Corporation is a separate legal entity. It has all the sole rights and duties just like an individual. It has unlimited life and limited liability which means that even the employees and directors any variably change, But the corporation will remain forever. All the shareholders personnel asset can not be made in the corporation it just deals with the development of the company and its value.
- What are the characteristics of corporation?
- What are the impact of Saloman case on Corporation?
- Explain separate legal entity?
Corporation as a separate legal entity
Corporation is an important and distinct entity which covers all the various companies aspects it is the most important entity which have all the rights being assigned just like an individual. All the corporations are generally being framed as in order to make their work in a proper and varied format and these corporations implies the elements being raised for the development of the organisation. It contains all the rights which are being possess by normal individual and also all the duties which improvise the working nature of the company. As for all the companies or a corporation this is quiet being possible that their can be a contract of them with certain group of individuals or working through by them. All the corporation contains various rights just like right file a sue against any corporation or person if has raised any harm for them, the corporation can borrow money from bank or any of the company which lays down the to give money. A corporation can enter in a contract with any person for any project or the agreements being made between them. They have various rights to hire any person or the employees whenever it is required for the company. A corporation mainly covers various elements that are important in all various aspects:
- All the corporations have same rights and duties as that of individual that means they cover all the kinds of rights which were being made and used in variable format and nature.
- All the shareholders which are taking part for getting the profits with all the dividends and also the stock from the corporation are not being personally liable in any company debts.
- Corporation are not made for profit earning as with the corporation their comes certain responsibilities and dependencies.
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The corporation have various proprietor and also partnership there are various characteristics which are to be covered:
- The corporation has unlimited life that means even though there happens any tragedy or there is death of any stockholder, or arises any inability in the employees working their will arise that it will not effect the companies and their working.
- The stockholder will have limited liability that means they can not just make any personnel asset for the creditors and can not make any corporate asset for the claims being made for it.
- Their will always be a professional manager who use to deal with the working of the organisation and can operate the managers for all the hiring management.
- The sale in the stock of the companies and corporations are usually being dependent on the government regulation that means all the legal rules which are being made for the financial statements, information, SEBI all do depend upon the government rules and bodies.
- All the corporation will be framed as a separate legal entity an it provides all the work of the shareholders for their personnel asset will not be entertained in any corporation.
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Separate legal entity
The corporation is always be known as a separate legal entity it just came from years ago where it provides that all the corporation works independently and separate from all the spheres. All the employees, owner and shareholders although works in the company and work for the better functioning of corporation but it provides that all these working will not affect the corporation and it will always remain the sole entity in any corporation. These corporation is mainly being set on continuation of all the self governance, all the specification being made of the asset, self governance of the corporation and identification of the persona of a company. The main area which helped to give information about separate legal entity is Saloman v. Saloman case, Where Saloman has transferred his business to a sole proprietorship, where all the members in the business were from hid family. He paid the price of the business through debentures and charges being floating. But when the company business was not working properly and failed their arises liquidation. Saloman was having the right of recovery where all the debentures claimed for the unsecured creditors. The liquidator said that Saloman is personally liable for a;; the company debt as he was the sole trader of that business. Court held that, a company is a Separate legal entity which has a distinct personality as that of the member. Thus the doctrine of corporate personality through company act 1862, states that all the insolvent creditors of the company can not sue the shareholders for any outstanding debts.
Thus, Separate legal entity means the separate rights of all the company just like an individual or an owner. This covers that all the business being done by many company can be made in all the legal rights and that company will carry the sole rights to contract, to sue, to engage with any partners just like a normal owner.
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