Law (LLB) Lecture Notes

Company Law - Share Capital and Issuing Shares (Part 1)

2012-01-17T23:06:00.000+08:00

Introduction One of the ways that a company raises finance is by issuing shares. When a person purchases shares he or she becomes a shareholder or member of that company. What is a share? Farwell J, Borland’s Trustee v Steel Bros & Co Ltd [1901] 1 Ch 279 “A share is the interest of a shareholder in the company measured by a sum of money, for the purposes of liability in the first place and

Company Law - Directors II (Part 2)

2011-12-31T00:16:00.002+08:00

The Companies Act 2006 reforms to directors’ duties Sections 170-177 Companies Act 2006 have to a large extent codified the case law set out above. s.170(3): “The general duties are based on certain common law rules and equitable principles as they apply in relation to directors and have effect in place of those rules and principles as regards the duties owed to a company by a director”

Company Law - Diretors II (Part 1)

2011-12-29T20:40:00.000+08:00

Introduction – fiduciary duties In addition to the common law duty of care and skill set out in Session 6, directors are in a position of trust and confidence, and as a result owe fiduciary duties to the company (as oppose to individual shareholders or creditors – Percival v Wright, although this has often been said to equate to the “interests of the general body of shareholders”. Duty to act

Company Law - Directors I (Part 3)

2011-12-18T22:06:00.000+08:00

Statutory power of removal – s.303 Companies Act 1985 s.168 Companies Act 2006 s.168: “A company may by ordinary resolution at a meeting remove a director before the expiration of his period of office, notwithstanding anything in any agreement between it and him.” The procedure is that any member who wishes to propose a resolution to remove a director must give the company “special notice” by

Company Law - Directors I (Part 2)

2011-12-15T03:13:00.001+08:00

The operation of the board of directors On many issues, this is the final decision-making body which exercises the company’s powers and which enters into transactions on the company’s behalf. However, as mentioned above more important decisions will be decided at a shareholders’ meeting. Procedure The procedure is set out in the articles, particularly arts. 88 – 98, Table A. Resolutions proposed

Company Law - Directors I (Part 1)

2011-12-13T00:31:00.003+08:00

The role of the director Although the company is a separate legal personality, it still requires agents to act on its behalf. As was mentioned in Session 4, members of a company often do not wish to be involved in the day-to-day management. Therefore, this power is delegated to the board of directors. Directors are in a position of trust and confidence, and wield considerable power. It is

Company Law - Management & Corporate Governance (Part 3)

2011-12-04T07:28:00.001+08:00

The Greenbury Committee report This report stemmed from criticism of the high levels of directors’ remuneration, published in 1995. It contained a new code of best practice and was aimed at directors of listed companies. This included, for example: - The interests of both shareholders and directors should be considered by the remuneration committee when determining the level of directors’

Company Law - Management & Corporate Governance (Part 2)

2011-12-02T00:28:00.001+08:00

Corporate Social Responsibility in UK The development of corporate social responsibility in the UK has been slow. This is in large part due to the case of: Hutton v West Cork Railway Company Facts: A company was in the process of winding up. At a general meeting of shareholders, a resolution was passed to compensate the corporate officers for their loss of employment, and to pay £1,500 in

Company Law - Management & Corporate Governance (Part 1)

2011-11-24T07:16:00.001+08:00

What is corporate governance? The term ‘corporate governance’ actually covers a very wide range of issues – essentially, it is concerned with the formal and informal regulation of both the internal and external relations of the company. Despite this, it has been said that it “is a fashionable concept, but like most fashionable ideas it is remarkably imprecise”. However, over time the

Company Law - Members and Meetings (Part 2)

2011-11-19T09:35:00.000+08:00

Types of voting Members can vote at general meetings in one of two ways – on a show of hands or on a poll vote. Show of hands If a vote is taken on a show of hands every member present at the meeting has one vote. Initially, all votes will be taken on a show of hands. If the result is not unanimous then a poll vote may be demanded. Poll vote On a poll vote, each member has one

Company Law - Members and Meetings (Part 1)

2011-11-15T23:32:00.003+08:00

Introduction The term members and shareholders mean the same in the context of companies. The members’ finance the company by purchasing shares in it and so become shareholders. Members may or may not be directors. Functions of the Member The amount of involvement the member has in the company will depend on the amount of shares he or she holds, the size of the company and the member’s

Company Law - Lifting The Corporate Veil (Part 2)

2011-11-14T07:08:00.002+08:00

Statute Under certain circumstances, statute may permit the veil to be pierced and liability imposed on the directors and/or members. State of National Emergency See Daimler v Continental Tyre & Rubber Co Agency In some situations, a proper analysis of the business arrangements may reveal an agency agreement between a parent and subsidiary company. However, it is not sufficient

Company Law - Lifting The Corporate Veil (Part 1)

2011-11-12T08:14:00.001+08:00

The case of Salomon v Salomon One of the cornerstones of modern company law is the case of Salomon v Salomon. This case established three principles: 1) The company has a separate legal personality to its members; 2) Its members enjoy limited liability; 3) Provided the correct procedures were followed, incorporation was open to all, irrespective of how large or small the business was.

