שינון

Question 1

5 basic legal characteristics of a business corporation

Answer 1

legal personality, limited liability, teansfrable shares, delegated management, investor ownership

Question 2

what does ECL do?

Answer 2

provide legal form that allows 5 characteristics, reduce costs by adressing agency problems

Question 3

freedom of establishment

Answer 3

the right of an economic operator to decide where to carry out its economic activity.
includers primary establishment and secondary establishment

Question 4

1st directive

Answer 4

general rules on setting up limited-liability companies, capital and disclosure requirements

Question 5

2nd directive

Answer 5

covers the formation of public limited-liability companies and the rules on maintaining and altering their capital

Question 6

3rd directive

Answer 6

national merger

Question 7

4th and 7th directive

Answer 7

annual and consolidated accoutns

Question 8

5th directive

Answer 8

was not approved. corporate governance

Question 9

6th directive

Answer 9

national division

Question 10

8th directive

Answer 10

statutory audit

Question 11

10th directive

Answer 11

cross-border mergers

Question 12

EEIG

Answer 12

a supranational type of business organization created by contract, between 2 or more natural people who carry an activity or provide services for 2 or more companies/firms/different MS/combination

Question 13

SE

Answer 13

at least 2 companies originating from different MS, minimum capital of 120,000 euros and in can be created through merger / establishment as holding/subsidiary / conversion

Question 14

SCE

Answer 14

like SE but cooperative

Question 15

first action plan (2003)

Answer 15

recasting of a lot of directives, delivery of 10 directieve, shareholders rights directive, recommendations on directors’ independence, remuneration policies and liability of auditors

Question 16

second action plan (2012)

Answer 16

enhancing transparency, engaging shareholders and supporting companies’ growth and competitiveness and improving the framework for cross border operations (through enabling transfer of seats, improving mechanisms for cross-border mergers, enabling cross-border divisions and improving awareness to the special European legal forms)

Question 17

CJEU case law on primary establishment (4 points)

Answer 17

companies incorporated under one MS do not have a right to transfer its centreal management to another MS (daily mail)
if MS allows a company to transfer, it does not mean it remains under MS’s law (cartesio)
freedom of establishment does cover transfers aimed at conversion (polbud; vale)
destination MS cannot refuse recognition of a company seeking to transfer if it is permitted by origin MS (Sevic; Überseering)

Question 18

secondary establishment in CJEU case law (4 points)

Answer 18

secondary right of establishment covers branches even if the entire comapany’s business is conducted in the other MS (Centros; Segers)
MS are prohibited from treating members of branches of companies incorporated in other MS differently (Segers)
MS are allowed to impose means to prevent fraud based on the Gebhard test, but not to prevent the evasion from more restrictive law (inspire act)
MS are prohibited from imposing obligations on branches from other MSs that are not in EU law (inspire act)

Question 19

possibile connecting factors

Answer 19

registered office, central management or principal place of business

Question 20

formation by single member

Answer 20

private - MS required to alloaw
public - MS allowed to allow
plurals becoming single - not null and void, unless court order
MS may create special regulation

Question 21

the steps of creating a new company

Answer 21

instrument of constitution and statutes
preventive control
entry in the pubic register

Question 22

formation of an SE

Answer 22

formation by merger
formation by establishment of an holding company or subsidiary
formatino by conversion
SE incubator

Question 23

legal capital

Answer 23

the sum of assets contributed to a company by shareholders when they are issued shares

Question 24

minimum legal capital

Answer 24

25,000 for PLC
120,000 for SE

Question 25

Authorized capital

Answer 25

the maximum amount of assets directors are authorized to raise as contributions from shareholders and third parties by issuing new shares

Question 26

Subscribed capital

Answer 26

the amount of assets existing shareholders already obligated to contribute. == legal capital

Question 27

issued and paid-up capital

Answer 27

the amount of assets already received from shareholders in exchange for shares

Question 28

consideration other than in cash

Answer 28

such contributions that are not in cash. Only assets capable of economic assessment, that are not undertakings to preform work or service, can be contributed and form part of the capital of a company

Question 29

net assets

Answer 29

resources contributed to the company or accumulated by it that are not liabilities or debt

Question 30

balance sheet test

Answer 30

required to pay dividends, shows that the dividends given are not part of the legal capital or the reserves that may not be distributed under the law

Question 31

conditions for interim dividends

Answer 31

drawing up interim accounts to show that the funds available for distribution are sufficient; the amount distributed can not exceed the total "net assets" since the end of the last financial year

Question 32

safeguards for creditors in transactions in the company's own shares

Answer 32

cannot have the effect of lowering the legal capital below a certain amount only fully paid up shares reporting and notification protocols no prejudicing creditors' claims possible cancelling if needed for reserves by law

Question 33

composite whole

Answer 33

balance sheet, profit and loss account and notes to the accounts

Question 34

accounting principles

Answer 34

true and fair view going concern prudence accrual basis

Question 35

consolidated accounts

Answer 35

Represents the activities of a parent and subsidiaries as one single economic unit

Question 36

when does a parent need to do consolidated accounts?

Answer 36

it is the ultimate parent majority voting rights right to appoint and remove organ's members + shareholder dominant influence + shareholder \ member

Question 37

the equity method

Answer 37

treating equity investment in associated companies (company that has an interest in another undertaking) as an asset, affecting the profits available for distribution

Question 38

IAS/IFRS principles

Answer 38

Additional EU regulation in the field of consolidated accounts

Question 39

corporate governance

Answer 39

the system by which companies are directed and controlled and the relationship between company's management, board, shareholders and stakeholders

Question 40

shareholders-oriented model

Answer 40

directors are committed to maximizing shareholders' value in the long term minority or non-controlling shareholders must be protected by the directors from exploitation directors are not committed to the interests of creditors

Question 41

enhancing CG according to 2003 action plan

Answer 41

enhancing disclosure strengthening shareholders' powers and rights modernizing the board's functioning coordingation CG efforts in MSs

Question 42

future CG enhancement according to 2012 action plan

Answer 42

enhancing transperancy engaging shareholders better on remuneration policies, party transactions, employee shares and more

Question 43

one-tier system

Answer 43

administrative organ appointed by general meeting division to executive and non-executive directors

Question 44

two-tier system

Answer 44

management organ: appointed by supervisory organ supervisory organ: appointed by general meeting

Question 45

workers participation

Answer 45

some sort, not necesarily in the organs

Question 46

the areas where there is importance to committees and independent directors

Answer 46

nomination of directors remuneration of directors audit