Legal Principles on Company

As stated in the previous post, Company is a separate legal entity and it's dinstinct from its members and shareholders.

Some legal principles hold for companies and among them are what I shall discuss below:

Doctrine of Corporate Legal Entity

A company is seen as just like a human individual entity and in no way will the position of a company interferes with the personality of the owners, members or shareholders of the company. The legal entity signifies that a company answers a name of its own, can sue and be sued, can buy, sell, lease and mortgage its property in its own name. So when there is any crises or legal issue, the owner of a company is treated differently and also the company as an individual legal entity.

• Legal decided case: Salomon vs Salomon Co. Ltd [1897] - A landmark UK company case of a shoemaker owned and operated by a single person. The case was upheld from a debt history that Mr Salomon found himself and the company in. The principle held was that the company will have to bear the liabilities alone and not with the owner of the company. (Please Kindly read the details of the case as provided in law references.

Lifting the Veil of Incorporation

This means that in certain circumstances, the directors and members of the company might be personally liable for theirbsiness transactions. Those circumstances include:

1. Business carried on when there are fewer than two members.
2. Defrauding the creditors.
3. Signing documents without the name of the company.

• Case: Lee William Leitch Bros Ltd. The company carried on business even after insolvency and the creditors discovered that they would not be able to pay. It was held that they carried out business with an intent to defaraud creditors. Hence, the directors of the company would be personally liable for the debts.

The Company and Its Law

A company is said to be "an association of persons formed for the purpose of an undertaking or business carried on in the name of association".

It should be emphasised that BUSINESS is any activity that provides good or services at a profit; then, every business carried out in no matter the form it takes, must be registered and must be not be illegal.

Types of Business:

1. Sole Proprietorship: it's the simplest form of business organization with minimal legal requirement. It's owned by one person but can have large number of employees. The liabilities are unlimited and the business ceases if the owner dies.

2. Partnership: it's the agreement between to or more people to engage their capital in working together. The responsibility, debt and risk of the company is shared among the partners. The liabilities are also unlimited and a partnership may end if any of the partners resigns or dies.

3. Companies: this is a separate legal entity and is distinct from its members and shareholders. A formed company is said to have been "incorporated". A company can own a property, make contracts, employ people and being sued or sue other party. Continuity continues in company is any of the members dies or incapacitated.

Classification of Companies: Companies could be any of the forms listed below:

• Unlimited and Limited Company
• Public and Private Company
• Holding and Subsidiary Company

The Doctrine of Stare Decisis

Dear Readers,

The topic for discussion in this post is "Doctrine of Stare Decisis"! What does it really mean and where, how and when is it used? Please dare to follow me as I will try to unveil few thruths about the Doctrine of Stare Decisis.

Stare Decisis is a legal term often used to refered to as the Doctrine of Stare Decisis. The words originates from the Latin phrase stare decisis et non quieta movere, which means "maintain what has been decided and do not alter that which has been established". According to the World Dictionary of Foreign Expression, Stare decisis means the principle of precedent where a judge is bound generally to apply principles and rules contained in earlier decisions.

For different countries as they have different leagal system, the doctrine of stare decisis depends on whether the country legal system avails the principle or not. It is known that the English and the American legal system practice the doctrine of stare decisis. In contrast, the French legal system does not practise the doctrine of stare decisis but offers instructive comparison.

The application of doctrine of stare decisis holds horizontally and vertically. Vertically, the inferior courts which conducts almost all the trial proceedings are bound to obey precedents by a superior court. E.g. a High Court to Court of Appeal; and Court of Appeal to Supreme Court. Horizontally, a judge is bound by (or at least should respect) decisions of earlier judges of similar or coordinate.

For every country whose legal system supports the Doctrine of Stare decisis, it's no mistake when you see a judge making references to previous decisions that have been upheld in the past before he or she gives aa final verdict. This is because he or she is bound by the doctrine od stare decisis. So unless it is abolished in that country, the doctrine of stare decisis will continue to hold.

For more reference, visit:

http://www.wickedlocal.com/cambridge/news/opinions/x1658506774/Guest-commentary-Stare-decisis-The-Supreme-Court-versus-the-Administration

http://en.wikipedia.org/wiki/Stare_decisis