1.
Corporate law
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Corporate law is the practice or study of how shareholders, directors, employees, creditors, and other stakeholders such as consumers, the community, and the environment interact with one another. Corporate law is a part of a broader companies law, other types of business associations can include partnerships, or trusts, or companies limited by guarantee. Under corporate law, corporations of all sizes have separate legal personality, shareholders control the company through a board of directors which, in turn, typically delegates control of the corporations day-to-day operations to a full-time executive. Corporate law deals with firms that are incorporated or registered under the corporate or company law of a state or their subnational states. Corporate law is divided into corporate governance and corporate finance. The word corporation is generally synonymous with large publicly owned companies in the United States, in United Kingdom, company is more frequently used as the legal term for any business incorporated under the Companies Act 2006. Large scale companies will be PLCs in the United Kingdom and will usually have shares listed on a Stock Market. In British legal usage any registered company, created under the Companies Act 2006 and previous equivalent legislation, is, strictly, such a company is created by the administrative process of registration under the Companies Act as a general piece of legislation. A corporation, in this British sense, can be a corporation sole which consists of an office occupied by one person e. g. the monarch or certain bishops in England. Here, the office is recognized as separate from the individual who holds it, in the United States, a company may or may not be a separate legal entity, and is often used synonymously with firm or business. A corporation may accurately be called a company, however, a company should not necessarily be called a corporation, which has distinct characteristics. According to Blacks Law Dictionary, in America a company means a corporation — or, less commonly, the defining feature of a corporation is its legal independence from the people who create it. If a corporation fails, its shareholders will lose their money, shareholders are not liable for any remaining debts owed to the corporations creditors. This rule is called limited liability, and it is why corporations end with Ltd, in the words of British judge, Walton J, a company is. only a juristic figment of the imagination, lacking both a body to be kicked and a soul to be damned. But despite this, under just about every system in existence and as per international norms, corporations have the same legal rights. Corporations can exercise human rights against real individuals and the state, just as they are born into existence through its members obtaining a certificate of incorporation, they can die when they lose money into insolvency. Corporations can even be convicted of offences, such as fraud. Although some forms of companies are thought to have existed during Ancient Rome and Ancient Greece, with increasing international trade, Royal charters were granted in Europe to merchant adventurers
2.
Australian corporate law
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Australian corporations law has historically borrowed heavily from UK company law. Its legal structure now consists of a single, national statute, the statute is administered by a single national regulatory authority, the Australian Securities and Investments Commission. The two federal statutes are the Corporations Act 2001 and Australian Securities and Investments Commission Act 2001, the corporations legislation is administered by the Australian Securities and Investments Commission, which reports to the Treasurer. Since provisions in the Act can frequently be traced back to some pioneer legislation in the United Kingdom, on the settlement of Australia by British colonists in 1788 the power in relation to corporations was controlled by the United Kingdom. As colonies gained independence, and their own parliaments, the power to control corporations passed to these parliaments. Each of the colonies passed laws in relation to the regulation of corporations, laws between states and territories were inconsistent. A later attempt at complex cross-vesting arrangements by the states, territories and it was after this, in 2001, that the current arrangement, where the states refer their power to the Commonwealth in respect of corporations was created. Australian law, like English law, recognises a kind of called the corporation sole. However, there are few cases of such corporations, the sole is excluded from the Australian statutory definition of corporation. A proprietary company, under CA2001 s 45A is one which has the suffix Pty Ltd and this form of business entity has similar characteristics to the Limited Liability Company, or LLC, that is a commonly used term in multiple jurisdictions around the world. Austin J held that it was a responsibility to have functioning financial and audit committees with independent directors, as well as internal review. The ASX Corporate Governance Councils Best Practice Recommendation 2.3 states the CEO, the ASX CGCBPR2.1 states there should be a majority of independent directors, and the chair should be independent. Under ASX CGCBPR8.1, the companies should have a remuneration committee, under ASX CGCBPR4.2 an audit committee should have at least three members, with a majority independent, and be chaired by an independent director, not including the chairman. Australia has strong rules, similar to those found across the Commonwealth, for public companies, under CA2001 section 203D there must be a meeting with two months notice where the director has a right to be heard. For private companies which do not offer shares to the public, and have under 50 shareholders, in Lee v Chou Wen Hsien 1 WLR1202, the Privy Council advised that a private company was permitted to have a provision for directors to remove other directors. Removal from office does not affect a directors claim for breach of contract, under CA2001 s 201H the directors of a public company can make the appointments of other directors. However, unlike the UK, if that happens, those new directors must be confirmed at the general meeting. This rule can be replaced, so it would be possible for a company to require that shareholders make all appointments, the Corporations Act 2001 contains a default rule in section 250E that shareholders have one vote per share
3.
