What Is Corporate Law?

Corporate law is a field of law that deals with issues relating to corporations. Corporations are unique in the eyes of the law, because they are considered a single entity, even though they might have hundreds or even thousands of employees. In the eyes of the law, the identity of a corporation is distinct from its shareholders, directors, and employees. This means that a corporation claims many of the rights that individual people have, and also means that the people who own shares in or run the corporation are not held liable for its actions.

While corporate law is named for corporations, it’s a body of law that regulates private companies and public ones, as well as sole traders, partnerships, and businesses. Each of these business entities are viewed differently by the law, in terms of how it’s financed, who takes a share of the profits, and who is responsible for debts.

Sole traders and partnerships are owned and run by a small number of people who collectively finance the business, split the profits, and share debt liability. Some small and medium businesses may also be included in this category.

Companies and corporations are considered separate legal entities, meaning that personal liability is limited, and shareholders and directors are not liable for debts. Owners and shareholders finance the organisation and receive the profits.

Private companies are owned by private individuals or groups, who are responsible for acquiring funding, and who share in the profits.

Corporations or public companies are financed by partly or fully by shareholders and are listed on the stock exchange.

Many matters of corporate law are related not to resolving disputes, but simply to helping organisations function on a day-to-day basis. Because a business can be organised in so many different ways, the field of corporate law covers a broad range of issues and situations. For instance, setting up a small business with financial help from a venture capitalist, helping a private corporation list on the stock exchange, and restructuring a corporate entity are all examples of matters that involve corporate law.

Corporate Law Processes

In corporate law, the two main processes involved in resolving disputes are arbitration and litigation. Mediation, in which the disputing parties try to settle the dispute through negotiation that is directed by a mediator, is rarely used to settle corporate disputes.


Arbitration is an alternative method of dispute resolution, which simply means it’s an alternative to the court system. Arbitration is conducted similar to court proceedings, where the disputing parties—or more usually their legal representatives—give evidence before an arbitrator.

Arbitration is the dispute resolution method that tends to be preferred by corporations, for several reasons. One reason is that the arbitrator who hears the case makes a legally binding judgement that both parties must abide by. Another is that arbitration is a private method of settling disputes.

In comparison, another possible method of alternative dispute resolution, mediation, doesn’t provide a legally binding result. And, while the court system produces a legally binding result, it is not necessarily private, which means that a corporation may risk unwanted publicity that might harm its reputation or damage its business relationships. Finally, arbitration is preferred because it’s generally quicker and less costly than a court case.

Litigation via the court system

If one or both parties are unwilling to use arbitration as a method of resolving the dispute, then the case may be taken to the courts to be settled through litigation.

In litigation, the plaintiff begins the process by filing a complaint with a civil court, which summarises their position and names the defendant. They must also ensure the defendant receives a copy of the complaint within a certain period of time. Next, the defendant must issue an acknowledgement of service—meaning they accept the charge made by the plaintiff—or file a defence, meaning they plan to challenge the claim.

The next stage is discovery, also known as a case management conference or hearing, where each side has the opportunity to review documents and evidence such as witness statements and expert reports from the other side.

During the trial itself, a judge hears evidence from both sides, and then makes a legally binding judgement. Depending on the nature of the case, the judgement might order the defendant to pay the plaintiff financial compensation or some other form of restitution, might order one party to fulfil a contractual obligation, or might order one party to refrain from taking a particular action.

If either party is dissatisfied with the outcome of the trial, they have the option of applying to appeal the decision, which may result in a second trial, or some other form of legal proceedings.

How can a Solicitor Help?

In most matters of corporate law, retaining the advice and help of a solicitor is almost essential. However, the various different kinds of businesses and organisations vary in their need for a solicitor, and in the type of work a solicitor might do for them. For instance, while a small business owner might need the services of a solicitor only occasionally, large corporations may work with multiple solicitors and law firms regularly, or may even have their own in-house solicitors working for them. For this and other reasons, many corporate solicitors specialise in working with particular kinds of business entities, and some even specialise in certain kinds of corporate transactions, such as mergers and acquisitions or equity finance.

In general, the kinds of things a corporate solicitor can do include:

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