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Topics covered

• The nature of legal personality and lifting the veil of incorporation. Incidents of corporate personality. Differences between incorporated and unincorporated associations. The rule in Salomon v Salomon & Co Ltd and its development. Tortious liability as an alternative to veil lifting.
• The formation of the company. The suitability of the company as a legal vehicle for different types of business. The registration process, including the memorandum and articles of association. Pre-incorporation contracts. The duties and liabilities of promoters.
• The relations between the company and outsiders. The growth and decline of the doctrines of ultra vires and constructive notice. The Turquand rule and the application of principles of agency. The commission of crimes and torts by the company. Vicarious liability and the alter ego doctrine.
• The relations between the company and its members and among the members inter se. The nature of and principles governing the statutory contract between the company and its members. Different capacities of members and relations between one member and another. Alteration of the statutory contract and remedies for breach.
• Management of the company. Directors and other officers. Appointment. Retirement. Dismissal. Disqualification. Meetings. Voting. Resolutions. Division of functions among officers and organs of the company.
• Directors’ duties. The general duties of directors, and the codification of those duties. Statutory controls on directors, including rules on self-dealing and the criminalisation of insider trading. The enforcement of directors’ duties, including rule in Foss v Harbottle and the statutory derivative claim. Company disclosure and investigations by the Department for Business, Energy and Industrial Strategy.
• The protection of minority shareholders. The statutory remedies for the protection of minority shareholders. Shareholders’ personal rights, including under the statutory contract.
• Corporate governance. Corporate accountability (stakeholder v shareholder issues). Problems arising from the separation of ownership and control, including executive compensation and shareholder engagement. The role of hostile takeovers in disciplining management. Reforming the role and composition of boards. UK corporate governance codes (e.g. the UK Corporate Governance Code and the Stewardship Code). The Company Law Review Steering Group.
• Shares and Debentures. Differences between shares and debentures. Registration. Different classes of shares. Rights of different classes and the variation of share rights.
• Capital. Raising, maintaining and reducing the capital of the company. Discounts. Premiums. Payment of dividends and purchase by the company of its shares. Financial assistance for the purchase of its shares. Raising capital from the public: the requirements for prospectuses and listing particulars.
• Winding-up. Types of winding-up. The powers and duties of the liquidator.

Learning outcomes

If you complete the module successfully you should be able to:

• Explain the main concepts that underpin company law, including separate legal personality and limited liability
• Comprehend the policy issues that arise regarding the regulation of companies, including the views of different commentators about those policy issues
• Discuss the main principles and rules that seek to regulate and protect different participants within companies, especially their directors, shareholders and creditors
• Summarise the issues that arise in respect of large, widely owned, public companies and the strategies that have been developed to ensure such companies are well governed
• Identify the legal issues raised by complex hypothetical ‘problem question’ scenarios, and apply their knowledge of the main principles and rules of company law to articulate well-argued solutions to those questions
• Critically analyse and evaluate selected areas of company law and place the policy issues raised by company law in their social, economic and political contexts
• Develop well-reasoned analysis and arguments for the reform of selected areas of company law, including by engaging critically with the arguments of other commentators
• Critically read case law and other materials and construct answers to questions set.

Assessment

4hr 15 mins unseen examination

Essential reading

• Dignam, A. and J. Lowry Company law. (Oxford: Oxford University Press, 2022) 12th edition [ISBN 9780192865359].