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Proscribe / prescribe

a..................... _: to tell someone what they must do; to give something as a rule

b...................... : to forbid something

Federal laws...................... sentencing guidelines and rigid mandatory minimum

sentences, especially for drug-and-gun offences.

3 Passive constructionsChange the underlined verbs in these sentences from active to
passive, keeping the tense the same and making any other necessary changes.

1 The court found the co-conspirators guilty on several counts, most notably fraud and conspiracy.

2 White-collar crime affects employees, consumers and citizens alike.

3 A judge sentenced the former CEO to 87 months in federal prison for his role in arranging fraudulent loans that led to the company's forced bankruptcy.

4 If the prosecutor fails to prove that the accused is guilty beyond a reasonable doubt, the jury renders a verdict of 'not guilty'.

5 The state prosecuted the company founder for tax evasion, and he is now serving a three-year sentence.

6 The parole board gut the prisoner on parole after four years of good conduct in prison.

7 The judge gave the defendant a suspended sentence for the theft of his sister's car while intoxicated.


R 1 Company law

THE STUDY OF LAWLead-in

A knowledge of company law is essential to anyone planning to practise commercial law. Law schools typically offer courses on business organisations, examining issues such as how each major type of business entity may be formed, operated and dissolved.

1 As business becomes increasingly globalised, company lawyers in one jurisdiction have to be more aware of the company laws of other jurisdictions as well as international regulations. Discuss these questions with a partner.

1 What types of business entity are you familiar with? Describe the organisation of one type of business entity in your jurisdiction to your partner.

2 What experience do you have of forming, running or working for a business entity? What kind of business entity was it?

3 What aspects of company law have you studied?

Reading i: Company law



2 aRead the text below and decide whether these statements are true (T) or false (F).

1 Under the law, a company and its members are distinct legal personalities.

2 Company members are generally not personally responsible for the money owed by the company.

3 A certificate of incorporation is issued when the proper documents for company formation have been filed.

4 The memorandum of association of a company contains regulations relating to the internal affairs of a company.

bWhat are the main differences between a sole proprietor, a partnership and a publicly listed company? Use the Glossary if necessary.

Company law1 is the law which deals with the creation and regulationof business entities. The most common forms of business entityare companies

and partnerships.

A company2 is a group of people which is treated as a legal person,with a separate identity from its shareholding members.It can own property, enter into contracts, sue others and be sued. This contrasts with a partnership, which is not considered to be a legal person and is not able to own property in its own name.



Because of the limited liabilityof the members of a company for its debts, as well as its separate personalityand tax treatment, the company has become the most popular form of business entity in most countries in the world.

1 (US) corporation(s) law or corporate law 2 (US) corporation


Companies have an inherent flexibility which can let them grow; there is no legal reason why a company initially formed by a sole proprietorcannot eventually grow to be a publicly listed company,but a partnership will generally have a limited number of partners.

A company has shareholders(those who invest money in it and get shares in return), a board of directors(people who manage the affairs of the company) and creditors(those to whom the company owes money). Company law deals with the relationships between companies and their shareholders, creditors, regulatorsand third parties.

The process of registering a company is known as company formation.1 Companies can be created by individuals, specialised agents, attorneys or accountants. Today, the majority of companies formed in the UK and the USA are formed electronically. In the UK, a certificate of incorporationis issued once the company's constitutional documentsand statutory formshave been filed.2

The constitution of a company consists of two documents. The memorandum of association3states the principal object of the company. The second document, the articles of association,4regulates the company's internal management and administrative affairs, including matters such as the rights and obligations of shareholders and directors, conduct of meetings and corporate contracts.

1 also company registration (UK) and incorporation (US)

2 (US) generally no official certificate is issued

3 (US) articles of incorporation or certificate of incorporation (US)

4 (US) bylaws

Key terms i: Who does what in company law

3 Complete the sentences below dealing with company law using the verbs in the box.

enter into has invests is makes manages monitor owes own owns serves on sue


 


1 A legal person................................. rights and duties under the law just like a

natural person.

2 The board of directors.................................. the affairs of the company and

................................ company policy.

3 A company can................................. property,.................................. contracts

and................................. other persons.

4 A shareholder................................. money by buying shares in a company.

5 A company director................................ the governing board of a corporation.

6 A creditor of a company is a person or entity to whom the company a debt.

7 Regulators................................. the activities of companies to ensure that

they comply with the law.

8 A sole proprietor.................................. a company and..................................

personally liable for its debts.


