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. 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 the person to whom the instrument is being transferred is known by the signer

It is bearer paper if the commercial paper is made "to bearer" or it is not made out to any particular person. Any holder of the paper can redeem it, subject to certain defenses.

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.

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. A company's ultimate owners are investors (or "stockholders," the words are by and large interchangeable). We are eligible to elect directors, vote on major corporate decisions (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 person doing the preliminary work that is incidental to a company being formed, including its promotion, incorporation, and flotation, and asking people to invest money in the company, usually when it is formed. An investment banker, an underwriter, or a shareholder may perform a promoter's role in whole or in part. Promoters generally owe a duty of utmost good faith so that potential investors are not misled and all material facts about the business of the company are disclosed.

6. Piercing the corporate veil" refers to a case in which courts set aside limited liability and hold the owners or directors of a company directly responsible for the acts or liabilities of the corporation. Veil piercing is most common in near corporations. Although the law varies by state, courts usually have a strong presumption against breaching the corporate veil, and may do so even if it has a corporate veil.