Question

1. What is order paper and what is bearer paper?

2. What are the main types of negotiable instruments?

3. What is the law merchant?

4. Who owns a corporation?

5. Who are the promoters of a corporation?

6. What does it mean to pierce the corporate veil?

Answer 1

1. A negotiable instrument (e.g. a bond) payable to the possessor (is the bearer). Compare an order paper that is payable only to the person named on the document. For example, a check is payable only to the person named on the check (the person to whom the paper commands payment). The order file must contain the words "pay to (identified person)" or "to (identified person) or request." Including the word "command" means the instrument is not limited to just one user. That is, the instrument's payee may appoint another person to receive payment. It usually requires the instrument to be indorsed (signed). Signing the instrument renders it bearer paper unless a person to whom the instrument is being transferred is known by the signer.

2. Negotiable instruments are a contractual document that meets certain requirements and can be transferred either through the application of the law or through the practice of the bleed in question.

Common Types of Negotiable Instruments are;

• Promissory notes.
• Bill of exchange.
• Check.
• Government promissory notes.
• Delivery orders.

3. Law merchant, during the Middle Ages, adopted the body of customary rules and principles concerning merchants and merchant transactions for the purpose of regulating their transactions. Initially, it was largely administered in special quasi-judicial tribunals such as those of the Italian guilds and later regularly constituted piepoudre tribunals in England

4. Shareholders (or "stockholders") are the ultimate owners of a corporation, the terms are by and large interchangeable. They are entitled to elect directors, vote on major corporate actions (such as mergers) and share the company's profits. Shareholders, however, have no right to direct the corporation's day-to-day operations.

5. A corporate promoter is a company or individual doing the preliminary work that is incidental to a company being created, including its creation, incorporation and flotation, and asking people to invest money in the company, usually when it is formed. An investment banker, an underwriter, or an investor can perform a promoter's position in whole or in part. Promoters usually owe a duty of absolute good faith so that potential investors are not deceived and all relevant information about the operation of the company are published.

6. Piercing the corporate veil "refers to a situation in which courts set aside limited liability and hold the shareholders or directors of a corporation personally liable for the actions or debts of the corporation. Veil piercing is most common in close corporations. While the law varies by state, courts generally have a strong presumption against piercing the corporate veil, and will do so only if it has a corporate veil.