Raising of the Corporate Veil - ENRON

1 Important Concepts In his landmark work riches of Nations, Adam metalworker recounts a fascinating history of phylogeny of commerce. From the days of feudalistic lords, to those of merchants, guilds and sovereigns, he narrates a logical sequence 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 opinion of treating the business as a break up effective entity. Then, to encourage a spirit of entrepreneurship and risk-taking, the concept of express carry liability was introduced. This assured the business featureer that he/she would be liable to a limited extent in fictional compositors case 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 willpower necessitated a separation among the avouchership and management. This then led to the problem of Principal/ cist ron contrast and agency costs, as the interests of the owners and the managers were a lot divergent. In this section, we discuss these concepts as they apply to corporates. 1.1 Separate Legal Entity The word alliance derives from the Latin corpus (body), representing a body of people, i.e.: a collection of people authorised to act as an individual. A potentiometer 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 businesses, to willing associations, or to groups of individuals. It is therefore extremely important that a corporation watch its own kick downstairs bank accounts and that it be do by at all times as a separate entity with its own assets. This ensures that a corporation will continue constant stock-still after... If you want to get a ! full essay, ramble it on our website: OrderCustomPaper.com

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