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The UNITED KINGDOM COMPANY LAW regulates corporations formed under the Companies Act 2006
Companies Act 2006
. Also governed by the Insolvency Act 1986 , the UK Corporate Governance Code , European Union
European Union
Directives and court cases, the company is the primary legal vehicle to organise and run business. Tracing their modern history to the late Industrial Revolution , public companies now employ more people and generate more of wealth in the United Kingdom
United Kingdom
economy than any other form of organisation. The United Kingdom
United Kingdom
was the first country to draft modern corporation statutes, where through a simple registration procedure any investors could incorporate, limit liability to their commercial creditors in the event of business insolvency , and where management was delegated to a centralised board of directors . An influential model within Europe
Europe
, the Commonwealth
Commonwealth
and as an international standard setter, UK law has always given people broad freedom to design the internal company rules, so long as the mandatory minimum rights of investors under its legislation are complied with.

Company law, or corporate law , can be broken down into two main fields. Corporate governance in the UK mediates the rights and duties among shareholders, employees, creditors and directors. Since the board of directors habitually possesses the power to manage the business under a company constitution, a central theme is what mechanisms exist to ensure directors' accountability. UK law is "shareholder friendly" in that shareholders , to the exclusion of employees , typically exercise sole voting rights in the general meeting. The general meeting holds a series of minimum rights to change the company constitution, issue resolutions and remove members of the board. In turn, directors owe a set of duties to their companies. Directors must carry out their responsibilities with competence, in good faith and undivided loyalty to the enterprise. If the mechanisms of voting do not prove enough, particularly for minority shareholders, directors' duties and other member rights may be vindicated in court. Of central importance in public and listed companies is the securities market, typified by the London
London
Stock Exchange . Through the Takeover Code the UK strongly protects the right of shareholders to be treated equally and freely trade their shares.

Corporate finance
Corporate finance
concerns the two money raising options for limited companies. Equity finance involves the traditional method of issuing shares to build up a company's capital . Shares can contain any rights the company and purchaser wish to contract for, but generally grant the right to participate in dividends after a company earns profits and the right to vote in company affairs. A purchaser of shares is helped to make an informed decision directly by prospectus requirements of full disclosure , and indirectly through restrictions on financial assistance by companies for purchase of their own shares. Debt finance means getting loans, usually for the price of a fixed annual interest repayment. Sophisticated lenders, such as banks typically contract for a security interest over the assets of a company, so that in the event of default on loan repayments they may seize the company's property directly to satisfy debts. Creditors are also, to some extent, protected by courts' power to set aside unfair transactions before a company goes under, or recoup money from negligent directors engaged in wrongful trading . If a company is unable to pay its debts as they fall due, UK insolvency law requires an administrator to attempt a rescue of the company (if the company itself has the assets to pay for this). If rescue proves impossible, a company's life ends when its assets are liquidated, distributed to creditors and the company is struck off the register. If a company becomes insolvent with no assets it can be wound up by a creditor, for a fee (not that common), or more commonly by the tax creditor (HMRC).

CONTENTS

* 1 History

* 2 Companies and private law

* 2.1 Forming a company * 2.2 Corporate personality * 2.3 Rules of attribution * 2.4 Piercing the veil * 2.5 Capital regulations

* 3 Corporate governance

* 3.1 Constitutional separation of powers * 3.2 Shareholder rights * 3.3 Investor rights * 3.4 Employees\' rights * 3.5 Directors\' duties * 3.6 Corporate litigation

* 4 Corporate finance
Corporate finance
and markets

* 4.1 Debt finance * 4.2 Equity finance * 4.3 Market regulation * 4.4 Accounts and auditing * 4.5 Mergers and acquisitions

* 5 Corporate insolvency * 6 Corporation
Corporation
tax * 7 Corporate law
Corporate law
internationally * 8 See also * 9 Notes * 10 References * 11 External links

HISTORY

See also: History of company law
History of company law
and History of company law
History of company law
in the United Kingdom
United Kingdom
Hendrick Cornelisz Vroom
Hendrick Cornelisz Vroom
's depiction in 1614 of competing British East India Company
British East India Company
and Dutch East India Company ships, both with monopolies to trade. Other chartered corporations, still in existence include the Hudson’s Bay Company (est 1670) and the Bank
Bank
of England (est 1694).

Company law in its modern shape dates from the mid-19th century, however an array of business associations developed long before. In medieval times traders would do business through common law constructs, such as partnerships . Whenever people acted together with a view to profit , the law deemed that a partnership arose. Early guilds and livery companies were also often involved in the regulation of competition between traders. As England sought to build a mercantile Empire , the government created corporations under a Royal Charter or an Act of Parliament
Act of Parliament
with the grant of a monopoly over a specified territory. The best known example, established in 1600, was the British East India Company
British East India Company
. Queen Elizabeth I
Queen Elizabeth I
granted it the exclusive right to trade with all countries to the east of the Cape of Good Hope . Corporations
Corporations
at this time would essentially act on the government's behalf, bringing in revenue from its exploits abroad. Subsequently, the Company became increasingly integrated with British military and colonial policy, just as most UK corporations were essentially dependent on the British navy's ability to control trade routes on the high seas . "The directors of such companies, however, being the managers rather of other people’s money than of their own, it cannot well be expected, that they should watch over it with the same anxious vigilance with which the partners in a private copartnery frequently watch over their own. Like the stewards of a rich man, they are apt to consider attention to small matters as not for their master's honour, and very easily give themselves a dispensation from having it. Negligence and profusion, therefore, must always prevail, more or less, in the management of the affairs of such a company. It is upon this account, that joint-stock companies for foreign trade have seldom been able to maintain the competition against private adventurers." A Smith , An Inquiry into the Nature and Causes of the Wealth of Nations
Wealth of Nations
(1776) Book
Book
V, ch 1, §107

A similar chartered company , the South Sea Company , was established in 1711 to trade in the Spanish South American colonies, but met with less success. The South Sea Company's monopoly rights were supposedly backed by the Treaty of Utrecht
Treaty of Utrecht
, signed in 1713 as a settlement following the War of Spanish Succession
War of Spanish Succession
, which gave the United Kingdom an assiento to trade, and to sell slaves in the region for thirty years. In fact the Spanish remained hostile and let only one ship a year enter. Unaware of the problems, investors in the UK, enticed by company promoters ' extravagant promises of profit, bought thousands of shares. By 1717, the South Sea Company was so wealthy (still having done no real business) that it assumed the public debt of the UK government. This accelerated the inflation of the share price further, as did the Royal Exchange and London
London
Assurance Corporation
Corporation
Act 1719 , which (possibly with the motive of protecting the South Sea Company from competition) prohibited the establishment of any companies without a Royal Charter. The share price rose so rapidly that people began buying shares merely in order to sell them at a higher price. By inflating demand this in turn led to higher share prices. The "South Sea bubble" was the first speculative bubble the country had seen, but by the end of 1720, the bubble had "burst", and the share price sank from £1000 to under £100. As bankruptcies and recriminations ricocheted through government and high society, the mood against corporations, and errant directors, was bitter. Even in 1776, Adam Smith
Adam Smith
wrote in the Wealth of Nations
Wealth of Nations
that mass corporate activity could not match private entrepreneurship, because people in charge of "other people's money" would not exercise as much care as they would with their own. Robert Lowe
Robert Lowe
, then Vice President of the Board of Trade
Board of Trade
has been dubbed the "father of modern company law" for his role in drafting the 1856 reforms .

The Bubble Act 1720 's prohibition on establishing companies remained in force until 1825. By this point the Industrial Revolution
Industrial Revolution
had gathered pace, pressing for legal change to facilitate business activity. Restrictions were gradually lifted on ordinary people incorporating, though businesses such as those chronicled by Charles Dickens in Martin Chuzzlewit under primitive companies legislation were often scams. Without cohesive regulation, undercapitalised ventures like the proverbial "Anglo-Bengalee Disinterested Loan
Loan
and Life Assurance Company" promised no hope of success, except for richly remunerated promoters. Then in 1843, William Gladstone took chairmanship of a Parliamentary Committee on Joint Stock Companies, which led to the Joint Stock Companies Act 1844 . For the first time it was possible for ordinary people through a simple registration procedure to incorporate. The advantage of establishing a company as a separate legal person was mainly administrative, as a unified entity under which the rights and duties of all investors and managers could be channeled. The most important development came through the Limited Liability Act 1855 , which allowed investors to limit their liability in the event of business failure to the amount they invested in the company. These two features - a simple registration procedure and limited liability - were subsequently codified in the world's first modern company law, the Joint Stock Companies Act 1856
Joint Stock Companies Act 1856
. A series of Companies Acts up to the present Companies Act 2006
Companies Act 2006
have essentially retained the same fundamental features.

Over the 20th century, companies in the UK became the dominant organisational form of economic activity, which raised concerns about how accountable those who controlled companies were to those who invested in them. The first reforms following the Great Depression, in the Companies Act 1948 , ensured that directors could be removed by shareholders with a simple majority vote . In 1977, the government's Bullock Report proposed reform to allow employees to participate in selecting the board of directors , as was happening across Europe, exemplified by the German Codetermination Act 1976 . However the UK never implemented the reforms, and from 1979 the debate shifted. Although making directors more accountable to employees was delayed, the Cork Report led to stiffer sanctions in the Insolvency
Insolvency
Act 1986 and the Company Directors Disqualification Act 1986 against directors who negligently ran companies at a loss. Through the 1990s the focus in corporate governance turned toward internal control mechanisms, such as auditing, separation of the chief executive position from the chair, and remuneration committees as an attempt to place some check on excessive executive pay . These rules applicable to listed companies, now found in the UK Corporate Governance Code , have been complemented by principles based regulation of institutional investors ' activity in company affairs. At the same time, the UK's integration in the European Union
European Union
meant a steadily growing body of EU Company Law Directives and case law to harmonise company law within the internal market.

COMPANIES AND PRIVATE LAW

See also: UK partnership law , English trust law , English contract law , English tort law , and English unjust enrichment

Companies occupy a special place in private law, because they have a legal personality separate from those who invest their capital and labour to run the business. The general rules of contract, tort and unjust enrichment operate in the first place against the company as a distinct entity. This differs fundamentally from other forms of business association . A sole trader acquires rights and duties as normal under the general law of obligations. If people carry on business together with a view to profit, they are deemed to have formed a partnership under the Partnership
Partnership
Act 1890 section 1. Like a sole trader, partners will be liable on any contract or tort obligation jointly and severally in shares equal to their monetary contribution, or according to their culpability. Law
Law
, accountancy and actuarial firms are commonly organised as partnerships. Since the Limited Liability Partnerships Act 2000 , partners can limit the amount they are liable for to their monetary investment in the business, if the partnership owes more money than the enterprise has. Outside these professions, however, the most common method for businesses to limit their liability is by forming a company. All directors of all public limited companies in the UK must prepare the financial statements and the directors’ report and make them available to the shareholders and the public. They are also expected to maintain proper internal control systems to guard and prevent possible misuse of the company’s resources (Collis 2015, p. 79). The annual report shows that the directors have lived to the expectations and has presented to its shareholders and the public all the financial statements. They include comprehensive income statement, balance sheet, cash flow statement, as well as a statement of changes in equity and a general directors’ report (Di Pietr, Art, and Ronen 2015, p. 39). Having an AGM and planned programs comply that the board should meet, and dialogue with the shareholders is evident in the shareholder engagement section Evaluation of the Regulatory Framework The UK has a regulatory framework that all its publicly listed companies should follow while preparing their annual reports. It provides the core financial statements that must appear in a yearly report, and they include; balance sheet, comprehensive income statement, statement of changes in equity as well as cash flow statement as required under international accounting standards (IAS 1). If further demonstrates the relationship that subsists among shareholders, management and the independent audit teams (Gibbon et al. 2017, 31). It is critical that all firms be guided by a universal code of corporate governance to enable companies to respond to issues that concern shareholders in a manner that enhances the effectiveness of organizational governance principle. Moreover, there are certain aspects of information that when not emphasized cannot be provided to the shareholders (ICSA 2015, p. 23). Thus, the framework plays a critical role through its emphasis on statutory disclosure in highlighting all the items that it considers vital for the shareholders. Financial statements must be prepared using a particular set of rules and regulations hence the rationale behind allowing the companies to apply the provisions of company law, international financial reporting standards (IFRS), as well as the UK stock exchange rules as directed by the Financial Conduct Authority (FCA). It is also necessary that shareholders cannot understand the figures as presented in the various financial statements hence it is critical that the board should provide notes on accounting policies as well as other explanatory notes to make them understand the report better. Conclusion

FORMING A COMPANY

Main articles: Company formation and Incorporation (business) Companies employ over half the workers in the UK, and turn over more than £2,500 billion.

