What is corporate law?

There is a lot of confusion around as to what corporate law is. There is much speculation, and little authentic information. In this post, New York City corporate lawyer, Hartley Bernstein, debunks a few common myths and provides a clear explanation of corporate law.

One of the most common myths surrounding corporations and the corporate law is that the legal system treats companies independently. In colloquial language, it means that people can sue modern corporations can be sued, without suing their shareholders and partners. Another interesting aspect of independent treatment is that shareholders have little liability. A corporation can go bankrupt, without taking its shareholders along with itself.

Corporate law in its modern form has been around for nearly half a millennium. It developed during the Age of Discovery when European traders partnered with each other to dissipate risk through the formation of guilds. The British East India Company, the Dutch East India Company, the French East India Company are early manifestations of the willingness of individuals to come together, spread risk, and fund projects that are too costly for independent funding.

Royal charters in Europe gave special privileges to these groupings. Very soon the grouping began to exist as an identity separate from its investors. A set of rules and regulations was required to control and direct this grouping. That set of rules was the beginning of corporate law. Over the next few centuries, corporate law has become increasingly sophisticated and complex. The globalisation of the past few decades has made corporate law essential to modern life, without with complex agreements are near-to-impossible.

The function of corporate law is not confrontation, as the recent legal battle between Apple and Samsung may have suggested. Instead, it focuses on mutual corporation. There are times when organisations battle between themselves. At the same time, there are times when organisations have to cooperate to tackle bigger projects. Corporate law assists firms in both situations.

To conclude, corporate law is not a shady profession. It is an essential part of the way modern society and corporations function. It facilities their working.

Hartley Bernstein is a New York based corporate lawyer. He has been practicing for more than 35 years. He has represented 100s of corporate and individual clients during his career.