curs_ultimele.pdf

8/11/2019 curs_ultimele.pdf

1/23

12/14/20

COMPANY LAW

LECTURES 3-4: COMPANY TYPES; COMPANY

FORMATION

COMPANY TYPES

In law, there are various types ofbusiness entity. For each one there are

different legal arrangements to registerthe company, different requirements for

presenting accounts, etc.


2/23

12/14/20

OWNERSHIP

A private business is an entity that isowned by individuals or a legal person.

In unlimited liabilitybusinesses, theowners are personally and entirely liable

for the debts of the company.

In a limited liability business, the

owners are liable only for the amount of

money they have invested in the business.

SOLE TRADER (U.K.)/SOLE PROPRIETORSHIP (U.K./U.S.A.)

A single person, who is self-employed,owns and operates a business

(freelancer)

Legally, the business has no separate

existence from its owner(proprietor)

All debts of the business are the debts of

the owner (full / unlimited liability)


3/23

12/14/20

PARTNERSHIP (U.K. and U.S.A)/

GENERAL PARTNERSHIP (U.S.A.) Two or more people work together and sharethe risks and profits.

This organisation does not have a separate legalidentity from the owners.

The partners are fully liable for (responsiblefor) any debts the business has.

In law, this is referred to as unlimited liability.

E.g. lawyers, architects, auditing firms

It is registered with the commercial register.

COMPANY / CORPORATION(U.S.A.) The business is a legal entitythat is

separate from its owners the

shareholders. The owners are not fullyliable for the debts of the business. Their

liability(potential risk) is restricted totheir share capital (= the amount of

cash that they have contributed to thecompany) the owners have limited

liability.


4/23

12/14/20

PRIVATE LIMITED COMPANY

The shares(AmE stocks) are private,they cannot be bought by the members of

the public.

smaller companies (family-run businesses)

In official documents, the company nameis followed by Ltd(UK) meaning

limited, or Llc(US) meaning limited

liability company.

PUBLIC LIMITED COMPANY(corporation U.S.A.) The shares are openly traded on a public

stock exchange. Large, well known businesses which are run

by managers under the supervision of aBoard of Directors.

The shareholders(US: stockholders)receive a share of the profits every year(paid as dividends), and will also get a

capital gain or loss when they sell theirshares.

In official documents, the company name isfollowed by PLC(UK) or Inc/Corp(USA)


5/23

12/14/20

FRANCHISE

A business arrangement in which thebusiness owner (franchiser) allows

other people (franchisees) to set up inbusiness using the companys brand

name, products and reputation. Thefranchisee has varying degrees of control

over how products are marketed and

sold. E.g. McDonalds, the Body Shop.

NON-PROFIT ORGANISATION

An organisation, usually a charity, thatraises funds and offers products and

services, but does not have to make aprofit to stay in business.


6/23

12/14/20

PRACTICE:agreement; cash; debts; on your own; owners; personal;publicly; separate; shareholding

WORKING FOR YOURSELF

If you work for yourself, you are self-employed either asa sole trader or a freelancer. The technical term for yourbusiness is a sole proprietorship. You automaticallybecome a sole trader when you register a trade with thetrade office and manage the business (1). However,German law regards some self-employed people e.g.

journalists, architects, translators and teachers differently.These people are freelancers. They do not need toregister with the trade office. A tax number from thelocal tax office is sufficient. As a self-employed person youhave unlimited liability for your (2).

PRACTICE: agreement; cash; debts; on your own; owners;

personal; publicly; separate; shareholding

PARTNERSHIPS

These business organisations do not have separate legalidentity from the people who form them. This means that thepartners are liable for the debts of the firm with their (3)assets. A partnership which is not registered with thecommercial registeris a GbR (civil law partnership). A writtenpartnership (4)is recommended but it is not required by law.If a partnership is registered, it becomes, for example, a OHG(ordinary partnership). Partners do not need to provide aminimum amount of equity by law but they can agree to pay

capital into the firm if they wish. Moreover, they are not only (5) but also directors of the company.


