Legal Aspects of Corporate Finance

This module, Legal Aspects of Corporate Finance, provides an understanding of the essential elements of the legal principles and institutions governing corporate finance at the national and international level. It complements the finance module, Corporate Finance, which together provide a comprehensive and coherent appreciation of the financial and legal aspects of the subject.

Learning outcomes

When you have completed your study of this module, you will be able to:

• outline and discuss the importance of corporate law for the creation of strong securities markets
• analyse the concepts of corporate personality and limited liability, the types of companies, the formation of the most important types of companies and key aspects of corporate constitutions
• explain and critically discuss the legal components of the financial structure and membership of corporations
• examine and discuss the key issues relating to the taxation of corporate profits and their implications for international competition in trade and investment
• outline and discuss the division of power between shareholders and directors in the internal governance of corporations and issues of liability relating to the obligations and rights of those – often competing – groups
• critically assess the legal aspects of corporations' attempts to raise finance from the public
• outline and discuss important legal and regulatory developments relating to takeovers and mergers against the background of general corporate law.

Tuition and assessment

Students are individually assigned an academic tutor for the duration of the module, with whom you can discuss academic queries at regular intervals during the study session.

You are required to complete two Assignments for this module, which will be marked by your tutor. Assignments are each worth 15% of your total mark. You will be expected to submit your first assignment by the Tuesday of Week 6, and the second assignment at the end of the module, on the Tuesday after Week 10. Assignments are submitted and feedback given online. In addition, queries and problems can be answered through the Virtual Learning Environment.

You will also sit a three-hour examination on a specified date in September/October, worth 70% of your total mark. An up-to-date timetable of examinations is published on the website in July each year.

Study resources

• Study guide: The module study guide is carefully structured to provide the main teaching, defining and exploring the main concepts and issues, locating these within current debate and introducing and linking the assigned readings.
• Key texts: 
  • Worthington S (2016) Sealy & Worthington's Text, Cases, and Materials in Company Law. 10th Edition. Oxford University Press.
  • French D (2021) Blackstone's Statutes on Company Law 2021–2022. 25th Edition. Oxford University Press.
• Readings: Throughout the module you will be directed to study a selection of readings, including journal articles, book extracts and case studies that are of particular relevance and interest to the topics covered in the module.
• Virtual learning environment: You will have access to the VLE, which is a web-accessed study centre. Via the VLE, you can communicate with your assigned academic tutor, administrators and other students on the module using discussion forums. The VLE also provides access to the module Study Guide and assignments, as well as a selection of electronic journals available on the University of London Online Library.

Study calendar 2022/23

Study calendars are subject to change.

Module overview

Unit 1 Incorporation and the Corporate Constitution

• 1.1 Introduction
• 1.2 Corporate Personality and Limited Liability
• 1.3 Types of Company
• 1.4 How a Company Is Formed
• 1.5 A Company's Constitution
• 1.6 Corporate Capacity
• 1.7 Articles of Association
• 1.8 How a Company Acts
• 1.9 Groups of Companies
• 1.10 Conclusion

Unit 2 Financial Structure and Membership

• 2.1 The Concept of Capital and the Financing of Companies
• 2.2 Share Capital
• 2.3 Capital Maintenance
• 2.4 Prohibition on Financial Assistance
• 2.5 Profit Distributions
• 2.6 Different Classes of Shares
• 2.7 Legal Incidents of Membership (Ownership of Shares)
• 2.8 Transfer of Shares
• 2.9 Debt Capital-Debentures
• 2.10 Conclusion

Unit 3 The Taxation of Companies

• 3.1 Background issues
• 3.2 UK Corporation Tax
• 3.3 Cross-border Taxation
• 3.4 Conclusion

Unit 4 Corporate Governance

• 4.1 Division of Power between Shareholders and Directors
• 4.2 Directors
• 4.3 Directors' Meetings
• 4.4 Shareholders' Meetings
• 4.5 Directors' Duties
• 4.6 Fair Dealing by Directors
• 4.7 Breach of Duty and Third Parties
• 4.8 Shareholders' Remedies
• 4.9 Conclusion

Unit 5 Public Disclosure of Information

• 5.1 Introduction
• 5.2 Financial Statements
• 5.3 Auditors
• 5.4 Other Information to be Made Available
• 5.5 Registration of Charges (Security Interests)
• 5.6 Company Investigations
• 5.7 Conclusion

Unit 6 Raising Capital from the Public

• 6.1 Introduction
• 6.2 Securities Markets and Securities Regulation Generally
• 6.3 Securities Regulation in the UK
• 6.4 Public Securities Offerings
• 6.5 Liability for Misstatements in Listing Particulars and Prospectus
• 6.6 Insider Dealing
• 6.7 Market Abuse
• 6.8 Corporate Finance Transactions
• 6.9 Conclusion

Unit 7 Regulation of Takeovers and Mergers

• 7.1 Introduction
• 7.2 Overview of Statutory Regime
• 7.3 Methods of Takeover
• 7.4 Takeover Code
• 7.5 Listing Rules
• 7.6 Compulsory Buy-out
• 7.7 Competition Law Aspects
• 7.8 Directors' Role In a Takeover
• 7.9 Conclusion

Unit 8 Corporate Collapse

• 8.1 Insolvency Law – Introduction
• 8.2 Overview
• 8.3 Company Voluntary Arrangements (CVA)
• 8.4 Administration
• 8.5 Receivership
• 8.6 Liquidation (Winding-up)
• 8.7 The Liquidation Process
• 8.8 Effect on Prior Transactions
• 8.9 Trading while Insolvent
• 8.10 Conclusion

Module samples

• M439 Module introduction (PDF)
• M439 Specimen examination (PDF)
• M439 Unit 1 (PDF)

Disclaimer

Important notice regarding changes to programmes and modules