Corporate Structure: Nature and Regulatory Framework

To introduce the legal structure of a company and the fundamental reason why a company exists.

Lesson Outline

Structure of Different Business Entities

• Sole Proprietorship: One face/owner where control and management are unified

• Partnership: A group of individuals with a weak form of entity shielding (priority for creditors but no liquidation protection)

• Company: A separate legal personality characterised by asset partitioning between owners and entity

Key Characteristics of a Company

• The Shielding Mechanisms

• Operational Framework

Corporate Purpose

• Maximising wealth for shareholders

• Contributing to society

• Balancing these interests by directors

The Role of Law

• Establishing the corporate structure

• Redressing conflicts between constituencies