Corporate law (also corporations law or company law) refers to the law establishing separate legal entities known as the company or corporation and governs the most prevalent legal models for firms, for instance limited companies (Ltd or Pty Ltd), publicly limited companies (plc) or incorporated businesses (Inc.).
In the U.K., corporate law is a subset of companies law, and in the U.S., it is often viewed (at least for teaching purposes) as part of the law of business associations. In each case, corporations are distinguished from a wider spectrum of organizational forms, such as partnerships, trusts, unincorporated associations, guilds or sole proprietorships.
Technically, a company (in the U.S., a corporation) is a juristic person or legal entity which has a separate legal identity from its shareholding members, and is ordinarily incorporated to undertake commercial business. Although some jurisdictions refer to unincorporated entities as companies, in most jurisdictions the term refers only to incorporated entities. It has been judicially remarked that "the word company has no strictly legal meaning", but is taken to mean a specific form of entity created under the laws of the relevant jurisdiction. Because of the limited liability of the members of the company (in the U.S., the shareholders of the corporation) for the company's debts and the separate personality and tax treatment of the company, it has become the most popular form of business vehicle in most countries in the world.
However, companies have a number of other uses. They are not normally subject to rules against mortmain or perpetuity as are trusts, and may have perpetual existence. Companies are often used in tax structuring. Companies, being commercial entities, are often easier to utilise in financing arrangements than partnerships and individuals. Companies have an inherent flexibility which can let them grow; there is no legal reason why a company initially formed by a sole proprietor cannot eventually grow to be a publicly listed company, but a partnership will generally always be limited as to the maximum number of partners.
