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Company law is offered as an optional module to students studying on the Standard Entry and Graduate Entry LLB courses. It is also offered as an Individual Module. Credits from an Individual Module will not count towards the requirements of the LLB.

Company law is a vital module for anyone intending to operate in a commercial field. The syllabus centres on the way the law regulates companies and the facilities that company law offers, such as limited liability and transferability of shares, as well as corresponding burdens such as duties of disclosure and compliance with statutory procedures.

Topics covered

• The nature of a company’s legal personality and piercing the veil of incorporation. Incidents of corporate personality. Differences between incorporated and unincorporated associations. The rule in Salomon v Salomon & Co Ltd and its development. Tortious liability as an alternative to veil lifting.
• The formation of the company. The suitability of the company as a legal vehicle for different types of business. The registration process, including the memorandum and articles of association. Pre-incorporation contracts.
• The relations between the company and outsiders. The decline of the doctrines of ultra vires and constructive notice. The application of principles of agency law to companies. The commission of crimes and torts by the company.
• The relations between the company and its members and among the members inter se. The nature of and principles governing the statutory contract between the company and its members. Different capacities of members and relations between one member and another. Alteration of the statutory contract and remedies for breach.
• Management of the company. Directors and other officers. Appointment. Retirement. Dismissal. Disqualification. Meetings. Voting. Resolutions. Division of functions among officers and organs of the company.
• Directors’ duties. The general duties of directors, and the codification of those duties. Statutory controls on directors, including rules on self-dealing. The enforcement of directors’ duties, including the rule in Foss v Harbottle and the statutory derivative claim.
• The protection of minority shareholders. The statutory remedies for the protection of minority shareholders. Shareholders’ personal rights, including under the statutory contract.
• Corporate governance. The corporate governance issues raised by larger companies. Additional shareholder protection mechanisms in larger companies, including board reform, executive pay and shareholder engagement. UK governance codes (e.g. the UK Corporate Governance Code and the Stewardship Code). The purpose of the company, including the shareholder primacy versus stake holding debate.
• Share capital and loans. The legal regulation of the raising of share capital and the protection of investors. Loan capital, and fixed and floating charges.
• Capital maintenance. The main principles governing the raising, maintenance and reduction of the share capital, including payment of dividends and share buy-backs.
• Winding up. Types of winding up. The winding up process and the protection of creditors. The implications of winding up for the company’s directors.

Learning outcomes

If you complete the module successfully you should be able to:

• Explain the main concepts that underpin company law, including separate legal personality and limited liability
• Comprehend the policy issues that arise regarding the regulation of companies, including the views of different commentators about those policy issues
• Discuss the main principles and rules that seek to regulate and protect different participants within companies, especially their directors, shareholders and creditors
• Summarise the issues that arise in respect of large, widely owned, public companies and the strategies that have been developed to ensure such companies are well governed
• Identify the legal issues raised by complex hypothetical ‘problem question’ scenarios, and apply their knowledge of the main principles and rules of company law to articulate well-argued solutions to those questions
• Critically analyse and evaluate selected areas of company law and place the policy issues raised by company law in their social, economic and political contexts
• Develop well-reasoned analysis and arguments for the reform of selected areas of company law, including by engaging critically with the arguments of other commentators
• Critically read case law and other materials and construct answers to questions set.
• Reflect on their own learning, including identifying areas where their knowledge or understanding needs improvement and respond appropriately.

Assessment

Timed unseen examination

Essential reading

• Dignam, A. and J. Lowry Company law. (Oxford: Oxford University Press, 2022) 12th edition [ISBN 9780192865359].