Company Law Essay Example | Topics and Well Written Essays - 2000 words - 8

Company Law - Essay Example Scholars denote that because a business organization is incorporated, then the assets of these people are protected from seizures by creditors of the company. That is, the owners of the business under consideration are not liable for the liabilities of the company2. It is also easy for the owners of the company to raise capital through the stock market; it is simple to transfer the ownership of this company to another individual, the tax charged on a company is lower as compared to a personal income, and finally, a company that is incorporated is able to achieve a lenient tax restriction, on losses that are carried forward. The Company’s Act of 2006 provides for the issuance of an article of incorporation once a company is incorporated. This article of incorporation is responsible for identifying the main purpose of the company, the location of the company, the number of shares issued by the company, etc. This article of incorporation will also contain the specific date of the company’s registration, and the fees paid for the incorporation. It is important to understand that majority of companies are created for the main purpose of doing business. This is an aspect that the British parliament wants to encourage, and this is because the existence of many companies in Britain will lead to an improvement in the economy of the country, and creation of jobs. However, it is important to understand that doing business is a risky affair, and a business organization might fail, or it may acquire some profits3. This acquisition of profits is the major incentive that makes people to engage in a business initiative. It is important to understand that the common law principle denotes that an individual who provides capital for a business operation, and is responsible for sharing the profits that the business makes, is also liable for any debts that the business under