Company

Law
LAW009-3
Level 6
 Welcome to Company Law

• Dr Dorota Galeza, Dorota.galeza@

beds.ac.uk
• Handbooks
• 11 weeks of delivering: Lecture 1 hour,
Seminar 1 hour in one session
• There are two online sessions on Week
6&9
• Seminars’ questions will be released
 Purpose of the Unit

1 2 3
Develop your Understand key legal Demonstrate problem-
knowledge and skills principles solving skills regarding
within general legal underpinning a issues of corporate law
framework in which corporation. and governance.
corporations operate.
 Learning Outcomes:
On completion of this unit, you should be able to

- in-depth knowledge and

critical understanding of
1. Demonstrate the Company Law principles
following and case law judgements
knowledge and which underpin the
subject and its
understanding development.
- ability to research
2. Demonstrate the relevant legal sources and
following skills and write fluent, logical and
complex prose with
abilities
accurate referencing.
 Reading Materials
Core text Derek French and Stephen W. Mayson on Company Law (38th edition, Oxford University
Press, 2023) (https://bedfordshire.rl.talis.com/index.html)

Guide readings
Alan J. Dignam; John P. Lowry: Company Law, 12th edition, Oxford University Press, (2022)
Brenda Hannigan: Company Law, 6th edition Oxford University Press (2021)

Introduction to company law [electronic resource], Paul Davies, Oxford, England : Oxford University
Press (2020)

Len Sealy and Sarah Worthington: Cases and Materials in Company Law 11th edition Oxford University
Press (2016)

Alan Dignam & John Lowry: Company Law, 10th edition, Oxford University Press (2016)
 Independent Study
In order to achieve expected
high grades, you will need to
demonstrate your wider reading
• There are resources providing
useful background reading for Modern Law Journal of Business
the material in this unit. This is New Law Journal
Review Law
not an exhaustive list and
students should read widely
from the variety of journals
available in the Learning
Resources Centre;

International Journal of
Law Quarterly Company and International International
Review Commercial Law Banking and Business law journal
Review Financial law
 Assessment
Details
• There is one assessment point on this unit. Students will sit a 2-
hour closed-book examination in which they will be asked to
answer 2 out of a selection of 3 questions.
Threshold Expectations
• In order to pass the assessment, you will need to :
1) Correctly identify the legal issues raised by the question,
including the principles and norms of Company Law which are
relevant to those issues;
2) Apply principles of Company Law to produce correct legal
analysis and a conclusion which is written in a grammatical,
well-structured and logical manner, with structured arguments.
Any questions
so far?
Lecture 1
The Nature of a
company, and
alternative
To: Trainee Solicitor
From: Senior Associate
25/09/2023

Dear Trainee,
We are expecting our new client, Mark Luton, to visit us next week. He has been recommended to our firm
through our partner in Singapore. He has informed us that he is looking to set up a business in the UK,
which he would like to instruct us to advise on relavant legal matters and form his business entity in the UK.
Hence, I would like you to join the team in this matter and prepare yourself for the meeting next week. It
would be great if you are preapred to answer his questions in the meeting regarding the main differences
between legal forms that his business might take. This could be including sole trader, partnership, and
company. You might need to cover related issues, such as, liabilties of investors, legal status, a number of
persons in establishing the entity, structure of management, and financing the company, etc. Since he may
ask us about these general aspects in our first meeting. Also, you may prepare any questions you might
want to ask in order to advise him further and draft a legal memorandum to the team.

See you next Monday.

Best regards,
Senior Associate
Corporate and Commercial Team
Possible Forms
of Business
Structures?
 Forms of Business
Strurctures
• Sole trader
• Partnership
• Limited Liability Partnership
• Private Limited Company
• Public Limited Company
Sole Trader/
Sole
Proprietorship
 Sole Trader/Sole Proprietorship
 Owned and controled by one person
 Small and local businesses mostly are
sole traders
 Mark will own the business himself solely
including all the assets of the business
 Contracts related to be entered by Mark
 Sole proprietorship also means that Mark
will be personally responsible for all the
 Limitations of Sole Trading
•The personal wealth and lifestyle that he has come to
enjoy might be threatened if the business faces problems.
•Business may be passed on to his children who may not be
able to run it efficiently.
•Expanding the business by raising additional capital might
be difficult. Banks may be concerned that if the business
fails, there may not enough assets to redeem the loan.
•No limitation of liability for the debts of the business;
unlimited personal liability
•No specific regulations or legislations governing a sole
trader
Partnership

• Section 1 Partnership Act 1890

defines a partnership as "... the
relation which subsists between
persons carrying on a business in
common with a view of profit.”
• Each partner entitled to:
(1)Participate in management
(2)An equal share of profits
(3)Not be expelled by other partners
 Partnership
• Each partner is liable with regard to the debts of
the partnership in the course of its business
• No separate legal identity
• Conducting the legal action in partners' own
name
• Owning property jointly
• Entering into contracts jointly
Partnership Disadvantages
• No limited liability
• Each partner is jointly and severally
liable for debts and obligations of the
business
• Partners have unlimited personal
liability
• The personal assets of each of the
partners themselves
 Limited liability partnership ('LLP')

• Limited liability equally to the amount they have invested

• A separate legal entity from its members
• LLP can own a property and enter into a contract, sue or be
sued in its own name
• Limited Liability Partnership Act (LLPA) 2000 and an LLP Members’
Agreement
• Hybrid between traditional a partnership and limited liability
company: flexibility
• Basically, they are self employed, thus pay income tax on their cut of
LLP’s profits
• No liability on personal assets
 'LLP’ Disadvantages
• Accounts must be filed at Companies House: too
transparent to the public
• Expenses and long process at Companies House; but
has its own name
• It is not a must, but should have Member’s
Agreement
• Pay personal income tax; no retained
• Must have at least 2, if one leaves, the LLP must be
dissolved
 Limited
partnerships
or
Limited liability
partnership ('LLP')
Compa
nies
 Companies
• “Ltd”: a private company limited by shares
• “Plc”: a public limited company; limited by shares
• Plc is subject to greater regulation than private Ltd
• A company is an artificial legal person
• Companies limited by shares are regulated by
‘Company Act 2006’
• With the common law and other relevant
legislation
 Companies
• Public or private company: legal person+ association of its
members
• At least one member (CA 2006, ss 7 (1) and 16 (1) and (2))
• Record at Companies House:
https://www.gov.uk/government/organisations/companies-h
ouse

• A company may own property and have rights and

obligations separately from the people who manage or
finance it
• The directors and shareholders can change while the
company continues unchanged as the owner of its property
Sharehold
ers
 Shareholders
• Shareholders own the company, also
know as its members
• Shareholders invest their money into
the company for a share; share capital
• A share certificate
• Then they become an owner of the
company, then they can excerise their
voting rights
• Different types of share may be issued
• Limited liability? Once that agreed
Direct
ors
 Directors
• Directors are appointed to manage the company’s business
and represent the company
• At lest one director to manage the company day-to-day basis
• Requirement to have directors
• 154 CA 2006; Companies required to have directors
(1)A private company must have at least one director.
(2)A public company must have at least two directors.
• 155 CA 2006; Companies required to have at least one
director who is a natural person
(1)A company must have at least one director who is a natural
person.
 Factors influencing the choice of business entity

Costs: setting up and its

Liability Insolvency Raising finance
ongoing

To think creatively of
Commercial risk and
other ways that your
what is and what is not
Tax client is able to achieve
permitted by law and if
what they wish, within
the latter,
the law
Advise Mark Luton
in the Meeting
next week
Thank you!