London School of Economics and Political Science (LSE)

Modules

27
The law of business organisations

For students who have not yet decided which profession to pursue and are interested in the subject area of accounting and finance, are advised that in order to satisfy some professional bodies you should choose to offer this paper.

The role of law: The nature and sources of law; the distinction between private and public law; the role of law in the creation and maintenance of business organisations; the nature of contract, agency and trusts and their relevance to the operation of business organisations.

Forms of business organisation: The distinction between:

1. individual and collective trading

2. registered and unregistered organisations

3. incorporated and unincorporated organisations

4. public and private companies

5. limited and unlimited companies

6. companies limited by shares and companies limited by guarantee.

The formation and operation of each of the above types of organisation; the nature of the constitution; how funds are raised for the purpose of carrying the proposed business.

Limited liability: The meaning and significance of limited liability; who is entitled to limited liability; the concept of the veil of incorporation and the lifting of the veil; fraudulent and wrongful trading.

Dealings between the organisation and the outside world: The relevance of the constitution to the dealings of the organisation; registered as opposed to unregistered organisations and the doctrine of constructive notice; when the organisation will be bound to contracts and other dealings with third parties – the relevance of principles of agency and the alter ego doctrine; the distinction between void and voidable acts.

Surveillance of actions within the organisation: The nature of the relationship between the organisation and its members; the duties of directors of companies and other executive committee members of different organisations; the ratification of breach of such duties; the enforcement of remedies for such breach and the protection of minorities.

Terminating the organisation: Circumstances leading to the termination of the organisation; different methods of termination; the importance of the distinction between solvent and insolvent organisations.