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Y2 Advance Corporate Law
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Providing a well-written summary with diagrams, graphics, tables of lecture and workshop notes of Year 2, Quarter 6. The notes include all required cases.
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Advanced Corporate Law (ACL)
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International Bachelor of LAW Program 2019 – 2020Advanced
Course Notes by 18024580 Page 1 of 39
Corporate Law
Course Notes
Lecture 1: Comparative Corporate law
▪ Y1 Recap
It is generally understood that company law (as a body of law) enables the creation of an entity with five
core structural characteristics. These distinguish a company from other corporate forms.
(1) Corporate/ Legal personality
A company is a separate legal entity stated by the law (entity doctrine)
• This personality give s companies the right to undertake actions with legal effect (entering into
contracts) and having legal standing in Court (sue and be sued).
• It is separate from its owners (shareholders) which is different to a sole trader/partnership, where the
business is fundamentally linked to the sole trader/partnership
(2) Limited liability
The SHs of the company have their personal assets and liabilities separated from the
company’s assets and liabilities.
Veil of incorporation: a wall between the SHs and the company created by separate legal
personality of the company through which liability cannot cross.
This differs from a sole proprietorship/partnership where the sole proprietor has unlimited liability for
business and the partners have joint and several unlimited liability for the partnership.
(3) Transferable Shares
:: The ownership of a company is divided among its SHs whom each own a share in the
company, which in principal freely transferrable.
Although that may be limited in a private company by agreement between the SHs
:: Shares have a nominal/par value representing the price invested in the company for the
share. However, they may be sold for a higher price than their nominal/par value.
(4) Delegated Management
The responsibility of managing the company is assigned to directors. They owe a fiduciary
duty to the SHs whose company they are managing and them may also be SHs.
(5) Shared ownership
The ownership of the company is distributed among the SHs in proportion to their
shareholding.
- The SHs have no rights of possession or use the company’s assets.
Unlike if they “own” care – which implies that they can possess and use it.
- SHs have a right to share in the profits of the company.
And the residual (if any) upon the liquidation of the company
▪ Corporate Law
Corporate law rules corporate governance. It provides the balance of powers within a company; (b)
mechanisms to control management and SHs’ rights; and (c) think of issues regarding how
management handles the company or liability of SHs.
❖ Example: what can SHs do if they are not happy with the directors? Or, what can directors do if they feel that
the SHs are interfering with their work?
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