LawyersOpinion
Ownership of a private company versus ownership of the company’s properties – The shareholders limitations
The author draws the distinction between the ownership of a private company and the ownership of its assets and offers recommendations for the promotion of compliance with long-standing company law practices and principles on company proper...
Capital given by shareholders provides initial funding for a private company’s operational activities. Additionally, shareholders could extend debt or loan to support a company’s operational activities. These shareholders’ financial investments coupled with other 3rd party credits or debts are used in the value generation (properties/assets and profits) activities of companies.
Shareholders as the residual owners of a company are not entitled to the direct benefits of properties/assets or profits of companies. By incorporation, a private company is bestowed with some unique characteristics – legal personality, limited liability, perpetual existence, centralized management, etc which insulates its operations, management, properties, liabilities among others from the personal benefits or use by its shareholders.
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