COMPANY LAW LGST 201 AY Term 2

Transcription

1 COMPANY LAW LGST 201 AY Term 2 Instructor Associate Professor Lee Pey Woan Tel Office PREREQUISITE LGST 101 Business Law pwlee@smu.edu.sg Rm 4038, Level 4, School of Law COURSE DESCRIPTION The corporate form, as a basic legal structure for the operation and conduct of businesses, pervades the commercial world. This is however no indication that the company is a simple structure. On the contrary, because it is effectively a web of different interests, rights and obligations, the company is a highly complex structure. As such, the corporate form is fittingly the most regulated of all business entities. In this course, we will examine diverse aspects of how a company is formed, managed and controlled, how it transacts with third parties, how it funds its activities, and how it is wound up. with third parties, how it raises capital, and finally, how it may be wound up or restructure At the end of the course, you may expect to have a good understanding of the company as a separate legal entity; the legal framework that regulates a company s activities; the different groups of persons (eg, shareholders, directors, creditors) with rights and liabilities in a company; how a company transacts with third parties; the legal responsibilities of those who control a company; how a company raises and maintains its capital; and how a company ends or restructures its business.. PRESCRIBED TEXTS Yeo & Lee, Commercial Applications of Company Law in Singapore 4 th ed (CCH, 2011) Tan CH (gen ed), Walter Woon on Company Law, Revised 3 rd Ed (Sweet & Maxwell, 2009) REFERENCE TEXTS Pearlie Koh, Company Law, 2nd edn (Lexis, 2009) Brenda Hannigan, Company Law, 3 rd ed (OUP, 2012) LS Sealy and S Worthington, Cases and Materials in Company Law, 9 th ed (OUP, 2010) or earlier edition. Andrew Hicks & SH Goo, Cases and Materials on Company Law, 7 th ed (OUP, 2011) or earlier edition.

2 LEGISLATION & CASES You will need to download relevant Singapore legislation and case law from online databases: Singapore Statutes Online Lawnet For this course, the most important piece of legislation is the Companies Act. ACADEMIC INTEGRITY All acts of academic dishonesty (including, but not limited to, plagiarism, cheating, fabrication, facilitation of acts of academic dishonesty by others, unauthorised possession of exam questions, or tampering with the academic work of other students) are serious offences. All work (whether oral or written) submitted for purposes of assessment must be the student s own work. Penalties for violation of the policy range from zero marks for the component assessment to expulsion, depending on the nature of the offense. When in doubt, students should consult the instructors of the course. Full compliance with the SMU Code of Academic Integrity is required at all times. COURSE METHOD The course will be conducted in seminar sessions of 3 hours each per week. A detailed outline of each seminar, together with the requisite reading instructions and materials will be posted on elearn before each class. There are 12 teaching weeks (weeks 1-7; weeks 9-13) followed by one student revision week in week 14. Recess week is in week 8. The final exam is in week 15. Assessment Component Weight Class Participation 10% Group Assignment 25% Oral 5%, individual grade Written-20%, combined grade Mid-term Test 20% Final Exam 45% Class Participation You will be assessed on your participation in class throughout the course. You will be rewarded for participation that is spontaneous, constructive and thoughtful. That does not mean that only right answers or good questions count. Rather, any participation that reflects your effort in understanding the subject matter will likely contribute positively to the class. For this purpose, preparation before class is absolutely crucial. Group Assignment You will be grouped into teams of 3 to 5 persons each (depending on class size). You may form your own group. Occasionally, the instructor may make final adjustments to keep group numbers as even as possible. Assignments typically take the form of hypothetical problems. The assignment will require students to study and present, in written form, the group s analysis of and views on the legal issues arising from the hypothetical situation. Students are also required to make an oral presentation in class of their analysis and views on such a problem. Credit will be given for the group s ability to generate class discussion will be recognised in the assessment mark. Generally, the assignments are released about 1.5 weeks before the due date.

3 Mid-term Test A mid-term test will be held before the mid-term recess. It is likely to be a 1-hour openbook test consisting of one or two questions in the form of hypothetical problems (or, more rarely, essay questions). The mid-term test mark will comprise 20% of the final grade. More details will be given closer to the time Final Examination The final examination is typically an open-book paper comprising problem and/or essay questions. The final examination will comprise 45% of the final grade. OTHER IMPORTANT RULES AND CLASS ETIQUETTE Attendance is mandatory: o Absence without cause will be penalised. o Prolonged or repeated absence may disqualify student from taking the final examination. o Unsatisfactory attendance may also lead to rejection of I-grade applications. Mid-term tests will not be rescheduled except for clashes with other SMU tests / exams. A student will not be excused for tests except with medical certificate stating that he/she is unfit to sit for the test. Punctuality is respectful and expected. No proceeding in class may be photographed or recorded without the prior consent of the person who is the subject of the photography or recording.

4 CLASS SCHEDULE Week Seminar Topic 1 1 INTRODUCTION TO THE COMPANY 1.1 Introducing the company definition context characteristics lifting the veil 1.2 Types of companies 1.3 Company formation 1.4 Comparison with other forms of business organisation 2 2 CONSTITUTION 2.1 Corporate Constitution Functions and significance Scope & effect 2.2 Alteration of constitution 2.3 Restraints on alteration 3 3 OWNERSHIP 3.1 Shareholding Share capital Classes of shares Class rights 3.2 Membership Incidents 4 4 MANAGING THE COMPANY 4.1 How a company operates Company organs Division of powers 4.2 The General Meeting 4.3 The Board of Directors Categories of directors Non-directorial officers Appointment, tenure and remuneration 4.4 Decision-making process General meeting Board of directors 4.5 Financial transactions with directors

5 Week Seminar Topic 5 5 DIRECTORS DUTIES 5.1 Issue of scope Statutory and common law duties Different stakeholders To whom are duties owed? 5.2 General equitable duties Bona fide rule Proper purpose rule 5.3 Fiduciary Duties No-conflict, no-profit rules 5.4 Duty of care, skill and diligence 5.5 Reform of the law 6 6 ENFORCEMENT OF CORPORATE RIGHTS 6.1 Corporate actions 6.2 Shareholder Actions Derivative actions Statutory derivative actions Oppression and derivative actions 7 7 OPPRESSION REMEDY Test for oppression Remedies Oppression and derivative actions 8 - MID-TERM RECESS WEEK 9 8 BUSINESS CONTRACTS 8.1 Corporate capacity Ultra vires Recent reform 8.2 Company organs and agents Agency principles Doctrine of constructive notice Indoor management rule 10 9 MAINTENANCE AND REDUCTION OF CAPITAL 9.1 Maintenance of capital rule 9.2 Share buy-backs and treasury shares 9.3 Redeemable shares 9.4 Authorised capital reductions

6 Week Seminar Topic 9.5 Financial assistance for the purchase of own shares 9.6 Dividends LOAN CAPITAL 10.1 Sources of finance 10.2 Loans and debentures ability to borrow security for loans 10.3 Charges fixed & floating charges priorities receivership LIQUIDATION 11.1 Objectives of liquidation 11.2 Winding up Types Collection of assets Distribution of assets ALTERNATIVES TO LIQUIDATION 12.1 Schemes of arrangement 12.2 Judicial management Procedure Legal issues 14 - REVISION WEEK (NO SEMINAR) 15 - FINAL EXAMINATION The above schedule is generally firm but may be changed owing to exigencies. Students are advised to refer to elearn which will reflect the latest status of the course schedule.