| Corporate law is the set of regulations instigated for | | | | United States. In case of civil law jurisdictions, both the |
| the corporate world. The word corporation is | | | | documents are consolidated into one single document |
| synonymous with publicly owned large companies. In | | | | known as the Charter. |
| US, a company is equivalent to a firm or business, | | | | Usually many companies supplement the Corporate |
| irrespective of whether or not it is a separate legal | | | | Constitution with additional agreements. This may |
| entity. A corporation can be called a company but a | | | | include documents like shareholder’s agreements |
| company cannot be called a corporation because a | | | | etc. One advantage of this document is that it will be |
| corporation is an association or a union that carries on | | | | completely confidential and will not be publicly filed in |
| industrial enterprises. | | | | case of a jurisdiction. This document fulfils many |
| The most important feature of a corporation is the | | | | functions same as that of the Corporate constitution |
| legal independence of it from the people who are | | | | that incorporate the Corporate Law. |
| impetus in creating it. If a corporation is on the verge of | | | | Another supplement to corporate constitution is that of |
| bankruptcy it will affect the employees more than the | | | | the voting trusts which is most common in United |
| higher executives. The shareholders will lose their | | | | States. |
| money but they are not liable for the debts that remain | | | | Corporate Litigation |
| to be paid to the creditors. This rule is known as limited | | | | As per the Corporate Law, as framed under the |
| liability and is the reason why corporations have a | | | | Corporate Constitution, members of the company |
| name ending with Ltd. | | | | have rights against the company and against each |
| Corporate Constitution | | | | other. According to this right, minority shareholders |
| Corporate law is derived from two sources which | | | | should accept that they do not have an overall control |
| constitute the corporate constitution. In some common | | | | over the company and have to accept the wishes of |
| law countries including United States, corporate | | | | the majority shareholders. This is because of their |
| constitution is divided into two different documents. | | | | voting limits. This is usually known as the majority rule. |
| The main and primary document is the Memorandum | | | | However, especially in case there is only one majority |
| of association which regulates the activities of the | | | | shareholder, this customary majority rule may be |
| companies with the outer world. This document implies | | | | unethical. |
| the various objects to be followed by the company | | | | There are number of exceptions to this majority rule, |
| and provides the authorized share capital of the | | | | according to the Corporate Law. Minority Members |
| company. | | | | have the right to sue the majority shareholders if they |
| The second document is the Articles of Association | | | | are voting to fool the minority and if the majority |
| which regulates the internal management and affairs | | | | invades the personal right of the minority. Another |
| of the company. These internal procedures include | | | | exception is that if the company is controlled by |
| board meetings, entitlements etc. In case of an | | | | potential wrongdoers, the minority shareholders can file |
| inconsistency, only the memorandum is publicized in | | | | a suit against them. |