A variety of companies may be incorporated under the Companies Act 2006 . The people interested in starting the enterprise - the prospective directors, employees and shareholders - may choose, firstly, an unlimited or a limited company. "Unlimited " will mean the incorporators will be liable for all losses and debts under the general principles of private law. The option of a limited company leads to a second choice. A company can be "limited by guarantee ", meaning that if the company owes more debts than it can pay, the guarantors' liability will be limited to the extent of the money they elect to guarantee. Or a company may choose to be "limited by shares", meaning capital investors' liability is limited to the amount they subscribe for in share capital. A third choice is whether a company limited by shares will be public or private. Both kinds of companies must display (partly as a warning) the endings "plc" or "Ltd" following the company name. Most new businesses will opt for a private company limited by shares , while unlimited companies and companies limited by guarantee are typically chosen by either charities, risky ventures or mutual funds wanting to signal they will not leave debts unpaid. Charitable ventures also have the option to become a community interest company . Public companies are the predominant business vehicle in the UK economy. While far less numerous than private companies, they employ the overwhelming mass of British workers and turn over the greatest share of wealth. Public companies can offer shares to the public, must have a minimum capital of £50,000, must allow free transferability of its shares, and typically (as most big public companies will be listed) will follow requirements of the London Stock Exchange
London Stock Exchange
or a similar securities market. Businesses may also elect to incorporate under the European Company Statute as a Societas Europaea
Societas Europaea
. An "SE" will be treated in every European Union
European Union
member state as if it were a public company formed in accordance with the law of that state, and may opt in or out of employee involvement .

Once the decision has been made about the type of company, formation occurs through a series of procedures with the registrar at Companies House . Before registration, anybody promoting the company to attract investment falls under strict fiduciary duties to disclose all material facts about the venture and its finances. Moreover, anybody purporting to contract in a company's name before its registration will generally be personally liable on those obligations. In the registration process, those who invest money in a company will sign a memorandum of association stating what shares they will initially take, and pledge their compliance with the Companies Act 2006
Companies Act 2006
. A standard company constitution, known as the Model Articles , is deemed to apply, or the corporators may register their own individualised articles of association . Directors must be appointed - one in a private company and at least two in a public company - and a public company must have a secretary, but there needs to be no more than a single member. The company will be refused registration if it is set up for an unlawful purpose, and a name must be chosen that is not inappropriate or already in use. This information is filled out in the "IN01" form available on the Companies House
Companies House
website, and a £18 fee is paid for online registration via Business Link
Business Link
in 8 to 10 days, or a £40 fee if using the paper IN01 form (the fee is £100 for same day registration using the paper form). The registrar then issues a certificate of incorporation and a new legal personality enters the stage.

CORPORATE PERSONALITY

See also: Separate legal personality and Limited liability The Corporation
Corporation
of London
London
, which governs the Square Mile from the Griffin at Temple Bar to the Tower of London
Tower of London
, is an early example of a separate legal person.

English law
English law
recognised long ago that a corporation would have "legal personality". Legal
Legal
personality simply means the entity is the subject of legal rights and duties. It can sue and be sued. Historically, municipal councils (such as the Corporation
Corporation
of London
London
) or charitable establishments would be the primary examples of corporations. In 1612, Sir Edward Coke remarked in the Case of Sutton\'s Hospital ,

the Corporation
Corporation
itself is onely in abstracto, and resteth onely in intendment and consideration of the Law
Law
; for a Corporation
Corporation
aggregate of many is invisible , immortal , and therefore it cannot have predecessor nor successor. They may not commit treason , nor be outlawed, nor excommunicate , for they have no souls , neither can they appear in person, but by Attorney . A Corporation
Corporation
aggregate of many cannot do fealty , for an invisible body cannot be in person, nor can swear, it is not subject to imbecilities, or death of the natural, body , and divers other cases.

Without a body to be kicked or a soul to be damned, a corporation does not itself suffer penalties administered by courts, but those who stand to lose their investments will. A company will, as a separate person, be the first liable entity for any obligations its directors and employees create on its behalf. If a company does not have enough assets to pay its debts as they fall due, it will be insolvent - bankrupt. Unless an administrator (someone like an auditing firm partner, usually appointed by creditors on a company's insolvency) is able to rescue the business, shareholders will lose their money, employees will lose their jobs and a liquidator will be appointed to sell off any remaining assets to distribute as much as possible to unpaid creditors. Yet if business remains successful, a company can persist forever , even as the natural people who invest in it and carry out its business change or pass away.

Most companies adopt limited liability for their members, seen in the suffix of "Ltd " or "plc ". This means that if a company does go insolvent, unpaid creditors cannot (generally) seek contributions from the company's shareholders and employees, even if shareholders and employees profited handsomely before a company's fortunes declined or would bear primary responsibility for the losses under ordinary civil law principles. The liability of a company itself is unlimited (companies have to pay all they owe with the assets they have), but the liability of those who invest their capital in a company is (generally) limited to their shares, and those who invest their labour can only lose their jobs. However, limited liability acts merely as a default position. It can be "contracted around", provided creditors have the opportunity and the bargaining power to do so. A bank, for instance, may not lend to a small company unless the company's director gives his own house as security for the loan (e.g., by mortgage ). Just as it is possible for two contracting parties to stipulate in an agreement that one's liability will be limited in the event of contractual breach , the default position for companies can be switched back so that shareholders or directors do agree to pay off all debts. If a company's investors do not do this, so their limited liability is not "contracted around", their assets will (generally) be protected from claims of creditors. The assets are beyond reach behind the metaphorical "veil of incorporation".

RULES OF ATTRIBUTION

See also: Attribution of liability to United Kingdom
United Kingdom
companies , Capacity in English law , Agency in English law , and Vicarious liability in English law
English law

* v * t * e

Company liability cases

Royal British Bank
Bank
v Turquand (1856) 6 E text-align: center; font-size: 80%; line-height: 1.5em; background-color: #fafafa; float: right; clear: right; margin: 0 0 1em 1em;;padding:3px">

* v * t * e

Corporate personality cases

Case of Sutton\'s Hospital (1612) 77 ER 960

Salomon v A Salomon & Co Ltd UKHL 1

Macaura v Northern Assurance Co Ltd AC 619

Gilford Motor Co Ltd v Horne Ch 935

Lee v Lee’s Air Farming UKPC 33

Jones v Lipman 1 WLR 832

Tunstall v Steigmann 2 QB 593

Littlewoods Mail Order Stores v IRC 1 WLR 1214

Wallersteiner v Moir 1 WLR 991

DHN Ltd v Tower Hamlets LBC 1 WLR 852

Woolfson v Strathclyde Regional Council UKHL 5

Adams v Cape Industries plc
Adams v Cape Industries plc
Ch 433

Ord v Belhaven Pubs Ltd EWCA Civ 243

Lubbe v Cape Plc UKHL 41

Gencor ACP Ltd v Dalby EWHC 1560 (Ch)

Trustor AB v Smallbone (No 2) EWHC 703 (Ch)

Chandler v Cape plc EWCA Civ 525

Prest v Petrodel Resources Ltd UKSC 34

VTB Capital plc v Nutritek Int Corp UKSC 5

Rome II Regulation (EC) No 864/2007 arts 1(2)(d) and 4

see UK company law

If a company goes insolvent, there are certain situations where the courts lift the veil of incorporation on a limited company, and make shareholders or directors contribute to paying off outstanding debts to creditors. However, in UK law the range of circumstances is heavily limited. This is usually said to derive from the "principle" in Salomon v A Salomon "> Whitechapel
Whitechapel
High Street , where Aron Salomon , the most famous litigant in company law, went insolvent .

This principle is open to a series of qualifications. Most significantly, statute may require directly or indirectly that the company not be treated as a separate entity. Under the Insolvency
Insolvency
Act 1986 , section 214 stipulates that company directors must contribute to payment of company debts in winding up if they kept the business running up more debt when they ought to have known there was no reasonable prospect of avoiding insolvency. A number of other cases demonstrate that in construing the meaning of a statute unrelated to company law, the purpose of the legislation should be fulfilled regardless of the existence of a corporate form. For example, in Daimler Co Ltd v Continental Tyre and Rubber Co (Great Britain) Ltd , the Trading with the Enemy Act 1914 said that trading with any person of "enemy character" would be an offence. So even though the Continental Tyre Co Ltd was a "legal person" incorporated in the UK (and therefore British) its directors and shareholders were German (and therefore enemies, while the First World
World
War was being fought).

There are also case based exceptions to the Salomon principle, though their restrictive scope is not wholly stable. The present rule under English law
English law
is that only where a company was set up to commission fraud, or to avoid a pre-existing obligation can its separate identity be ignored. This follows from a Court of Appeal case, Adams v Cape Industries plc . A group of employees suffered asbestos diseases after working for the American wholly owned subsidiary of Cape Industries plc . They were suing in New York to make Cape Industries plc pay for the debts of the subsidiary. Under conflict of laws principles, this could only be done if Cape Industries plc was treated as "present" in America through its US subsidiary (i.e. ignoring the separate legal personality of the two companies). Rejecting the claim, and following the reasoning in Jones v Lipman , the Court of Appeal emphasised that the US subsidiary had been set up for a lawful purpose of creating a group structure overseas, and had not aimed to circumvent liability in the event of asbestos litigation. The potentially unjust result for tort victims, who are unable to contract around limited liability and may be left only with a worthless claim against a bankrupt entity, has been changed in Chandler v Cape plc so that a duty of care may be owed by a parent to workers of a subsidiary regardless of separated legal personality. However even though tort victims are protected, the restrictive position remains subject to criticism where a company group is involved, since it is not clear that companies and actual people ought to get the protection of limited liability in identical ways. An influential decision, although subsequently doubted strongly by the House of Lords, was passed by Lord Denning MR in DHN Ltd v Tower Hamlets BC . Here Lord Denning MR held that a group of companies, two subsidiaries wholly owned by a parent, constituted a single economic unit. Because the companies' shareholders and controlling minds were identical, their rights were to be treated as the same. This allowed the parent company to claim compensation from the council for compulsory purchase of its business, which it could not have done without showing an address on the premises that its subsidiary possessed. Similar approaches to treating corporate "groups" or a "concern " as single economic entities exist in many continental European jurisdictions. This is done for tax and accounting purposes in English law, however for general civil liability the rule still followed is that in Adams v Cape Industries plc . It is very rare for English courts to lift the veil. The liability of the company is generally attributed to the company alone.

CAPITAL REGULATIONS

See also: Capital requirement , Dividends
Dividends
, and Financial assistance (share purchase)

* v * t * e

Capital regulation sources

Second Company Law
Law
Directive 2012/30/EU arts 6-10, 15

Companies Act 2006
Companies Act 2006
ss 761-763

Centros Ltd v Erhvervs- og Selsk. (1999) C-212/97

Companies Act 2006
Companies Act 2006
ss 542, 584-597

In re Wragg Ltd 1 Ch 796

Pilmer v Duke Group Ltd 2 BCLC 773

Ooregum Gold Mining Co of India v Roper AC 125

Mosely v Kofffontein Mines Ltd 2 Ch 108

CMAR 2008 Sch 3, paras 4 and 70

Companies Act 2006
Companies Act 2006
ss 830-831

Re Halt Garage 3 All ER 1016

Aveling Barford Ltd v Period Ltd BCLC 626

Progress Ltd v Moorgarth Ltd UKSC 55

It’s A Wrap (UK) Ltd v Gula EWCA Civ 544

Bairstow v Queen\'s Moat Houses plc EWCA Civ 712

Companies Act 2006
Companies Act 2006
ss 658, 684-735

Re Chatterly-Whitfield Collieries Ltd 2 All ER 593

see UK company law

Because limited liability generally prevents shareholders, directors or employees being sued, the Companies Acts have sought to regulate the company's use of its capital in at least four ways. "Capital" refers to the economic value of a company's assets, such as money, buildings, or equipment. First, and most controversially, the Companies Act 2006
Companies Act 2006
section 761, following the EU's Second Company Law Directive , requires that when a public company begins to trade it has a minimum of £50,000 promised to be paid up by the shareholders. After that, the capital can be spent. This is a largely irrelevant sum for almost any public company, and although the first Companies Acts required it, since 1862 there has been no similar provision for a private company. Nevertheless, a number of EU member states kept minimum capital rules for their private companies, until recently. In 1999, in Centros Ltd v Erhvervs- og Selskabsstyrelsen the European Court of Justice held that a Danish minimum capital rule for private companies was a disproportionate infringement of the right of establishment for businesses in the EU. A UK private limited company was refused registration by the Danish authorities, but it was held that the refusal was unlawful because the minimum capital rules did not proportionately achieve the aim of protecting creditors. Less restrictive means could achieve the same goal, such as allowing creditors to contract for guarantees. This led a large number of businesses in countries with minimum capital rules, like France
France
and Germany, to begin incorporating as a UK "Ltd ". France
France
abolished its minimum capital requirement for the SARL in 2003, and Germany
Germany
created a form of GmbH
GmbH
without minimum capital in 2008. However, while the Second Company Law
Law
Directive is not amended, the rules remain in place for public companies. A 1903 stock certificate of a circus business, Barnum "> The FTSE 100 Index
FTSE 100 Index
, here between 1969 and 2013, indicates value that traders in the stock market perceive the UK's top 100 companies to have, given the dividends they will pay out. Dividends
Dividends
can only be paid on profits above a company's "legal capital ": the initial total shareholders contributed when they bought their shares.