7/23

12/14/20

PRACTICE: agreement; cash; debts; on your own; owners;personal; publicly; separate; shareholding

LIMITED COMPANIES

These business organisations must be registered with the commercialregister and have a (6)legal entity. This means the members are only liablefor the size of their (7)in the company. It is the company that is liable tocreditors with its assets. In the case of GmbH (company with limited liability)the minimum equity is EUR 25,000. However, this company capital does notconsist entirely of (8) tangible assets e.g. machinery can also becontributed. The company must also have a written agreement called thearticles of association.

An AG (public limited company) is often but not always a company whoseshares are traded (9) i.e. anyone is allowed to buy them. For thesecompanies the minimum equity is larger and there are different requirementsregarding the number of directors and accounting procedures.

A new mini-GmbH is planned. Its equity will be EUR 1 but the company

will have to make use of some of its (10)every year to build up equity ofEUR 25,000 to become a full GmbH.

The following are required to form acompany:

A memorandum of association. This documentsets out details of the companys existence and

contains basic information such as:

the companys name,

the objects of the company, its address,

a statement of limited liability.

COMPANY FORMATION


8/23

12/14/20

Articles of association. This is a more

substantive document which

governs the running of the company and

constitutes the contract between the company and itsmembers.

It deals with such matters as

the voting rights of shareholders,

the conduct of shareholders and directors meetings,

the powers of management,

the appointment of directors.

COMPANY FORMATION

documents must be sent to the Registrar ofCompanies+ the appropriate fee

the Registrar will then issue a certificate ofincorporation.

*The Registrar of Companies is a governmental body

based at Companies House in London, which hasresponsibility for controlling the formation andrenewal of companies.

COMPANY FORMATION


9/23

12/14/20

By law,

a PLC minimum two directors,

a LC one director.

They are appointed to carry out the day-to-day

management of the company.

They owe FIDUCIARY duties to the company and

a duty of care in negligence.

DIRECTORS

Their formal responsibilities include: Presenting annually to members the accounts of the

company and the directors report.

Keeping a register of directors, a register of directorsshareholdings, and a register of shares.

Calling the AGM

Sending all relevant documents to the Registrar of

Companies.

Submitting a statement of affairs (which sets out thecompanys financial position) if the company is wound up.

DIRECTORS


10/23

12/14/20

A shareholder is an owner of shares in a limitedcompany. As such, they are a member of the companyand their name is entered in the register ofmembers. The powers of a shareholder are not easyto define, but a majority shareholder may haveextensive powers of control that may remove orthreat to remove a director from office.

In formal legal terms, the relationship between themember shareholders and the company is a

contractual one. It is based on the memorandum andarticles of association of the company.

SHAREHOLDERS

The rights of a shareholder of a companyinclude:

The right to a dividend.

The right to vote at meetings.

The right to apply to the court in certaincircumstances, e.g. where the companys affairs

have been conducted in a way unfairly prejudicialto the members, or where the directors have

breached their fiduciary duty.

SHAREHOLDERS


11/23

12/14/20

A share in a company constitutes a right that can be enforced bylegal action. Shares are issued with a par value(also called nominalvalue).

The true value of shares will fluctuate according to the level ofsuccess that the company is enjoying.

Shares are issued or allotted by directors to the extent of thenominal capital of the company. The issuing of shares can only becarried out in a way authorized in the articles of association of thecompany or agreed at company general meetings.

A transfer of shares may be made by means of a sale or a gift. Oncethe share sale is agreed, the vendor must execute a stock transferform and send it together with the SHARE CERTIFICATE to the

purchaser, who must pay the STAMP DUTY.

SHARES

FOCUS ON SKILLS:MEETINGS

LECTUREs 5-6: TYPES OF MEETING; AGENDA;

MINUTES; LANGUAGE OF MEETINGS


12/23

12/14/20

MEETINGS

Play an essential role in an organisation A tool - to get decisions made

- to spread information

- to gather information

- to generate ideas

- to review or evaluate

- to solve problems

- to negotiate

Types of MEETING Board meetings

Departmental meetings

Team meetings

Staff meetings

Weekly meetings

AGMs (Annual General Meetings) EGMs (Extraordinary General Meetings)


13/23

12/14/20

MEETINGS

An EFFECTIVE meeting has:

A clear purpose

A list of points to discuss

A result

A report of what took place at the meeting

WORD PARTNERSHIPS: MEETINGTo arrangeTo organise

To scheduleTo call

To runTo chair

To haveTo hold

To attendTo participate inTo take part in

To go toTo be present at

To postponeTo cancel

A MEETING


14/23

12/14/20

KEY VOCABULARY: THE FORMAL

MEETING AGENDA A list of items to be discussed at a meeting.

