Table of
Table of Contents
Content
Introduction.................................................................................................................................................4
What is Company Law?............................................................................................................................4
s
Corporate Law v Business Law.................................................................................................................5
Which legal Frameworks?........................................................................................................................6
Business Forms........................................................................................................................................8
Types of Business formats...................................................................................................................9
The Company and its core characteristics.................................................................................................12
Purpose of Companies...........................................................................................................................12
Company Characteristics.......................................................................................................................13
Legal personality................................................................................................................................14
Limited Liability..................................................................................................................................15
Transferable shares...........................................................................................................................15
Delegated management....................................................................................................................16
Shared ownership..............................................................................................................................17
Public Company vs. Private Company....................................................................................................17
Shareholders role & Corporate Organ Interrelationships..........................................................................20
Shareholders..........................................................................................................................................20
Terminology.......................................................................................................................................20
Who can be a shareholder?...............................................................................................................21
Functions of a shareholder................................................................................................................22
Shareholders’ rights and duties.............................................................................................................22
Shareholders voting and the general meeting of shareholders.............................................................24
Shareholders vote on shareholder resolutions..................................................................................24
Shareholders vs. Directors.....................................................................................................................25
Director primacy................................................................................................................................26
Shareholder primacy..........................................................................................................................26
Incorporation and Establishment..............................................................................................................28
, Defining Company or Corporation.........................................................................................................28
Legal personality theories......................................................................................................................28
Public and Private Companies................................................................................................................29
Legal Theory of Company Law...............................................................................................................30
Corporate Legal Origin Theory...............................................................................................................30
Incorporation and Establishment..........................................................................................................31
Constitutional Documents.....................................................................................................................34
Right to Establishment...........................................................................................................................36
Directors....................................................................................................................................................38
Directors of a Company.........................................................................................................................38
POWERS OF THE MANAGEMENT BOARD..............................................................................................39
Who can be a Director?.........................................................................................................................39
The Organization and Structure of Boards.............................................................................................41
Appointment of Directors......................................................................................................................43
Removal of Directors.............................................................................................................................44
Power of Representation.......................................................................................................................45
Principle-Agent Relationship..................................................................................................................47
Duties of Directors.....................................................................................................................................48
To whom are the duties owed?.............................................................................................................48
Company’s interest................................................................................................................................48
Directors’ duties....................................................................................................................................48
Duty of care.......................................................................................................................................49
Duty of Loyalty...................................................................................................................................49
The Statutory Duties..............................................................................................................................49
Duty to avoid conflicts of interest......................................................................................................51
Duties of directors in Insolvency............................................................................................................52
Directors liability....................................................................................................................................53
Insolvency, Winding-up and Dissolution....................................................................................................55
Lifecycle Company.................................................................................................................................55
Insolvency..............................................................................................................................................58
Types of winding-up..............................................................................................................................59
Settling Company’s debts and selling the assets....................................................................................63
,
, Week 1
Introduction
There are legal and natural persons.
Companies are legal persons.
What is Company Law?
Why study it?
o influential role society, economies
o understand dynamics (int’l) business activities
o (intl) commercial transactions
o (intl) trade, free market neo-liberalization & globalization
It is important because…
o Company law regulates companies and the environment which they
move, i.e capital markets
Regulates company organizational structure for business
Terminology
o Company or corporations – differences
For the purpose of this course: used Interchangeably
Company –
From late Latin companio, literally "bread fellow,
messmate,
com "with, together" + panis "bread”
mid-12c. Old French compagnie
o "society, friendship, body of soldiers", large group
from late 13c. Sense of "business association" first
recorded 1550s, having earlier been used in reference to
trade guilds (c. 1300)
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