The third, and practically most important strategy for creditor protection, was to require that dividends and other returns to shareholders could only be made, generally speaking, if a company had profits. The concept of "profit " is defined by law as having assets above the amount that shareholders, who initially bought shares from the company, contributed in return for their shares. For example, a company could launch its business with 1000 shares (for public companies, called an "IPO" or initial public offering ) each with a nominal value of 1 penny, and an issue price of £1. Shareholders would buy the £1 shares, and if all are sold, £1000 would become the company's "legal capital ". Profits are whatever the company makes on top of that £1000, though as a company continues to trade, the market price of shares could well be going up to £2 or £10, or indeed fall to 50 pence or some other number. The Companies Act 2006
Companies Act 2006
states in section 830 that dividends , or any other kind of distribution, can only be given out from surplus profits beyond the legal capital. It is generally the decision of the board of directors, affirmed by a shareholder resolution, whether to declare a dividend or perhaps simply retain the earnings and invest them back into the business to grow and expand. The calculation of companies' assets and liabilities, losses and profits, will follow the Generally Accepted Accounting Principles in the UK, but this is not an objective, scientific process: a variety of different accounting methods can be used which can lead to different assessments of when a profit exists. The prohibition on falling below the legal capital applies to "distributions" in any form, and so "disguised" distributions are also caught. This has been held to include, for example, an unwarranted salary payment to a director's wife when she had not worked, and a transfer of a property within a company group at half its market value. A general principle, however, recently expounded in Progress Property Co Ltd v Moorgarth Group Ltd is that if a transaction is negotiated in good faith and at arm's length, then it may not be unwound, and this is apparently so even if it means that creditors have been "ripped off". If distributions are made without meeting the law's criteria, then a company has a claim to recover the money from any recipients. They are liable as constructive trustees , which probably mirrors the general principles of any action in unjust enrichment . This means that liability is probably strict, subject to a change of position defence, and the rules of tracing will apply if assets wrongfully paid out of the company have been passed on. For example, in It’s A Wrap (UK) Ltd v Gula the directors of a bankrupt company argued that they had been unaware that dividend payments they paid themselves were unlawful (as there had not in fact been profits) because their tax advisers had said it was okay. The Court of Appeal held that ignorance of the law was not a defence. A contravention existed so long as one ought to have known of the facts that show a dividend would contravene the law. Directors can similarly be liable for breach of duty, and so to restore the money wrongfully paid away, if they failed to take reasonable care. After a leveraged buyout of the leading UK football team, the Glazer ownership of Manchester United plunged the club into debt, a thing that would have been more difficult before prohibitions on financial assistance for share purchase were relaxed in 1981.

Legal
Legal
capital must be maintained (not distributed to shareholders, or distributed "in disguise") unless a company formally reduces its legal capital. Then it can make distributions, which might be desirable if a company wishes to shrink. A private company must have a 75 per cent vote of the shareholders, and the directors must then warrant that the company will remain solvent and will be able to pay its debts. If this turns out to be a negligent statement, the director can be sued. But this means it is hard to claw back any profits from shareholders if a company does indeed go insolvent, if the director's statement appeared good at the time. If not all the directors are prepared to make a solvency statement, the company may apply to court for a decision. In public companies, a special resolution must also be passed, and a court order is necessary. The court can make a number of orders, for example that creditors should be protected with security interest . There is a general principle that shareholders must be treated equally in making capital reductions, however this does not mean that unequally situated shareholders must be treated the same. In particular, while no ordinary shareholder should lose shares disproportionately, it has been held legitimate to cancel preferential shares before others, particularly if those shares are entitled to preferential payment as a way of considering "the position of the company itself as an economic entity". Economically, companies buying their own shares back from shareholders would achieve the same effect as a reduction of capital. Originally it was prohibited by the common law, but now although the general rule remains in section 658 there are two exceptions. First, a company may issue shares on terms that they may be redeemed, though only if there is express authority in the constitution of a public company, and the re-purchase can only be made from distributable profits. Second, since 1980 shares can simply be bought back from shareholders if, again this is done out of distributable profits. Crucially, the directors must also state that the company will be able to pay all its debts and continue for the next year, and shareholders must approve this by special resolution. Under the Listing Rules for public companies, shareholders must generally be given the same buy back offer, and get shares bought back pro rata. How many shares are retained by the company as treasury shares or cancelled must be reported to Companies House. From the company's perspective the legal capital is being reduced, hence the same regulation applies. From the shareholder's perspective, the company buying back some of its shares is much the same as simply paying a dividend, except for one main difference. Taxation of dividends and share buy backs tends to be different, meaning that often buy backs are popular just because they "dodge " the Exchequer.

* v * t * e

Financial assistance cases

Barclays
Barclays
Bank
Bank
Ltd v British "> Tough corporate governance reform, the CDDA 1986 , disqualified the directors in Re Barings plc (No 5) , after a rogue trader brought down Barings Bank, unsupervised, from the Singapore
Singapore
office.

Corporate governance is concerned primarily with the balance of power between the two basic organs of a UK company: the board of directors and the general meeting . The term "governance" is often used in the more narrow sense of referring to principles in the UK Corporate Governance Code . This makes recommendations about the structure, accountability and remuneration of the board of directors in listed companies, and was developed after the Polly Peck , BCCI and Robert Maxwell scandals led to the Cadbury Report of 1992. However, put broadly corporate governance in UK law focuses on the relative rights and duties of directors, shareholders , employees , creditors and others who are seen as having a "stake " in the company's success. The Companies Act 2006
Companies Act 2006
, in conjunction with other statutes and case law, lays down an irreducible minimum core of mandatory rights for shareholders, employees, creditors and others by which all companies must abide. UK rules usually focus on protecting shareholders or the investing public, but above the minimum, company constitutions are essentially free to allocate rights and duties to different groups in any form desired.

CONSTITUTIONAL SEPARATION OF POWERS

Main articles: Company constitutions in the United Kingdom
United Kingdom
and Articles of association

* v * t * e

Company constitution cases

Attorney General v Davy (1741) 2 Atk 212

R v Richardson (1758) 97 ER 426

Pender v Lushington (1877) 6 Ch D 70

Automatic Self-Clean. Filter Ltd v Cuninghame 2 Ch 34

Quin "> A board of directors is accountable to the general meeting . These are the two essential organs of all UK companies.

Typically, a company's articles will vest a general power of management in the board of directors, with full power of directors to delegate tasks to other employees, subject to an instruction right reserved for the general meeting acting with a three quarter majority. This basic pattern can theoretically be varied in any number of ways, and so long as it does not contravene the Act, courts will enforce that balance of power. In Automatic Self-Cleansing Filter Syndicate Co Ltd v Cuninghame , a shareholder sued the board for not following a resolution, carried with an ordinary majority of votes, to sell off the company's assets. The Court of Appeal refused the claim, since the articles stipulated that a three quarter majority was needed to issue specific instructions to the board. Shareholders always have the option of gaining the votes to change the constitution or threaten directors with removal, but they may not sidestep the separation of powers found in the company constitution. Though older cases raise an element of uncertainty, the majority opinion is that other provisions of a company's constitution generate personal rights that may be enforced by company members individually. Of the most important is a member's right to vote at meetings. Votes need not necessarily attach to shares, as preferential shares (e.g., those with extra dividend rights) are frequently non-voting. However, ordinary shares invariably do have votes and in Pender v Lushington Lord Jessel MR stated votes were so sacrosanct as to be enforceable like a "right of property". Otherwise, the articles may be enforced by any member privy to the contract. Companies are excluded from the Contracts (Rights of Third Parties) Act 1999 , so people who are conferred benefits under a constitution, but are not themselves members, are not necessarily able to sue for compliance. Partly for certainty and to achieve objectives the Act would prohibit, shareholders in small closely held companies frequently supplement the constitution by entering a shareholders\' agreement . By contract shareholders can regulate any of their rights outside the company, yet their rights within the company remain a separate matter.

SHAREHOLDER RIGHTS

See also: Shareholder rights in the United Kingdom
United Kingdom
, Institutional investor , and Shareholder "...the relationship between management and ownership in limited liability companies has tended progressively to be more and more shadowy. Even before the war, apprehension was expressed on this point, and remedies were then suggested, and, with the great growth in the size of companies, the old relationship, which really grew out of the idea of partnership, where individual owners were closely concerned themselves with the management, has largely disappeared in modern company structure. The growth of groups or chains of companies, which make the true economic entity rather than the company itself, where we get a whole complex of companies operating together—that factor has still further divorced management from ownership. This now well-developed tendency is, in fact, practically ignored by the company law as it exists today, and that is another reason why amendment is required…" Sir Stafford Cripps , President of the Board of Trade
Board of Trade
introducing the Companies Act 1947 .

Technically speaking, shareholders have very few rights in the Companies Act 2006
Companies Act 2006
, because only in a handful of places are "shareholders" (those who invest capital in a company) expressly identified as the subject of rights. Instead, "members" have rights in UK company law. Anybody can become a company member through agreement with others involved in a new or existing company. However, because of the bargaining position that people have through capital investment, shareholders typically are the only members, and usually have a monopoly on governance rights under a constitution. In this way, the UK is a "pro-shareholder" jurisdiction relative to its European and American counterparts. Since the Report of the Committee on Company Law
Law
Amendment , chaired in 1945 by Lord Cohen , led to the Companies Act 1947 , as members and voters in the general meeting of public companies, shareholders have the mandatory right to remove directors by a simple majority, while in Germany, and in most American companies (predominantly incorporated in Delaware
Delaware
) directors can only be removed for a "good reason". Shareholders will habitually have the right to change the company's constitution with a three quarter majority vote, unless they have chosen to entrench the constitution with a higher threshold. Shareholders with support of 5 per cent of the total vote can call meetings , and can circulate suggestions for resolutions with support of 5 per cent of the total vote, or any one hundred other shareholders holding over £100 in shares each. Categories of important decisions, such as large asset sales, approval of mergers, takeovers, winding up of the company, any expenditure on political donations, share buybacks, or a (for the time being) non-binding say on pay of directors, are reserved exclusively for the shareholder body.

INVESTOR RIGHTS

The London Stock Exchange
London Stock Exchange
, at Paternoster Square
Paternoster Square
, lists most public companies. Shareholder voting rights are not yet exercised by elected representatives of economic investors, and are mostly appropriated by asset managers with potential conflicts of interest .

While shareholders have a privileged position in UK corporate governance, most are themselves institutions - mainly asset managers - holding "other people's money" from pension funds, life insurance policies and mutual funds. Shareholding institutions, who are entered on the share registers of public companies on the London
London
Stock Exchange , are mainly asset managers and they infrequently exercise their governance rights. In turn, asset managers take money from other institutional investors , particularly pension funds , mutual funds and insurance funds , own most shares. Thousands or perhaps millions of persons, particularly through pensions , are beneficiaries from the returns on shares. Historically institutions have often not voted or participated in general meetings on their beneficiaries' behalf, and often display an uncritical pattern of supporting management. Under the Pensions Act 2004 sections 241 to 243 require that pension fund trustees are elected or appointed to be accountable to the beneficiaries of the fund, while the Companies Act 2006
Companies Act 2006
section 168 ensures that directors are accountable to shareholders. However, the rules of contract , equity and fiduciary duty that operate between asset managers and the real capital investors have not been codified. Government reports have suggested, and case law requires, that asset managers follow the instructions about voting rights from investors in pooled funds according to the proportion of their investment, and follow instructions entirely when investors have separate accounts. Some institutional investors have been found to work "behind the scenes" to achieve corporate governance objectives through informal but direct communication with management, although an increasing concern has developed since the global financial crisis that asset managers and all financial intermediaries face structural conflicts of interest and should be banned from voting on other people's money entirely. Individual shareholders form an increasingly small part of total investments, while foreign investment and institutional investor ownership have grown their share steadily over the last forty years. Institutional investors, who deal with other people's money, are bound by fiduciary obligations, deriving from the law of trusts and obligations to exercise care deriving from the common law . The Stewardship Code 2010, drafted by the Financial Reporting Council (the corporate governance watchdog), reinforces the duty on institutions to actively engage in governance affairs by disclosing their voting policy, voting record and voting. The aim is to make directors more accountable, at least, to investors of capital.

