United Kingdom Company Law - Companies and Civil Law

Companies and Civil Law

See also: UK partnership law, English trust law, English contract law, English tort law, and English unjust enrichment

Companies occupy a special place in civil law, because they have a legal personality separate from those who invest their capital and labour to run the business. The general rules of contract, tort and unjust enrichment operate in the first place against the company as a distinct entity. This differs fundamentally from other forms of business association. A sole trader acquires rights and duties as normal under the general law of obligations. If people carry on business together with a view to profit, they are deemed to have formed a partnership under the Partnership Act 1890 section 1. Like a sole trader, partners will be liable on any contract or tort obligation jointly and severally in shares equal to their monetary contribution, or according to their culpability. Law, accountancy and actuarial firms are commonly organised as partnerships. Since the Limited Liability Partnerships Act 2000, partners can limit the amount they are liable for to their monetary investment in the business, if the partnership owes more money than the enterprise has. Outside these professions, however, the most common method for businesses to limit their liability is by forming a company.

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