British Virgin Islands company law
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The British Virgin Islands has approximately 30 registered companies per head of population, which is probably the highest ratio of any country in the world. Annual company registration fees provide a significant part of Government revenue in the British Virgin Islands, accordingly, company law forms a much more prominent part of the law of the British Virgin Islands than might otherwise be expected. The first companies legislation in the British Virgin Islands was the Companies Act,1884, however the great leap forward for company law in the jurisdiction occurred in 1984 with the passing of the International Business Companies Act,1984. The International Business Companies Act was enormously successful, and resulted in the registration of a number of companies. However, in the early 2000s the British Virgin Islands came under pressure to repeal statutes such as the International Business Companies Act which provided for ring-fenced taxation. The change had little impact on incorporation rates as the British Virgin Islands imposes virtually no form of direct taxation. In the British Virgin Islands, only a licensed registered agent can form a company and it is not possible for a member of the public to do so. The principal reason for this is to reinforce anti-money laundering obligations under the Anti-Money Laundering, any person who wishes to form a registered company must do so through a licensed agent, and the agent is required to obtain client due diligence to comply with the regulations. Almost all companies formed in the British Virgin Islands are now registered under the BVI Business Companies Act, in addition there are a small number of statutory corporations, most of which serve some kind of public function. All segregated portfolio companies are required to include the designation within their name, a restricted purpose company is a special type of company intended for use in bankruptcy remote bond issues, and which only has limited corporate capacity to undertake certain specific purposes. Slightly unusually, in the British Virgin Islands the formation of a company does not involve the issuing of subscriber shares, accordingly, when a company is incorporated it initially has no members. The registered agent has a power to appoint the first directors of the company. However, until the first shares are issued the directors are personally liable for anything which they do in the name of the company, in the British Virgin Islands a company has separate legal personality from its members. The liability of the members of a company is limited to their shares or the amount of their guarantee, similarly, directors or officers of a company are not normally liable for the companys debts except insofar as they may otherwise be liable for their own conduct or actions. Conversely, the assets of a company are regarded as belonging solely to the company, the corporate constitution of a private company registered under the BVI Business Companies Act consists of the memorandum and articles of association. The memorandum and articles of association of a company are available for inspection at the Companies Registry. Any amendment to the memorandum or articles normally becomes effective when filed at the Companies Registry. In exceptional circumstances the court has power to order that an amendment should take effect at an earlier date, however shareholders agreements are not publicly filed in the British Virgin Islands
4.
Canadian corporate law
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Canadian company law concerns the operation of corporations in Canada, which can be established under either federal or provincial authority. Federal incorporation of corporations is governed by Corporations Canada under the Canada Business Corporations Act. All of the Canadian provinces and territories also have laws permitting the incorporation of corporations within their area of jurisdiction, when it was introduced into UK company law by the Companies Act 1862 as a matter of general application, the Canadian colonies introduced legislation to enable the same locally. In 1914, in John Deere, it was held that the provinces could not interfere with an incorporated company by requiring them to be registered locally in order to conduct business. It was in this manner that the Canadian Pacific Railway was originally formed, the articles of incorporation can provide for different classes of shares. Like most of the Commonwealth and Europe, the one share, one vote principle prevails in public companies, shareholders must elect directors at each annual meeting, and, where the articles are silent, directors remain in office until the annual meeting after their election. There can be staggered boards, but any director’s term is limited to three annual meetings, Directors elected by a particular class cannot be removed without consent of that class. All changes in directors have to be filed with the registrar, in October 2012, the TSX also issued a proposal to require majority voting at uncontested elections. The larger pension plans and other investment funds have instituted practices relating to the behaviour that is expected of the companies they invest in, publications in that regard include, Proxy Voting Principles and Guidelines. 2013 Best Practices for Proxy Circular Disclosure, Proxy Voting by Canadian Mutual Funds 2006–2009. On September 29,2016 the Financial Post reported that a Bill introduced in Parliament would vanquish zombie directors who fail to win majority shareholder votes Directors set their own remuneration and they have a fiduciary duty to not put their own interests first when setting it. Otherwise the remuneration committee should be composed of independent directors, there is no say on pay rule in the CBCA. However, a number of Canadian companies have been having say on pay votes. Under s.140 of the CBCA, all shareholders have the right to vote, shareholders holding the same class of shares must be treated equally, and so, for instance, no voting ceilings are allowed. With 5% of the rights, known as a requisition. Uniquely, under s.137 of the CBCA, a holder of shares may submit a proposal. This means a group of people who sit behind investment dealers or other intermediaries in the investment chain are now enfranchised. 137 the only way to challenge this is by application to a court, the proposal also has to not have been submitted within the last 5 years, if the last time it got less than 3%, 6% or 10% of the votes
5.
