70417 Corporate Law
Warning: The information on this page is indicative. The subject outline for a
particular session, location and mode of offering is the authoritative source
of all information about the subject for that offering. Required texts, recommended texts and references in particular are likely to change. Students will be provided with a subject outline once they enrol in the subject.
Subject handbook information prior to 2017 is available in the Archives.
Credit points: 8 cp
Result type: Grade and marks
Requisite(s): 70317c Real Property AND 70517c Equity and Trusts
The lower case 'c' after the subject code indicates that the subject is a corequisite. See definitions for details.
Anti-requisite(s): 70107 Principles of Company Law AND 79014 Applied Company Law
Description
Corporations are an all-pervading presence in contemporary society. An understanding of corporate law is essential for students intending to enter a commercial legal practice or aspiring to a senior appointment within a company. Awareness of the different rights and responsibilities of corporate stakeholders, such as directors, employees, creditors and shareholders, is also important for any prospective lawyer, since so many legal issues involve one or more corporations as parties to the action or transaction.
This subject is an introduction to the field of corporate law and corporations, and their role in commerce and society. It looks at that mode of business activity conducted in the form of a vehicle known as a company or a corporation and asks 'What/why/how/who is it?' and considers the various actors involved: shareholders, directors, creditors, regulators and the public, and the web of relationships between these parties. It also explores the legal system and laws, corporate laws, and how they provide dispute resolution mechanisms. In addition, the increasing role of laws as regulatory and prescriptive is explored with a tilt towards understanding and utilising theoretical models of the body corporate and public policies.
This subject is taught from a student-centred perspective, with an emphasis on case and policy analysis, which may involve lectures, seminars and online exercises. It is Australian-laws focused and cases chosen for readings and discussion reflect this bias.
Subject learning objectives (SLOs)
Upon successful completion of this subject students should be able to:
| 1. | Correctly apply relevant legislative and general law rules to solve legal problems involving the rights and liabilities of members, creditors and officers of Australian companies, and communicate advices to hypothetical clients. |
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| 2. | Critically evaluate the adequacy of Australia???s current framework of corporate law, and the scope for reforms. |
| 3. | Clearly articulate and critically evaluate the ethical issues that may arise from a company???s actions and their interaction with commercial issues, and identify solutions to manage these issues. |
| 4. | Assess their own understanding of the perspectives of relevant stakeholders that may be impacted by a company???s decision-making. |
| 5. | Identify and use appropriate information resources to locate relevant and up-to-date legal materials to assist in resolving practical legal problems relating to the decision-making processes and/or actions of Australian companies. |
| 6. | Articulate the legal, commercial, political and economic factors that drive changes in Australian corporate law, and reflect upon how these factors may impact upon Australian corporate law in the future. |
Course intended learning outcomes (CILOs)
This subject also contributes specifically to the development of the following graduate attributes:
- Legal Knowledge
A coherent understanding of fundamental areas of legal knowledge including the Australian legal system, social justice, cultural and international contexts and the principles and values of ethical practice. (1.0) - Ethics and Professional Responsibility
A capacity to value and promote honesty, integrity, accountability, public service and ethical standards including an understanding of approaches to ethical decision making, the rules of professional responsibility and, an ability to reflect upon and respond to ethical challenges in practice. (2.0) - Critical Analysis and Evaluation
A capacity to think critically, strategically and creatively including an ability to identify and articulate legal issues, apply reasoning and research, engage in critical analysis and make reasoned choices. (3.0) - Self management
The ability to implement appropriate self-management and lifelong learning strategies including initiating self-directed work and learning, judgment and responsibility, self assessment of skills, personal wellbeing and appropriate use of feedback and, a capacity to adapt to and embrace change. (6.0)
Teaching and learning strategies
Principles of learning and teaching for this subject
These are the principles that shape learning in this subject:
- Learning will be more effective when it is active, when you are actively engaged in the learning process. That requires prior preparation on your part and regular participation in seminars.
- The value of interactive learning and teaching lies in its encouragement of higher order thinking skills such as analysis, synthesis and critical evaluation. These are part of the subject objectives identified above
- Learning is based on individual student preparation and exploring understanding in discussion with other students both in and out of class. Cooperative learning with peers out of class is strongly encouraged, to develop interpersonal, professional and cognitive skills as well as friendships and enduring connections. (Extend friendship to your fellow students as your seminar leaders do to each of you). Learning and teaching is at its core a humanistic enterprise.
- Learning is most effective when you are stretched and challenged, in class and through assessment tasks.
- Learning will be most effective and personal goals best achieved when the learning and teaching process is shaped by the past experience each student brings to the subject and by their future ambitions.