Company Law - The Formation of a Company (Part 3)

2011-11-08T20:33:00.004+08:00

Criticisms of Hickman Despite Hickmam attempting to clarify the ‘insider/outsider’ debate, it has itself come in for some criticism: - s.14 clearly states “all provisions” – therefore, how could the court place any restriction on such a clearly worded statute? - Is it even possible to draw a clear distinction between ‘insider’ and ‘outsider’ rights? For example, in Quin

Company Law - The Formation of a Company (Part 2)

2011-11-04T08:12:00.002+08:00

The Articles of Association The articles of association form the ‘rule book’ of the company. The lay down, in detail, how its internal affairs operate. The articles will therefore provide the answer as to whether the members or directors are permitted to do certain acts and the procedure they need to follow. The law prior to the Companies Act 2006 Prior to the Companies Act 2006, the

Company Law - The Formation of a Company (Part 1)

2011-11-03T00:10:00.005+08:00

Registration of a Company The Companies Act 2006, sections 7-13 deal with the registration of a company. In order to form a company, the following must be sent to the registrar at Companies House: 1) Memorandum of association; 2) Articles of association; 3) Form 10 - details of the people who will be the first directors and first secretary; 4) Form 12 - statutory declaration

Company Law - Introduction

2011-11-01T20:33:00.003+08:00

Introduction When setting up a business, one of the most important considerations is what form that business should take. The three main options are: 1) Sole trader; 2) Partnership; 3) Company. Sole trader A sole trader is someone who is in business on his own as a self-employed person. There are no formalities for setting up the business. A sole trader is personally liable

English Legal System - The Human Rights Act (Part 3)

2011-10-27T07:50:00.002+08:00

The Effect of the Human Rights Act 1998 The HRA finally gave UK citizens the ability to enforce convention rights through the domestic courts. Public Authorities also have to behave in a way that is compatible with the Act. Prior to the HRA, the UK courts could take the Convention into account where legislation was ambiguous, e.g Waddington v Miah [1974] 1 WLR 683, used Art. 7 to show that

English Legal System - The Human Rights Act (Part 2)

2011-10-24T09:19:00.003+08:00

The Human Rights Act 1998 The Human Rights Act 1998 finally came into force in October 2000. The introduction of the Human Rights Act (HRA) 1998 has provoked much debate, criticism and media debate. The preamble to the Human Rights Act 1998 states that it is ‘An Act to give further effect to the rights and freedoms guaranteed under the European Convention on Human Rights’. The

English Legal System - The Human Rights Act (Part 1)

2011-10-19T21:14:00.001+08:00

Human Rights Human rights issues have been brought to the forefront of the world stage from the latter part of the 20th Century onwards. This could be viewed partly as a sign of the progression of society, that more formalised regimens are being put into place to protect individual rights, but also as a response to the atrocities that have also been witnessed, in the case of Europe those that

English Legal System - Sources of EU Legislation (Part 2)

2011-10-17T20:50:00.001+08:00

Decisions Article 249 EC stipulates that decisions are binding in their entirety on those to whom they are addressed. They must be notified to the addressee and take effect when notified to those to whom they are addressed. Decisions are not the judgements of the European Court of Justice, but general measures adopted by the Community or one of its institutions in the form of administrative

English Legal System - Sources of EU Legislation (Part 1)

2011-10-15T03:10:00.001+08:00

EU Legislation The legislative process which operates in the Community is very complex with different legislative procedures applicable to different contexts. It is not possible to identify a single body as the ‘legislature’ for the Community as a whole. The Commission, the Council and the European Parliament all take part in the process of making EU legislation. All legislation starts as

English Legal System - The Evolution of the EU and Principal Institutions (Part 2)

2011-10-13T16:59:00.000+08:00

The Commission The Commission composes of twenty (20) Commissioners, nationals and appointed by the Member States for five (5) year renewable periods at a time. There is at least one (1) Commissioner from each Member State (smaller states) - France, Germany, Italy, Spain and the UK having two (2) Commissioners each. The Commissioners do not represent their own States but are independent

English Legal System - The Evolution of the EU and Principal Institutions (Part 1)

2011-10-12T00:59:00.000+08:00

The European Communities At the end of the Second World War much of Europe was devastated by the effects of war, and shocked at the horrors revealed by it. The costs in terms of human life and the depletion of natural resources were enormous. The overwhelming consensus was that a war like that should never be experienced again. Winston Churchill in 1946 wanted to ‘build a kind of United

English Legal System - Sources of Law Custom Equity and Treaties (Part 3)

2011-09-28T00:48:00.000+08:00

Reform by Parliament Law reform is mainly carried out by the Parliament in four (4) different ways a) Repeal – of old or/and obsolete laws b) Creation – completely new law or adapting existing legislation c) Codification – if development has taken place in a form of large body of case law and statute, these may be codified into one d) Consolidation – bringing