A set of laws that are put in place to deal with the operations as well as the formation of corporation is known as corporate law. In order to understand corporate laws, one must first understand what corporations are. Corporations can be defined as a legal entity that operates within the laws of the state which it is incorporated with.
Although state laws in the US are different in different states, they exist so that it can regulate the organization, dissolution as well as the creation of corporations. In order to maintain business and other necessities, corporations are promoted as a person, which means that they are capable of suing or being sued.
Corporations are also taxable so that the owners and shareholders can be protected from liabilities. It also protects them from debts that are accumulated in the corporation. The exception to this is unpaid taxes, although this is limited.
The taxes that corporations have to pay are lower than that paid by ordinary individuals. The life of a corporation is endless which mean the demise of certain officials and stockholders wouldn’t affect structure of the corporation.
The US Supreme Court holds the ultimate say in matters regarding the rights and powers that are distributed to the people as well as the states which is why, at the federal level, it holds the highest legal authority. If a law that has been passed is seen as unconstitutional, the federal courts have the power to nullify the law.Anyone that resides in the US, including permanent resident, citizens and corporations are supposed to pay federal tax. Worldwide income, the state in which they reside notwithstanding, of these individuals are also taxable.
By reviewing the issue at hand, state laws may surpass federal laws in terms of superiority. It can also be inferior. State laws may exist to give the residents living in the state more rights.
This is why businesses are created more at the state level. The state also govern shareholder and regulation rights.
Privileges and Immunities Clause
This mandates each state to treat people from other states in the same manner as they treat their own people.
From a business point of view, no business can be prevented from operating in a state unless their intents are malicious. “Foreign” business entities can go about their operations as much as “domestic” business entities. To define what company is foreign and what’s not, one formed outside the state borders are called foreign companies. Hence, whichever state has laws that are favourable can be chosen by a company to do business.