These principles are applied in the following learning strategies:
Strategy 1 (independent learning): Student learning outside the classroom is a key learning strategy in this subject. You will do a large part of the learning in this subject by undertaking all of the pre-class activities including listening to the weekly podcast recording, watching any audiovisual material, studying and reflecting upon the assigned readings and undertaking online quizzes. Students will need to complete a range of tasks in preparation for seminar classes:
A weekly, one hour podcast recording made available on UTSOnline to students at least 1 week prior to face to face seminars. Students must listen carefully to the podcast before attending the seminar.
A practice online quiz before some seminars, and/or view audiovisual material before seminars
Prescribed readings (as set out in the program below) and attempt the seminar questions (as listed in the Seminar Guide on UTSOnline) before each seminar.
Strategy 2 (online activities): The subject incorporates a weekly podcast recording (available UTSOnline). The podcast recordings build upon prior student reading of assigned material so that the seminar does not focus on knowledge transmission but is devoted to strengthening skills of comprehension, analysis, application to problems, and appraisal of policy. UTSOnline will provide a range of mixed media materials to support deeper learning and engagement by students by highlighting ethical issues and legal problems in a commercial context with a view to advising a range of potential clients in a corporate legal practice environment.
Strategy 3 (interactive seminars): The seminars involve interactive class discussion with their peers and teachers about pre-assigned problems, exercises, audio-visual material and readings. Students will learn through collaborative practice-based exercises in seminars that will involve a range of common tasks that corporate lawyers are typically involved in, including meeting simulations, client advice simulations, drafting exercises and small group debates and discussions. Students undertake a variety of collaborative practical exercises including:
- analyse and discuss pre-assigned factual scenarios to learn about how decision-making processes within corporations are used to resolve ethical and commercial considerations
- complete an Australian Securities and Investment Commission form in order to undertake the process of applying to form a company
- undertake exercises designed to allow students to learn about the assessment criteria in the subject. Students will assess a pre-prepared legal advice on a factual scenario and also grade their peer’s legal advice in a low stakes peer feedback exercise.
- examine and, discuss pre-assigned factual scenarios and provide legal advice on those factual scenarios;
- examine and discuss pre-assigned policy-focused questions designed to allow students to critically evaluate the corporate law framework and the scope for reform of corporate law.
Students will also have the opportunity to prepare for the legal advice assessment task by discussing and providing legal advice on past assessment questions.
Strategy 4 (feedback): Students will receive feedback on assessment tasks from the markers and will benefit from ongoing peer and staff feedback through in-class group and individual activities. Students will be provided with a short legal advice exercise in the first two weeks of teaching which will be peer reviewed in class and discussed together with an exemplar from a prior semester to assist students to develop and refine their legal advice writing skills within a corporate law practice context.
Strategy 5 (assessment): The undertaking of assessment in this subject is designed to assess how well students can apply their knowledge and skills derived from their collaborative learning both in class and online to practical hypothetical problems that are commonly faced by corporate lawyers. The assessment tasks will help students develop and improve their professional attributes and knowledge through problem-solving skills and the provision of legal advice both individually and in groups. The assessment also assists students to develop a detailed understanding of corporate decision-making processes and the role that lawyers can have in those processes.
Subject Delivery
Learning in this subject involves a one-hour podcast before each three hour seminar. Students must attend and actively participate in seminars.
Seminars for this subject commence in Week 1. Students are expected to remain in their seminar groups for the duration of the semester.
The timetabled activities for this subject can be found on the UTS timetable online at http://timetable.uts.edu.au. Students enrolled in this subject can view their personalised timetable in My Subject Activities online at https://mysubjects.uts.edu.au.
Content (topics)
This subject introduces the core doctrines of company (or corporate) law (the terms company and corporation will be used interchangeably except where the distinction between them is relevant). It also introduces doctrines of partnership law, one of the foundation stones of Australian company law. These topics will build on students’ prior studies of contract, property, tort, and agency law as well as the law of fiduciary duties.
The subject contains the company law topics required for an accredited law degree. These topics are the basic ones common to all company types.
In teaching this subject, we seek to balance the needs of those who wish to specialise in this area of law and those whose interest is less central to their career plans. We aim to develop your capacity to understand and apply the principles, goals and techniques of corporate law and ability to appreciate the important legal, social and moral questions that the corporation peculiarly poses for all of us. In seeking to achieve this aim, we provide and apply distinct theoretical frameworks to the principles of corporate law. Students will critically assess corporate law principles by applying these theoretical positions to real life commercial problems.