Cayman Islands company law
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Cayman Islands company law is primarily codified in the Companies Law, and to a lesser extent in the Securities and Investment Business Law. The Cayman Islands is a leading Offshore Financial Centre, and financial services forms a significant part of the economy of the Cayman Islands, accordingly company law forms a much more prominent part of the law of the Cayman Islands than might otherwise be expected. There are broadly two types of company in the Cayman Islands, the first, and more prevalent, are companies formed under the Companies Law. Such companies may be formed as ordinary resident companies, ordinary non-resident companies, exempted companies, the second is limited liability companies formed under the Limited Liability Companies Law,2016. LLCs are a form of hybrid between companies and partnerships, in practice, companies are almost invariably formed by professional trust companies rather than members of the public. Under the Companies Law it is possible to register companies as either a limited by shares or a company limited by guarantee. A company limited by guarantee may also be incorporated with a share capital, in practice the vast majority of companies are incorporated as companies limited by shares. Where a company will carry out its business principally outside of the Cayman Islands and this broadly replicates the International Business Company concept from other jurisdictions, except that in relation to exempt companies, there is no tax saving. The main benefit of registering as a company is that exempt companies do not need to file accounts. Exempted companies can also be registered as limited companies, or as special economic zone companies. In the Cayman Islands company may also further be registered specifically as segregated portfolio company, a segregated portfolio company is a company which segregates the assets and liabilities of different classes of shares from each other and from the general assets of the company. All segregated portfolio companies are required to include the designation SPC or “Segregated Portfolio Company” in full within their name, in the Cayman Islands a company has separate legal personality from its members ). The liability of the members of a company is limited to their shares or the amount of their guarantee, similarly, directors or officers of a company are not normally liable for the companys debts except insofar as they may otherwise be liable for their own conduct or actions. Conversely, the assets of a company are regarded as belonging solely to the company, the corporate constitution of a private company registered under the Companies Law consists of the memorandum and articles of association. Companies may adopt the form of Articles set out in Schedule 1 to the Companies Law. The memorandum and articles of association of a company are filed with the Companies Registry but are not available for public inspection, any amendment to the memorandum or articles normally becomes effective upon the passing of the special resolution. The company is required to file the special resolution with the Companies Registry. Once adopted, the memorandum and articles bind the company and each member of the company as if they had executed by the same under seal
6.
South African company law
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South African company law is that body of rules which regulates corporations formed under the Companies Act. A company is an organisation which earns income by the production or sale of goods or services. This entry also covers rules by which partnerships and trusts are governed in South Africa, together with cooperatives, a company has three distinguishing features, its legal separateness from the people involved in it—specifically from its owners, called shareholders, its potential immortality, and its size. The same generally applies, however, to businesses which are not companies. There is also, more importantly, usually a separation between the company and its owners, the locus classicus for the principle that a company is a separate entity from its directors and shareholders is the landmark English case of Salomon v Salomon. The separation between the shareholder and the company has one important consequence. If a company is wound up, its shareholders will lose their stake, if, on the other hand, an unincorporated business should go bankrupt, its owners, who do not enjoy such separation, will be liable for its debts. It has rights and duties, but not the body, of a natural person, Companies range from the very small to the very large. There are no large businesses which are not companies. It is important at the outset to appreciate what, exactly, is meant by holding a share in a company. The fact that a person is a shareholder of Pick n Pay does not entitle him to go along to one of its branches and his share in Pick n Pay does not take the form of its stock. Before the Industrial Revolution, companies were a rare business form. Until 1844, there was no legislation governing companies, so that they had to be incorporated by a specific Act of Parliament. Such was the case with the British East India Company in 1600, the Joint Stock Companies Act 1844 was the first piece of legislation which would be recognised as modern company law, but it was fairly limited in scope. The concept of limited liability, for instance, was not considered and this omission was remedied by the Joint Stock Companies Act 1856, which also introduced the suffix Ltd to the company name. It is still in use today, the first South African company legislation was the Companies Act of 1926, which was based on the Transvaal Companies Act, which was in turn based on the British Companies Act 1908. The next major South African legislation in this area was the Companies Act of 1973, the 1973 Act had over the years been amended on numerous occasions to bring it up to date, it had as a consequence, like the Income Tax Act, become unwieldy. Changes in society, and in the way the international community expects businesses to operate, also demanded the introduction of new concepts like stakeholder rights and corporate governance
7.
