monetary fulfilment through a process of acquiring financial resources (Krus, 2005). This study highlights some long term financial goals, which are cash increase, return increase, and revenue growth. 1. Cash increase Cash increase is a long term goal necessary for the survival of a corporation. This long term goal results to an increase of corporation’s capital. For the target to be considerable and effectual, consequently the goal should be measurable and realistic (Krus, 2005). A measurable goal means that, the corporation can evaluate its achievements. Realistic goal means that set objectives are within reach and can... be...
1 Pages(250 words)Essay

Client entity letter

...Client Entity Letter Business entity occurs in various such as sole-proprietorship, partnership, limited company, cooperative and corporations. What distinguish the different kind of business entities goes down to size of the operations, their formations and legal status. For instance, a sole-proprietorship is the simplest business entity and requires few demands in terms of capital, legal issues and formation. The same way, it has few legal or size advantages compared to a larger business such as a limited company. A discussion of advantages and disadvantages of business entity will...
1 Pages(250 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 Coursework on topic The Corporation as a Legal Entity for FREE!

Contact Us