EMPLOYEES\' RIGHTS

See also: Workplace participation in the United Kingdom
United Kingdom
, Codetermination , UK labour law , and Bullock Report

* v * t * e

Workplace participation sources

Companies Act 2006
Companies Act 2006
ss 112 and 168

Bullock Report (1977) Cmnd 6707

Draft Fifth Company Law
Law
Directive

European Company Regulation 2157/2001

Employee
Employee
Involvement Directive 2001/86/EC

Cross Border Merger Directive 2005/56/EC

Pensions Act 2004 ss 241-243

Health and Safety at Work Act 1974 s 2

see Workplace participation in the UK

While it has not been the norm, employee participation rights in corporate governance have existed in many specific sectors, particularly universities , and many workplaces organised as partnerships . Since the turn of the 20th century Acts such as the Port of London Act 1908 , Iron and Steel Act 1967 , or the Post Office Act 1977 required all workers in those specific companies had votes to elect directors on the board, meaning the UK had some of the first "codetermination " laws in the world. However, as many of those Acts were updated, the Companies Act 2006
Companies Act 2006
today still has no general requirement for workers to vote in the general meeting to elect directors, meaning corporate governance remains monopolised by shareholding institutions or asset managers . By contrast in 16 out of 28 EU member states employees have participation rights in private companies, including the election of members of the boards of directors, and binding votes on decisions about individual employment rights, like dismissals, working time and social facilities or accommodation. At board level, UK company law in principle allows any measure of employee participation, alongside shareholders, but voluntary measures have been rare outside employee share schemes that usually carry very little voice and increase employees' financial risk. Crucially, the Companies Act 2006
Companies Act 2006
section 168 defines "members" as those with the ability to vote out the board. Under section 112 a "member" is anybody who initially subscribes their name to the company memorandum, or is later entered on the members' register, and is not required to have contributed money as opposed to, for instance, work. A company could write its constitution to make "employees" members with voting rights under any terms it chose. Universities in the UK are generally required to give staff members a right to vote for the board of managers at the head of corporate governance , such as in the Oxford University Act 1854 , or the Cambridge University Act 1856 .

In addition to national rules, under the European Company Statute , businesses that reincorporate as a Societas Europaea
Societas Europaea
may opt to follow the Directive for employee involvement. An SE may have a two-tiered board, as in German companies , where shareholders and employees elect a supervisory board that in turn appoints a management board responsible for day-to-day running of the company. Or an SE can have a one tiered board, as every UK company, and employees and shareholders may elect board members in the desired proportion. An "SE" can have no fewer employee participation rights than what existed before, but for a UK company, there is likely to have been no participation in any case. In the 1977 Report of the committee of inquiry on industrial democracy the Government proposed, in line with the new German Codetermination Act 1976 , and mirroring an EU Draft Fifth Company Law Directive , that the board of directors should have an equal number of representatives elected by employees as there were for shareholders. But reform stalled, and was abandoned after the 1979 election . Despite successful businesses like the John Lewis Partnership
Partnership
and Waitrose
Waitrose
that are wholly managed and owned by the workforce, voluntary granting of participation is rare. Many businesses run employee share schemes , particularly for highly paid employees; however, such shares seldom compose more than a small percentage of capital in the company, and these investments entail heavy risks for workers, given the lack of diversification .

DIRECTORS\' DUTIES

See also: Directors\' duties in the United Kingdom
United Kingdom
, Directors\' duties , Board of directors
Board of directors
, and Fiduciary
Fiduciary

* v * t * e

Director duty cases

The Charitable Corporation
Corporation
v Sutton (1742) 26 ER 642

Aberdeen Railway Co v Blaikie Brothers (1854) 1 Macq HL 461

Percival v Wright 2 Ch 421

Cook v Deeks 1 AC 554

Re City Equitable Fire Insurance Co Ch 407

Re Smith and Fawcett Ltd 1 Ch 304

Regal (Hastings) Ltd v Gulliver 1 All ER 378

IDC Ltd v Cooley 1 WLR 443

Howard Smith Ltd v Ampol Petroleum Ltd AC 821

Re Lo-Line Electric Motors Ltd Ch 477

Re Sevenoaks Stationers (Retail) Ltd Ch 164

Re D’Jan of London
London
Ltd 1 BCLC 561

Re Barings plc (No 5) 1 BCLC 433

Peskin v Anderson
Peskin v Anderson
EWCA Civ 326

CMS Dolphin Ltd v Simonet EWHC (Ch) 4159

Bhullar v Bhullar EWCA Civ 424

Eclairs Group Ltd v JKX Oil "> The duty to avoid any possibility of a conflict of interest for fiduciaries has been engrained in law since the financial crisis following the South Sea Bubble of 1719.

The central equitable principle applicable to directors is to avoid any possibility of a conflict of interest , without disclosure to the board or seeking approval from shareholders. This core duty of loyalty is manifested firstly in section 175 which specifies that directors may not use business opportunities that the company could without approval. Shareholders may pass a resolution ratifying a breach of duty, but under section 239 they must be uninterested in the transaction. This absolute, strict duty has been consistently reaffirmed since the economic crisis following the South Sea Bubble
South Sea Bubble
in 1719. For example, in Cook v Deeks , three directors took a railway line construction contract in their own names, rather than that of their company, to exclude a fourth director from the business. Even though the directors used their votes as shareholders to "ratify" their actions, the Privy Council advised that the conflict of interest precluded their ability to forgive themselves. Similarly, in Bhullar v Bhullar , a director on one side of a feuding family set up a company to buy a carpark next to one of the company's properties. The family company, amidst the feud, had in fact resolved to buy no further investment properties, but even so, because the director failed to fully disclose the opportunity that could reasonably be considered as falling within the company's line of business, the Court of Appeal held he was liable to make restitution for all profits made on the purchase. The duty of directors to avoid any possibility of a conflict of interest also exists after a director ceases employment with a company, so it is not permissible to resign and then take up a corporate opportunity, present or maturing, even though no longer officially a "director". I do not think it is necessary, but it appears to me very important, that we should concur in laying down again and again the general principle that in this Court no agent in the course of his agency, in the matter of his agency, can be allowed to make any profit without the knowledge and consent of his principal; that that rule is an inflexible rule, and must be applied inexorably by this Court, which is not entitled, in my judgment, to receive evidence, or suggestion, or argument as to whether the principal did or did not suffer any injury in fact by reason of the dealing of the agent; for the safety of mankind requires that no agent shall be able to put his principal to the danger of such an inquiry as that. James LJ, Parker v McKenna (1874-75) LR 10 Ch App 96, 124-125

The purpose of the no conflict rule is to ensure directors carry out their tasks like it was their own interest at stake. Beyond corporate opportunities, the law requires directors accept no benefits from third parties under section 176, and also has specific regulation of transactions by a company with another party in which directors have an interest. Under section 177, when directors are on both sides of a proposed contract, for example where a person owns a business selling iron chairs to the company in which he is a director, it is a default requirement that they disclose the interest to the board, so that disinterested directors may approve the deal. The company's articles could heighten the requirement, say, to shareholder approval. If such a self dealing transaction has already taken place, directors still have a duty to disclose their interest and failure to do so is a criminal offence, subject to a £5000 fine. While such regulation through disclosure hovers with a relatively light touch, self dealing rules become more onerous as transactions become more significant. Shareholder approval is requisite for specific transactions with directors, or connected persons, when the sum of money either exceeds 10% of the company and is over £5000, or is over £100,000 in a company of any size. Further detailed provisions govern loaning money. On the question of director remuneration where the conflict of interest appears most serious, however, regulation is again relatively light. Directors pay themselves by default, but in large listed companies have pay set by a remuneration committee of directors. Under section 439, shareholders may cast a vote on remuneration but this "say on pay ", as yet, is not binding.

Finally, under section 172 directors must "promote the success of the company". This somewhat nebulous provision created significant debate during its passage through Parliament, since it goes on to prescribe that decisions should be taken in the interests of members, with regard to long term consequences, the need to act fairly between members, and a range of other "stakeholders ", such as employees, suppliers, the environment, the general community, and creditors. Many groups objected to this "enlightened shareholder value " model, which in form elevated the interests of members, who are invariably shareholders, above other stakeholders. However, the duty is particularly difficult to sue upon since it is only a duty for a director to do what she or "he considers, in good faith, would be most likely to promote the success of the company". Proof of subjective bad faith toward any group being difficult, directors have the discretion to balance all competing interests, even if to the short term detriment of shareholders in a particular instance. There is also a duty under section 173 to exercise independent judgment and the duty of care in section 174 applies to the decision making process of a director having regard to the factors listed in section 172, so it remains theoretically possible to challenge a decision if made without any rational basis. Only registered shareholders, not other stakeholders without being members of the general meeting, have standing to claim any breach of the provision. But section 172's criteria are useful as an aspirational standard because in the annual Director\'s Report companies must explain how they have complied with their duties to stakeholders. Also, the idea of whether a company's success will be promoted is central when a court determines whether a derivative claim should proceed in the course of corporate litigation.

CORPORATE LITIGATION

See also: Corporate litigation in the United Kingdom
United Kingdom
, Derivative suit , and Unfair prejudice

* v * t * e

Minority protection cases

Companies Act 2006
Companies Act 2006
ss 260-264

Foss v Harbottle (1843) 67 ER 189

Southern Foundries (1926) Ltd v Shirlaw
Southern Foundries (1926) Ltd v Shirlaw
AC 701

Edwards v Halliwell 2 All ER 1064

Greenhalgh v Arderne Cinemas Ltd Ch 286

Wallersteiner v Moir (No 2) QB 373

Estmanco v Greater London Council 1 WLR 2

Smith v Croft (No 2) Ch 114

Johnson v Gore Wood "> Derivative claims are used by shareholders against directors alleged to have breached their duties of care or loyalty, exemplified in current litigation against BP plc executives for losses connected to the Deepwater Horizon oil spill catastrophe.

In practice very few derivative claims were successfully brought, given the complexity and narrowness in the exceptions to the rule in Foss v Harbottle . This was witnessed by the fact that successful cases on directors' duties before the Companies Act 2006
Companies Act 2006
seldom involved minority shareholders, rather than a new board, or a liquidator in the shoes of an insolvent company, suing former directors. The new requirements to bring a "derivative claim " are now codified in the Companies Act 2006
Companies Act 2006
sections 261-264. Section 260 stipulates that such actions are concerned with suing directors for breach of a duty owed to the company. Under section 261 a shareholder must, first, show the court there is a good prima facie case to be made. This preliminary legal question is followed by the substantive questions in section 263. The court must refuse permission for the claim if the alleged breach has already been validly authorised or ratified by disinterested shareholders, or if it appears that allowing litigation would undermine the company's success by the criteria laid out in section 172. If none of these "negative" criteria are fulfilled, the court then weighs up seven "positive" criteria. Again it asks whether, under the guidelines in section 172, allowing the action to continue would promote the company's success. It also asks whether the claimant is acting in good faith, whether the claimant could start an action in her own name, whether authorisation or ratification has happened or is likely to, and pays particular regard to the views of the independent and disinterested shareholders. This represented a shift from, and a replacement of, the complex pre-2006 position, by giving courts more discretion to allow meritorious claims. Still, the first cases showed the courts remaining conservative. In other respects the law remains the same. According to Wallersteiner v Moir (No 2) , minority shareholders will be indemnified for the costs of a derivative claim by the company, even if it ultimately fails.

