The following sets out some basic principles of corporate law and is designed to provide lay persons with a general framework for understanding how corporations work and the rights and responsibilities of shareholders and directors.
It is important to have a clear understanding of some of the terms used when discussing corporate law principles because these terms have meanings which are somewhat different than the everyday meanings of these words.
Person and Individual
In law the word “individual” is used to describe an actual fleshy human being that walks and breathes, and the word “person” is used to describe a legal entity that has certain legal powers, such as the power to enter into contracts, to own property, and to sue and be sued.
A legal person is not necessarily an individual, but all individuals are legal persons.