The following is general legal information and not intended as legal advice.  Always seek professional legal counsel. All individual circumstances are different and it is not possible to discuss all the exceptions and distinctions for specific situations.

Corporate law (also "company" or "corporations" law) is the study of how shareholders, directors, employees, creditors, and other stakeholders such as consumers, the community and the environment interact with one another. Corporate law is a part of a broader companies law (or law of business associations). Other types of business associations can include partnerships, or trusts (like a pension fund), or companies limited by guarantee (like some universities or charities). Under corporate law, corporations of all sizes have separate legal personality, with limited liability or unlimited liability for its shareholders. Shareholders control the company through a board of directors which, in turn, typically delegates control of the corporation's day to day operations to a full-time executive. Corporate law deals with firms that are incorporated or registered under the corporate or company law of a sovereign state or their subnational states. The four defining characteristics of the modern corporation are:

The word "corporation" is generally synonymous with large publicly owned companies. In the United States, a company may or may not be a separate legal entity, and is often used synonymously with "firm" or "business." A corporation may accurately be called a company; however, a company should not necessarily be called a corporation, which has distinct characteristics. According to Black's Law Dictionary, in the U.S. a company means "a corporation — or, less commonly, an association, partnership or union — that carries on industrial enterprise."

The defining feature of a corporation is its legal independence from the people who create it. If a corporation fails, its shareholders will lose their money, and employees will lose their jobs, though disproportionately affecting its workers as opposed to its upper executives. Shareholders, however owning a part piece of the company, are not liable for debts that remain owing to the corporation's creditors. This rule is called limited liability, and it is why corporations end with "Ltd." (or some variant like "Inc." and "plc"). In the words of British judge, Walton J, a company is...

"...only a juristic figment of the imagination, lacking both a body to be kicked and a soul to be damned."

But despite this, corporations are recognized by the law to have rights and responsibilities like actual people. Corporations can exercise human rights against real individuals and the state, and they may be responsible for human rights violations. Just as they are "born" into existence through its members obtaining a certificate of incorporation, they can "die" when they lose money into insolvency. Corporations can even be convicted of criminal offences, such as fraud and manslaughter.


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