While derivative claims mean suing in the company's name, a minority shareholder can sue in her own name in four ways. The first is to claim a "personal right" under the constitution or the general law is breached. If a shareholder brings a personal action to vindicate a personal right (such as the right to not be misled by company circulars ) the principle against double recovery dictates that one cannot sue for damages if the loss an individual shareholder suffers is merely the same as will be reflected in the reduction of the share value. For losses reflective of the company's, only a derivative claim may be brought. The second is to show that a company's articles were amended in an objectively unjustifiably and directly discriminatory fashion. This residual protection for minorities was developed by the Court of Appeal in Allen v Gold Reefs of West Africa Ltd , where Sir Nathaniel Lindley MR held that shareholders may amend a constitution by the required majority so long as it is "bona fide for the benefit of the company as a whole." This constraint is not heavy, as it can mean that a constitutional amendment, while applying in a formally equal way to all shareholders, has a negative and disparate impact on only one shareholder. This was so in Greenhalgh v Arderne Cinemas Ltd , where the articles were changed to remove all shareholders' pre-emption rights, but only one shareholder (the claimant, Mr Greenhalgh, who lost) was interested in preventing share sales to outside parties. This slim set of protections for minority shareholders was, until 1985, complemented only by a third, and drastic right of a shareholder, now under the Insolvency
Insolvency
Act 1986 section 122(1)(g), to show it is "just and equitable" for a company to be liquidated. In Ebrahimi v Westbourne Galleries Ltd , Lord Wilberforce held that a court would use its discretion to wind up a company if three criteria were fulfilled: that the company was a small "quasi-partnership" founded on mutual confidence of the corporators, that shareholders participate in the business, and there are restrictions in the constitution on free transfer of shares. Given these features, it may be just and equitable to wind up a company if the court sees an agreement just short of a contract, or some other "equitable consideration", that one party has not fulfilled. So where Mr Ebrahmi, a minority shareholder, had been removed from the board, and the other two directors paid all company profits out as director salaries, rather than dividends to exclude him, the House of Lords regarded it as equitable to liquidate the company and distribute his share of the sale proceeds to Mr Ebrahimi. The most numerous type of case in company litigation involves unfair prejudice petitions in closely held businesses.

The drastic remedy of liquidation was mitigated significantly as the unfair prejudice action was introduced by the Companies Act 1985 . Now under the Companies Act 2006
Companies Act 2006
section 996, a court can grant any remedy, but will often simply require that a minority shareholder's interest is bought out by the majority at a fair value. The cause of action, stated in section 994, is very broad. A shareholder must simply allege they have been prejudiced (i.e. their interests as a member have been harmed) in a way that is unfair. "Unfairness" is now given a minimum meaning identical to that in Ebrahimi v Westbourne Galleries Ltd . A court must at least have an "equitable consideration" to grant a remedy. Generally this will refer to an agreement between two or more corporators in a small business that is just short of being an enforceable contract, for the lack of legal consideration . A clear assurance, on which a corporator relies, which would be inequitable to go back on, would suffice, unlike the facts of the leading case, O\'Neill v Phillips . Here Mr O'Neill had been a prodigy in Mr Phillips' asbestos stripping business, and took on a greater and greater role until economic difficulties struck. Mr O'Neill was then demoted, but claimed that he should be given 50 per cent of the company's shares because negotiations had started for this to happen and Mr Phillips had said one day it might. Lord Hoffmann held that the vague aspiration that it "might" was not enough here: there was no concrete assurance or promise given, and so no unfairness in Mr Phillips' recanting. Unfair prejudice in this sense is an action not well suited to public companies, when the alleged obligations binding the company were potentially undisclosed to public investors in the constitution, since this would undermine the principle of transparency. However it is plain that minority shareholders can also bring claims for more serious breaches of obligation, such as breach of directors\' duties . Unfair prejudice petitions remain most prevalent in small companies, and are the most numerous form of dispute to enter company courts. But if to hold directors accountable dispersed shareholders do not engage through voting, or through litigation, companies may be ripe for takeover.

CORPORATE FINANCE AND MARKETS

See also: Corporate finance
Corporate finance
London
London
's new central business district, Canary Wharf
Canary Wharf
was formerly the epicentre of the world's shipping trade at West India Quay .

While corporate governance primarily concerns the general relative rights and duties of shareholders, employees and directors in terms of administration and accountability, corporate finance concerns how the monetary or capital stake of shareholders and creditors are mediated, given the risk that the business may fail and become insolvent . Companies can fund their operations either through debt (i.e. loans) or equity (i.e. shares). In return for loans, typically from a bank, companies will often be required by contract to give their creditors a security interest over the company's assets, so that in the event of insolvency, the creditor may take the secured asset. The Insolvency Act 1986 limits powerful creditors ability to sweep up all company assets as security, particularly through a floating charge , in favour of vulnerable creditors, such as employees or consumers. If money is raised by offering shares, the shareholders' relations are determined as a group by the provisions under the constitution. The law requires disclosure of all material facts in promotions, and prospectuses. Company constitutions typically require that existing shareholders have a pre-emption right , to buy newly issued shares before outside shareholders and thus avoid their stake and control becoming diluted . Actual rights, however, are determined by ordinary principles of construction of the company constitution. A host of rules exist to ensure that the company's capital (i.e. the amount that shareholders paid in when they bought their shares) is maintained for the benefit of creditors. Money is typically distributed to shareholders through dividends as the reward for investment. These should only come out of profits , or surpluses beyond the capital account. If companies pay out money to shareholders which in effect is a dividend "disguised" as something else, directors will be liable for repayment. Companies may, however, reduce their capital to a lower figure if directors of private companies warrant solvency, or courts approve a public company's reduction. Because a company buying back shares from shareholders in itself, or taking back redeemable shares, has the same effect as a reduction of capital, similar transparency and procedural requirements need to be fulfilled. Public companies are also precluded from giving financial assistance for purchase of their shares, for example through a leveraged buyout , unless the company is delisted and or taken private. Finally, in order to protect investors from being placed at an unfair disadvantage, people inside a company are under a strict duty to not trade on any information that could affect a company's share price for their own benefit.

DEBT FINANCE

* v * t * e

Cases on secured debt

Holroyd v Marshall (1862) 10 HLC 191

British India Steam Navigation Co v IRC (1881) 7 QBD 165

Salomon v A Salomon text-align: center; font-size: 80%; line-height: 1.5em; background-color: #fafafa; float: right; clear: right; margin: 0 0 1em 1em;;padding:3px">

* v * t * e

Sources on company shares

Birch v Cropper (1889) 14 App Cas 525

Andrews v Gas Meter Co 1 Ch 361

Borland’s Trustee v Steel Brothers & Co Ltd 1 Ch 279

Companies Act 2006
Companies Act 2006
ss 33 and 282-4

Scottish Insurance Corp v Wilsons & Clyde Coal Ltd AC 462

Dimbula Valley (Ceylon) Tea Co v Laurie Ch 353

Will v United Lankat Plantations Co Ltd AC 11

Re Bradford Investments Ltd BCLC 224

Second Company Law
Law
Directive 77/91/EEC

Companies Act 2006
Companies Act 2006
ss 549-551 and 561-571

Companies Act 2006
Companies Act 2006
ss 10 and 617

Re Scandinavian Banking Group plc Ch 87

see UK company law

See also: Share capital , Authorised share capital , and Issued share capital

Companies limited by shares also acquire finance through ‘equity’ (a synonym for the share capital). Shares differ from debt in that shareholders rank last in insolvency . The main justification for shareholders’ residual claim is that, unlike many creditors (though not large banks) they are capable of diversifying their portfolio . Taxation of profits on shares can also be treated differently with a different tax rate (under the Income Tax Act 2007 ) to capital gains tax on debt (which falls under the Taxation of Chargeable Gains Act 1992 ). This makes the distinction between shares and debt important. In principle, all forms of debt and equity arise from contractual arrangements with a company, and the rights which attach are a question of construction. For instance, in Scottish Insurance Corp Ltd v Wilsons "> Modern portfolio theory suggests a diversified portfolio of shares and other asset classes (such as debt in corporate bonds , treasury bonds , or money market funds ) will realise more predictable returns if there is prudent market regulation.

To give people shares initially there is formally a two step process. First, under CA 2006 section 558, shares must be "allotted", or created in favour of a particular person. Second, shares are "issued" by being "transferred" to a person. In practice, because shares are not usually ‘bearer shares’ (i.e. the share is a physical piece of paper), the "transfer" simply means that the person’s name is entered on the register of members. Under CA 2006 sections 768 and 769, a certificate that evidences the share issue should be given by the company within two months. In a typical company constitution, directors are entitled to issue shares as part of their general management rights, although they have no power to do so outside the constitution. An authorisation must state the maximum number of allottable shares and the authority can only last for five years.

The main reason to control directors’ power over share allottments and issues is to prevent shareholders’ rights being watered down if new shares are created. Under CA 2006 section 561, existing shareholders have a basic pre-emption right , to be offered any new shares first in proportion to their existing holding. Shareholders have 14 days to decide whether to buy. There are a series of exceptions under CA 2006 sections 564-567, for issuing bonus shares, partly paid shares, and employee shares, while private companies can opt out of pre-emption rules altogether. Furthermore, by special resolution (a three-quarter majority vote) under CA 2006 sections 570-571, shareholders may disapply pre-emption rights. In practice, large companies frequently give directors ad hoc authority to disapply pre-emption rights, but within the scope of a ‘Statement of Principles’ issued by asset managers. At present, the most influential guide is the document by the Institutional investors’ Pre-emption Group, Disapplying Pre-emption Rights: A Statement of Principle (2008). This suggests that the general practice is to disapply the pre-emption rights on a rolling basis for routine share issues (e.g. shares subject to a clawback) at no more than 5% of share capital each year.

MARKET REGULATION

Main articles: Prospectus (finance)
Prospectus (finance)
, Market abuse , and Insider trading Prospectuses

* Listing Directive 2001/34/EC arts 42 – 51 * Financial Services and Markets Act 2000
Financial Services and Markets Act 2000
ss 74-8 * R v International Stock Exchange, ex parte Else QB 534 * Prospectus Directive 2003/71/EC, amending the Listing Directive * Transparency for Listed Companies Directive 2004/109/EC * Financial Services and Markets Act 2000
Financial Services and Markets Act 2000
Part VI * Derry v Peek
Derry v Peek
(1889) L R 14 App Cas 337

Insider dealing

* Criminal Justice Act 1993 ss 52-64 crime of insider trading * Financial Services and Markets Act 2000
Financial Services and Markets Act 2000
s 397 (criminal provision on misleading information) s 118 (civil wrong of market abuse, no false or misleading information for participants in secondary trading markets), s 119 (FSA Code of Market Conduct), s 120 (legitimate circulation of price sensitive information, e.g. compliance with listing and takeover rules) * Directive 2003/6/EC on insider dealing and market manipulation (market abuse) and its implementing Directive 2003/124/EC on the definition and public disclosure of inside information and the definition of market abuse * Re an Inquiry under the Company Securities (Insider Dealing) Act 1985 1 AC 660 * Rigby and Bailey v R 1 WLR 306

ACCOUNTS AND AUDITING

Main article: Accounting in the United Kingdom
United Kingdom

* Enron
Enron
and Sarbanes–Oxley Act of 2002 * Companies Act 2006
Companies Act 2006
ss 495-497, true and fair view of company in accounts. * UK Corporate Governance Code , audit committees * Generally Accepted Accounting Practice (UK) * Chartered Institute of Management Accountants * British qualified accountants * Deloitte
Deloitte
, Ernst & Young
Ernst & Young
, KPMG
KPMG
and PwC
PwC
* Directive 84/253/EEC, art 24 * International Accounting Standards Board * Auditing Practices Board
Auditing Practices Board
* Companies Act 2006
Companies Act 2006
ss 532-536, auditor liability * Re Kingston Cotton Mill Co (No 2) 2 Ch 279 * Candler v Crane, Christmas text-align: center; font-size: 80%; line-height: 1.5em; background-color: #fafafa; float: right; clear: right; margin: 0 0 1em 1em;;padding:3px">

* v * t * e

Takeover regulation sources

Hogg v Cramphorn Ltd Ch 254

Howard Smith Ltd v Ampol Petroleum Ltd AC 821

Imperial Pension Ltd v Imperial Tobacco Ltd 1 WLR 589

Criterion Properties plc v Stratford LLC UKHL 28

Takeover Code rule 21

Takeover Directive 2004/25/EC

Employment
Employment
Rights Act 1996 ss 86, 94 and 135

TUPER 2006 (SI 2006/246)

Companies Act 2006
Companies Act 2006
s 168

Companies Act 2006
Companies Act 2006
ss 942-965

R (Datafin plc) v Takeover Panel QB 815

Takeover Code

Companies Act 2006
Companies Act 2006
ss 974-991

Re Grierson Oldham and Adams Ltd Ch 17

Re Bugle Press Ltd Ch 270

Insolvency Act 1986 ss 110-111

Companies Act 2006
Companies Act 2006
ss 895-941

Public Company Mergers Directive 2011/35/EU

see UK company law and takeovers

Main article: Mergers and acquisitions in United Kingdom
United Kingdom
law

The market for corporate control , where parties compete to buy controlling stakes in companies, is seen by some as an important, although perhaps limited, mechanism for the board of directors ' accountability. Because individual shareholders may not be as likely to act collectively as a majority shareholder, the threat of a takeover when a company share price drops, heightens the prospect that a director is removed from office by an ordinary resolution under CA 2006 section 168. Since 1959 the UK has taken the approach that directors, particularly of public companies, should do nothing with the effect of frustrating a takeover bid, unless shareholders approve it by a majority at the time of the takeover. Rule 21 of the City Code on Takeovers and Mergers consolidates this now. Typical takeover defence tactics, routinely found in US corporate law , led by Delaware , include issuing extra shares to everyone but a takeover bidder to dilute their stake unless the bidder has the board's consent to buy shareholders' shares (a "poison pill "), paying a takeover bidder to go away ("greenmail "), merely selling a key company asset to a friendly third party, or engaging in large share buyback schemes. In the US, defensive tactics must merely be employed in good faith , and be proportionate to the threat posed with regard to factors like the offer price, timing and effect on the company's stakeholders. Moreover, Delaware
Delaware
directors can often only be removed for a "good reason" (fought out in court) with a board classified into directors a third of whom will be removable in any given year. This makes hostile takeovers very difficult, unless a bidder promises the incumbent board large golden parachutes in return for their consent. After much debate, the EU 's newly implemented Takeover Directive decided to leave member states the option under articles 9 and 12 of whether to mandate that boards remain "neutral". UK directors, like those at Cadbury
Cadbury
facing the takeover from Kraft , are unable to use corporate powers to block takeover bids and enrich themselves, but this potentially leaves employees vulnerable to job cuts, or reductions in environmental or ethical standards.

