- •Contents
- •1. Words to be remembered.
- •2. Text for reading. The Classification of English Law
- •Legal Personality
- •Natural persons
- •Corporations
- •Unincorporated associations
- •The Sources of English Law
- •Case law
- •Legislation
- •The Courts in Great Britain European Community Law
- •The direct applicability and direct effectivity of Community law
- •Legislation Treaty provisions
- •Regulations
- •3. Questions.
- •4. Find the following sentences in the text.
- •5. Recite the main points of the text. Unit 2. Business Organisations
- •1. Words to be remembered.
- •2. Text for reading.
- •A. The Sole Trader
- •B. The Partnership
- •The existence of a business
- •Carried on in common
- •With a view of profit
- •Persons capable of being partners
- •Firm and the firm name
- •Illegal Partnerships
- •The Relations of Partners to One Another
- •Partnership Property
- •The rights of Partnership Inter Se
- •The expulsion of a partner
- •Duties of Partners Rendering true accounts and full information
- •Duty to account for secret profits
- •Liability in Torts
- •Vicarious liability
- •3. Questions.
- •4. Find the following sentences in the text.
- •5. Recite the main points of the text. Unit 3. Business Organisations The Registered Company
- •1. Words to be remembered.
- •2. Text for reading. C. The Registered Company
- •Unlimited liability companies
- •Limited liability companies
- •Private and public companies limited by shares
- •Groups of Companies: Holding and Subsidiary Companies
- •Separate legal person
- •The Constitution of a Registered Company
- •The contents of the Memorandum
- •The name clause
- •Change of name
- •Common law restrictions on choice of name: ‘passing off’
- •The registered office clause
- •The capital clause
- •Company Promoters
- •Fiduciary duties of promoters
- •Provisional Contracts by Public Companies
- •3. Questions.
- •4. Find the following sentences in the text.
- •5. Recite the main points of the text. Unit 4. Business Organisations The Registered Company as Itself
- •1. Words to be remembered.
- •2. Text for reading. The Directors
- •The appointment of directors
- •The retirement of directors
- •Age restrictions on directors
- •Disqualification of directors
- •Duty to disqualify unfit directors of insolvent companies
- •The Company Secretary
- •The Enforcement of Directors’ Duties
- •Common law exceptions to the rule in Foss V. Harbottle
- •Illegal acts
- •Personal rights of a shareholder
- •The form of the minority action.
- •Statutory exceptions to Foss V. Harbottle
- •Just and equitable winding up
- •Department of Trade investigations.
- •3. Questions.
- •4. Find the following sentences in the text.
- •5. Recite the main points of the text. Unit 5. Shares and Shareholders
- •1. Words to be remembered.
- •2. Text for reading. Shares and Shareholders
- •The rights and liabilities of the shareholder
- •Registered and bearer shares
- •Mortgages of shares
- •Classes of share
- •Variation of shareholders’ rights
- •Becoming a Member of a Company
- •Ceasing to be Member
- •Transfer of Shares
- •Restrictions on transfers
- •The Register of Members
- •4. Find the following sentences in the text.
- •5. Recite the main point of the text. Unit 6. Consumer Protection
- •1. Words to be remembered.
- •Merger – поглощение, слияние компаний
- •2. Text for reading. Aims of Competition Law
- •The Fair Trading Act 1973
- •Control of Rogue Dealers
- •Monopolies
- •Mergers
- •The Consumer Protection Act 1987
- •Defective product
- •3. Questions.
- •4. Find the following sentences in the text.
- •5. Recite the main points of the text. Unit 7. Bankruptcy
- •1. Words to be remembered.
- •2. Text for reading. Bankruptcy
- •Persons who can be made bankrupt
- •The bankruptcy petition
- •The consequences of the bankruptcy order
- •3. Questions.
- •4. Find the following sentences in the text.
- •1. Words to be remembered.
- •2. Text for reading. Definition of Agency
- •Types of Agent
- •The Authority of the Agent
- •By conscent of the principal
- •Ratification
- •Authority by operation of the law: agency of necessity
- •3. Questions.
- •4. Find the following sentences in the text.
- •5. Recite the main points of the text.
- •1. Words to be remembered. Tort – деликт, гражданское правонарушение
- •2. Text for reading.
- •Importance of Tortious Liability
- •Torts affecting the person
- •Torts affecting property
- •Torts affecting economic rights
- •Torts affecting reputation
- •Torts affecting rights generally
- •3. Questions.
- •4. Find the following sentences in the text.
- •5. Recite the main points of the text. Unit 10. The Law of Contract
- •1. Words to be remembered.
- •2. Text for reading. The Law of Contract
- •Essentials of a Contract
- •Contracts for the Sale of Goods
- •The Form of the Contract
- •The Implied Terms in a Contract for the Sale of Goods
- •3. Questions.
- •4. Find the following sentences in the text.
- •5. Recite the main points of the text. Unit 11. Contracts of Employment
- •1. Words to be remembered.
- •2. Text for reading. Contracts of Employment The Contract for Service and the Contract for Services
- •The distinguishing criteria
- •The position of casual workers
- •The position of temporary workers
- •Vicarious Liability
- •Continuity of Employment
- •Formation of the Contract of Employment.
