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LAW OF BUSINESS1
TABLE OF CONTENTS1.INTRODUCTION3.2.Concept of Incorporation3.3.Distinct Corporate Personality3.4.Consequences of Separate Legal Personality5.5.Roles and Responsibilities5.6.Piercing the Corporate Veil6.7.CONCLUSION7.8.REFERENCES8.2
INTRODUCTIONIncorporation marks the birth of a corporate personality in legal terms, though it doesnot have any physical presence. The operations and functions of a company are undertakenonly by the human minds as otherwise it is not possible for a company to operate on its own.Hence the entire credit of all the profits and losses can be given to all the personnel who areresponsible for managing the business. However, it is important to note that all these actionsare undertaken only in their professional capacity, in the name of company. This implies thatthere is no direct benefit which they are deriving out for their personal self. In addition, thereare other members in the form of shareholders who are considered as the true owners andmake investment to run to develop the capital of company. In pursuance to the same it washeld by the court that it is essential to establish a distinction between corporate personality ofcompany and those of all the natural persons made responsible for operating the company. Concept of IncorporationIncorporation is an event in the life a company which makes it come into existenceand also enable the corporate personality to come alive. Section 14 of the Company Act 2006requires every entity to register with the concerned authority, in pursuance to which thecertificate of incorporation as stipulated in section of the Act is awarded. This is the juncturewhere the company is said to have incorporated. In section 15 of the Act it has been clearlystated that certificate of incorporation presents a conclusive evidence for valid existence of acompany. Once this certificate is issued by the authorities the body corporate is made entitledto exercise all its functions and operate to earn profits. All the subscribers and other membersof company from this point onwards are known in the name of incorporated company asstated in the certificate of incorporation.Distinct Corporate PersonalityOnce a corporate comes into existence after receiving the certificate of incorporation,it acquires a separate as well as distinct identity. In consequence to which an artificial personcomes into existence who undertakes all its operations or functions. Such an artificial personalso has power to sue others and be sued by others. The English law adopted the concept ofdistinct legal personality which ascertains and creates separate rights and obligations for acorporate. As observed in Mach Marketing International SA v. MacColl (1995), every3
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