Even with the UK's non-frustration principle directors always still have the option to persuade their shareholders through informed and reasoned argument that the share price offer is too low, or that the bidder may have ulterior motives that are bad for the company's employees, or for its ethical image. Under common law and the Takeover Code , directors must give out information to shareholders relevant to the bid, but not merely recommend the highest offer. The overriding common law rule, however, is to avoid any possibility of a conflict of interest , which precludes using management powers for the purpose of frustrating takeovers. In Hogg v Cramphorn Ltd the director, purportedly concerned that a takeover bidder would make many workers redundant, issued a block of company shares to a trust, thus ensuring the bidder would remain outvoted. Buckley J held the power to issue shares creates fiduciary duty to only do so for the purpose of raising capital. Directors cannot plead they acted in good faith if a court determines their interests may possibly conflict. The result is that even though directors may wish to protect employees and stakeholders from ominous bidders, the law responds in other ways. UK workers have a minimal measure of job security, with very limited rights to be consulted, and no formal rights outside collective bargaining to participate in elections for the board or codetermine dismissal issues in works councils . Employees do have rights before dismissal or redundancies to reasonable notice, dismissal only for a fair reason, and a redundancy payment, under the Employment
Employment
Rights Act 1996 . Moreover, any changes to workers terms and conditions, or redundancies, following a restructuring through an asset (as opposed to share) sale triggers protection of the Transfer of Undertakings (Protection of Employment) Regulations 2006 meaning good economic, technical or organisational reasons must be given. The Takeover Panel 's Code, an example of principles based self-regulation , requires equal treatment and good information for shareholders, including consideration of the effects on employees.

Beyond rules restricting takeover defences, a series of rules are in place to partly protect, and partly impose obligations on minority shareholders. Under CA 2006 section 979 when a takeover bidder has already acquired 90 per cent of a company's shares it can "squeeze out" or compulsorily purchase the minority's shares at the same price per share as paid for the rest of the takeover. Only if a court determines that price is "manifestly unfair" (and market prices are presumed fair) can the shareholder object, or if the whole arrangement is merely a trick for incumbent shareholders to expropriate a minority they find undesirable, or it can be shown that shareholders had been given insufficient information to properly evaluate the offer. Conversely section 983 allows minority shareholders to require that their stakes are bought out. Further standards apply to listed companies under the Takeover Code . The Code contains six principles for takeover bids. Shareholders in the same class should be equally treated, there must be time for them to adequate information including consequences for employees, the board must act in the company's whole interests not their own, false markets and share prices should not artificially fluctuate, bids should only be announced when bidders can follow through with money, and a bid should not distract the business longer than reasonable. Following on from these principles are 38 rules, designed to flesh out in legal terms the "common sense" standards embodied in the 6 principles. The Takeover Panel administers the Code, and enforces it. Originally established in 1968 as a private club that self-regulated its members' practices, was held in R (Datafin plc) v Takeover Panel to be subject to judicial review of its actions where decisions are found to be manifestly unfair. Despite a handful of challenges, this has not happened.

CORPORATE INSOLVENCY

Main article: UK insolvency law

* v * t * e

Insolvency
Insolvency
procedure cases

Insolvency Act 1986 Sch B1

Re Harris Simons Construction Ltd 1 WLR 368

Re Charnley Davies Ltd (No 2) BCLC 760

Oldham v Kyrris EWCA Civ 1506

Re Atlantic Computer Systems (No 1) EWCA Civ 20

Powdrill v Watson 2 AC 394

Downsview Ltd v First City Corporation
Corporation
Ltd UKPC 34

Medforth v Blake EWCA Civ 1482

Re Peveril Gold Mines Ltd 1 Ch 122

Re Rica Gold Washing Co (1879) 11 Ch D 36

Stonegate Securities Ltd v Gregory Ch 576

Re Kayley Vending Ltd EWHC 904 (Ch)

see UK insolvency law

* K Cork, Insolvency
Insolvency
Law
Law
and Practice, Report of the Review Committee (1982) Cmnd 8558 * Priority on insolvency * Insolvency
Insolvency
procedures * Voidable transactions * Directors' disqualifications and unlawful trading * Insolvency Act 1986 ss 213-215 * Company Directors Disqualification Act 1986 ss 6-7 * Colin Gwyer Associates Ltd v London
London
Wharf (Limehouse) Ltd * Adams v Cape Industries Ch 433 * Re Hydrodam (Corby) Ltd 2 BCLC 180

CORPORATION TAX

Main articles: UK corporation tax and Taxation in the United Kingdom
United Kingdom

* Income and Corporation
Corporation
Taxes Act 1988 * Corporation
Corporation
Tax Act 2009 * Corporation
Corporation
Tax Act 2010

CORPORATE LAW INTERNATIONALLY

Main article: Corporate law
Corporate law

* v * t * e

Freedom of establishment cases

TFEU arts 49-55

R (Daily Mail and General Trust plc) v Treasury (1988) Case 81/87

Gebhard v Avvocati e Procuratori di Milano (1995) C-55/94

Centros Ltd v Erhvervs- og Selskabsstyrelsen (1999) C-212/97

Überseering BV v Nordic Construction GmbH
GmbH
(2002) C-208/00

Kamer van Koophandel v Inspire Art Ltd (2003) C-167/01

Cartesio Oktató és Szolgáltató bt (2008) C-210/06

Commission v Germany (2007) C-112/2005

The Rosella or ITWF v Viking Line ABP (2007) C-438/05

Demir and Baykara v Turkey ECHR 1345

See EU LAW

One of a number of posters created by the Economic
Economic
Cooperation Administration to promote the Marshall Plan
Marshall Plan
in Europe
Europe

* Regulatory competition * European company law * Centros Ltd v Erhvervs-og Selskabsstryrelsen 2 CMLR 551 (C-212/97) * Kamer van Koophandel en Fabrieken voor Amsterdam v Inspire Art Ltd ECR I-10155 (C-167/01) * US corporate law * Liggett v Lee * Delaware
Delaware
General Corporation
Corporation
Law
Law
* Berkey v Third Avenue Railway * Dodge v. Ford Motor Company , on directors' duties to the corporation and the community * Aronson v Lewis * Guth v. Loft Inc. 5 A.2d 503 (Del. 1939) * In re Walt Disney Derivative Litigation * Jay v North * Chef v Mathes * German company law
German company law
* World
World
Trade Organization * International trade * International economic law * International Labour Organization
International Labour Organization
* Organisation for Economic
Economic
Co-operation and Development and OECD Guidelines for Multinational Enterprises * United Nations Principles for Responsible Investment (PRI) * Conflicts of law * Shipping law * International Corporate Governance Network , www.icgn.org/

SEE ALSO

* FTSE 100
FTSE 100

* Corporate law
Corporate law
* European company law * German company law
German company law
* US corporate law * French company law
French company law
* UK public service law * UK labour law * UK banking law * UK commercial law
UK commercial law
* Corporate social responsibility * Socially responsible investing * Environmental Social and Corporate Governance * Companies House
Companies House
* Department for Business, Innovation and Skills
Department for Business, Innovation and Skills
* Board of Trade
Board of Trade
(or DTI or DBERR ) * Insolvency
Insolvency
Service * Corporate tax * UK corporation tax * Corporation
Corporation
Tax Act 2010 (c 4)

