Commercial Law Outline

A helpful commercial law outline would begin with a description of the nature of a company.

When people set up a business they will usually form a (limited) company or a partnership.  The main distinction between a company and a partnership is that the company is treated as a separate entity or person in law.  The partnership, on the other hand is not seen as a separate entity and consists only of those who have chosen to join together for business purposes.

One other point of note in this commercial law outline is that a company will pay corporation tax, whilst a partnership will pay only that tax due as an individual liability.

A company has access to what is known as "limited liability".  This is where the liability for debt of directors is limited.  Not all companies are limited companies.  If a company is not limited, there is no requirement to file accounts at Companies House.  Partnerships have no such access to limited liability.

A company can separate ownership from control.  People who subscribe to a company and purchase its shares do not necessarily have any control over the company or the running of its business.  This is especially the case in a large Public Limited Company, where shareholders receive a return on their investment in the company.

It is important in any commercial law outline to understand the distinction and advantage for a company in the area of raising finance.  The company as a separate entity can raise finance in its own right, mortgage any assets by way of a floating charge and generally enjoy access to finance that is not available to a partnership.

If you would like to obtain legal advice in relation to commercial law, Contact Law can put you in touch with a local specialist commercial solicitor free of charge.  So if you have any questions or would like our help in finding local commercial law solicitors, please call us at 0800 1777 162 or complete the web-form above.