Raising of the Corporate Veil - ENRON

1 Important Concepts In his landmark work wealthiness of Nations, Adam metalworker recounts a fascinating history of evolution of commerce. From the days of feudalistic lords, to those of merchants, guilds and sovereigns, he narrates a logical taking over of evolution that has lead to the current day wads. As business grew, it was felt that businesses might outlast the proprietors. Thus surfaced the pattern of treating the business as a break up sub judice entity. Then, to encourage a spirit of entrepreneurship and risk-taking, the concept of express send liability was introduced. This assured the business featureer that he/she would be reasonable to a limited extent in fictional eccentric of the failure of business. Soon, it was felt that professional help was needed in the ever-increasing complexity of the businesses. Also, distributed pattern of professership necessitated a separation among the ownership and management. This then led to the problem of Principal / cistron remainder and agency costs, as the interests of the owners and the managers were practically divergent. In this section, we discuss these concepts as they apply to corporates. 1.1 Separate Legal Entity The word commode derives from the Latin corpus (body), representing a body of people, i.e.: a chemical group of people authorised to act as an individual.

A can is a legal entity ( distinguishable from a natural person) that often has kindred rights in law to those of a natural person. It has its own rights, privileges, and liabilities distinct from those of its members. It has special privileges not vouchsafed to ordinary unincorporated busin! esses, to unbidden associations, or to groups of individuals. It is therefore extremely important that a corporation watch its own discontinue bank accounts and that it be treated at all times as a separate entity with its own assets. This ensures that a corporation will continue ceaseless stock-still after... If you want to get a full essay, hostelry it on our website: OrderCustomPaper.com

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