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PRIVATE LAW 2 NOTES 2nd exam moment Flashcards

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1
Q

What is Legal Personality in the context of a company?

A

A company is a separate legal entity from its shareholders with its own certificate of incorporation.

Referenced in Salomon v. A Salomon & Co Ltd case (UK)

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2
Q

What does a Certificate of Incorporation allow a company to do?

A

It allows the company to:
* enter contracts
* own assets
* be sued or sue others
* operate independently from its shareholders.

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3
Q

What does ‘Piercing the Corporate Veil’ refer to?

A

It refers to fraudulent or illegal behavior by shareholders that allows them to be held liable for the company’s acts.

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4
Q

What is Limited Liability?

A

Shareholders’ personal assets are protected from the company’s debts.

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5
Q

Define Shared Capital.

A

The total amount of money paid by all shareholders for their shares.

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6
Q

What is the Corporate Veil?

A

It is the separation of personal assets from the financial risks of the company.

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7
Q

What is Promotion in the context of company formation?

A

The idea of a company is developed, and promoters prepare for incorporations by defining business purpose, company name, and drafting documents like Articles of Association.

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8
Q

What does Incorporation mean?

A

It means the business is registered with the state, becoming a separate legal entity owned by shareholders with a certificate of incorporation.

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9
Q

What is the role of Promoters?

A

Promoters are the initial shareholders who contribute to establishing the company.

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10
Q

What are Articles of Association?

A

Documents for a company’s internal management that outline the rights of shareholders and directors.

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11
Q

What does NV stand for in the Netherlands?

A

Public company.

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12
Q

What does BV stand for in the Netherlands?

A

Private company.

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13
Q

What is the difference between Ordinary Shares and Preference Shares?

A

Ordinary Shares represent ownership and give voting rights, while Preference Shares have priority over dividends and are income-focused.

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14
Q

What is Dilution in terms of shares?

A

If you don’t buy any of the new shares, your piece of the company pie gets smaller.

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15
Q

What are Pre-Emption Rights?

A

They allow existing shareholders to buy new shares first before they are offered to others unless stated otherwise in the articles of association.

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16
Q

What is a Derivative Action?

A

A lawsuit brought by shareholders on behalf of the company to address wrongs done to the company.

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17
Q

What is the difference in Share Trading between Private Limited Companies and Public Limited Companies?

A

Private Limited Companies are not publicly traded; Public Limited Companies are publicly traded on the stock market.

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18
Q

What is the purpose of a General Meeting of Shareholders (GMS)?

A

It is set by the Board of Directors for shareholders to discuss company matters.

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19
Q

What is the significance of a Special Resolution?

A

It requires a higher majority vote (75% +) for approval.

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20
Q

How is a Beneficial Shareholder defined?

A

The true owner of the shares who possesses voting rights and the right to transfer ownership.

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21
Q

What is Shareholder Activism?

A

Shareholders actively engage in corporate governance to influence the company’s decisions.

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22
Q

What are the three stages of a company’s lifecycle for shareholders?

A
  • Initial Stage
  • Established Stage
  • End Stage
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23
Q

Define International Trade.

A

Exchange of goods/services between countries for commercial purposes.

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24
Q

What is a Cross-Border Legal Dispute?

A

A disagreement between two or more parties with a cross-border element.

