Samenvatting
Corporate Law and Accounting Summary
Excellent summary of theoretical part. Includes everything mentioned in class.
[Meer zien]Voorbeeld 3 van de 24 pagina's
Voorbeeld 3 van de 24 pagina's
In winkelwagenVerkoper
Volgen
Voorbeeld van de inhoud
Lecture 1: Corporate law - IntroductionPart one: Sources of corporate law:
Sources of corporate law heavily depend on the country of origin. In some countries it might be integrated in
the civil code, European directives, jurisprudence and legal doctrine, and primary the code of companies and
associations.
Most important directives of EU corporate law:
1. Second directive of December 13th 1976 on the protection of capital
2. Third directive of October 9th 1978 on the merger of public liability companies
3. Fourth directive of July 25th 1978 on the annual accounts of companies
4. Sixth directive of December 17th 1983 on the demerger of publicly limited liability companies
There have been various initiatives by the European Commission to simplify and harmonise law, which is
done to provide an efficient and modern legal framework. This can also serve as an advantage because it
serves as a competitive advantage against other world players. This is a plan to move forward.
What are some steps towards harmonising?
1.SLIM (Simpler legislation for the Internal Market): it is a made proposal for new legislation to provide a
more efficient and modern legal framework adapted to the new global business environment.
2.High Level Group chaired by Mr.Jaap Winter: it summarises in a report : “A modern regulatory framework
for company law in Europe” which advises consultation procedures
What is the difference between US and EU Law?
There is a very important difference on the type of law: Europe follows civil law which is a legal system
inspired by Roman Law and it is mainly codified. US and the UK follow common law, other known as “case
law” and is law developed through court case.
How does corporate law works in the US?
In the US, corporate law is a competence of local states. We use the definition of Delaware Corporation
which is a company that is legally registered in the Delaware but can conduct its business anywhere else.
Most companies become Delaware companies because they have a special court to rule on corporate law
disputes without juries.
Part two: Applicable law
Applicable law relates to the following problem: the law of which country will govern the corporate status of
a company? To solve this problem we have two theories:
1.Incorporation theory: applicable law is the law of country where the company has been incorporated
2.Real seat theory: applicable law is the law of country where the company is effectively managed
Can we transfer registered seat to another company?
This is possible within the EU because of the principle of free movement. Outside the EU?
This transfer has its consequences in relation to
1.applicable law
2.risks
3.procedure migration/immigration
Part three: Reasons for starting a company
We have principle reasons which include:
1.Partnership between different parties: articles define the rules of collaboration and in case of a conflict
between the partners, these form a reference base to solve it.
2.Limitation of liability: when we talk about liability we relate to the obligation that a person has towards
its business. Therefore, when establishing a company it is possible to limit liability.
3.Continuity: by continuity we relate to that business can be continued after the death of the entrepreneur
and this avoids family conflict between heirs.
4.Tax reasons: there is a difference between individual and corporate tax.For example, in Belgium the
individual tax rate is 55%, whereas the company tax rate is 20%. A company can also be positively
influenced by international taxation rules.
,Part four: Types of companies
Companies can be divided according to various criteria:
1.Companies with or without separate legal personality: can be divided into either limited or unlimited
liability of the partners. Companies with unlimited liabilities are not considered separate legal entities and
are one persons companies.
2.Persons vs capital companies
Persons companies:
Started because of the person of each of the partners: intuitu personae
Stands with the person of each of the partners
Shares are in principle only transferable if all partners approve unanimously
Limited rules apply: collaboration to be set in the articles of association
Capital companies
Started because of contribution
The partners are as such not essential and can be established in spite of non participation of one of the
partners
It continues when one of the partners leaves
Shares are in principle freely transferable
Example:public liability companies
3.Profit purpose: we relate to profit or non profit organisations. Non profit organisations, under Belgian law
are allowed to make profit and consequently develop commercial activities but will NEVER be able to
distribute a dividend or provide advantages to its members. It is also possible for companies to opt for not
having a profit purpose.
4.Single person companies: it goes against the principle of contract because there is no other party to start a
contract with. It is established by one person who, in principle manages the company and is at the same time
its sole shareholder. In some countries it is forbidden.
5.Starter company: starter companies are those who have a minimal start up capital of 1 EUR, or no capital
requirement in some countries (USA for example). It encourages entrepreneurship.
6.Listed vs non listed companies: relates to if the company is or isn’t listed on stock exchange. Stringent
rules apply.
7.EU Companies: They can either be:
SE(Sociatae Europea): it is a European private company.A European company allows enterprises to
operate in various member states on the basis of a single set of rules ,a uniform management and reporting
system without having to establish a network of national companies. The disadvantage to a European
company is the difference in tax laws, as there is no uniform tax regime.
SCE(European co-operative society): By co-operative we mean the autonomous association of a persons
united voluntarily to meet their common economic, social and cultural needs and not the renumeration of a
capital investment. the purpose is to provide cross EU co-operation with adequate legal instrument to
facilitate their cross-border and transnational activities. Its principal objective is the satisfaction of its
members needs and the development of their economic and social activities, but not the renumeration of a
capital investment.
