10. Loan Capital

The Concentrate Questions and Answers series offers the best preparation for tackling exam questions and coursework. Each book includes typical questions, suggested answers with commentary, illustrative diagrams, guidance on how to develop your answer, suggestions for further reading, and advice on exams and coursework. This chapter examines loan capital—borrowing by companies. It focuses on: the legal distinction between fixed and floating charges created by companies over their assets as security for loans, the registration of charges, applications for extension of the period for registration, the priority of charges on insolvency, and the avoidance of charges under the Insolvency Act 1986.

9. Share Capital

The Concentrate Questions and Answers series offers the best preparation for tackling exam questions and coursework. Each book includes typical questions, suggested answers with commentary, illustrative diagrams, guidance on how to develop your answer, suggestions for further reading, and advice on exams and coursework. This chapter examines the law on share capital for public and private companies. The doctrine of capital maintenance ensures that the company has raised the capital it claims to have raised; and that the capital is not subsequently returned, directly or indirectly, to the shareholders. There is a great deal of (mainly statutory) law surrounding this doctrine This chapter considers the capital maintenance doctrine itself and many related topics, including: the issue of shares for non-cash consideration, issue of shares at a discount, reduction of capital, purchase of a company’s own shares, redeemable shares, payment of dividends, and financial assistance by a company for the purchase of its own shares.

7. Minority Shareholder Remedies

The Concentrate Questions and Answers series offers the best preparation for tackling exam questions and coursework. Each book includes typical questions, suggested answers with commentary, illustrative diagrams, guidance on how to develop your answer, suggestions for further reading, and advice on exams and coursework. This chapter examines the law on minority shareholder remedies, which provide some limited protection or avenues of redress for a shareholder with grievances concerning the actions of the company, directors, or majority shareholders. The chapter explores, in particular: the rule in Foss v Harbottle; derivative claims; personal claims and the issue of reflective loss; the ‘unfair prejudice’ remedy in Companies Act 2006, s. 994; and petitions to wind up the company on the ‘just and equitable’ ground under Insolvency Act 1986, s. 122(1)(g).

6. Company Management and Governance

The Concentrate Questions and Answers series offers the best preparation for tackling exam questions and coursework. Each book includes typical questions, suggested answers with commentary, illustrative diagrams, guidance on how to develop your answer, suggestions for further reading, and advice on exams and coursework. This chapter explores important issues in company management and corporate governance, starting by examining the role of directors and shareholders (and the relationship between them) and the separation of ‘ownership and control’. Since the early 1990s, the governance of listed companies has been dominated by self-regulatory codes (currently the UK Corporate Governance Code). This chapter examines how these codes operate and considers key themes in corporate governance, including the role of non-executive directors and auditors; the position of institutional investors; and executive remuneration.

2. Companies and Corporate Personality

The Concentrate Questions and Answers series offers the best preparation for tackling exam questions and coursework. Each book includes typical questions, suggested answers with commentary, illustrative diagrams, guidance on how to develop your answer, suggestions for further reading, and advice on exams and coursework. This chapter considers the main legal forms used for businesses in the UK—particularly sole traders, general partnerships, limited liability partnerships (LLPs), and companies (public and private). It then examines how registered companies limited by shares come into existence. On registration a company becomes a legal person, separate from its shareholders and directors. This chapter explores this ‘corporate personality’ and the popular topic of when the ‘veil of incorporation’ can be lifted or pierced by statute or the courts.

1. Exam Skills for Success in Company Law

The Concentrate Questions and Answers series offers the best preparation for tackling exam questions and coursework. Each book includes typical questions, suggested answers with commentary, illustrative diagrams, guidance on how to develop your answer, suggestions for further reading, and advice on exams and coursework. This chapter provides advice on exams and exam questions in company law to ensure you are best prepared for your assessment, including guidance on how to approach essay and problem questions. It provides lots of important tips for exam success, covering both your preparation for the exam, and your approach to the exam itself. The well-known approaches of IRAC (Issue, Rule, Apply, Conclude) to problem questions and PEA (Point, Explain, Analysis) to essay writing are reviewed.

12. Mixed Topic Questions

The Concentrate Questions and Answers series offers the best preparation for tackling exam questions and coursework. Each book includes typical questions, suggested answers with commentary, illustrative diagrams, guidance on how to develop your answer, suggestions for further reading, and advice on exams and coursework. This chapter looks at mixed topic questions and provides four example questions and suggested answers. The questions require the consideration of a variety of topics, including: directors’ duties, shareholder remedies, derivative claims, unfair prejudice, de facto and shadow directors, corporate personality, lifting/piercing the veil of incorporation, pre-incorporation contracts, wrongful trading, disqualification, and the articles of association.

11. Corporate Insolvency

The Concentrate Questions and Answers series offers the best preparation for tackling exam questions and coursework. Each book includes typical questions, suggested answers with commentary, illustrative diagrams, guidance on how to develop your answer, suggestions for further reading, and advice on exams and coursework. This chapter examines the law on corporate insolvency. It considers the important and topical subject of corporate rescue, reviewing, in particular, administration and company voluntary arrangements. The chapter addresses several issues relating to liquidation, including: winding up petitions and the meaning of ‘inability to pay debts’; assets available to creditors; distribution of assets to creditors; priority of claims; the pari passu principle; and transaction avoidance (dispositions of property after the commencement of winding up, transactions at an undervalue, preferences, voidable floating charges, and transactions defrauding creditors). The potential liability of directors on a company’s insolvent liquidation is considered, concentrating on wrongful and fraudulent trading and disqualification.

5. Directors’ Duties

The Concentrate Questions and Answers series offers the best preparation for tackling exam questions and coursework. Each book includes typical questions, suggested answers with commentary, illustrative diagrams, guidance on how to develop your answer, suggestions for further reading, and advice on exams and coursework. This chapter examines the very important topic of directors’ duties. The chapter considers the main duties, as codified in the Companies Act 2006, including: the duty to act within powers (the proper purposes rule); the duty to promote the success of the company; the duty to exercise independent judgment; the duty to exercise reasonable care, skill, and diligence; the duty to avoid conflicts of interest; and the duty to disclose an interest in a proposed transaction with the company. Related areas such as substantial property transactions and liability for breach are considered. This chapter considers who is a ‘director’, examining the concepts of de facto and shadow directors and how far they owe duties to the company.

4. Shares and Shareholders

The Concentrate Questions and Answers series offers the best preparation for tackling exam questions and coursework. Each book includes typical questions, suggested answers with commentary, illustrative diagrams, guidance on how to develop your answer, suggestions for further reading, and advice on exams and coursework. Shareholders in a company own shares, but the nature of a share and the rights of a shareholder are not easily defined. This chapter discusses the definition and characteristics of a share; the differences between different types of share, particularly ordinary and preference shares; allotment of shares and pre-emption rights; return of capital; and variation of class rights.