MINUTES An official record of the proceedings of a meeting.

CHAIR the person who controls a meeting, also known as

CHAIRMAN/CHAIRWOMAN/CHAIRPERSON.

SECRETARY The person responsible for the agenda and the minutes of a meeting.

PARTICIPANTS The people who attend a meeting.

AOB (any other business) An item on the agenda which gives participants an opportunity to raise

points that were not already included in the agenda. VOTE

An expression of opinion/preferences about a question raised.

The types of meeting at which all members ofthe company can attend include extraordinary

general meetingsand annual general meetings.

The term board meeting refers to a private

meeting of the directors of the company.

Business at general meetings is transacted bypassing resolutions on the issues which needto be decided.

MEETINGS AND RESOLUTIONS


15/23

12/14/20

An ordinary resolution is the most commonlyused resolution. It requires a simplemajority of votes cast to be in favour to bepassed.

An extraordinary resolution and a specialresolution both require a three-quartersmajority. A special resolution is required inmany circumstances, including resolutions toalter the articles or objects.

RESOLUTIONS

An agendais prepared and circulated prior to themeeting.

Participants have the opportunity to contribute to theagenda.

Advance notice of meeting time and venueis providedto those invited.

Meeting facilities are comfortable and adequate forthe number of participants.

The meeting begins on time and has a scheduledending time.

The use of time is monitored throughout the meeting.

CHECKLIST for EVALUATING AMEETING


16/23

12/14/20

Everyone has an opportunity to present his/her point ofview.

Participants listen carefully to each other.

There are periodic summaries as the meeting progresses.

No one tends to dominate the discussion.

Everyone has a voice in decisions made at the meeting.

The meeting typically ends with a summary ofaccomplishments.

People will carry out any action agreed to during themeeting.

Minutes of the meeting are provided to each participantfollowing the meeting.

CHECKLIST for EVALUATING A

MEETING

The chair / chairperson is the leader of the meeting the person who controls the direction that it takes. Heor she is responsible for: Introducing the agenda Introducing the speakers, if appropriate Running the meeting Ensuring that rules are followed Encouraging everybody to take part Preventing digressions Timekeeping Achieving objectives of the meeting Summing up at the end Setting the date of the next meeting if necessary

THE ROLE OF THE CHAIR


17/23

12/14/20

OPENING STARTING THE

MEETING Good , everyone. I think we

should make a start. Right, shall we begin? OK, can we start now please? We have received apologies from

[names of people who cannot attend.]

INTRODUCINGPARTICIPANTS Id like to introduce our partners

from Peru and Chile.

PURPOSE OF THEMEETING

We are here to discuss The purpose of this meeting is to

What we want to do today is

INTRODUCING THEAGENDA Does everybody have a copy of the

agenda? You will see that there are points on

the agenda.

THE MINUTES OF THEPREVIOUS MEETING Can we take the minutes as read? Proposed? Seconded?

FIRST POINT Now, Id like to move on to the first

point. The first item on the agenda is

ASKING FORCONTRIBUTIONS

Who would like to start? Id like to ask Mr Wheeler to tell us Can we hear from Human Resources on

that please?

ESSENTIAL LANGUAGE OF MEETINGS

HANDING OVER TOANOTHER PERSON

Now, over to you James.

Mr Reid, would you like to take itfrom here?

BRINGING OTHERS IN

James, how do you feel about whatHenrys said?

George, have you got anycomments on that?

Would you like to add anything,Martha?

CONTROLLING THESPEAKERS

Sorry Rob, Ill have to stop youhere.

Mike, can you let Paula finish?

We are moving away from the pointhere.

Can you be brief?

TIMEKEEPING

Right, that leaves us with about twentyminutes to discuss

We need to move on now if we aregoing to get through everything.

SUMMARIZING KEY POINTS

DURING THE MEETING

The main points we have looked at are

So the issues weve looked at so farare



18/23

12/14/20

DISCUSSION ASKING FOR OPINIONS

What do you think, Rob?

Could we hear what Rowan has tosay?

Whats your view on this?

