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Assignment sample solution of BL201 - Corporate Law

Q.1 Discuss the concept of separate legal entities in corporate law.

Q.2 What are directors’ duties under corporate law?

Q.3 Explain the purpose of corporate governance.

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Business law Assignment Sample

Q1:

Answer :

Q.1 Ans. The doctrine of a separate legal entity establishes that a corporation is distinct from its shareholders and directors. This principle was affirmed in Salomon v. Salomon & Co. Ltd. (1897), where the court upheld the company’s independent legal identity. As a separate entity, a company can own property, enter contracts, and sue or be sued. This distinction provides limited liability protection, ensuring shareholders' personal assets are not at risk for corporate debts.

Q.2 Ans. Directors’ duties include acting in good faith, avoiding conflicts of interest, exercising due care, and acting in the company’s best interest. These fiduciary duties are governed by statutory laws such as the Corporations Act 2001 (Australia). Breaches, such as insider trading or negligence, can result in personal liability. For example, failing to disclose a conflict of interest could harm corporate trust and attract legal sanctions.

 

Q.3 Ans. Corporate governance refers to the systems and processes by which a company is directed and controlled. Its purpose is to ensure transparency, accountability, and ethical management, benefiting stakeholders like shareholders, employees, and customers. Effective governance minimizes risks, enhances decision-making, and ensures compliance with laws. Principles like board diversity, stakeholder engagement, and financial reporting underpin governance standards globally.