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25
What is Transnational Civil Litigation?
Legal procedure to resolve cross-border legal disputes of civil nature.
26
Differentiate between Substantive Law and Procedural Law.
* Substantive Law defines WHAT actions are right/wrong and rights people have. * Procedural Law defines HOW legal cases are processed in court.
27
What is the outcome of Civil Proceedings?
Compensation, usually monetary.
28
What is the outcome of Criminal Proceedings?
Sentence, punishment, fine.
29
What are UNIDROIT/ALI Principles?
Non-binding principles designed to promote fairness and efficiency in transnational civil litigation.
30
What does Conflict of Laws refer to?
Dispute when laws differ across states/countries determining applicable law in a specific case.
31
Define Transnational Commercial Transactions.
Commercial contracts between nationals of different states and transactions in a state by nationals of another state.
32
What are the Fundamental Procedural Principles of Transnational Civil Litigation?
* Independence * Impartiality * Qualifications of court and judges * Jurisdiction over parties * Procedural equality of parties * Right to engage a lawyer * Due notice and right to be heard * Languages * Prompt rendition of justice * Provisional and protective measures * Structure of proceedings.
33
What is the Principle of Judicial Independence?
Judges and tribunal members must be unbiased, neutral, and free from outside influence.
34
What is meant by Judicial Impartiality?
Judges must be free from personal bias and external influences.
35
What is Jurisdiction over Parties?
Determined by: * Consent * Implicit Consent * Substantial Connection * Forum Necessitatis.
36
What does Consent mean in terms of jurisdiction?
Parties agree to specific court jurisdiction in the contract.
37
What is Tag Jurisdiction?
A legal principle in the USA that allows a court to have jurisdiction over someone present in the state when served legal documents.
38
What is a Provisional Measure?
Temporary court orders meant to protect a party’s rights before the final decision in a case.
39
What is the Right to Engage a Lawyer?
The right to choose your lawyer in legal proceedings.
40
What is the Rule of Confidentiality?
Lawyers must maintain client confidentiality except in specific circumstances.
41
What is Due Notice?
The right of a party in dispute to be informed about legal proceedings, the case's nature, and the timeline for response.
42
What does Equal Treatment ensure in legal proceedings?
It ensures equal opportunities for both parties.
43
What are Security for Costs?
A requirement that a party must provide security for potential costs in legal proceedings.
44
What is Effective Notice?
Party notified via method most likely to reach them (mail, in-person, etc…)
45
What does the Procedure for Response entail?
Notice must explain how to respond and what happens if you don’t respond
46
In Germany, who serves the notice?
Court registry serves the statement of claim
47
How long does a party in Germany have to indicate defence?
2 weeks to indicate defence, + 2 more weeks to file full defence
48
In France, who initiates service of notice?
Plaintiff initiates through a bailiff
49
What is the time frame for a Commercial Court in France to serve notice?
Writ of summons at least 15 days before hearing
50
What is Arbitration?
Alternative Dispute Resolution where a 3rd party makes a binding decision in dispute
51
What does Waiver of Rights imply in the context of arbitration?
Agreed to arbitration means giving up the right to sue in regular court
52
What are Provisional Measures?
Injunctions and ex-parte applications
53
What is a Bond in the context of provisional relief?
A sum of money to protect the other party if the provisional relief was unjustified
54
What are the phases of court proceedings?
* Pleading Phase * Interim Phase * Final Phase
55
What is the role of a jury in Common Law Jurisdiction?
Decide facts & follow judge’s instructions about the law
56
What is the burden of proof in civil cases?
Plaintiff has to provide evidence to prove the case first
57
What is the difference between Ordinary Witness and Expert Witness?
* Ordinary Witness: states what they saw * Expert Witness: provides opinions based on expertise
58
What is the Discovery Phase in legal proceedings?
Allows to build arguments for trials
59
What is the Statute of Limitations in Common Law System?
Time limit for bringing a case
60
What is Direct Examination?
Examination by the calling party
61
What is Cross-Examination?
Examination by opposing party
62
What does the Court of Appeal do?
Reconsiders entire case & issues new rulings
63
What is Corporate Governance?
Rules by which a company is controlled/directed
64
What is Director’s Liability?
Directors are jointly + severally liable for board’s decisions
65
What is the role of the Board of Directors?
Collective body responsible for overall company’s management
66
How are Directors appointed in the UK?
By shareholders through open applications, nominations, methods specified in AoA
67
What is a One-Tier Board Structure?
1 board responsible for management + supervision
68
What is a Two-Tier Board Structure?
Separate management + supervisory boards
69
What is the Principal-Agent Relationship?
Relationship between shareholder (principal) and director (agent)
70
What must a director do to resign?
Formally inform the company by resignation letter
71
What is Verification of Authority?
Consult company’s AoA accessible through public register
72
What is Express Authority?
Clearly given authority in writing, AoA
73
What is Implied Authority?
Authority coming from the director's role
74
What is Apparent Authority?
3rd party believes authority exists

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