TEST REVISION.

Prof. Mauricio Muñoz

Ingles LegalColegio de Abogados

De san Luis.2013

COMPANY FORMATION- ROLES IN A COMPANY- MEMORANDUM OF ASSOCIATION- PROCESS

TO INCORPORATE A COMPANY- PLC- LTD- PARTNERSHIP- LLPARTNERSHIP-

TEST REVISION.

CAPITALISATION- SHARES CATEGORIES- SUPERVISORY BOARD- ONE- TIER/ TWO –TIER BOARD -COLLOCATIONS WITH EXERCISE/ RESTRICT/ ACCRUE/ DISMISS - PLAIN LANGUAGE AND LEGALESE - PAR-VALUE CUMULATIVE PREFERRED SHARES AND OTHERS. TREASURY SHARES. THE RAINMAKER.

Business Association: it is a legal person, distinct from its officers and shareholders.

PROPERTY and LIABILITY.LIFT THE CORPORATE VEIL.Partnership: not a legal entity; treated as such

as regards ownership.Process of incorporation (seek for the other ppt,

image with wheels and chains that show the process in motion).

MEMORANDUM OF ASSOCIATION/ ARTICLES OF INCORPORATION.

COMPANY FORMATION.

ANNUAL GENERAL MEETINGS/ EXTRAORDINARY MEETINGS.

BOARD OF DIRECTORS- A.G.M. – (LATER ON: TWO- TIER BOARD OR ONE –TIER BOARD).

OFFICERS: DIRECTOR, MANAGER, COMPANY SECRETARY.

TWO DIFFERENT DUTIES: DUTY OF CARE AND FIDUTIARY DUTY.

NEED TO AVOID CONFLICT OF INTERESTS.DOCUMENTS: BALANCE SHEET/ PROFIT-

AND-LOSS ACCOUNT.

COMPANY FORMATION.

AUDITOR COMPANY SECRETARY DIRECTOR LIQUIDATOR

MANAGING DIRECTOR

OFFICIAL RECEIVER PROMOTER PROXY

RECEIVER SHAREHOLDER.

ROLES IN COMPANY MANAGEMENT.

LOOK FOR ANOTHER PPT WITH ALL THE PROCESS OF INCORPORATION (THE ONE WITH CHAINS IN MOTION, for example).

LOOK AT THE CHART on page 22. with all the Documents required for formation and operation.

DOCUMENTS REQUIRED FOR FORMATION AND OPERATION.

LOOK FOR THE CHART (THE ONE WITH THE FLAGS) where there is the comparison between PLC AND LTD.

DIFFERENCES WITH PARTNERSHIP: **no legal entity**no protection against liability.**but they are capable of owning a property at

its own name.

COMPARISON BETWEEN PLC, LTD AND PARTNERSHIP.

RELATIVELY NEW INSTITUTION.OBLIGATIONS ACCRUE TO THE

NAME OF THE PARTNERSHIP. ONLY PERSONAL LIABILITY: IN

RESPECT OF HIS PRE-DETERMINED CONTRIBUTIONS TO PARTNERSHIP FUNDS.

LIMITED LIABILITY PARTNERSHIP

LIMITED LIABILITY PARTNERSHIP.

ADVANTAGESLegal entity.Obligations: to the name

of the partnership rather than the names of its individual members.

More flexible in terms of decision-making, board meetings, minutes books .

Annual or extraordinary meetings are not required

DISADVANTAGESAccounting requirements of

the Companies are applicable in the case of LLPs.

These accounting requirements are quite demanding.

If the turnover of the LLP exceeds 350.000 pounds annualy, accounts must be professionally audited.

Claw-back provisions of the Insolvency Act 1986 apply to LLPs.

A LLP director can be liable to a third party for his negligent act or omissions in the course of his duties.

TEXT WRITTEN TO A CLIENT.ANALYSIS OF A LEGAL PROBLEM: THE

CLIENT CAN MAKE AN INFORMED DECISION CONCERNING A COURSE OF ACTION.

IT IS ALSO A LEGAL OPINION ON CERTAIN MATTER.

LETTER OF ADVICE.

INDICATES THE FUTURE COURSE OF ACTION BETWEEN YOU AND THE CLIENTCLOSING: expressions to follow on with the relationship.

OUTLINES THE CLIENT`S OPTIONS, ADVANTAGES AND DISADVANTATES.FACTORS: RISK, DELAY, EXPENSES.

IDENTIFY THE LEGAL ISSUE AND HOW LAW APPLIES TO THE FACTS.RIGHTS AND OBLIGATIONS OF THE CLIENT.

• Maximum amount of share capital that the company can issue, as stated in the memorandum of association.

AUTHORISED SHARE

CAPITAL• This capital refers to the whole number of shares actuall held by shareholders.

• A company may not issue shares for more amount of money than the authorised share capital.

ISSUED SHARE

CAPITAL

COMPANY CAPITALISATION.

PREFERENCE SHARES

No voting rights

Fixed Divident.

ORDINARY SHARES

Voting rights

Payment of Dividents:

dependent upon performance of

the Co.

