Chapter 1 - Introduction To Company Law

Question 1

What are the 4 key components of corporate law?

Answer 1

1 Company Law
2 Securities Regulation
3 Insolvency Law
4 Corporate Governance

Question 2

Why is insolvency law relevant to company law?

Answer 2

Because companies do not exist forever, and at some point need to be wound up or liquidated.

Question 3

Why is securities regulation relevant to company law?

Answer 3

Securities regulation protects investors.

Question 4

What is corporate governance?

Answer 4

Corporate governance can mean different things at different times, but is typically the way in which companies are managed.

Question 5

What are the two primary sources of company law?

Answer 5

Legislation

Case Law

Question 6

Name 7 statutes relevant to company law and which is the most important?

Answer 6

CA 2006 (most important)
IA 1986
Company Directors Disqualification Act 1986
FSMA 2000
CA 1985 (company investigations)
CJA 1993
Companies (Audit, Investigation and Community Enterprise) Act 2004

Question 7

Since when has it been possible tor register a company using a relatively straightforward process?

Answer 7

Since the passing of the Joint Stock Companies Act 1844

Question 8

What are the principal arguments for allowing limited liability?

Answer 8

• encourages investment
• facilitates transferability of shares
• provides clarity and certainty as to the assets available to creditors.

Question 9

What are the principal arguments against allowing limited liability?

Answer 9

• could facilitate recklessness

- allows complex limited liability structures in large group companies.

Question 10

When was a legal distinction drawn between a private and public company?

Answer 10

The CA 1907

Question 11

What steps have been taken at EU level relating to company law?

Answer 11

• providing equivalent protection for EU shareholders
• ensuring freedom of establishment for companies
• fostering efficiency and competitiveness of business.
• promoting cross-border cooperation between companies
• stimulating discussions between member states on the modernisation of company law and governance

Question 12

Name three EU company structures.

Answer 12

Societas Europaea
European Economic Interest Grouping (EEIG)
Societas Privata Europaea

Question 13

What aim was the EU Financial Services Action Plan drawn up to pursue?

Answer 13

• enhancing transparency
• encouraging shareholder engagement
• improving the framework for cross-boarder company operation

Question 14

Which UK body fulfils the role of “UK Listing Authority”?

Answer 14

The FCA