Corporate Law -BAAF2 Coursework October 2010

London School of Economical & Political Science

                                         

CORPORATE LAW

BAAF2/BAPA2/ PAC2

Coursework October 2010

PLEASE READ THE FOLLOWING CAREFULLY BEFORE ATTEMPTING THIS ASSESSMENT

1. The assessment

    Southend Fashion Designs Ltd

Lorraine, Brenda and Pam wish to transfer their existing business to a company so that they could obtain the benefit of limited liability. The company is to be called “Southend Fashion Designs Ltd.”They instruct their solicitor, Michelle, to prepare the necessary documentation. The company is to have an issued share capital of 5000 £1 shares. Lorraine, Brenda and Pam will each hold 1000 10% preference shares, and Jade and Ivor will each hold 1000 ordinary shares. All the shares are to be fully paid up. The directors are to be Lorraine and Brenda.

On 4th September 2010, Lorraine hears that Compute Ltd. is selling computers cheaply and she signs a contract to purchase one on behalf of her company. She signs the contract in the following way:“Lorraine, agent of Southend Fashion Designs Ltd.”

In early September 2010, Southend Fashion Designs Ltd. receives its certificate of incorporation. The Registrar issues the certificate on 11th September 2010, but in error inserted 11the November as the date of the certificate.

Lorraine and Brenda hold a board meeting at which they ratify the contract with Compute Ltd. Shortly afterwards Compute Ltd telephone Lorraine to say that the computer that she ordered is now only available with a double disc drive and not a single disc drive as agreed. There is a small increase in the cost but nevertheless Lorrain agrees to this and signs a letter approving the alteration.

Michelle and Compute Ltd have not been paid.

(a)    Advise Michelle and Compute Ltd.

On 20th December 2010, Southend Fashion Designs Ltd. receives a letter from the Companies Registrar informing its directors that they should change the company's name.

(b)   Advise Lorraine and Brenda whether they have to comply with the Registrar's request.

Assume that in the first financial year of Southend Fashion Designs Ltd, the company makes no profit and so declares no dividend.  In the second financial year, the company has £900 profits available for distribution as dividend. In the third financial year a £1000 profits is available for distribution as dividend. You may assume that the directors declare a dividend on all profits available for distribution.

(c)  Calculate how these profits would be distributed amongst the various classes of shareholders. (You should support your answer by reference to decided cases)

Assume that in the fifth financial year of the company, it goes into a members' voluntary liquidation, and, after all prior claims have been satisfied, the sum of £3,000 is available for repayment of shareholders' capital.

(d) State how this sum will be distributed between the various classes of shareholders.

(You should support your answer by reference to decided cases).

                                                                                  

2. Presentation instructions

(a) The guideline word limit is 2,500 with a maximum of 3,000. Footnotes will not count towards word count totals but must only be used for referencing – not the provision of additional text. Bibliographies will not count towards word totals. Unless specifically required in the assessment instructions appendices are not permitted, other than those required under 5(h) below.

(b) A word count total must be provided on each course work submitted. An inaccurate word count may be dealt with as cheating (an attempt to obtain an unfair advantage). See the cheating and plagiarism guidelines in the Course Guide for further details.

(c) If the word limit is exceeded any work beyond the word limit will not be marked and will thus not be awarded credit.

(d) Course work must be submitted in word-processed form, double-spaced, and correctly paginated.

(e) Standard referencing guidelines must be followed – these can be found in the Course Guide.

3. Assessment criteria

This assessment seeks to assess the following unit outcomes:

1. This assessment seeks to assess the following areas of knowledge and understanding:
9. The rules relating to the management, administration and regulation of companies.

(b) This assessment seeks to assess the following legal skills:

1. ability to assimilate and evaluate complex legal materials from a range of legal sources

(ii)     ability to produce persuasive and cogently argued analyses of a range of contentious issues relating to the general principles of corporate law.          

(c) This assessment seeks to assess the following transferable skills:

(i)  ability to prepare a sustained and lucid argument based on relevant research;

(ii) ability to discriminate between relevant and irrelevant information and argument;

(iii) researching original material in both hard copy and from electronic sources

(d) This assessment seeks to assess the following communication skills:

1. ability to produce a word-processed document with appropriate referencing and pagination;
2. ability to communicate effectively and persuasively in written English

(e) Credit will be awarded for this assessment based on the following criteria:

1. evidence of understanding of the principles of and rationale for corporate law;
2. clarity and structure of argument; reasoned conclusion;
3. use of source materials;
4. presentation

4. Guidance

(a) In attempting this assessment candidates may want to have particular regard to the following issues:

1. Types of Company Contracts
2. Company names
3. Types of shares and rights attached to shares.

(b) In attempting this assessment candidates may want to have particular regard to the following useful sources:

Company Law : De Freitas – Chapters 2,4, 5  and 7

Company Law: Mayson, French & Ryan – Chapters 3  - 10

NB: These references are starting points – they are not exhaustive. You should make full use of other materials to be found by conducting independent hard copy literature searches and on-line searches.

(i) In attempting this assessment candidates should be aware of these common errors and should try to avoid them:

• Simply setting out examples drawn from the existing law;
• Lengthy repetition of the facts of cases;
• Lengthy references to cases without any explanation as to how this develops the argument;
• Uncritical repetition of arguments found in textbooks or consultation papers.

5. Submission instructions

(a) Submission date : Monday 6th December -London Road-Room 105.

(b)Extensions:

(i) Maximum extension - the maximum is 2 weeks. Extensions must be obtained before the submission deadline. Only in very exceptional circumstances will an extension be granted for this maximum length of time. See the Course Guide for further details.

(ii) If an extension has not been obtained assessed work submitted up to 2 weeks after the deadline can only be awarded credit up to the pass mark applicable. After 2 weeks the work will receive a mark of zero. See you course guide for further details.

2. Return date:
3. Candidates must indicate clearly on the front of the coursework their seminar group and seminar tutor (part-time students - class lecturer).

(e) Candidates must not put their names on the course work – student numbers must be used.

(f) Candidates must retain a copy of the assessment submitted – both hard copy and on disk. Further copies of assessed work may be required by the Course Director or Exam Board.

(g) The submitted assessment must be the candidate's own work. All quotations must be credited and properly referenced. Paraphrasing is still regarded as plagiarism if a candidate fails to acknowledge the source for the ideas being expressed. Candidates are referred to the cheating and plagiarism guidelines in the Course Guide.

(h) Candidates are required to attach to their submitted assessments a copy of the first page of each article cited as a source. This applies whether the article is from a hard copy or downloaded from the Internet. This requirement does not apply to law reports (unless specifically requested in the assessment instructions). Copies of articles referred to must be retained.  Candidates may be required to produce these articles if there are concerns about the use of source materials.

6. Feedback

Examples of work submitted may be copied (with student identifiers removed) and distributed to all candidates in order to provide examples of good practice. Please state clearly on your assessment if you are not willing for it to be copied and distributed for this purpose.