Unit 5 Company law ( 5^


Reading 2: Course in company law

4 Read the outline of an undergraduate course in company law and tick the topics that are mentioned.

1 formation of a company in accordance with regulations

2 the development of company legislation over time □

3 a company's dealings with other entities and institutions □

4 financing a company's operations □

5 the process of joining together two companies

6 increasing company profits □

7 dissolving a company □

Company law

Course outline

This module concentrates on UK company law in the context of modern capitalism and the wider global economy. A series of introductory lectures and seminars will provide students with an understanding of, inter alia, the rules governing incorporation, funding and corporate finance, corporate governance and fundamental changes to the structure of a company (including corporate insolvency and winding up).We will also consider the more general operation of this particular form of business vehicle. During the second half of the course, we will examine the concepts of corporate personality, corporate rights and members' rights in more depth before turning to the newly introduced directors' duties under the Companies Act 2006. Finally, we will consider how progressive lawyers might work with businesses in order to ensure that directors meet their responsibilities to their shareholders, non-affiliated stakeholders, the environment and the communities in which they operate. One way of encouraging such a commitment is through the careful drafting of the memorandum and articles, on which topic two optional half-day sessions are now offered as a supplement to the company-law module.

5 Match the terms and phrases from the text (1-6) with their definitions (a-f).

1 inter alia a raising money to pay for a business or business idea

2 funding b responsibilities of leading company officers

3 winding up c among other things

4 business vehicle d type of company organisation

5 directors' duties e process of bringing a company to an end

6 memorandum and articles f documents governing external and internal relations of a

company

6 Find words that collocate with corporate in the text above and in the summary text (Reading 1, pages 50-51). Look up the meanings of the ones you don't know in the Glossary or a dictionary. Do you know any other collocations with corporate?

7 What do similar courses in your country typically include? Discuss with a partner.


Listening i: Lecture on company law

You are going to hear an introductory lecture on company law at an American university.

8 a^:5.i Listen to the first part of the lecture and say whether the professor

is discussing the advantages of corporations, the disadvantages of corporations or both.

b "4 c5.1 Listen again and answer these questions.

1 According to the speaker, what is the most important advantage of a corporation?

2 Which significant disadvantage does she mention?

3 How can double taxation be avoided?

9 a^65.2 Listen to the second part of the lecture. How many advantages and

disadvantages does the professor mention?

b *^5.2 Tick the correct answer for each of the questions in the table. Listen to the lecture again if necessary.

 

Corporation Partnership Sole Proprietorship
1Which entity best protects the property and assets of the shareholders?      
2 Which entity no longer exists when its owner dies?      
3 Which of the entities mentioned is the most expensive to form?      
4 Which entity type(s) require relatively little paperwork?      
5 Which entity requires shareholder-employees to pay unemployment tax?      

C ^c5.2 Listen to the second part of the lecture again and complete these notes.

ddvantages and disadvantages of Corporations compared to sole

proprietorships and partnerships

advantages

1 Stockholders are not tiable for corporate ..........................

2 Self-em.ploijm.ent tax....................

3 Continuous.......................

V Easier to raise........................

5 Easier to........ -.............

disadvantages

(o Jtiaher ..............................

7 format organisation and Corporate.........................

9 Unemployment.....................

Unit 5 Company law


Language use: Discussing advantages and disadvantages

10 aIn Listening 1, the professor points out the most important advantages and

disadvantages of corporations. Look at the audio transcripts of the lecture on page 129 and underline the words and phrases she uses to refer to them.

b Complete these phrases taken from the lecture.

1 The.................................. advantage of a corporation is that its owners, known

as stockholders or shareholders, are not personally liable for its debts and liabilities.

2 One................................. disadvantage of a traditional corporation is double

taxation.

3 Corporations.................................. many advantages.................................. other

business entities.

4 The second................................ of corporations is self-employment tax savings.

5 The first of these................................... is the higher cost.

Speaking i: Role-play: lawyer-client interview

11 Work with a partner. One of you plays the role of the lawyer, the other is the client.
Use the WASP approach from Unit 3.

Lawyer

A self-employed client has called a meeting to discuss whether she should conduct her business as a sole proprietorship or if she should incorporate (become a corporation). You know little about her work other than the fact that she is trained as a plumber.

Prepare to meet the client by considering the kinds of question you should ask in order to give her the best advice. As you prepare, consider the advantages and disadvantages each type of company would have for the client.

Client

You have been working as a self-employed plumber for several years and have recently taken on two apprentices. You would like to expand even further, as business is going well. You have built up a good reputation and have begun to specialise in providing plumbing services for retirement communities. You would like advice on what form your business should take.

Prepare to meet your lawyer by considering the kinds of question you will need to ask. Your lawyer will also ask about your business, so be ready to answer questions on your current situation and plans for the future.

LAW IN PRACTICE

Lead-in

The Companies Act 2006 is the longest piece of legislation ever to be passed in the UK. It sets out the basic procedures and systems for how a company should operate, and introduced many reforms. Unlike previous company law, the Act also states that companies must consider the effects of their business practices on the community, employees and environment. Do you have an equivalent of the Companies Act in your jurisdiction? What does it cover?


12 The Companies Act 2006 highlights links between a company's financial
success and its social and environmental impact. What kinds of provisions
do you think it might contain? What different parties have an interest in a
company's business practices? Should the law provide equal protection for
these different interests? Discuss in small groups.


Date: 2015-12-24; view: 3269


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