Coordinator:  Associate Professor Paul Ali    Telephone:  83441088    Office:   Room 0758    Email:   Click here to email Paul Ali

 

Prerequisites and/or Corequisites

Prerequisites: Contracts, Legal Method and Reasoning, Obligations, Principles of Public Law, Property

Description

This subject introduces students to the general body of corporations law and provides a brief comparison with other forms of association such as partnerships. The subject undertakes a functional analysis of basic concepts of corporations law, as they apply to both closely and widely held companies.  Particular emphasis is given to the governance of companies, including the relationship between directors and shareholders. None of these topics requires for its study a background in accounting, commerce or business law.  Necessary terms and concepts will be introduced in the subject itself. 

The course of study is divided into five parts.

1.1 Introductory
The first part provides an introduction to corporations and corporations law.  It looks at the historical development of the modern company, and compares companies with other forms of business association, in particular partnerships.  It explains the nature and sources of corporations law and its legislative and administrative framework.  It introduces students to main theoretical strands underlying corporate law reform and scholarship, as well as issues of corporate social responsibility and corporate governance.

1.2 The process and incidents of incorporation, nature of shares, and corporate decision-making
Part 2 explores the idea and implications of the corporation as a legal person.  It looks at the process by which companies are formed, their constitutions, the different ways in which companies are classified for the purposes of regulation, and the significance of that classification.  It then examines the separate entity doctrine, the challenges to that doctrine presented by corporate groups, and the circumstances in which the corporate veil may be pierced.  This section explains the nature of shares, the process for the creation of new shares, the rights generally associated with different classes of shares and provides an overview of the regulatory framework for public and private offers of shares. This section also deals with the manner in which the company (as an artificial person) incurs liabilities to outsiders, including the authority of corporate officers and agents to bind the company in contract, and the bases on which companies can be held accountable in tort and crime. Finally, this section introduces the structure of companies and the manner in which companies are managed and controlled. It begins by looking at the allocation of decision-making power within companies between the board of directors and the members in general meeting, and then at the delegation of board power to executives.  It considers the composition and operation of the board, and at the procedural and other rules that relate to member decision-making.

1.3 Share capital transactions
Part 3 introduces students to the various forms of capital reorganisation, including reductions of capital and share buy-backs.  Finally it provides an overview of some of the key concepts of corporate debt finance. 

1.4 Corporate structure, duties and remedies
The focus of Part 4 is largely on the relationship between the company, its shareholders and its officers, but it includes consideration of the extent to which the interests of other stakeholders may or should be taken into account in the management of the company. The first section deals with directors’ and officers’ statutory and general law duties to the company, including their duties to avoid insolvent trading, to act with care, skill and diligence, to act in good faith in the interest of the company and for a proper purpose, and to avoid unauthorised conflicts and profits.  Along side this it considers the statutory regulation of situations involving interested dealings by directors and controllers, including the requirements for disclosure and the related party transaction laws.  This section concludes with a discussion of the criminal and regulatory sanctions for breach of directors’ duties, and the company’s remedies against defaulting directors.  The last section looks at the remedies available to shareholders where there has been maladministration of the company’s affairs.

1.5 Corporate mortality
The final part provides a brief overview of external administration and the dissolution of the corporate entity.  This part of corporations law is explored more fully in 730-422 Insolvency Law. 

Finally, the last class is left open for review or other purposes.

Points: 12.5

Contact hours: Two 2-hour seminars per week

Estimated Total Time Commitment: 144 Hours

Subject Suites: Corporate & Commercial Law