. This essay focuses on the company as a legal artificial person. to the previous year, and how it compares with the financial condition of your chosen company’s competitor.
Discuss what this comparison tells you about your chosen company’s current financial condition, how it compares to the previous year, and how it compares with the financial condition of your chosen company’s competitor.
The law treats the company as a legal artificial person because it has its name and bank accounts. It can also own property under its name, file a lawsuit against other companies or personals, or be partnered up with other companies. It performs all of the activities that a person can legally do; a company can do it well. Therefore, it acts as an artificial individual.
The registration process of a company is lengthy; it should have a memorandum of association, board of directors, share prices and shareholders, a name, office, phone number, address, and other legal documentation.
The liability of shareholders is limited to their share price only; it is in the limited companies by share. On the other hand, in the case of limited companies. This is by guarantee, where the share of contributors is like an asset. It is in the company; if the company goes bankrupt, then the shareholders. They have to pay a small amounts to cover up the loss of the company.
When we say legal entity, what it means that it’s completely independent of its people who control its operations. In other words, the company won’t be responsible if its members don’t pay their debt. The same goes for the company as well; that the members don’t have to pay for the debt of the company, if it’s unable to pay to its creditors.