The separate legal person.
WHAT A COMPANY IS
A legal person, separate from the people who own and run it.
WHAT THAT MEANS PRACTICALLY
It owns its own assets It enters its own contracts It owes its own debts It continues when owners change
WHY THAT MATTERS
The owners' liability is limited to what they agreed to contribute.
WHAT LIMITS THAT PROTECTION
Personal guarantees given Director duties breached Statutory deductions not remitted Trading while insolvent Fraudulent or reckless conduct Personal and company finances mixed
WHAT THE KEY ROLES ARE
- Shareholders: own the company
- Directors: manage it
- Company secretary: maintains its records and compliance
WHY THE DISTINCTION MATTERS
They have different powers and different obligations, even when the same person holds all three.
WHAT SHAREHOLDERS DECIDE
Fundamental matters: constitution, share capital, appointment and removal of directors, major transactions.
WHAT DIRECTORS DECIDE
Everything else: how the business is run.
WHAT MANY SMALL COMPANIES GET WRONG
Treating the company's money as the owner's.
WHY IT MATTERS
It is the commonest route to losing the protection the structure provides.
WHAT TO ESTABLISH
That the company is genuinely treated as separate.
WHAT TO TREAT THIS CATEGORY AS
General guidance, with specific matters taken from a solicitor or company secretary.
