Study Guide to Corporate Laws Companies and other forms of business organisation, the development of company law in Ireland, Irish company law and E.U. law. How a company is formed, types of company that may be formed, memorandum of association (including the objects and powers clauses), articles of association, the promoters. Separate legal personality of the company, lifting the veil of incorporation, pre-incorporation contracts, the ultra vires rule. Shareholder agreements. The rule in Royal British Bank v Turquand. Liability of the company in tort and crime. Statutory Registers, Accounts and the Annual Return. A. The characteristics of a registered company, what is meant by a veil of incorporation and when this veil can be lifted B. The documents required to form a company (both a private limited company and a public limited company) C. The content and purpose of the Certificate of Incorporation D. The distinction between public and private limited companies E. The nature and purpose of a company s registered office F. The role of promoters and the liability of promoters for a breach of duties G. The nature of a pre-incorporation contract and the steps that a promoter can take to limit his exposure to liability in relation to pre-incorporation contracts H. The legal requirements in relation to the alteration of the Articles of Association I. The nature of Section 25 rights and when they can be invoked J. The nature of the objects clause of a contract and the potential validity of any ultra-vires contract (including constructive notice, main objects clauses, plenipotentiary clauses, independent objects clauses, Section 8 CA 63 and Article 6 European Communities (Companies) Regulations 1973 K. The nature and effect of the indoor management rule on contracts created in breach of the provisions of the Articles of Association, as well as the limits to the application of this rule L. The liability of a company in contract and tort based on the application of separate legal personality Page 1 of 9
M. The liability of a company in criminal law based on the application of separate legal personality as well as the restrictions in relation to certain crimes, and the justification for these restrictions N. The obligations imposed upon a company in relation to (1) the maintenance of Registers and minute books, (2) the maintenance of accounts, (3) the nature and content of these account, (4) the filing of an Annual Return, and the significance of the Annual Return Date Flotation of a company, application for and allotment of shares, commencement of business The capital of the company types of capital, the maintenance of capital and alteration and reduction of capital. Dividends and distribution of profits Nature of a share, rights of the shareholder, duties of the shareholder, different classes of shares, variation of rights of classes of shareholders, share certificates and warrants. Preference shares, Calls, liens, forfeiture and surrender of shares, transfer and transmission of shares Membership of the company, Becoming a Member, Capacity to be a Member, Register of Members, Disclosure of interests in shares. A. The definition of capital and the distinction between share capital and loan capital B. The various classifications of capital authorised, issued, called-up, uncalled and reserve capital C. The nature of the shares (both wholly paid and partly paid) and the procedure/method for the calling of a payment due on a partly-paid share, as well as the consequences of non-compliance D. The various rights bestowed upon shareholders when they purchase shares E. The distinction between ordinary shares and preference shares, and the various methods for alteration of class rights F. The rules in relation to the transfer and transmission of shares, including the directors unfettered discretion to refuse to register a transfer of shares and the restriction on the transfer of shares in a private company G. The rules regarding the allotment of shares and share pre-emption H. Legal evidence of ownerships of shares through share certificates, share warrants and the Register of Members and obligations imposed upon company officers to disclose their interests in shares I. The various methods by which a public limited company can issue shares to the public (1) prospectuses, (2) offer for sale, (3) placement of shares, (4) offer by tender, (5) bonus issue, and (6) rights issues J. Rules regarding issuing shares at a premium, at a discount and for non-cash consideration K. The rules in relation to redeemable shares, a company buying its own shares or providing financial assistance for the purchase of its own shares Page 2 of 9
L. The rules regarding increasing and reducing the authorised and issued share capital of a company M. The rules regarding the declaration of dividends, the specific requirements regarding dividends and public limited companies, the nature of an unlawful distribution of a dividend and the effect Page 3 of 9