- •Terms implied into a contract of employment by the common law
- •Terms implied into contracts of employment by statute
- •Unfair dismissal
- •Remedies for unfair dismissal
- •Transfers of undertakings.
- •Fixed Term and Performance Contracts
- •3. Questions.
- •4. Find the following sentences in the text.
- •5. Recite the main points of the text. Unit 12. The Nature and Classification of Business Property
- •1. Words to be learned.
- •2. Text for reading. The Nature and Classification of Business Property
- •Introduction into English Law of Real Property
- •Freehold estates
- •Leasehold estates
- •Equitable estates
- •Legal and equitable estates compared
- •Rights Over the Property of Another
- •Easements and profits
- •Restrictive covenants
- •The Reforms of 1925
- •Registered and Unregistered Conveyancing
- •Unregistered conveyancing
- •Registered conveyancing
- •The Classification of Estates and Interest in Land: Unregistered and Registered Unregistered land
- •Registered land
- •Choses in Possession
- •Choses in Action
- •Assignable choses in action
- •Negotiable choses
- •Negotiable instruments.
- •Intellectual Property Rights Trade marks and brand names
- •3. Questions.
- •4. Find the following sentences in the text.
- •5. Recite the main points of the text. Unit 13. The Nature of Security
- •1. Words to be learned.
- •2. Text for reading. Securities for Loans The Nature of a Security
- •Mortgages of Land
- •Legal mortgages
- •Mortgage by demise.
- •Mortgages and reality of consent
- •Priority and Protection of Mortgagees
- •Mortgage protection in unregistered conveyancing
- •Mortgage protection in registered land
- •3. Questions
- •4. Find the following sentences in the text.
- •5. Recite the main points of the text.
- •Vocabulary
- •Latin terms
2. Text for reading. C. The Registered Company
The Companies Act 1985 (CA 1985) provides that ‘any two or more persons, associated for any lawful purpose may, by subscribing their names to a memorandum of association and otherwise complying with the registration requirements of this Act . . . form an incorporated company, with or without limited liability’.
Unlimited liability companies
Persons trading as an unlimited liability company enjoy the advantages of corporate status but their liability for the debts of the company is unlimited. Because of this, there is no obligation to disclose details of its operation, other than to its members. The company also escapes liability for an annual audit of its accounts. These advantages are now available for small private limited companies and the unlimited company form is rarely encountered. It is, however, suitable for business activities where persons are restricted from trading with limited liability and could be used by solicitors and accountants as an alternative to partnership.
Limited liability companies
The members of such companies have limited liability for the debts and liabilities of the company, although the company is always liable fully for its debts. There are two different forms of limited liability company: the company limited by guarantee and the company limited by shares, of which only the latter is suitable for trading.
Companies limited by guarantee.
The members are required to contribute to the company’s assets on liquidation the amount guaranteed when they became members. The form is used for charitable, educational or other worthwhile purposes: for example, The League Against Cruel Sports, The British Ski Federation, London Guildhall University. They can drop the word ‘limited’ from their name although their exact status must be disclosed on letterheads and other documents.
Private and public companies limited by shares
The liability of the members is limited ‘to the amount, if any, unpaid on the shares respectively held by them’. This is the most usual form of all trading companies and is the only company that can exist as a private or as a public company. The others can only exist as private companies.
Private companies cannot invite the public to subscribe for shares or debentures (loan stock). Thus private companies are restricted to raising their money through institutional sources or from the sale of shares by private treaty or to members of the family of shareholders or employees. Public companies are more closely regulated since there is a greater need to protect the general public.
A private company has the word Limited (Ltd) as the last word of its name whereas the public company has the words Public Limited Company (plc).
The private company can commence trading immediately on incorporation whereas the public company must obtain a certificate to the effect that it has raised the minimum capital (£50 000) which is required of a public company.
The private company may only have one director whereas a public company must have at least two.
Directors of private companies are not subject to age limits unless the company is a subsidiary of a public company.
The company secretary of a private company does not need formal qualifications whereas the company secretary of a public company does.
There are less strict rules governing many aspects of a private company including:
– restrictions on loans to directors,
– regulation of raising and maintenance of capital.
Disclosure requirements in the annual return are less onerous where the private company is classified as either ‘small’ or ‘medium’. There is also exemption for small and medium-sized groups in respect of group accounts.
Private companies can enjoy deregulation which enables them to dispense with formal meetings of their shareholders.
A private company may be exempt from the statutory audit of their accounts.
Most companies are initially incorporated as private companies and will then ‘go public’ when they have increased sufficiently in size and need greater freedom to raise capital for expansion. Many public companies seek access to the financial markets. There are two markets for company securities access to which is regulated by the Stock Exchange. Companies seeking to join the London Stock Exchange’s Official List must comply with strict requirements of the London Stock Exchange regarding capital size, length of trading record and the percentage of shares in public hands, which must be at least 25 per cent. There is also Alternative Investment Market (AIM) for which there are no restrictions on capitalisation, length of trading record or minimum percentage of shares in public hands. Companies whose securities have been traded on AIM can apply to join the Official List after two years. The vast majority of limited liability companies are private.