Unit 4: Company Law Fundamental Changes in a Company
Reading 1: Intro to Changes in a Company • This unit deals with those changes in a company that are of particular relevance to lawyers, i.e. changes that are potentially controversial and tend to be tightly regulated by law. These include liquidation (concluding a company’s affairs and selling its assets) of a company and constitutional amendments (such as changing a company’s name or capital structure). • One such amendment is discussed in Listening 2 and Reading 3: increasing the authorized share capital of a company by amending its capital clause (a clause in a company's memorandum of association that states the amount of the company's equity and its division into shares)
Reading 1: Intro to Changes in a Company • Often the most important fundamental changes to a company involve buying another company or being bought itself. • The three ways of buying a company are… • A. acquisition of controlling shares • B. merger • C. sale of substantially all assets* *also a de-facto merger; discussed in Reading 4
Reading 1: Intro to Changes in a Company • acquisition of controlling shares: the acquiring company (acquirer) has control over the acquired company (target) through share purchase, however, the two companies remain to separate legal entities • merger: is similar to the former except that the acquired company ceases to exist as a distinct legal entity • a sale of substantially all assets: does not involve shares, but rather the company’s assets (property, equipment, and intangible assets such as trademarks or brands)
Language Notes: Prepositions • In contrast to... • unlike… • as opposed to… • ex. “In contrast to a hostile takeover, in a friendly takeover, the management are in favor of the merger.” • ex. “Unlike under common law, under the civil law system precedents take a back seat to interpretation of the written law.” • ex. “I much prefer sutlac – as opposed to gullac.”
Language Notes: Prepositions • Merger and Consolidation • In everyday English, merger is often taken to involve a “merger of equals” – two companies becoming one new company with a new name. (see:Wikipedia“merger”) However, in legal English when this happens it is called a consolidation. • In legal English, a merger is often described as an “acquisition” or “takeover.” The difference is noted in the use of prepositions: • Everyday English: “a merger between x and y”; “a merger of x and y” • Legal English: “a merger of x into y”; “x has merged into y”
Key Terms 2: Pair Work Use the prepositions to discuss the five vocabulary words and their opposites. (10 min)
Grammar: Noun Clauses • Clause construction is an important component of English. A clause is basically a group of words that contains a subject and a verb yet may or may not be a sentence. • One important type of clause is a noun clause, which takes the place of a noun, and which will briefly be discussed here. Ex. “I don’t know the procedure.” (subject= “I”; verb = “do know”; object = “the procedure”) Ex. “I don’t know what to do.” (subject=“I”; verb=“do know”; object=“what to do”
Grammar: Noun Clauses Ex. “They are required by law to provide (the documents).” They are required by law to provide (what was asked for).” Ex. “A lawyer must explain (the procedures).” “A lawyer must explain (what procedures are necessary).” Ex. “I don’t know (where he is going) or (when he will come back).” Ex. “To be a judge, you must learn (how to listen).”
Language Notes: Vocabulary for Listening 1 Due diligence: a fair attempt or reasonable care or attention to a matter (issue). In legal English it has come to refer to the process of gathering information before a fundamental change in a company To verify: to affirm something formally or under oath Intellectual property: refers to products of the intellect which has some commercial value, such as patents, business methods or industrial processes Warranty: a written statement of assurance To attest to (something): is to confirm that it is genuine, typically in writing Indemnities: actions whereby someone is compensated fairly for what they have lost or is protected (i.e. insured against) from any such future losses
Listening 1: Explaining the legal aspects of an acquisition A lawyer’s involvement in the mergers and acquisitions of companies often entails (involves) communicating with the parties (entities) concerned: i.e., a lawyer may explain to the owner of a company what procedures have to be completed in the course of an acquisition or inform shareholders how the changes resulting from a merger will affect them.
Text Analysis: Beginning a presentation In Listening 1, the lawyer began his presentation by introducing himself and his topic. After this, he provided an overview (summary) of the points that he planned to cover (talk about; deal with). He also informed his listeners about general matters (issues) that are related to his presentation, such as whether there would be a break or if questions were permitted.
Reading 2 • Scan the text and discuss in pairs the two questions in part 10. • (8 min)
Listening 2: • Checklists are useful tools for making sure that proper procedures are being followed and that the necessary documents are being drawn up (written). Once an issue has been addressed (discussed; made known), the box is ticked to confirm that the particular matter has been considered. • While listening, complete the boxes with the correct words or phrases.
Reading 3: Meeting Minutes • When fundamental changes are made to a company, meetings must be convened (brought together) so that issues can be voted on. The official record of such a meeting is called the minutes.
Language Use 2: Collocations a meeting a resolution
Winding up the Lesson… If time in class, refer to Standard Phrases for opening and closing letters and emails …also, Language focus pp. 60,61 Assignment: Refer to Text analysis on p. 51. Begin to think about a short presentation on an area of your expertise or on a similar topic of your choice. It should be about 7 minutes and include a short Powerpoint or Prezi. They will be presented in Weeks 7 and 8. They wll be then posted on the class Wiki.