Issues specific to stock exchange listed companies are not covered in any depth in this subject but are treated in the subject 77901 Securities Markets Law. These excluded topics include the regulation of securities markets, corporate fundraising and company takeovers and some specialist topics in equity finance. A brief overview of corporate insolvency is also provided, with a more detailed treatment given in the subject 76115 Insolvency.
This subject comprises the following distinct components or themes.
THEME 1- CONTEXTUAL AND THEORETICAL ISSUES
The subject commences by introducing the idea of a corporation and the role of corporate law. It looks at the structure of the Corporations Act, some of the justificatory theories behind the design of corporate law, and some critical approaches to the analysis of corporate law. As the subject progresses, and your familiarity with corporate law doctrine and theory grows, this model will become more sophisticated in design and application. This part of the subject allows us to focus on some of the key stakeholders in a company, especially those people who decide to set up, invest in, deal with and eventually close down a company. Obvious stakeholders include shareholders and directors; others include creditors, employees, suppliers to the company and the wider community on which it depends for non-financial inputs. We will use different (sometimes competing) theories of corporate law to assess the basic question of the separation of ownership and control that exists within many corporations (particularly large public corporations). Corporate social responsibilities will also be canvassed.
THEME 2- PARTNERSHIPS
The subject then contrasts the principal characteristics of the corporate structure with those of the partnership form of business association. The partnership is important in its own right — it is the most common form of business association — but it is also the business form from which the principal characteristics of the English and Australian registered company are drawn. Some other forms of unincorporated association, pursued for business or for non-profit goals, are also briefly introduced.
THEME 3- COMPANIES FORMED UNDER THE CORPORATIONS ACT
This theme examines the concepts that form the basis for the incorporation of business enterprises under the Corporations Act 2001 (Cth). We will discuss the legal nature of share capital and provide an overview of the basic types of corporations, and the corporate organs and decision-making processes that operate within corporations. This theme also includes an introduction to corporate insolvency law. Apart from providing a brief general introduction to insolvency law processes, we will examine the challenges posed to traditional notions of corporate law that arise when the company is unable to pay all of its debts.
THEME 4-CORPORATE EXISTENCE-CHARACTERISTICS AND CONSEQUENCES
The fourth part of the subject examines the separate personality (or persona/identity) ascribed to the corporation and its independence from that of the various stakeholders or other actors in the corporate enterprise. In addition to the concept of corporate personality, we explore when that personality is treated as a facade and an apparently corporate act is regarded as an act of one of the corporate stakeholders (this process is known as lifting or piercing the corporate veil). This part also requires us to re-examine the scope of the legal protection investors rely upon when they invest in a corporation through the doctrine of limited liability. A further aspect of corporate personality concerns how doctrines of legal liability are applied to this fictitious legal person. We pose basic (but fundamental) questions: how does a corporation, being an artificial entity, act? How does it sign documents and incur contractual and criminal liability?
THEME 5-CORPORATE DECISION-MAKING
This theme builds on Theme 4 and explores in detail how the power to make particular decisions is allocated between participants in the corporation (principally, the board of directors and the shareholders as a collective group) and the degree of independence each group enjoys with respect to the exercise of their particular powers. This topic raises difficult questions concerning the apparent agency relationship between shareholders (as owners of capital) and directors/executives (as managers of that capital). The important role played by the corporate constitution in dividing powers between the different corporate organs will also be discussed. The question of how companies are funded will also be addressed by examining public and private fundraising programs through the use of prospectus documents and through private placements.
THEME 6-CORPORATE GOVERNANCE
The allocation and exercise of corporate decision-making powers is but part of the wider topic of corporate governance, namely, processes by which a company is directed and controlled. The final and most substantial theme of the subject deals with two other topics in corporate governance: the duties and liabilities imposed on directors and senior managers and the protection of minority shareholders and other corporate stakeholders. At the centre of this subject is the idea of the corporation and the role and shape of corporate law and regulation. Is the corporation best understood as simply a series of contracts between those who have an economic interest in it? Is the role of the law simply to provide default contractual protections to serve the interests of the providers of capital? Or does it have an entity or institutional status that is independent of those interests, and which asserts a claim to attention in its own right? Put another way, is the corporation a predominantly private association, subject to regulation on the same basis as natural persons; or has it assumed a role or significance in its larger public formations that changes the way we should view its purposes, character and regulation? What is the measure, or content, of corporate purpose and responsibility? Is it to maximise shareholder wealth with the only limit that set by the general legal system? Do the answers to these questions change when we shift the focus from the nation state to the international dimension of corporate activity? These are some of the important questions that underlie this subject.
