Share Company Law. Key concepts and Definitions
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A legally recognized organization that is formed to conduct business. It can take various forms such as a sole proprietorship, partnership, or company.
A business entity
An entity (such as a company or organization) that has legal rights and obligations, similar to those of a natural person, including the capacity to enter into contracts and sue or be sued.
A legal person
A group of individuals elected by shareholders to manage and oversee the affairs of a company.
The board of directors
A person or institution that owns stocks in a company and thus holds a portion of its ownership.
A shareholder
A person appointed to the board of directors who helps make major decisions and ensure the company complies with its legal obligations.
A company director
A person or entity to whom money is owed by the company.
A creditor
A government or independent authority that oversees and enforces compliance with laws and regulations in a specific sector, such as company law or financial services.
Regulator
An individual who owns and operates a business alone, with no legal distinction between the owner and the business.
A sole proprietor/trader
The legal process of creating a new company, including registration with the relevant authority (e.g., Companies House in the UK).
Company formation
An official document issued by a government authority that confirms a company’s legal existence.
Certificate of incorporation
Legal documents that govern the internal structure and operation of a company, typically including the memorandum and articles of association.
Constitutional documents
A legal document that sets out the company’s relationship with the outside world, including the company’s name, objectives, and initial subscribers.
The memorandum of association
A document that outlines the rules for the internal management of the company, including procedures for meetings, voting rights, and the roles of directors.
The articles of association
A type of company structure where the owners (members) have limited liability, protecting their personal assets from company debts. Common in the US.
LLC
A company whose shares are traded on a public stock exchange and can be bought by the general public. Typically subject to stricter regulations.
PLC
A company whose shares are privately held and not traded publicly. Shareholders have limited liability.
Ltd (a private limited company)