NOTES

* ^ See Joint Stock Companies Act 1856
Joint Stock Companies Act 1856
. The French Code de Commerce of 1807, as part of the Napoleonic Code allowed for public company formation with limited liability after an express governmental concession, and the New York Act Relative to Incorporations for Manufacturing Purposes of 1811 allowed for free incorporation with limited liability, but only for manufacturing businesses. So, while necessarily drawing on ideas formulated in France
France
and the US, the UK had the first modern company law. * ^ RC Clark , Corporate Law
Law
(Aspen 1986) 2, defines the modern public company by these three features (separate legal personality, limited liability, delegated management) and in addition, freely transferable shares. * ^ A Smith, An Inquiry into the Nature and Causes of the Wealth of Nations (1776) Book
Book
V, ch 1, para 107 * ^ See J Micklethwait and A Wooldridge, The company: A short history of a revolutionary idea (Modern Library 2003) ch 3 * ^ See the Bubble Companies, etc. Act 1825 , 6 Geo 4, c 91 * ^ See C Dickens , Martin Chuzzlewit (1843) ch 27, "‘The secretary’s salary, David,’ said Mr Montague, ‘the office being now established, is eight hundred pounds per annum , with his house–rent, coals, and candles free. His five–and–twenty shares he holds, of course. Is that enough?’ David smiled and nodded, and coughed behind a little locked portfolio which he carried; with an air that proclaimed him to be the secretary in question. ‘If that’s enough,’ said Montague, ‘I will propose it at the Board to–day, in my capacity as chairman.’ The secretary smiled again; laughed, indeed, this time; and said, rubbing his nose slily with one end of the portfolio: ‘It was a capital thought, wasn’t it?’ ‘What was a capital thought, David?’ Mr Montague inquired. ‘The Anglo–Bengalee,’ tittered the secretary. ‘The Anglo–Bengalee Disinterested Loan
Loan
and Life Assurance Company is rather a capital concern, I hope, David,’ said Montague. ‘Capital indeed!’ cried the secretary, with another laugh —’ in one sense.’ ‘In the only important one,’ observed the chairman; ‘which is number one, David.’ ‘What,’ asked the secretary, bursting into another laugh, ‘what will be the paid up capital , according to the next prospectus?’ ‘A figure of two, and as many oughts after it as the printer can get into the same line,’ replied his friend. ‘Ha, ha!’ At this they both laughed; the secretary so vehemently, that in kicking up his feet, he kicked the apron open, and nearly started Cauliflower’s brother into an oyster shop; not to mention Mr Bailey’s receiving such a sudden swing, that he held on for a moment quite a young Fame, by one strap and no legs." * ^ Report of the Parliamentary Committee on Joint Stock Companies (1844) British Parliamentary Papers vol VII * ^ e.g. Case C-212/97 Centros Ltd v Erhvervs-og Selskabsstryrelsen 2 CMLR 551 and Case C-167/01 Kamer van Koophandel en Fabrieken voor Amsterdam v Inspire Art Ltd ECR I-10155 * ^ CA 2006 s 3(4); under CA 2006 s 448, unlimited companies are exempt from publishing accounts and reports * ^ Insolvency Act 1986 s 74(2)(d) ‘In the case of a company limited by shares, no contribution is required from any member exceeding the amount (if any) unpaid on the shares in respect of which he is liable as a present or future member.’ * ^ CA 2006 s 4 * ^ CA 2006 s 58 * ^ CA 2006 s 3(4) * ^ CA 2006 s 35(2) and the Companies (Audit, Investigations and Community Enterprise) Act 2004 * ^ See CA 2006 ss 755 (offering shares to the public), ss 761-763 (minimum capital); for market regulation rules, see the Financial Services and Markets Act 2000 * ^ See The European Public Limited-Liability Company Regulations 2004 SI 2326/2004 and EU Regulation 2157/2001/EC * ^ EU Directive 2001/86/EC * ^ CA 2006 s 7 * ^ See Erlanger v New Sombrero Phosphate Co (1878) 3 App Cas 1218, reversing Clarke v Dickson (1858) EB & E 148. On remedies for misrepresentation, Derry v Peek
Derry v Peek
(1889) LR 14 App Cas 337, Heilbut, Symons CA 2006 s 51, implementing the Second Company Law
Law
Directive 68/151/EEC, replaced by the Single Person Company Directive 2009/101/EC and Phonogram Ltd v Lane 2 QB 938 * ^ CA 2006 s 13 * ^ CA 2006 s 20 and the Companies (Model Articles) Regulations 2008 (SI 2008/3229) * ^ See CA 2006 s 154 (directors), s 12 (secretary) s 7 (member) and Single Person Company Directive 2009/102/EC * ^ See CA 2006 ss 54-69, Business Names Act 1985 and Bowman v Secular Society Ltd AC 406; see also, F Goldsmith (Sicklesmere) Ltd v Baxter 1 Ch 85, holding that if a company misstates its name in a contract, the contract is not void if a reasonable person would understand the entity referred to. * ^ See http://www.companieshouse.gov.uk/forms/formsContinuation.shtml#IN01 (last accessed 22 July 2010) * ^ Case of Sutton\'s Hospital (1612) 10 Rep 32; 77 Eng Rep 960, 973 * ^ The turn of phrase used in Northern Counties Securities Ltd v Jackson they therefore do as they like." John Poynder , Literary Extracts (1844) vol 1, p 2 or 268 * ^ For a very old example, see Edmunds v Brown and Tillard (1668) 83 ER 385-387 * ^ It is highly improbable in practice that companies lifespans are longer than an average person's. Of the 100 largest global companies in 1912, 48 had gone by 1995, see L Hannah, 'Marshall's Trees and the Global Forest: Were Giant Redwoods Different?' in N Lamoreaux et al (eds), Learning by Doing in Markets, Firms and Countries (1998) 253, 259 * ^ See Insolvency Act 1986 s 74(2)(d) in the case of a company limited by shares, no contribution is required from any member exceeding the amount (if any) unpaid on the shares in respect of which he is liable as a present or past member'. * ^ See generally, PL Davies , An Introduction to Company Law (Clarendon 2002) ch 4 * ^ See Meridian Global Funds Management Asia Ltd v Securities Commission 2 AC 500 * ^ cf Stone as a matter of agency law , however directors may have exceeded their authority. CA 2006 s 40 states third parties will lose protection if they have acted in bad faith with the knowledge that a company exceeded its capacity. * ^ e.g. Royal British Bank
Bank
v Turquand (1856) 119 ER 327, Mahony v East Holyford Mining Co (1875) LR 7 HL 869 * ^ See Hely-Hutchinson v Brayhead Ltd 1 QB 549 * ^ See Freeman and Lockyer v Buckhurst Park Properties (Mangal) Ltd 2 QB 480 * ^ e.g. Lister v Hesley Hall Ltd UKHL 22; see also R Stevens, 'Vicarious Liability or Vicarious Action' (2007) 123 Law
Law
Quarterly Review 30; Middleton v Folwer (1699) 1 Salk 282 and Ackworth v Kempe (1778) 1 Dougl 40 * ^ Lord Haldane Lennard\'s Carrying Co Ltd v Asiatic Petroleum Co Ltd AC 705; see also, Bolton v Graham & Sons Limited , per Lord Denning, "A company may in many ways be likened to a human body. It has a brain and nerve centre which controls what it does. It also has hands which hold the tools and act in accordance with directions from the centre... (the) directors and managers represent the directing mind and will of the company and control what it does. The state of mind of these managers is the state of mind of the company and is treated by the law as such." * ^ e.g. Tesco Supermarkets v Nattrass AC 153 * ^ See Williams v Natural Life Health Foods Ltd 1 WLR 830 * ^ Salomon v A Salomon see also, The Albazero AC 774, 807; Re A Company 1 BCC 99421; Bank
Bank
of Tokyo Ltd v Karoon AC 45n, 64; cf Canada Safeway Ltd v Local 373, Canadian Food and Allied Workers (1974) 46 DLR (3d) 113, and contrast Dimbleby see also Littlewoods Mail Order Stores v Inland Revenue
Revenue
Commissioners 1 WLR 1214; Wallersteiner v Moir 1 WLR 991 * ^ This terminology follows from AA Berle, 'The Theory of Enterprise Entity' (1947) 47(3) Columbia Law
Law
Review 343, and is a concept used in German company law
German company law
. See C Alting, 'Piercing the corporate veil in German and American law - Liability of individuals and entities: a comparative view' (1994–1995) 2 Tulsa Journal Comparative cf Southern Foundries (1926) Ltd v Shirlaw
Southern Foundries (1926) Ltd v Shirlaw
AC 701 * ^ See also, Investors Compensation Scheme Ltd v West Bromwich Building Society 1 WLR 896 * ^ (1741) 26 ER 531 * ^ See Model Articles , arts 3-5 * ^ 2 Ch 34 * ^ The shareholder, Mr McDiarmid, brought the claim as a derivative action in the name of the company, given the rule in Foss v Harbottle (1843) 67 ER 189 presupposed a majority of shareholders could litigate * ^ See John Shaw RJ Smith (1978) 41 MLR 147 * ^ (1877) 6 Ch D 70; cf Ashby v White (1703) 92 ER 126 * ^ See Eley v Positive Government Security Life Assurance Co Ltd (1876) 1 Ex D 88; but cf Hickman v Kent or Romney Marsh Sheep-Breeders\' Association 1 Ch 881 * ^ The Contracts (Rights of Third Parties) Act 1999 s 6, excludes the Companies Acts from its scope; however the rule of privity is unsteady on orthodox principles, see Smith and Snipes Hall Farm Ltd v River Douglas Catchment Board 2 KB 500 * ^ See Russell v Northern Bank
Bank
Development Corp Ltd 1 WLR 588 * ^ Hansard HC vol 438 col 585 (6 June 1947) Companies Bill, 2nd Reading, Sir Stafford Cripps, 585-588. * ^ e.g. CA 2006 s 370 (right of action for unauthorised donations), s 561 (pre-emption rights), and s 983 (right to sell-out after a takeover). * ^ In closely held, private companies, the mandatory removal right in CA 2006 s 168 is qualified by the majority House of Lords decision in Bushell v Faith AC 1099, holding that a company's articles could allow a shareholder's votes to triple if facing removal as a director. This followed the Cohen Report's recommendations. * ^ CA 2006 s 168, previously Companies Act 1985 , section 303, implemented in the Companies Act 1947 , following recommendations of the Cohen Committee , Report of the Committee on Company Law
Law
Amendment (1945) Cmd 6659. See EM Dodd , 'The Cohen Report' (1945) 58 Harvard Law
Law
Review 1258 * ^ See Aktiengesetz 1965 §76. This is the Vorstand , or the "executive" of the company that carries out all functions of management, rather than the Aufsichtsrat or supervisory council, which appoints it and is in turn elected by shareholders and employees. * ^ See Delaware
Delaware
General Corporation
Corporation
Law
Law
s 141(k) and Ralph B. Campbell v. Loews, Inc 134 A.2d 852 (1957); for a comprehensive critique, see AA Berle and GC Means, The Modern Corporation
Corporation
and Private Property (1932) * ^ CA 2006 s 283 (special resolution definition), ss 21-22 (amending the constitution) * ^ CA 2006 s 303, as amended by Companies (Shareholders' Rights) Regulations 2009/1632 Pt 2, reg 4 * ^ CA 2006 ss 304-305 * ^ UKLA Listing Rule 10. * ^ CA 2006 ss 366-368 and 378 require a resolution, itemising the money to be donated, be passed by shareholders for any political contributions over £5000 in 12 months, lasting a maximum of four years. * ^ CA 2006 s 439; other transactions where directors have a conflict of interest that require binding approval of shareholders are ratification of corporate opportunities, large self dealing transactions and service contracts lasting over two years. * ^ See PL Davies and S Worthington, Gower and Davies' Principles of Modern Company Law
Law
(2016) 15-27 ' Conflicts of interest and inactivity'. E McGaughey, 'Does Corporate Governance Exclude the Ultimate Investor?' (2016) 16(1) Journal of Corporate Law
Law
Studies 221. * ^ See PL Davies and S Worthington, Gower and Davies' Principles of Modern Company Law
Law
(2016) 15-27 ' Conflicts of interest and inactivity'. A Smith , An Inquiry into the Nature and Causes of the Wealth of Nations
Wealth of Nations
(1776) Book
Book
V, ch 1, para 107 and LD Brandeis , Other People\'s Money And How the Bankers Use It (1914) * ^ E McGaughey, 'Does Corporate Governance Exclude the Ultimate Investor?' (2016) 16(1) Journal of Corporate Law
Law
Studies 221 and RC Nolan, ‘Indirect Investors: A Greater Say in the Company?’ (2003) 3(1) Journal of Corporate Law
Law
Studies 73 * ^ Hampel Committee , Committee on Corporate Governance: Final Report (1998) para 5.7, ‘The right to vote is an important part of the asset represented by a share, and in our view an institution has a responsibility to the client to make considered use of it.’ Also Cadbury Report , Financial Aspects of Corporate Governance (1992) para 6.12 * ^ Butt v Kelson Ch 197, Lehman Brothers International (Europe) v CRC Credit Fund Ltd EWCA Civ 917, and Barlow Clowes International Ltd v Vaughan EWCA Civ 11, Dillon LJ, ‘it is accepted that... the assets and moneys in question are trust moneys held on trust for all or some of the would-be investors (“the investors”) who paid moneys to BCI or associated bodies for investment, and are not general assets of BCI.’ * ^ Discussed by E McGaughey, 'Does Corporate Governance Exclude the Ultimate Investor?' (2016) 16(1) Journal of Corporate Law
Law
Studies 221 and see further RC Nolan, ‘Indirect Investors: A Greater Say in the Company?’ (2003) 3(1) Journal of Corporate Law
Law
Studies 73 * ^ See BS Black and JC Coffee, 'Hail Britannia?: Institutional Investor Behavior Under Limited Regulation' (1994) 92 Michigan Law Review 1997-2087 * ^ See in the US, Dodd Frank Act of 2010 §957 (banning broker dealers from voting without instructions on any important issue, including director elections) and the Swiss, Verordnung gegen übermässige Vergütungen bei börsenkotierten Aktiengesellschaften 2013 (banning banks from voting on behalf of any company investor, and placing a duty instead on pension funds to be active in their voting). * ^ See the Oxford University Act 1854 ss 16 and 21, Cambridge University Act 1856 ss 5 and 12. Also the Further and Higher Education Act 1992 , ss 20(2) and 85, and Sch 4, para 4. Discussed in E McGaughey, ‘Votes at Work in Britain: Shareholder Monopolisation and the ‘Single Channel’ (2016) ssrn.com * ^ See also the South Metropolitan Gas Act 1896 s 19, Port of London
London
Act 1908 s 1(7), Iron and Steel Act 1967 , Sch 4, Part V, Aircraft and Shipbuilding Industries Act 1977
Aircraft and Shipbuilding Industries Act 1977
s 2(8), Post Office Act 1977 s 1 * ^ See M Weiss (ed) et al., Handbook on employee involvement in Europe
Europe
(Kluwer 2004). For the most developed example, see in German labour law the Mitbestimmungsgesetz 1976 and the Betriebsverfassungsgesetz 1972 §87. Member states with no participation rights are Belgium, Cyprus, Estonia, Italy, Latvia, Lithuania, Romania and the United Kingdom. * ^ Oxford University Act 1854 ss 16 and 21, Cambridge University Act 1856 ss 5 and 12; cf King\'s College London
London
Act 1997 s 15, though since amended. Discussed in E McGaughey, ‘Votes at Work in Britain: Shareholder Monopolisation and the ‘Single Channel’ (2016) ssrn.com * ^ See Employee
Employee
Involvement Directive 2001/86/EC * ^ See generally, PL Davies , ' Workers
Workers
on the Board of the European Company?' (2003) 32(2) Industrial Law
Law
Journal 75 * ^ (1977) Cmnd 6706; see also Lord Donovan, Report of the Royal Commission on Trade Unions and Employers’ Associations (1965–1968) Cmnd 3623, §§997-1006, where the minority favoured worker directors in principle. * ^ See KW Wedderburn, 'Employees, Partnership
Partnership
and Company Law' 31(2) Industrial Law
Law
Journal 99, a minor duty that could not be legally enforced was CA 1985 s 309, requiring directors to act in shareholders and employees' interests, now reflected in CA 2006 s 172 * ^ Growth and Infrastructure Act 2013 s 31, and PJ Purcell, ‘The Enron
Enron
Bankruptcy and Employer Stock in Retirement Plans’ (11 March 2002) CRS Report for Congress * ^ See Re Hydrodam (Corby) Ltd BCC 161; CA 2006 s 251; a shadow director is typically a bank or a dominant shareholder, according to whose directions a director is accustomed to act. * ^ See Percival v Wright Ch 401, Peskin v Anderson
Peskin v Anderson
2 BCLC 1 and CA 2006 s 170; directors do not, generally, owe duties to shareholders or any other group directly. But duties may arise in tort, Williams v Natural Life Health Foods Ltd 1 WLR 830. Also, when approaching insolvency directors may owe duties to creditors, e.g. West Mercia Safetywear Ltd v Dodd BCLC 250 and Colin Gwyer and Associates Ltd v London
London
Wharf (Limehouse) Ltd 2 BCLC 153. * ^ CA 2006 ss 232-235; while a director may not have to pay for breach of duties, they will not be able to avoid negative publicity and possibly appearing in court should the insurance company choose to contest the claim. * ^ e.g. Bishopsgate Investment Management Ltd v Maxwell (No 2) BCLC 814 * ^ e.g. Hogg v Cramphorn Ltd Ch 254 and Howard Smith Ltd v Ampol Ltd AC 832 * ^ e.g. Criterion Properties plc v Stratford UK Properties LLC UKHL 28; nb the UK Takeover Code Rule 21 voids any measure, without shareholder approval, with the effect of frustrating a takeover bid. This is reflected in the Takeover Directive 2004/25/EC, art 9(2). * ^ For the old and abandoned approach of the pure subjective standard, see Re Cardiff Savings Bank
Bank
2 Ch 100; In re Brazilian Rubber Plantations and Estates Ltd 1 Ch 425; Re City Equitable Fire Insurance Co Ch 407 * ^ 1 BCLC 561 * ^ See Lord Hardwicke LC in The Charitable Corporation
Corporation
v Sutton (1742) 26 ER 642 and Lord Wilberforce in Howard Smith Ltd v Ampol Petroleum Ltd AC 821 * ^ 1 BCLC 433 * ^ See Boardman v Phipps UKHL 2 * ^ See Keech v Sandford (1726) Sel Cas Ch 61, Whelpdale v Cookson (1747) 1 Ves Sen 9; 27 ER 856, Ex parte James All ER Rep 7, Parker v McKenna (1874) LR 10 Ch App 96 and Bray v Ford AC 44 * ^ 1 AC 554, UKPC 10 (PC) * ^ EWCA Civ 424 * ^ e.g. Industrial Development Consultants v Cooley 1 WLR 443, CMS Dolphin Ltd v Simonet 2 BCLC 704, In Plus Group Ltd v Pyke EWCA Civ 370, and Foster Bryant Surveying Ltd v Bryant EWCA Civ 200 * ^ See Aberdeen Railway Co v Blaikie Brothers (1854) 1 Macq HL 461 * ^ See CA 2006 s 180(1)(b) and Imperial Mercantile Credit Association v Coleman (1871) LR 6 Ch App 558, Costa Rica Railway Company v Forwood 1 Ch 746, Motivex v Bulfield Ltd BCLC 104, 117 and Boulting v ACTAT 2 QB 606, 636 * ^ CA 2006 ss 182-183 * ^ Under CA 2006 ss 252-254, a "connected person" includes family members, and companies, partnerships and trusts where the director has a large stake. * ^ See CA 2006 ss 197-214 * ^ e.g. Model Articles , art 22, and cf Guinness plc v Saunders 2 AC 663 * ^ This follows from the UK Corporate Governance Code 2010 for public listed companies. There is no requirement to comply with the Code, but explanations must be given to the market if not. * ^ cf CA 1985 s 309, which stipulated that shareholders and employees interests had to be considered. No cases were ever brought under this provision. Older cases such as Hutton v West Cork Railway Co (1883) 23 Ch D 654 and Parke v Daily News Ltd Ch 927 suggested directors of insolvent companies could not protect employees, though this had been reversed by statute, IA 1986 s 187 and CA 2006 s 247 (Power to make provision for employees on cessation or transfer of business) * ^ CA 2006 s 172(1)(a)-(f) * ^ CA 2006 s 172(3) * ^ CA 2006 s 172(1) * ^ cf Regentcrest plc v Cohen 2 BCLC 80 * ^ CA 2006 s 419 * ^ (1812) 1 Ves & B 154, 158 * ^ e.g. Model Articles , art 3 * ^ (1843) 67 ER 189 * ^ cf Alexander Ward v Samyang 2 All ER 424 and Breckland Group Holdings Ltd v London
London
& Suffolk Properties Ltd BCLC 100 * ^ For highly instructive comparison in the US, see Joy v North , 692 F 2d 880 (1981). Another model for a derivative claim in the German Aktiengesetz § 148, whereby 1% of shareholders, or those holding at least €100,000 in shares, can bring a claim. * ^ See CA 2006 s 239, stipulating that a breach of duty can only be ratified by disinterested shareholders. It also appears that disinterested shareholders would not, however, be competent to ratify fraudulent behaviour, contrary to public policy. * ^ CA 2006 s 263(3) * ^ CA 2006 s 263(4), and see Smith v Croft (No 2) Ch 114 * ^ The pre-2006 case law may still be indicative of the present law, however since according to CA 2006 s 260(2) a claim can only be brought "under this Chapter", the sole rules for derivative actions are contained in ss 260-264. * ^ e.g. Mission Capital plc v Sinclair EWHC 1339 (Ch) and Franbar Holdings Ltd v Patel EWHC 1534 (Ch) * ^ QB 373 * ^ e.g. Pender v Lushington (1877) 6 Ch D 70, cf Macdougall v Gardiner (1875) 1 Ch D 13 * ^ See Prudential Assurance v Newman Industries Ltd Ch 204. The duty to not mislead arises from the law of tort, and negligent misstatement . * ^ See further, Johnson v Gore Wood & Co 2 AC 1, Giles v Rhind EWCA Civ 1428, Gardner v Parker 2 BCLC 554 * ^ 1 Ch 656 * ^ Ch 286 * ^ See also, Brown v British Abrasive Wheel Co 1 Ch 290, Sidebottom v Kershaw, Leese & Co Ltd 1 Ch 154, Dafen Tinplate Co Ltd v Llanelly Steel Co (1907) Ltd 2 Ch 124, Shuttleworth v Cox Bros and Co (Maidenhead) 1 Ch 154, Southern Foundries (1926) Ltd v Shirlaw
Southern Foundries (1926) Ltd v Shirlaw
AC 701 and Citco Banking Corporation
Corporation
NV v Pusser\'s Ltd UKPC 13 * ^ AC 360 * ^ 1 WLR 1092 * ^ See Re Blue Arrow plc BCLC 585 * ^ e.g. Bhullar v Bhullar EWCA Civ 424 * ^ e.g. O\'Donnell v Shanahan EWCA Civ 751 * ^ See Borland’s Trustee v Steel Brothers & Co Ltd 1 Ch 279 * ^ See Attorney General of Belize v Belize Telecom Ltd UKPC 10 * ^ Birch v Cropper (1889) 14 App Cas 525, preferential shareholders presumed to be entitled to distribution on winding up like other shareholders, as constitution did not say otherwise. Alliance Perpetual Building Society v Clifton 1 WLR 1270, whether shares are ordinary or preference shares. * ^ UKHL 3 * ^ Borland’s Trustee v Steel Brothers aff'd 571 A.2d 1140 (Del. 1989) * ^ See DGCL §141(k) * ^ Takeover Directive 2004/25/EC arts 9(2) and 12 * ^ See L Lucas and A Rappeport, 'Mergers and acquisitions: A bitter taste' (23 May 2011) Financial Times. When Kraft broke public promises to keep 500 jobs in the Somerdale plant it was criticsed by the Takeover Panel. * ^ See Gething v Kilner 1 All ER 1166 * ^ Re a Company No. 008699 of 1985 BCLC 383 * ^ Ch 254 * ^ Howard Smith Ltd v Ampol Petroleum Ltd AC 821, per Lord Wilberforce * ^ ERA 1996 ss 86, 94 and 135 * ^ TUPER 2006 SI 2006/246 * ^ Re Grierson Oldham and Adams Ltd Ch 17 * ^ Re Bugle Press Ltd Ch 270 * ^ Fiske Nominees Ltd v Dwyka Diamond Ltd EWHC 770; 2 BCLC 123 * ^ QB 815 * ^ ex parte Guinness plc 1 QB 146, the Panel was found to be ‘insensitive and unwise’ no action. Also, ex parte Fayed BCLC 938

