Companies and the Law
MODULE CODE
CREDIT VALUE
DELIVERY
Module Aims
Aim 1
The aims of this module are to explain the basic principles of company law, to encourage students to consider the practical problems which the legal rules are endeavouring to resolve and to enable students to be in a position whereby they can critically evaluate the extent to which the rules achieve the desired effect.
Module Content
A AGENCY LAW
- The role of the agent, and examples of such relationships with regard to partners and company directors.
- Establishment of the agency relationship.
- The authority of the agent and different types.
- The potential liability of both principal and agent.
- Termination of agency relationship.
B PARTNERSIPS
- Legislation governing the partnership, both general and limited.
- Establishment of partnerships.
- The authority of partners in relation to partnership activity.
- The liability of various partners for partnership debts.
- Ways in which partnerships can be brought to an end.
C CORPORATIONS AND LEGAL PERSONALITY
- Sole traders, partnerships and companies.
- Meaning and effect of limited liability.
- Different types of companies, in particular private and public companies.
- Effect of separate legal personality.
- Instances where separate legal personality will be ignored.
D COMPANY FORMATIONS
- Role, duties and liabilities of company promoters.
- Procedure for registering companies, both public and private.
- Statutory books, records and returns that companies must keep or make.
- Content and effect of the memorandum of association.
- Meaning and effect of the ultra vires rule.
- Contents of Table A articles of association.
- Effect of a company’s constitutional documents.
- Explain how articles and memorandum of association can be changed.
E CAPITAL AND THE FINANCING OF COMPANIES
1. Share capital
a) The different meanings of capital.
b) Various classes of shares.
c) Procedure for altering class rights.
2. Loan capital
a) Companies’ borrowing powers.
b) Loan capital and debentures.
c) Distinction of loan capital from share capital.
d) The concept of a company charge and distinction between fixed and floating charges.
e) Need and the procedure for registering company charges.
3. Capital maintenance and dividend law
a) The doctrine of capital maintenance and capital reduction.
b) The effect of issuing shares at either a discount, or at a premium.
c) The rules governing the distribution of dividends in both private and public companies.
F LEGAL IMPLICATIONS RELATING TO COMPANIES IN DIFFICULTY OR IN CRISIS
- Meaning of and procedure involved in voluntary liquidation.
- Meaning of and procedure involved in compulsory liquidation.
G ETHICAL ISSUES RELATING TO BUSINESS
- Nature and legal control over insider dealing
- Nature and legal control over `money laundering
- Policies and procedures required by accountants and auditors to detect and prevent criminal activities, e.g., money laundering
- Potential criminal activity in the operation management and winding up companies
- Fraudulent and wrongful trading
- Governance – corporate governance, types and categories of corporate governance and ethical issues relating to business.
- Sustainability – Sustainability concepts and the importance of sustainability as it relates to the responsibilities of company directors and employers.
Learning Outcomes
On successful completion of this module, a student will be able to:
Teaching Methods
Material will be introduced in the weekly lecture followed up by directed reading and discussion. There will also be one group session each week comprising work on case material in seminars. Students are expected to complete pre-set exercises prior to each workshop. There are additional seminar support sessions, which are timetabled.
The assessment strategy is designed to allow students to gain proficiency in the fundamental technical and computational aspects of the subject. It is also designed meet the Accountancy Professional Bodies exemption criteria as well as test the width and depth of a student’s knowledge.
During this module students will develop and enhance the graduate attributes of numeracy, problem-solving and planning. This will aid employability with the accounting profession and careers in general business management.
Formative feedback on seminar and practice questions is provided to students on a weekly basis, with additional support available in the timetabled Technical Support Workshops.
Assessment Methods
This module is assessed through a poster examinations (25% and 75%)
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Compulsory
