Principles of company law

Unless otherwise stated, this article is based on UK law of February 1, 2010.
Companies come in many different shapes and sizes. There are key differences between what they can and can’t do, and what each object is designed for. But everyone is an independent legal entity, independent of its directors and shareholders. The law rarely supports a company and treats it as the same person as the person controlling the company.
The concept of treating a company as an independent legal entity has two consequences:
Company property belongs to it and does not belong to its directors, management or shareholders. Even if you are the sole director and 100% shareholder, you will still be convicted of theft from your own company. In companies that plunder the company under normal day-to-day control, liquidators and future owners will be interested in making claims for theft or misuse of assets. Many companies have been tricked into court because they have forgotten this basic principle.
Companies are responsible for their own debts and liabilities. Shareholders and directors (usually directors) cannot be forced to pay them.
The second point is why the limited company has to give shareholders limited liability. A company may be sued until all of its assets are exhausted, but creditors cannot turn to shareholders and ask them to make up for any deficit. Once the company receives at least the face value of its issued shares (1 share for 1 share, etc.), the stock has been paid in full and the shareholder no longer assumes further responsibility. Shares can be paid in part: 1 share is issued at 25 pence and should be paid at the time of issue, while 75 pence is paid on a certain date in the future or in an earlier liquidation. However, once these payments are paid in full, the shareholders no longer bear any responsibility for the company’s debt.
These basic principles form the bulk of the book. But it’s important to remember that they are the principles of corporate law. Especially in the area of ​​taxation, regulations and courts have taken many measures to enable the authorities to supervise the corporate structure that truly owns and controls the entity.
Most companies are subject to share restrictions, and they may be private companies or public companies. A listed company may not be obligated to list or trade its shares on a stock exchange.
If the company is not subject to share restrictions, it may or may not be subject to warranty restrictions. All of these different types of companies are described in the OUT-LAW Guide.

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