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Corporate Law: The Basic Principles

  • October 15, 2022
  • Darren
Corporate Law
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When you turn on the TV, you’d think that every corporation out there is engaged in a money laundering scheme or a complicated plot to swindle their investors out of money. In reality, at its basic level, corporate law tends to be one of the lesser complicated and adversarial branches of the practice of law. That’s not to say that the difficult-to-understand parts of corporate law aren’t complicated—they are—but it doesn’t take a rocket scientist to grasp its basic functions.

The Corporation as Legal Entity

If you were to engage in a legal contract with another person, say in the selling of a house, you would want a lawyer involved. Law wise provides its clients with professional legal advisors with years of experience to assist you with such matters. When a corporation decides to buy or sell land, it needs a lawyer too—because in the eyes of the law, the corporation is a legal entity. It’s a “person,” in the sense that it has to pay taxes, it can own property, and it can sue others and be sued itself. Now you can begin to see why a corporation would need its own lawyer, or power of attorney lawyers in Mississauga if you live in Canada to facilitate these contracts and other transactions.

The Concept of Limited Liability

Limited liability is another key concept in corporate law—heck, it’s why many corporations exist in the first place. It’s tied to the idea of the corporation as its own “person” or separate legal entity. Limited liability means an investor or owner of a company is only bound to that company by the amount they originally put into it or some other fixed sum. If another business or person decides to sue the company, they can only get the money that the investor put into it—not the investor’s home or personal wealth as well. You’ve surely heard the term “LLC” attached to a business; this means “limited liability company.”

Transferable Stock

In a publically traded company, investors receive shares of that company that are usually traded on a listed stock exchange. This idea, that the public can own part of a company simply through investing in it, helps companies gather capital and spread the wealth of the company beyond the board of directors. As the shareholders have provided the capital for a company, the corporation is bound to act in those shareholders’ best interest; corporate governance is in charge of ensuring that this happens. Corporate malfeasance, as was alleged in the cases of Enron, MCI WorldCom, and others, happens when corporate governance doesn’t work in the best interest of the shareholders, but others involved in the company.

A Delegated Corporate Management Team

Since the number of stockholders of a particular company may be in the thousands, it is clearly not feasible for every one of them to have a hand in the day-to-day running of a corporation. Instead, this is delegated to an elected board of directors, who are in charge of appointing the company’s chief executive, approving budgets, and more.

Name: Notary Point Mississauga

Address: 4287 Village Centre Ct Suite 310, Mississauga, ON L4Z 1S2, Canada

Phone: +1 647-948-7819

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  • Corporate Law
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San Francisco has long been thought of as a town a bit too far left of left. As James Hurysz and others remember, it’s had a long history of being liberal, free-flowing, and far less conservative than other locales. However, it’s also been a city of change, being the birthplace of the tech boom as well as the ancestral home of some of the most prolific and influential writers and artists in the 1960s and 1970s. Unfortunately, today, San Francisco is leaning so far off track, it has now triggered just as much of a hard reaction by pushing back. James Hurysz reflects on the same view as others on the outside; the city’s government has embraced the idea of non-enforcement to the point that homelessness, drugs, and crime have made the city unlivable for regular people and businesses. And that has pushed businesses to the point of something that is fundamental to American independence: a tax revolt. The frustration and anger of businesses in San Francisco aren’t restricted just to the City by the Bay, from what James Hurysz sees online. It’s been happening across the country in other locations with a similar attitude towards social leniency. Unfortunately, too much leniency has come with too much of a cost. Businesses are constantly being robbed or vandalized, customers threatened, and sidewalks soiled badly on a daily basis. Yet, when business owners beg the municipality for help and law enforcement, the most liberal cities have taken a “hands-off” approach. As a result, many businesses have gotten to the point where they are closing, leaving, and failing. Those ventures that have survived to date are drawing a line in the sand, refusing to pay any more in business taxes to get their cities’ attention. James Hurysz is not surprised or shocked. Cities are no different than any other organic development, argues James Hurysz. They thrive best with a balance. Clearly, the zenith of conservatism is a police state run by corporations, and the extreme opposite is what is happening in San Francisco. Neither are healthy or long-lasting. Ideally, a healthy city is one that finds a balance between social liberalism and protecting its business community so that income generation can help long-term growth and support the city’s programs. When, however, municipalities treat their businesses like cash cows, only good for income and no protection at all. Then, at some point, James Hurysz notes even the most giving of companies have a breaking point. That is what is happening in San Francisco with its small business tax revolt. The sentiments today are no different from those of the colonists during the Boston Tea Party. At a certain point, the colonists under the abuse of England using them as a tax coffer got sick of their treatment. And they pushed back. While no one expects San Francisco to be the start of the next American Revolution, the aspect of government delegitimizing itself still exists. And if those in local government don’t pay attention, they will find their entire system being fundamentally changed again from the ground up. Balance protects all elements, social and business. Protect the balance and everyone grows within limits. Ignore it, and change comes quickly and chaotically
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