Topic: Company law coursework assignment

Assessment Information

This assignment is designed to assess learning outcomes:

Critically evaluate the legal principles relating to registered companies
Critically evaluate and review the conceptual underpinning of various statutory provisions and common law rules governing registered companies
Critically evaluate and review information from a range of sources and utilize that ability to analyse real and hypothetical situations involving registered companies
Use highly specialist research skills to critically review and consolidate a body of knowledge and to critically evaluate the shortcomings and deficiencies of existing company law and suggest possible reforms (where applicable).

This assignment is an individual assignment.

You MUST answer the PROBLEM QUESTION in Section A (60%) and attempt to answer only ONE question in Section B (40%)

Compulsory 2000

Problem Question (60%)

Op-Tech Ltd (‘the company’) is a high-tech company incorporated in England on 1st October 2018. It manufactures night-vision equipment for sale to the military around the world. The company was formed to take over the business that had previously been run as a partnership by its two founders Alex and Peter. To save costs, Alex and Peter purchased a ‘shelf company’ that had articles in the standard form and then changed its name to ‘Op-Tech Ltd’. Both men were immediately appointed directors of the company. They transferred the entire business of the partnership to the company in payment for the 500 shares with a nominal value of £1,000 each that the company issued to each of them. The business was independently valued at £1m as at the date of transfer (1st October 2018).

The company has recently experienced a rapid expansion in its order-book but has been unable to secure a bank loan to finance the expansion. It has, however, been approached by Gilmorehill Private Equity LLP (‘GPE’), which has expressed an interest in investing in the company. GPE’s proposal is to invest £2m in the company as follows:

GPE to subscribe £1.5m for the issue to it of a new class of ordinary shares (B shares) with the holder of the shares to have the right to appoint a director. GPE propose a subscription price 20% above that paid by Alex and Peter to reflect the recent growth in the business. The ordinary shares held by Alex and Peter would be re-designated as A shares.

GPE to subscribe £0.5m for a new issue of 5% redeemable preference shares with a nominal value of £1. These shares will carry no votes and can be redeemed at par by the company at any time after the second anniversary of their issue.

GPE is prepared to grant Alex and Peter ‘tag along’ rights should GPE sell its ordinary shares, but in return they must accept that GPE will have ‘drag along’ rights in respect of such a sale.

You are asked by Alex and Peter to advise them as shareholders in respect of these proposals. You are required to set out your advice in a memorandum (with a word-limit of 2,000 words) accompanied by a draft of the amendments to the articles of association that would be required to give effect to GPE’s proposal.

In your advice, you should also consider whether Op-Tech Ltd should become a public company in order to issue shares to GPE.

Your draft of the articles must be by way of ‘track changes’ to the ‘Word’ version of the standard articles posted to Aula (the Model Articles for Private Companies Limited by Shares contained in the Companies (Model Articles) Regulations 2008, SI 2008/3229).

While your advice may refer to alternative terms for the transaction, your draft of the articles MUST BE BASED ON GPE’s PROPOSAL.

The draft Model Articles for Private Companies Limited by Shares is in the ‘Assessment’ section on Aula.

AND EITHER (40%) 1500 words

Option 1

  1. What are the rationales for separate legal personality and limited liability? Are they convincing, or mostly seen as excuses for corporate fraud?

OR

Option 2

  1. Insolvency legislation in England treats floating charge holders less favourably than fixed charge holders. Discuss.

OR

Option 3

  1. Directors’ general duties are codified in the Companies Act 2006 (CA 2006). Explain with reference to legislation and case law:

a) who are directors for this purpose;
b) to whom are the duties owed; and
c) the relationship with the common law duties.

OR

Option 4

  1. Courts are not well placed to make business judgements. ‘The UK’s derivative remedies lead to poor and inconsistent judicial decisions, and cause fear within the business community.’ Discuss.

Criteria for Assessment
.
This assessment is intended to test your ability to:
Critically identify and analyse the legal and theoretical issues raised by the quotation and the question posed.
Carry out the necessary research so as to fully inform your answer.
Critically demonstrate in your writing that you understand and have applied your research.
Make appropriate use of case law and academic journal articles.
Critically explain your reasoning in a clear and cogent fashion.
Apply the law to a given practical scenario.

Word Count

The word count is 3500.

There will be a penalty of a deduction of 10% of the mark (after internal moderation) for work exceeding the word limit by 10% or more.
The word limit includes quotations and citations but excludes the references list.

Type of service: Academic paper writing
Type of assignment: Coursework
Subject: Law
Pages/words: 12/3300
Number of sources: 6
Academic level: Undergraduate
Paper format: OSCOLA
Line spacing: Double
Language style: UK English

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