SHARE SUBDIVISION

SHARE CONSOLIDATIO

N.

OTHER TOPICS TO STUDY:

RIGHTS ISSUE

DEBENTURESLOAN

CAPITAL

PRE-EMPTIO

N RIGHTS.

FIXED CHARG

E

FLOATING CHARGE.

TWO PROBLEMS FOR THE SHAREHOLDER:

SHAREHOLDERS: RIGHTS AND POSSIBILITES.Shareholders: The owners of the Company`s

Assets.

RIGHTS: a) determine how assets are to be managed. B) to receive the residual income from the asset. C) to transfer ownership of the assets

to others.

A question. Can Shareholders exercise control if the directors fail to protect

their interests??

THEY ARE TOO MANY- SPREADING OF OWNERSHIP.

THEY DO NOT HAVE GOOD

INFORMATION.

DUE TO RISK DIVERSIFICATION NEEDS: THE COMPANY TRIES TO SPREAD OWNERSHP .-

THE SHAREHOLDERS ARE TOO MANY, AND IN THE A.G.M. THEY DO NOT HAVE MUCH RELEVANCE.

THEY CAN PARTICIPATE IN THE A.G.M. BUT AWKWARD QUESTIONS (PARTICIPATIONS THAT QUESTION THE WAY DIRECTORS HAVE ACTED) ACN BE HELD OFF BY THE CHAIRMAN IN THE MEETING.

FIRST FACTOR. (SHAREHOLDERS)

SECOND FACTOR- LACK OF INFORMATION.

THEY LACK OF AN ADQUATE FLOW OF INFORMATIONTHEY FACE CONSIDERABLE OBSTACLES IN OBTAINING GOOD INFORMATIONONE SHAREHOLDER CAN INVEST AND OBTAIN GOOD INFORMATION. (HE BEAR ALL THE COSTS)IF HE GETS ANY ADVANTAGE OF THAT, ALL OTHER SHAREHOLDERS WILL ACCRUE BENEFITS AT HIS EXPENSES. (THIS IS THE “FREE RIDER ISSUE”).WHAT CAN A SH. DO? HE CAN SELL HIS SHARESIF SO, HE IS “VOTING WITH HIS FEET”.

SUPERVISORY BOARD.ONE- TIER BOARD.Managing executives

are represented on the board, all directors, executives and non-executives.

Directors: appointed by shareholders.

All of them ANSWER to the AGM.

This system: promotes cosiness.

TWO-TIER BOARD.Consists of an executive

board and a supervisory board.

Executive board includes the top-level management team; the supervisory b.: outside experts such as bankers, executives from other Co., employee-related representatives.

Bad strategic decisions are subjected to the public gaze.

REVISE THE FIRST PPT “Legal English general rules” (March 2012).

LEGALESE:Lengthy and complex sentences.Archaic words and expressions.Passive constructions.Use of English and Latin words.Use of twin expressions. (ammended and adapted, for

e.) Thereof, Therein, Herein, Hereinafter. Long sentences w.o. commas.

PLAIN LANGUAGE/ LEGALESE.

SOMETIMES COMPANIES HAVE ISSUED SOME SHARES, AND HAVE HAD BOUGHT THEM BACK.

THEY HOLD THOSE SHARES “IN TREASURE”.

TREASURY SHARES.

--UNTIL 2003 U.K. LAW PROHIBITED COMPANIES TO HOLD THEIR OWN SHARES IN TREASURY AFTER CERTAIN PERIOD. SINCE 2003: ACT THAT PERMITS COMPANIES TO

BUY BACK THEIR OWN SHARES AND HOLD THEM IN TREASURY RATHER THAN HAVING TO CANCEL

THEM. IT ONLY APPLIES TO COMPANY SHARES THAT

ARE LISTED ON THE LONDON STOCK EXCHANGE´S OFFICIAL LIST, THE A.I.M. OR

COMPARABLE EUROPEAN MARKET.

THE RAINMAKER.

CHARACTERS

• RUDY BAYLOR.• LYMAN BRUISER STONE.• DECK SHIFFLET.• DOT AND BLUDDY BLACK.

TWO CLIENTS

• His elderly landlady.• The Blacks.

A CASE TO COPE

WITH

• A CASE VS. GREAT BENEFIT LIFE INSURANCE.

• HE HAS TO ARGUE A CASE BEFORE A JUDGE AND A JURY.

THE RAINMAKER.IN WHICH LAW FIRMS HE HAS

WORKED SO FAR (UP TO

CH.7)? WHO IS

JONATHAN LAKE?

WHAT IS “THE LAKE FIRM”? WHAT DOES BRUCE SAY ABOUT HOW TO GET A CASE?

HOW DID

RUDY MEET KELLY RIKER

?

WHO IS

CLIFF?

WHAT IS SAID ON CH.6 ABOUT THE OPONENT TRIAL

LAWYER?

DOES RUDY

RECEIVE ANY

OFFER, PRIOR TO THE TRIAL? HOW

MUCH? DOES

HE ACCEPT

THE OFFER?

STUDY HARD!! THANK YOU !!