Corporate law includes those laws which
govern corporations as an entity, as well as the laws which apply to the
individuals which comprise that entity. That may include
shareholders, those in leadership roles and creditors of that corporation.
Some types of corporations have limited
liability and others have unlimited legal liability for the actions or in
actions of the corporation as an entity. The laws which apply to corporations
vary according to the type of corporation, as well as the type of business
conducted by that corporation.
The law treats a corporation as an
individual, separate from those which work for or control that corporation.
That means that in most cases individuals are not held liable for the
corporation. Take for example a corporation which declares bankruptcy. Corporate
law would dictate the responsibility of that company to creditors, as well as
to shareholders. In most cases, no single individual would be responsible for
the corporation as an entity, but the responsibility would instead fall on the
corporation itself. However, shareholders
may lose their shares in order to pay off the creditors.
Corporate law often include a law firm with a myriad of lawyers that
work there. That law firm may be a corporation as well being governed by the partners in that
firm. Depending on the type of corporation formed by those
individuals, the individual lawyers may or may not be legally liable for their
actions in the courtroom and outside of the courtroom.
Umbrella corporations are those corporations
which cover many smaller corporations. For example, an umbrella corporation may
provide services, such as legal services, for the smaller companies which are
protected by the umbrella corporation.
In most cases, an umbrella corporation is
utilized as part of a large structure of corporations in order to provide
services, protection and financing to smaller companies found under the
umbrella of that large corporation.
In some cases, a corporate umbrella is used
to cover the larger part of the corporate structure which has several brands
below it. For example, the corporate umbrella may be
named as the distributor of many different brand name
For example, X Corporation may be a
distributor for the products of both Y and Z products. That distributor
protects the smaller corporations, as well as handles much of the financial
issues for those smaller corporations. By taking on the liability and other
issues, the distributor also takes a large percentage of the profits from the
distribution of those products.
There are many benefits associated with an
umbrella corporation, including legal liability issues such as those which may
occur with a recall of a product distributed by that corporation. In addition,
the companies which fall under that umbrella may also enjoy discounted services
because of the bulk of business is conducted
by the umbrella corporation, such as insurance and payroll services.
Multinational corporations, also known as
transnational corporations, are those corporations which conduct business in
more than one country, or those which deliver services to more than one
country. In general, the company will only have headquarters in one county, but
they conduct business in other countries.
Multinational corporations are important to
the economy of the countries where the headquarters are located, as well as in the counties where they conduct business. However, that economic impact is not
always positive, as a multinational corporation may take away business from
smaller corporations which conduct business in that country. In either case,
transnational corporations played and continue to play an important role in
globalization and the relationships between differing countries which may rely
on one another for certain types of business, including exporting and
Some transnational corporations offer
employment opportunities in countries that would otherwise have very few. In
addition, a multinational corporation may also contribute to each local economy
where business is conducted in a positive and beneficial manner. There are also
issues of taxation which cross international borders with transnational
corporations, allowing many countries to enjoy the tax benefits of that entity.
A transnational corporation can greatly
influence the relationship between the countries where business is conducted.
In fact, many multinational corporations enjoy tax breaks as
an incentive to doing business in specific counties. That strengthening of
relationships between counties also helps the economy in those countries, as
well as has an influence over the global economy.
Types of corporations
Each type of corporation has liability as an
entity. However, many times the individuals employed by a company are not held
liable for the actions of that entity. Yet, employees of a corporation can be
held liable in cases where they acted alone or without permission from the
S corporations enjoy limited liability, just
as many other types of corporations do. The factor which sets apart an S
corporation is the singular taxation on the profits of the company. The
dividends are distributed to shareholders and employees before the profits are
taxed. Each individual is then responsible to declare those dividends as income
and pay taxes as an individual.
C corporations are those corporate entities
which receive double taxation on the profits of the company. The profit is
taxed at the corporate level and again when it is distributed to shareholders.
C corporations can become S corporations in order to receive singular taxation,
but it is dependent on the number of shareholders.
Multinational corporations are those
corporations which conduct business in more than one country. In most cases, a
multinational corporation will have their headquarters in one country with
offices being found in many other countries.
Corporate laws include those laws which
govern the actions and legality of those actions, of corporations as an entity.
In most cases, individuals cannot be held liable for actions of the corporate
entity, unless they acted as individuals rather than employees of that company.
Umbrella corporations are those corporations
which offer legal and financial protection, as well as services too many smaller corporations. For example, umbrella corporations may distribute products from several manufacturing
corporations and then become responsible for any recalls of those products.