Equity instrument and Legal personality: Difference between pages

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A contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities.
The essential feature of a company is that it exists as a separate legal entity distinct from its members.
 
This is the case even if one member owns all the shares. This is known as the separate personality principle.  This principle underpins the whole of company law.
 
The most important consequence of the separate personality principle is that of limited liability. The company is liable without limit for its own debts but, in a limited company, the members, as distinct from the company, have limited liability.


== See also ==
== See also ==
* [[Equity]]
* [[Company]]
* [[Equity capital]]
* [[Legal person]]
* [[Financial instrument]]
* [[Limited liability]]
* [[Separate personality principle]]
   
   



Revision as of 14:19, 23 October 2012

The essential feature of a company is that it exists as a separate legal entity distinct from its members.

This is the case even if one member owns all the shares. This is known as the separate personality principle. This principle underpins the whole of company law.

The most important consequence of the separate personality principle is that of limited liability. The company is liable without limit for its own debts but, in a limited company, the members, as distinct from the company, have limited liability.

See also