Commercial law is also popular in other terms, such as trade law, or mercantile law. It is the body of law that governs the following:
- Conduct of persons
All the mentioned above engaged in sales, commerce, merchandising, and trade. It is often considered a branch of civil law and deals with both public and private law. It is also referred to as the legal practice of law connecting to corporations or the theory of corporations. A corporate law governs the body of law in legal entities and conducts business.
Corporations formed under the corporation owner and state law are referred to as the shareholders. It is applicable to the three types of a corporation:
- S Corporation
- C Corporation
- B Corporation
Legal issues of a corporation may encompass corporate law. Corporations are subject to several regulations to follow to enjoy tax and other benefits to be received.
Four Principles of a commercial law
- Legal personality. Corporation owners put their resources into a variety of entities. The entity can use its assets and then sell them. The creditors can’t take the assets back quickly but form a separate entity that acts on its connection.
- Limited liability. It is one of the benefits of a corporation. It is when a corporation will be sued, but only the assets are at risk. The complainant doesn’t go after any individual assets from the corporation’s owner.
- Delegated management. A defined structure in corporations, regarding how they handled their affairs. The board of directors and officers share the responsibilities of making any decision. The board members are in-charge of monitoring and hiring officers. Additionally, confirming any big decision they make.
- Transfer shares. The owners may transfer the shares. For example, if an owner ended up deciding they can’t own part of the corporation. It doesn’t mean the corporation needs to close. The distinctive part of the corporation is the owners can transfer shares without difficulties and hassles often related to ownership transferring a partnership.
The owners will always have a say in making decisions for a corporation; this is covered under hong kong commercial law. But, they are not in charge of running the business directly. The owner has the right to make decisions and takes part in profit sharing related to the ownership interest. A corporation must be knowledgeable regarding commercial law, if not, a corporate lawyer can legally assist your business.