Chapter 1 - Sources of Company Law and Governance

Question 1

What are the main sources of UK company law?

Answer 1

The main sources include legislation (e.g Companies Act 2006), case law, the company’s constitution, contact law, corporate governance codes and reports and European Law.

Question 2

What is the role of case law in company law?

Answer 2

Case law interprets legislation, fills gaps where legislation is silent and establishes principles such as directors’ duties and member remedies.

Question 3

How does the UK Corporate Governance Code operate?

Answer 3

It applies to companies with a premium listing and operates on a “comply or explain” basis, meaning companies must either comply with it’s provisions or explain why they do not.

Question 4

Quick hit
Companies Act 2006

Answer 4

The principle piece of UK company legislation.

Question 5

Quick hit
BEIS

Answer 5

Department for Business, Energy and Industrial Strategy - responsible for company law reform.

Question 6

Quick hit
Comply or explain

Answer 6

A principle where companies must either follow governance codes or explain their non-compliance.

Question 7

Quick hit
Case: Braymist Ltd v Wise Finance Co Ltd

Answer 7

Established that a promoter can enforce a pre-incorporation contract.