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Simple English definitions for legal terms
continuity of existence
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A quick definition of continuity of existence:
Continuity of Existence: This means that even if the owner of a company dies, becomes unable to work, or the company goes bankrupt, the company still exists. It doesn't just disappear. This is especially important for corporations.
A more thorough explanation:
Definition: Continuity of existence, also known as the continuity-of-life doctrine, is the principle that the withdrawal, incapacity, bankruptcy, or death of the owner of an entity (especially a corporation) does not end the entity's existence.
Example: Let's say John owns a corporation. If John dies, the corporation will continue to exist and operate as usual. The same applies if John becomes incapacitated or bankrupt. The corporation is a separate legal entity from John, and its existence is not dependent on his personal circumstances.
This principle is important because it allows corporations to continue operating even if there are changes in ownership or management. It also provides stability and continuity for employees, customers, and other stakeholders.