GIVING OPINIONS

I feel

I think

It seems to me that

It is clear that

In my view,

AGREEING

I agree. / I agree with John / with what

John said. Thats right.

Absolutely.

DISAGREEING I dont agree. Im sorry, I cant agree with that. Im afraid I completely disagree with you. That cant be right.

INTERRUPTING Excuse me, can I just say a word? Sorry to interrupt, but

HANDLING INTERRUPTIONS Could you just let me finish? Ill come to that later. Yes, go ahead please.

INDICATING THAT YOU AREACTIVELY LISTENING Yes, I see . Right. Mm, I understand.

REFERRING TO OTHERSPEAKERS As Patricia said, Going back to what Connor was saying,


ENDING SUMMING UP

Now, to summarize whats beensaid,

So, weve agreed to

The decisions made here today are

SUMMARIZING FOLLOW-

UP ACTION

Paul will look into

Before the next meeting we needto

Carol, can you follow up the ?

So, whos going to ?

CLOSING THE MEETING

Thats all for today.

Lets finish there.

Thank you for coming.

ARRANGING NEXT MEETING

The next meeting will be on (date,time).

Ill be in touch about the date of thenext meeting.

What day would suit people for the

next meeting? Can you check yourdiaries?



19/23

12/14/20

It should be circulated in advance to the participants, offering themthe opportunity to contribute to it.

It should communicate the purpose of the meeting and the goal ofeach item

It should include necessary, practical information

The language should be clear and concise.

RECOMMENDED ELEMENTS: Items to be handled, listed in proper sequence Meeting adjournment time Time of scheduled breaks, if necessary

The leader of the meeting should have an approximate time allocation for each item Notes on points to be clarified Equipment that may be required

AGENDA

1. title of the meeting / reason for the meeting

2. date, time, location

3. a list of those required to attend, usually in an alphabetical order (withofficers first)

4. apologies for absence (may be sent in advance / presented at themeeting)

5. approval of the minutes of the last meeting

6. matters arising (from the minutes / last meeting)

7. correspondence received

8. reports from the officers

9. specific topics for discussion 10. AOB (any other business)

11. Next meeting

Adjournment (ESTIMATED END)

AGENDA - structure


20/23

12/14/20

AGENDA

Minutes should be written as soon as possibleafter the meeting, and circulated to the

participants and anyone else affected by thecontent(usually within 24 hours).

The person assigned to take the minutesnotes down all the important points made at

the meeting and later writes up a clearsummary of what was said and decided.

MINUTES


21/23

12/14/20

LAYOUT(standard format)

a. subject and date of the meeting

b. list of participants (apologies, if necessary)

c. summary of the chairs introduction

d. summary of opinions and suggestions exchanged

e. action points decided upon, people assigned to

each action and deadlines given

f. date and time of the next meeting

MINUTES

LANGUAGE STYLE

Quite formal

Short, clear, concise, readable sentences

Summarize only the most important points

Long speeches must be summarized and for the

main ideas use bullet points

Minutes shouldnt be longer than one page, nomatter how long the meeting was.

MINUTES


22/23

12/14/20

GIVING THE LIST OF PARTICIPANTS Use PRESENT:followed by the list.

SUMMARISING THE CHAIRS INTRODUCTION Mr/Ms X opened the meeting with the following points: (+ bullet points)

SUMMARISING A DISCUSSION Mr X was the first to speak / react/ contribute and put forward the following ideas: Mr Y agreed / expressed approval and added: Ms Z disagreed and argued: Mr X expressed disapproval / concern and insisted Ms Z accepted that but defended her position on . However, she conceded that

Mr X agreed / offered / promised / refused / wanted (+ to infinitive) Mr Y denied / admitted / suggested / recommended (followed by the gerund)

Ms Z advised / asked / instructed / reminded (+ object + to + infinitive) Everyone agreed on

MINUTES - Useful phrases

ACTION POINTS AND DEADLINES

The following action points were decided upon:

Mr X will look into / research / draw up a list of /

calculate / study by the end of next week.

Mr Y will speak to before the 15th.

Ms Z will come to the next meeting with

Mr X will get back to / send a report to the Finance

Committee within the next few days.

MINUTES - Useful phrases


23/23

12/14/20

curs_ultimele.pdf

Documents