Borrowing by the company borrowing powers of companies, debentures and floating charges, registration of charges and receivers. Charges and the crystallisation of charges. Appointment, rights and duties of a Receiver. Powers of a Receiver. A. The source of a company s borrowing powers and the restrictions that may be imposed upon these powers B. The nature of a debenture and the various types of debentures that can be issued by a company (1) single, (2) series, and (3) debenture stocks C. The nature of a Debenture Trust Deed D. The rights bestowed upon debenture holders (and in particular the comparison between shareholders rights and debenture holders rights) E. The distinction between fixed charges and floating charges, and the rules regarding the validity of these clauses (charges created within a certain time period of liquidation and fraudulent preferences) F. The various grounds that would result in the crystallisation of a floating charge G. The obligations imposed upon companies in relation to registration of charges, the information required to be registered with the CRO, the impact of late registration, the consequences of nonregistration and the content of the Register of Charges H. The definition of a Receiver, the various methods of appointment (by the Debenture Holder or the Court), the various actions that would constitute default that would facilitate the appointment of a Receiver, the qualification of a Receiver, his powers and duties and the effect of his appointment, and the reporting obligations imposed upon a Receiver Meetings of the Company. Majority and minority rights, the rule in Foss v Harbottle and its exceptions. A. The various different types of meetings that can be conducted by a company, the nature of an AGM, EGM and class meetings B. The various procedures that should be followed at meetings such as (1) the role of the chairperson, (2) the notice requirements of meetings, (3) the various different people who can call a meeting, (4) the rules regarding quorums, (5) the rules regarding proxies, (6) the various methods by which voting is conducted at meetings, (7) the distinction between ordinary Page 4 of 9
resolutions and special resolutions, (8) the nature of a written resolution, and (9) obligations imposed in relation to the maintenance of minutes at meetings C. The various methods by which minority shareholders are protected by both common law and legislation D. Common Law Protection: the rule in Foss v Harbottle, and the exceptions to this rule, the nature of the action and the remedies available E. Legislative Protection: Section 205 CA 63 the various persons who have locus standi to make an application for relief, the grounds, the rules regarding these grounds, the remedies available F. Legislative Protection: Section 213 CA 63 discuss the distinction between Section 205 and Section 213 in relation to the remedies available to an oppressed or disregarded shareholder Company Directors formalities, duties and liability. Company Auditors formalities, duties and liability. Company Secretary formalities, duties and liability. Insider dealing in shares. Money laundering and the obligations imposed upon accountants and auditors. Fraudulent and reckless trading. Investigation of officers conduct civil and criminal remedies. A. Define the role of a director and explain the procedure in relation to the appointment, removal and rotation of company directors B. The various classifications of directors that can be appointed to a company and the distinction between them C. The eligibility requirements to act as a company director D. The role of the Board of Directors, and in particular the Managing Director E. The corporate authority of directors to create contracts on behalf of the company F. The main duties that directors owe the company G. The nature of fiduciary duties and the consequences of a breach H. The nature of statutory duties (in particular, (1) directors loans, (2) directors interests in company contracts, (3) substantial property transactions and (4)political donations) and the consequences of a breach I. The nature of the duty of care and skill, its limits and the consequences of a breach J. The role of a company auditor, his qualifications/eligibility, the procedure in relation to appointment and removal, the main powers and duties of the auditor, the liability of an auditor where a breach arises K. The audit exemption threshold for companies, and the procedure to become audit exempt Page 5 of 9
L. The role of a company secretary, his qualifications/eligibility to act as a secretary in a public limited company, the procedure in relation to appointment and removal, the main powers and duties of the secretary, the ability of a secretary to create contracts on behalf of the company, and the liability of the secretary where a breach arises M. The potential liability of company officers in relation to Disqualification and Restriction Orders N. The nature, elements and consequences of fraudulent trading or reckless trading O. The nature of insider trading, its key definitions, civil and criminal sanctions P. The nature of money laundering, its key definitions, the various methods by which it can be committed, its sanctions and the obligations imposed upon designated bodies (including auditors and accountants) to counteract money laundering, the sanctions for non-compliance, reporting obligations, and liability regarding tipping off Investigation of a company s affairs. Appointment, rights and duties an Examiner. Powers of Examiner. Examinership process, Examiner s report. Schemes of arrangement. Appointment, rights and duties of a Liquidator. Types of winding up, compulsory winding up, voluntary winding up. Order of payment of debts and charges on liquidation. Effects of examinership, receiverships or liquidations on shareholders, directors and employees. Protection of investors and creditors. Accounts of an Examiner, Receiver and Liquidator. A. The concept of examinership, the grounds for appointment, the application and procedure for the appointment of an examiner, the effect of appointment, the various powers and duties of an examiner and in particular vís-a-vís their reports and the scheme of arrangement, and the various outcomes of examinership B. The effect of examinership upon the company s stakeholders C. The nature of a Court ordered investigation, who can present the petition, the grounds, it s terms of reference, the powers and duties of the Inspector and the Inspector s report, and the potential outcomes of an investigation D. The nature of an investigation into the ownership of a company, the procedure and grounds, the powers and duties of the Inspector, and the potential outcomes of an investigation E. The nature of a preliminary investigation F. The power of the ODCE to investigate the ownership of shares or debentures without appointing an Inspector Page 6 of 9