United States corporate law
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United States corporate law regulates the governance, finance and power of corporations in US law. The US Constitution was interpreted by the US Supreme Court to allow corporations to incorporate in the state of their choice, twenty-four states follow the Model Business Corporation Act, while New York and California are important due to their size. At the Declaration of Independence, corporations had been unlawful without explicit authorization in a Royal Charter or an Act of Parliament of the United Kingdom, since the worlds first stock market crash corporations were perceived as dangerous. Corporations were only thought to be legitimate in specific industries that could not be managed efficiently through partnerships, after the US Constitution was ratified in 1788, corporations were still distrusted, and were tied into debate about interstate exercise of sovereign power. The First Bank of the United States was chartered in 1791 by the US Congress to raise money for the government and it had private investors, but faced opposition from southern politicians who feared federal power overtaking state power. So, the First Banks charter was written to expire in 20 years, State governments could and did also incorporate corporations through special legislation. In 1811, New York became the first state to have a simple registration procedure to start corporations for manufacturing business. It also allowed investors to have limited liability, so if the enterprise went bankrupt investors would lose their investment. An early US Supreme Court case, Trustees of Dartmouth College v Woodward, States quickly reacted by reserving the right to regulate future dealings by corporations. Generally speaking, corporations were treated as persons with separate legal personality from its shareholders, directors or employees. Over the late 19th century, more and more states allowed free incorporation of businesses with a registration procedure. Many corporations would be small and democratically organized, with one-person, one-vote, no matter what amount the investor had, however, the dominant trend led towards immense corporate groups where the standard rule was one-share, one-vote. At the end of the 19th century, trust systems were used to concentrate control into the hands of a few people, or a single person. By the end of the First World War, it was perceived that ordinary people had little voice compared to the financial oligarchy of bankers. In particular, employees lacked voice compared to shareholders, but plans for an industrial democracy did not become widespread. Through the 1920s, power concentrated in fewer hands as corporations issued shares with voting rights. This practice was halted in 1926 by public pressure and the New York Stock Exchange refusing to list non-voting shares, New shareholders had no power to bargain against large corporate issuers, but still needed a place to save. Before the Wall Street Crash of 1929, people were being sold shares in corporations with fake businesses, as accounts, the Wall Street Crash saw the total collapse of stock market values, as shareholders realized that corporations had become overpriced
8.
Corporate law in Vietnam
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Corporate law in Vietnam was originally based on the French commercial law system. However, since Vietnams independence in 1945, it has largely influenced by the ruling Communist Party. Currently, the sources of Corporate Law are the Law on Enterprises, the Law on Securities. Corporate law in Vietnam is largely influenced by French laws due to its colonial past, after the 1954 Geneva Conference, Vietnam separated into two zones, the North and the South. In 1980, after the North took control of the South, in 1986, the government initiated economic reforms to the corporate sector to reinvigorate the ailing economy. These policies aimed to reverse most of policies that led to crises in the 1970s and 1980s following the Vietnam War. Development of the sector was encouraged and the economy was liberalized in hopes of increasing the potential for economic development. In 1987, the Law on Foreign Investment was passed, allowing foreign investors into the country, in 1990, the Law on Private Enterprises and Companies Law were introduced to boost economic development. They were subsequently superseded by the Law on Enterprises in 1999, within three years of implementing the LOE, over 70,000 enterprises were registered as compared to just over 40,000 for the previous nine years. Law on Investment and a new LOE were enacted in 2005 and these statutes are expected to further strengthen Vietnams economy and its potential for international economic integration. The Constitution - Mainly seen as the ultimate Party policy documents,4 different versions Legislation - Originated from civil law passed down from the French. The LOE governs business enterprises in Vietnam, Enterprises in all economic sectors have to satisfy the stipulated conditions accounted for in Article 7. There are 4 forms of business enterprises, an LLC is established by members capital contribution to the company. As a LLC is an entity separate from the owners. LLCs exist in two forms - one-member LLC, or multi-member LLC, the former is owned by an organisation/individual, while the latter allows for two to fifty members. The management structure consists of a Members Council, Chairperson of the MC, where there are more than 11 members in LLC, an Inspection Committee must also be established. An SC is an entity with at least three shareholders, where ownership of the firm depends on the number of shares they hold and it is the only form of enterprise that can issue securities to raise capital. Shareholders liability is limited to their contribution, however, shareholders can be personally liable where the company is substantially undercapitalised on formation