Assessment
Assessment task 1: Advanced seminar participation
| Objective(s): | This task addresses the following subject learning objectives: 1, 2, 3, 4, 5 and 6 This task contributes specifically to the development of the following graduate attributes: 1.0, 2.0, 3.0 and 6.0 |
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| Weight: | 10% |
| Criteria: |
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Assessment task 2: Ethics reflection
| Objective(s): | This task addresses the following subject learning objectives: 3 and 4 This task contributes specifically to the development of the following graduate attributes: 2.0, 3.0 and 6.0 |
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| Weight: | 15% |
| Length: | 2 pages maximum (see Further Information) |
| Criteria: |
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Assessment task 3: Legal Advice
| Objective(s): | This task addresses the following subject learning objectives: 1, 3, 5 and 6 This task contributes specifically to the development of the following graduate attributes: 1.0, 2.0 and 3.0 |
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| Weight: | 25% |
| Length: | 1500 words including footnotes (if any). |
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Assessment task 4: Final exam
| Objective(s): | This task addresses the following subject learning objectives: 1, 2, 3, 4, 5 and 6 This task contributes specifically to the development of the following graduate attributes: 1.0 and 3.0 |
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| Weight: | 50% |
| Length: | 3 hours |
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Required texts
Corporations Legislation 2017
AND either
Jason Harris, Company Law: Theories, Principles and Applications (LexisNexis Butterworths, 2nd ed, 2015)
or
Paul Redmond, Corporations and Financial Markets Law (Thomsonreuters, 6th ed, 2013).
All 3 major publishers (Thomson Reuters, LexisNexis Butterworths and CCH) publish annual editions of the Corporations Act 2001 (Cth). Each of these volumes contains the legislation with brief supporting notes, although the Thomson Reuters version also provides a detailed annual review and case annotations. The LexisNexis Butterworths version ‘practitioner edition’ also has brief case annotations.
PLEASE NOTE: Old editions of the books and legislation are not suitable for this subject.
THE IMPORTANCE OF LEGISLATION: Both the reading materials and lectures make extensive reference to legislation, particularly (but not exclusively) the Corporations Act 2001 (Cth). Sometimes these references are in passing and sometimes they are in detailed analysis. You must ensure that you read and understand all legislation referred to and have it on hand during the examinations. In previous semesters many students have received poor marks because when problem solving they have sought to rely upon general statements of statutory provisions rather than studying the primary source. Don't let this happen to you !!!
References
General reading on corporate law
- RP Austin and IM Ramsay, Ford's Principles of Corporations Law (LexisNexis Butterworths, 16th ed, 2015) (the most thorough and comprehensive reference on Australian corporate law (also available on-line via the UTS Library))
- RP Austin, HAJ Ford and IM Ramsay, Company Directors: Principles of Law and Corporate Governance (LexisNexis Butterworths, 2005) (a detailed treatment of the legal rules of corporate governance, directed at the needs of specialist legal practitioners)
- E Boros and J Duns, Corporate Law (Oxford University Press, 3rd ed, 2013) (a succinct discussion of key corporate law principles)
- J Corkery and B Welling, Principles of Corporate Law in Australia (Scribblers, 2008) (a concise discussion of key corporate law principles and cases)
- P Hanrahan, I Ramsay and G Stapledon, Commercial Applications of Company Law (CCH, 2014) (a good introduction to the subject but written with business, not law, students in mind)
- J Harris, A Hargovan and M Adams, Australian Corporate Law (LexisNexis Butterworths, 4th ed, 2013) (a good introduction to the subject but written with business, not law, students in mind)
- P Lipton, A Herzberg and M Welsh, Understanding Company Law (Lawbook Co, 17th ed, 2013) (a good introduction to the subject but written with business, not law, students in mind)
- R Tomasic, S Bottomley and R McQueen, Corporations Law in Australia (Federation Press, 2nd ed, 2002) (this book is good at putting the subject into context although given its publication date does not include recent developments)
Specialist online commentaries include:
- R Austin and A Black, Austin and Black's Annotated Corporations to the Corporations Act (LexisNexis AU)
- R Barrett (ed), Robson's Annotated Corporations Act (LegalOnline)
- LexisNexis AU, Australian Corporations Law Principles and Practice
Other resources
Useful Websites
- Australian Securities and Investments Commission (www.asic.gov.au)
- Corporations and Markets Advisory Committee (www.camac.gov.au)
- Parliamentary Joint Committee on Corporations and Financial Services (www.aph.gov.au)
- Melbourne Law School Centre for Corporate Law & Securities Regulation (http://cclsr.law.unimelb.edu.au)
