Company law Essay Example | Topics and Well Written Essays - 4500 words

Company law - Essay ExampleIt must be emphasized that the confederation is nothing but a collection of individuals and not a recognise entity in itself. As such, there is no concept of limited liability. All the partners be jointly and severally liable for the debts of the business. This means that the creditors of the business can not only seize the assets which were border into the Business by the partners, but also to the in the flesh(predicate) assets of the partners. So for example if your Business defaults on the loan that you intend to take out from Credit Crunch Bank, then not only give the 10,000 put in by each partner be liable for forfeiture, but the personal assets of the partners will also be up for grabs. To emphasize the point, under a partnership there is no dividing line between the Business and the Partners themselves.A private company limited by shares is different. Here a company will be incorporated having separate legal personality and the Business will be carried out by this company. In the eyes of the law, the company is a separate person just like all you and your fellow colleagues are different people. Any debts of the company will re main(prenominal) its own and will not rise over to the shareowners. Similarly, any assets contributed to the company will belong to the company and will no longer be a part of the shareholders estate.The main duty of the shareholder is to contribute to the value of the share. Once this is done, there is no further liability on the shareholder. Even if the company later faces debts, the personal assets of the shareholder are safe. The concepts of separate legal personality and limited liability come together to ensure that the liability of the shareholder is limited to any amounts unpaid on the price of the shares and nothing else. So if, as before, the company defaulted on the Credit Crunch Bank loan, then only the assets of the business such as the myriad each contributed as capital by you and yo ur colleagues would