REFERENCES

Textbooks

* PL Davies , Gower's Modern Company Law
Law
(8th edn Sweet and Maxwell, London
London
2008) * D Kershaw, Company Law
Law
in Context ( OUP
OUP
, Oxford 2009) * R Kraakman, J Armour, PL Davies , L Enriques, H Hansmann, G Hertig, K Hopt, H Kanda and E Rock, The Anatomy of Corporate Law
Law
(2nd edn OUP
OUP
2009) * J Lowry and A Dignam, Company Law
Law
(6th edn OUP
OUP
2010) ISBN 978-0-19-928936-3 * L Sealy and S Worthington, Cases and Materials in Company law (9th edn OUP, Oxford 2010) * AF Topham, Principles of Company Law
Law
(1978)

Treatises

* AA Berle and GC Means, The Modern Corporation
Corporation
and Private Property (1932) * B Cheffins, Company law: Theory, Structure and Operation (1998) * J Micklethwait and A Wooldridge The company: A short history of a revolutionary idea (Modern Library 2003) * JE Parkinson , Corporate Power and Responsibility : Issues in the Theory of Company Law
Law
(Clarendon 1995)

Articles

* AA Berle , 'The Theory of Enterprise Entity' (1947) 47(3) Columbia Law
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Review 343 * BS Black and JC Coffee , 'Hail Britannia?: Institutional Investor Behavior Under Limited Regulation' (1994) 92 Michigan Law
Law
Review 1997-2087 * PL Davies , E Schuster and E Van de Walle de Ghelcke, 'The Takeover Directive as a Protectionist Tool?' (2010) EGCI Working Paper * PL Davies , ' Workers
Workers
on the Board of the European Company?' (2003) 32(2) Industrial Law
Law
Journal 75 * EM Dodd, ' Book
Book
Review' (1945) 58 Harvard Law
Law
Review 1258 * A Garrett, 'A Comparison of United States and United Kingdom Approaches to Board Structure' (2007) 3 The Corporate Governance Law Review 93 * R Grantham, 'The Doctrinal Basis of Company Law' (1998) 57 Cambridge Law
Law
Journal 554 * P Ireland, 'Company Law
Law
and the Myth of Shareholder Ownership' (1999) 62 Modern Law
Law
Review 32 * D Kershaw, 'No End in Sight for the History of Corporate Law: The Case of Employee
Employee
Participation in Corporate Governance' (2002) 2 Journal of Corporate Law
Law
Studies 34 * D Kershaw, 'The Illusion of Importance: Reconsidering the UK's Takeover Defence Prohibition' (2007) 56 ICLQ 267 * E McGaughey, 'Does Corporate Governance Exclude the Ultimate Investor?' (2016) 16(1) Journal of Corporate Law
Law
Studies 221 * E McGaughey, 'Ideals of the Corporation
Corporation
and the Nexus of Contracts' (2015) 78(6) Modern Law
Law
Review 1057 * E McGaughey, 'Donoghue v Salomon in the High Court' (2011) 4 Journal of Personal Injury Law
Law
249, on SSRN * C Mitchell , 'Lifting the Corporate Veil in the English Courts: An Empirical Study' (1999) 3 Company, Financial and Insolvency
Insolvency
Law
Law
Review 15 * KW Wedderburn , 'Shareholders’ rights and the rule in Foss v Harbottle' (1957) 16 Cambridge Law
Law
Journal 194 * KW Wedderburn , ‘Companies and employees: common law or social dimension’ (1993) 109 Law
Law
Quarterly Review 261 * KW Wedderburn , 'Employees, Partnership
Partnership
and Company Law' 31(2) Industrial Law
Law
Journal 99

Reports

* Wrenbury Committee, Report of the Company Law
Law
Amendment Committee (1918) * Greene Committee , Report of the Company Law
Law
Amendment Committee (1926) Cmnd 2657 * Cohen Committee , Report of the Committee on Company Law
Law
Amendment (1945) Cm 6659 * Jenkins Committee , Report of the Company Law
Law
Committee (1962) Cmnd 1749 * Bullock Committee, Report of the committee of inquiry on industrial democracy (1977) Cmnd 6706 * Cork Committee, Insolvency
Insolvency
Law
Law
and Practice, Report of the Review Committee (1982) Cmnd 8558 * Law
Law
Commission, Shareholder Remedies (1997) Law
Law
Com No 246

EXTERNAL LINKS

* Companies Act 2006 * Companies Act 2006
Companies Act 2006
PDF * Companies House * Department of Business corporate governance homepage * Corporate Law
Law
and Governance, a UK company law blog * corpgov.net, a US corporate law

.