It's the law of business associations is the field of law concerning companies and other business organizations. This includes corporations, partnerships and other associations which usually carry on some form of economic or charitable activity. The most prominent kind of company, usually referred to as a "corporation", is a "juristic person", i.e. it has separate legal personality, and those who invest money into the business have limited liability for any losses the company makes, governed by corporate law. The largest companies are usually publicly listed on stock exchanges around the world. Even single individuals, also known as sole traders may incorporate themselves and limit their liability in order to carry on a business. All different forms of companies depend on the particular law of the particular country in which they reside.
There are various types of company that can be formed in different jurisdictions, but the most common forms of company are:
- 1. A company limited by guarantee. Commonly used where companies are formed for non-commercial purposes, such as clubs or charities. The members guarantee the payment of certain (usually nominal) amounts if the company goes into insolvent liquidation, but otherwise they have no economic rights in relation to the company .
- 2. A company limited by guarantee with a share capital. A hybrid entity, usually used where the company is formed for non-commercial purposes, but the activities of the company are partly funded by investors who expect a return.
- 3. A company limited by shares. The most common form of company used for business ventures.
- 4. Unlimited company either with or without a share capital. This is a hybrid company, a company similar to its limited company (Ltd.) counterpart but where the members or shareholders do not benefit from limited liability should the company ever go into formal liquidation.
There are, however, many specific categories of corporations and other business organizations which may be formed in various countries and jurisdictions throughout the world. The law of business organizations originally derived from the common law of England, but has evolved significantly in the 20th century.
In common law countries today, most addressed forms are:
- - Corporation
- - Limited company
- - Unlimited company
- - Limited liability partnership
- - Limited partnership
- - Not-for-profit corporation
- - Company limited by guarantee
- - Partnership
- - Sole Proprietorship