What Is A Corporation?
A corporation is a company or a group of people who act as legal entities separately to run a business. A business gains this status when it incorporates, meaning that the business assets are separated from personal assets.
Simply put, when someone owns shares of a company, they have limited liability; in case of any business loss, they will only bear the loss of the amount they invested. They will not be held responsible for the company’s debts. Businesses decide to become a corporation because it protects their personal assets, allows easy transfer of ownership, makes it easier to raise capital and lowers the tax rate.
Shikana Group provides corporate legal advisory services in East Africa. Their team of professional lawyers with significant experience under their belt can help you regarding the legal matters of your business.
What Do Corporate Laws Do?
Corporations are known to hold a large amount of money and decent power in the market; as they grow, they start to monopolize the industry, which makes them the leading provider of any particular industry.
People might assume that corporate laws are made to make the company jump higher and become the exclusive provider in the industry, which is not the case. The purpose of corporate laws is to maintain balance in the market so new companies can enter and compete with others. They keep all the companies on an even playing field by implying equal laws, and it prevents any unpredictable business behavior.
Difference Between Corporate Law And Business Law
There has been confusion between business and corporate law; both of these are concerned with legal matters and have specific roles that people are unaware of; the main difference between the two laws is that business law deals with employment, contracts, and taxes, while corporate law deals with the issues regarding purchasing and selling of the items in the market.
With appropriate knowledge about both the laws, companies can quickly differentiate and imply the law according to their need.
Corporations need lawyers with a significant amount of knowledge and experience in contract law, tax law, bankruptcy, and all the other branches of law that may affect the compliance of the business. This need of the corporation requires expertise in the field, and corporate lawyers have the talent and skills that these companies need.
Corporations usually like to get all the help they can get, which is why they prefer consulting medium to large advisory firms because they have a wide range of expertise in all areas of the law. Corporations might face more situations where they need legal advice, which is why corporate lawyers also build a relationship with these companies.
However, rather than hiring another firm, some corporations do prefer to have a whole team of lawyers working under them.
Reasons To Hire A Corporate Lawyer
Legal matters can be hard to avoid, especially if you are running a corporation; there might be unpredictable events that will get you entangled in legal matters. To prevent any of that, a corporation needs an experienced and trustworthy corporate lawyer who can take care of the legal matters if any disputes arise. Here are some areas where they can offer their help.
- To choose the correct entity for your business.
- Negotiation and signing of leases, contracts, and agreements.
- Administering an acquisition.
- Receiving financing.
- To protect your intellectual entity.
- Establishing a fair hiring system.
Hundreds of companies from different cities apply to corporations, and without legal assistance, it is impossible to manage the compliance of laws, which is why hiring a corporate lawyer is essential to run a corporation smoothly and effectively.
Categories Of Corporate Law
Some common areas of corporate law include;
- Business formation laws establish the steps to form a corporation.
- Consumer protection law to prevent fraud.
- Laws governing licenses and permits.
- Environmental laws.
- Employment and hiring statutes that protect the employees working at the corporation.
If you want to know more about corporate laws and seek corporate legal advisory services, reach out to Shikana Group. Their team of professional legal advisors will help you in your corporate legal matters.