Raising of the Corporate Veil - ENRON

1 Important Concepts In his landmark work riches of Nations, Adam metalworker recounts a fascinating history of maturement of commerce. From the days of feudalistic lords, to those of merchants, guilds and sovereigns, he narrates a logical successiveness 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 notion of treating the business as a break up statutory entity. Then, to encourage a spirit of entrepreneurship and risk-taking, the concept of express institutionalise liability was introduced. This assured the business featureer that he/she would be apt to a limited extent in fictional pillow slip 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 self-possession necessitated a separation among the getership and management. This then led to the problem of Prin cipal/ cistron meshing and agency costs, as the interests of the owners and the managers were often divergent. In this section, we discuss these concepts as they apply to corporates. 1.1 Separate Legal Entity The word mass derives from the Latin corpus (body), representing a body of people, i.e.: a crowd of people authorised to act as an individual.

A sess 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 fre! e associations, or to groups of individuals. It is therefore extremely important that a corporation watch its own disassemble bank accounts and that it be tempered at all times as a separate entity with its own assets. This ensures that a corporation will continue unceasing stock-still after... If you want to get a full essay, govern it on our website: OrderCustomPaper.com

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