G. The effect of an investigation upon the company s stakeholders H. The definition of liquidation and the distinction between a voluntary and compulsory liquidation. I. In relation to compulsory liquidations, a discussion of who can present the petition, the grounds, the procedure in relation to the petition hearing, the effect of the liquidation order, and the obligations in relation to the presentation of the statement of affairs J. In relation to voluntary liquidation the distinction between a members voluntary liquidation and a creditors voluntary liquidation K. The procedure and grounds to effect a members voluntary liquidation L. The procedure and grounds to effect a creditors voluntary liquidation M. The role of a Creditors Committee in relation to liquidation N. The qualifications, powers and duties of a liquidator O. The effect of liquidation on the company s stakeholders and the priority of debt upon liquidation P. The impact of a Section 55 Freezing Order (CLEA 2001) and how it can be utilised upon liquidation Q. The reporting obligations imposed upon the liquidator to the ODCE and the DPP R. The right of the liquidator to (1) disclaim unprofitable contracts, (2) refuse to enforce fraudulent preferences, (3) avoid certain floating charges, and (4) institute proceedings for fraudulent or reckless trading S. The role of the ODCE in relation to voluntary liquidations Types of credit vendor credit, lender credit, fixed term and revolving credit. Types of security real security, possessory security interests, pledges, liens, non-possessory security interests, mortgages, charges, personal security, guarantees, indemnities, letters of credit, performance guarantees, letters of comfort, quasi-security, retention of title, bills of exchange, set-off agreements, use of assets as quasi-security. Formalities and registration of security interests, Bills of Sale Acts, Companies Acts. These are self-explanatory and students will be required to be able to, as appropriate, assess, appraise and or discuss. Introduction nature and consequences of agency, identifying agents, types of agent, agency distinguished. Authority and power. The effects of agency. Principal and agent relations. Liability of a company in respect of unauthorised or irregular transactions, the doctrine of ostensible or apparent authority. Page 7 of 9
A. The definition of an agent and identify the various parties in an agency relationship B. The various classifications of agent C. The various methods by which a contract of agency can be created with particular focus on the doctrine of ostensible or apparent authority D. The rights and duties of both the principal and the agent, and the consequences for breach of those duties E. The various methods by which a contract of agent can be terminated F. The validity of otherwise of an unauthorised or irregular contract created by a company officer upon the company G. The distinction between the indoor management and the doctrine of ostensible or apparent authority and the differing situations in which both are applied Contract of employment, contract of service and contract for services. Formation of the contract. Terms of the contract. Rights of the employee. Duties and rights of the employer. Termination, unfair and wrongful dismissal, redundancy. Maternity leave, Paternity leave, Adoptive leave, Parental leave, Force majeure leave rights and entitlements A. The distinction between contracts of and for services, the importance of the distinction, and the various tests used by the Court in making this distinction B. How a contract of employment is created and the various terms likely to be included in a contract, as well as the obligations imposed by the Minimum Notice and Terms of Employment Information Act 1973, as amended C. The various right and duties of an employee D. The various rights and duties of an employer E. The various methods by which a contract of employment can be terminated F. The procedure that should be followed to effect a fair dismissal of an employee G. The meaning of the term unfair dismissal as well as the eligibility requirements to make a claim for unfair dismissal H. The burden of proof in unfair dismissal cases, and the statute of limitations for bringing a claim Page 8 of 9
I. The grounds upon which a dismissal is presumed both fair and unfair J. The adjudication machinery and remedies in relation to claims for unfair dismissals K. The meaning of the term constructive dismissal, the burden of proof and the various tests used by the Court to determine whether or not a constructive dismissal took place L. The meaning of the term wrongful dismissal, and the reasons why someone would choose to bring a claim for wrongful as opposed to unfair dismissal M. The meaning of the term redundancy, the eligibility criteria, fair and unfair selection criteria, and rights of an employee being made redundant N. The obligations imposed upon employers undertaking collective redundancies O. The method by which redundancy payments are calculated P. The adjudication machinery and remedies in relation to claims regarding breaches of the redundancy legislation Q. The rights and protection afforded to employees under the terms of the Maternity Acts, Adoptive Leave Acts and Parental Leave Acts and in particular, eligibility requirements in relation to leave, obligations in relation to salary, and the adjudication machinery and remedies available for breach of any of these protective leave rights R. The right of fathers to paternity leave Page 9 of 9