Why is it important to give organisations legal personalities
Answers
International legal personality is an important facet of international law that has developed throughout history as a means of international representation. With the acquirement of personality comes privileges and responsibilities. Personality has been given to states, corporations, non-governmental organizations, international organizations, and individuals[citation needed].
Explanation:
There are many factors that influence incorporation. The state of incorporation is the process by which a business receives a state charter allowing it to be corporation. That is the formation of the company. This is when a business entity takes a step to be separated from its members and owners. This form of distinction is called separate legal entity. This in law is defined as a company being different from its owners, this means that a company is an artificial person who can sue or be sued in their own name. This means that if a company needs to get involved in any kind of legal action, it is free to do so as it is on its own. When a company is being sued the company is on its own as a legal artificial person, the members belongings are not at risk of being taken away when the action is taken against the company. For a company to come into existence it should first have enough capital, this is to make sure that company will continue running in the foreseeable future. There seem to be no problem with a company starting with capital minimum as £10 but this does not secure the company’s future. The creditors must be assured that they would get paid. This also implies that a company is formed with the view that it would not dissolve. This is governed by the insolvency act which governs issues related to things like bankruptcy. Before a company is incorporated it has to know if it is going to be a public or a private company. Then after it has to know how it is going to raise its capital. Since public companies are listed at the stock exchange and are opened to the public for them to invest and raise capital for the company while private companies allot shares to members within the company itself. Incorporation can also be brought about by the fact that is that the company will be experiencing limited liability. Limited liability means that the members and owners are not personally liable for the losses and liabilities of the business. Limited liability concept protects the members against creditors running after them personally. Like it is mentioned earlier the business is by itself.
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