8.Branch office vs representation office
Representation office: office of a company located abroad but only to represent it: they have no external
commercial activities and no registration formalities
Branch office: office of a company located in another country than where its main office is located. They
have no legal separate personality and are represented by a legal representative. The accounts of parent
company is to be filed with national authorities, as well as taxes.
, Lecture two:Incorporation of a company
Definition of a company:a company is established by a legal act by one or more persons, called partners,
who make a contribution. It has an equity and has the purpose the performance of one or more specific
activities. One of its goals is to distribute or provide a direct or indirect capital gain to its partners.
Decomposing this definition:
A company is established by a legal act of one or more persons: it is a legal act, you have to do
something to legalise it, unlike a sole propriety. These persons who make a contribution, put something in
common and at the risk of the company/entrepreneurship. Those who input capital are its shareholders.
It has an equity in the sense that “capital” is abolished for certain types of companies.
The common purpose defines the activities of a company, and its objective is to provide the partners a
direct or indirect advantage. This purpose does not necessarily need to be profit.
Requirements for starting a company:
It can be established by one or more persons
There has to be contribution
There has to be a common objective and purpose
These activities should provide direct or indirect benefit which leads to capital gain. It is important to note
that profit purpose, in some companies, is not an essential characteristic.
The Plurality requirement
The incorporation of a company can be done by one or more persons. This means that the plurality
requirement is abolished.
Following the old legislation, a company equalled a contract. In concept, when more than one persons a
contract is needed because there needs to be consent of two or more parties, but this does not prohibit sole
proprietorship.
There is no longer a reference to a “contract” in case the incorporation is only done by one person.
A contract is however needed when there exists a partnership and a cooperative company.
There needs to be valid consent:
In a contract, we mentioned how there needs to be consent between two parties, but this consent needs to
be valid.
Minors cannot participate. The only way they can is via a “guardian” but this required consent of the
competent court = to protect minors from misuse
Two married individuals are legally capable to start a company together, but it is very important to check a
matrimonial status. For example, the matrimonial status needs to asses whether contribution will come as
two separate properties, and if there will be a separation of goods.
There are no nationality requirements to start a company, and within the EU it is in principle forbidden.
There are also no residency requirements, but it will have tax consequences.
Contribution:
Definition of contribution: contribution is an act whereby a person makes something available to an
existing company or a company to be established, with the intention to become a partner of the company
or to increase the number of shares in the company, and therefore its share in its profits => to invest and
take a risk, you have to put something at the risk of the company
In law, there is no reference to capital (except in public limited companies). Although equity does become
important, and capital can become abolished for certain types of companies.
In principle, everything that can be object of commitment can be contributed, but it has to have a specific
purpose and use
Classification of contribution can be: contribution in cash, in kind(vehicles,machinery etc…) and
contribution of labour/industry.
Contribution in cash:
Contribution in cash is a commitment to transfer a sum of money to put at the disposal of a company. This
ensures liquidity to finance start-up costs of the company.
For contribution in cash to be worthy, it has to be transferred in a blocked account of the company with a
bank recognised in the EU.
Voordelen van het kopen van samenvattingen bij Stuvia op een rij:
√ Verzekerd van kwaliteit door reviews
Stuvia-klanten hebben meer dan 700.000 samenvattingen beoordeeld. Zo weet je zeker dat je de beste documenten koopt!
Snel en makkelijk kopen
Je betaalt supersnel en eenmalig met iDeal, Bancontact of creditcard voor de samenvatting. Zonder lidmaatschap.
Focus op de essentie
Samenvattingen worden geschreven voor en door anderen. Daarom zijn de samenvattingen altijd betrouwbaar en actueel. Zo kom je snel tot de kern!
Veelgestelde vragen
Wat krijg ik als ik dit document koop?
Je krijgt een PDF, die direct beschikbaar is na je aankoop. Het gekochte document is altijd, overal en oneindig toegankelijk via je profiel.
Tevredenheidsgarantie: hoe werkt dat?
Onze tevredenheidsgarantie zorgt ervoor dat je altijd een studiedocument vindt dat goed bij je past. Je vult een formulier in en onze klantenservice regelt de rest.
Van wie koop ik deze samenvatting?
Stuvia is een marktplaats, je koop dit document dus niet van ons, maar van verkoper flaviaribaj. Stuvia faciliteert de betaling aan de verkoper.
Zit ik meteen vast aan een abonnement?
Nee, je koopt alleen deze samenvatting voor €7,66. Je zit daarna nergens aan vast.
Is Stuvia te vertrouwen?
4,6 sterren op Google & Trustpilot (+1000 reviews)
Afgelopen 30 dagen zijn er 52510 samenvattingen verkocht
Opgericht in 2010, al 14 jaar dé plek om samenvattingen te kopen