Legal aspects of corporate finance
- Module Code:
- Taught in:
- Term 1
This module provides an understanding of the essential elements of company law, with special attention to corporate finance issues. It complements the finance module, Corporate Finance, together giving the student a comprehensive and coherent appreciation of the financial and legal aspects of the subject. The module offers an understanding of how the agency problems between shareholders and creditors and between majority and minority shareholders are addressed by the law; it includes, among other topics: capital structure, dividends, limits to concealed distribution, reduction of capital and share buy-back, the solvency test and the European debate on the legal capital, shareholders rights, financial assistance, issue of shares and of debentures, takeovers and the market for corporate control. The module is based on English law, with reference to the harmonization effort of European Union law, to the law of other jurisdictions, and to international practice. English law provides a good vehicle through which the principles can be taught, it is the basis for the law and practice of many other jurisdictions, and it is a good example of the Western model to which many Middle East, Asian and African jurisdictions look or which are imposed on such jurisdictions.
Objectives and learning outcomes of the module
The main objectives of the course are as follows:
The learning objectives are to enable students to:
- To provide a grounding in the legal issues of corporate finance
- To provide an understanding of the national and international legal practice issues relating to corporate finance
By the end of the course students will:
- Have a sound knowledge of the main principles of company law and of the legal aspects of corporate finance
- Have an appreciation of a comparative law approach on the main policy issues related to corporate finance
This module consists of a 1-hour weekly lecture over 10 weeks of term plus a revision lecture in term 3 as preparation for the final examination. Students will be supplied with a syllabus with a breakdown week by week of required and additional reading. Reading materials are usually accessed electronically from the BLE and students should come to class prepared.
This module also has a weekly 1-hour tutorial where the questions posed by the tutor relevant to the lecture are explored and discussed by the students. Students also prepare and deliver a short presentation.
Total Work load:
Students on this module will have 2 taught hours each week. Additionally, adequate personal study time should be allocated for reading and class preparation.
Method of assessment
Assessment for this module is in three elements:
- One tutorial presentation at 10%
- One essay of 2,500 words at 30%
- One unseen 2-hour written examination at 60%
All elements except the presentation may be resubmitted.
Selected chapters from:
- Paul L Davies & Sarah Worthington: Gower and Davies: The Principles of Modern Company Law (Sweet & Maxwell, London, 10th edition, 2016)
- Reinier Kraakman et al.: The anatomy of corporate law (OUP Oxford, 2nd edition, 2009)
- Len Sealy & Sarah Worthington: Sealy’s Cases and materials in company law (OUP Oxford, 11th edition, 2016)
As an alternative to Davies’ book, students can use the following book, which is very detailed and constantly updated on-line:
- Mayson, French and Ryan on Company Law (OUP Oxford, 33rd edition, 2016)
Other reference books
- RM Goode; Principles of Corporate Insolvency Law (Sweet & Maxwell London, 4th edition, 2011)
- Eilis Ferran - Look Chan Ho; Principles of corporate finance law (OUP Oxford, 2nd edition, 2013)
- David Kershaw, Company law in context (OUP Oxford, 2nd edition 2012)