Английский язык для юристов. Предпринимательское право

Коростелев Станислав

Sometimes, the court will disregard corporate status to impose personal liability on those who have used the corporation to commit fraud or crimes or to harm the public. In such cases, the court will pierce the corporate veil and hold the wrongdoers (usually the controlling shareholders) personally liable for activities committed in the corporation's name.

Corporate financing begins when the original investments are made to set up the corporation. Once the corporation is operating, additional corporate financing may be obtained from earnings, loans, and the issuance of additional shares of stock. The issuing and selling of shares of stock in order to raise capital is known as equity financing, and the equity securities give their owners a legal interest in the assets, earnings, and control of the corporation. The part of a corporation's net profits or surplus that is set aside for the shareholders is known as dividends.

The number of shares and classes of stock that a corporation is authorized to issue are established in its certificate of incorporation. A shareholder who purchases corporate stock invests money or property in the corporation and receives a stock certificate. A stock certificate is written evidence of ownership of a unit of interest in the corporation.

The most common type of dividend is the cash dividend declared and paid out of current corporate earnings or accumulated surplus at regular intervals. A corporation's board of directors has the sole authority to determine the amount, time, place, and manner of dividend payment. In a few instances, a distribution of earnings is made in shares of capital stock. This is called a stock dividend.

The most usual type of corporate stock is common stock. Common stock carries with it all the risks of the business, inasmuch as it does not guarantee its holder the right to profits. The holders of common stock are paid dividends when the corporation elects to make such a distribution.

Classes of stock that have rights or preferences over other classes of stock are known as preferred stock. These preferences generally involve the payment of dividends and/or the distribution of assets on the dissolution of the corporation. Preferred stock may be either cumulative or noncumulative. In general, dividends on cumulative preferred stock are paid every year, or in later years, if any dividends at all are paid by the corporation. Dividends of noncumulative preferred stock are also usually paid each year. However, with noncumulative preferred stock, dividends that are not paid in one year are lost forever. Participating preferred stock is stock that gives its holders a priority on a certain stated amount or percentage of dividends. After a prescribed dividend is paid to the participating preferred shareholders and the common stock shareholders, both participating preferred and common stock shareholders share in any surplus. The holders of nonparticipating preferred stock are not entitled to any distribution of surplus dividends along with common stock shareholders. The rights that preferred shareholders enjoy in regard to dividends do not include the inherent right to receive them. They are merely superior rights to dividends over common stock shareholders, when and if dividends are declared by the corporation's board of directors.

Par value is the value that is placed on the shares of stock at incorporation. This value, which is the same for each share of stock of the same issue, is stated on the corporation's certificate of incorporation. In the case of par value shares, the amount of the capital stock or stated capital is the total par value of all of the issued stock. No par value stock is corporate stock that is issued without any stated price.

Exercise 1. Comprehension questions:

1. Explain the term corporation.

2. Identify the difference between the legal status of the partnership and the legal status of corporation.

3. How is the corporation taxed?

4. What may be the purposes of private corporations?

5. What rights do shareholders have?

6. What is the purpose of corporation by estoppel?

7. What are the duties of promoters?

8. Explain the term novation.

Exercise 2. Find in the text English equivalents to the following:

Правила

внутреннего распорядка; дивиденд, выплаченный наличными; разрешение на создание корпорации; закрытая акционерная корпорация; обыкновенные акции; дивиденды; учредители; цессия прав по обязательству; привилегированные акции; частно-правовая корпорация; представитель в силу закона; сертификат о праве собственности на акции; дивиденд в форме акций.

Exercise 3. Consult recommended dictionaries and give words or phrases to the following definitions:

Закрытое акционерное общество; открытое акционерное общество; уставный капитал; дочерние и зависимые общества; цена размещения акции; бюллетень для голосования; выплата дивидендов.

Exercise 4. Be ready to talk on one of the following topics:

1. Distinguish by their characteristics the major forms of business incorporations.

2. Relate how state incorporation statutes, articles of incorporation, initial organizational meetings, and corporation bylaws each serve to define the legal boundaries within which a corporation may conduct its business.

3. Differentiate among de jure corporation, de facto corporation, and corporation by estoppel.

4. Explain the activities that would cause courts to go behind the legal status of a corporate entity to pierce the corporate veil.

5. Distinguish between common and preferred stock and between par value and no par value stock.

Exercise 5. Make up your own dialog on the case: Instead of forming the corporation before engaging in any promotional activities, a promoter may enter into all contracts and commitments in his own name without referring to a «corporation to be formed», and thereafter assign all his rights and duties to the corporation. If a promoter does so, what are his liabilities under the contracts after they are assigned to the corporation? What problems may the corporation face if it seeks to enforce such a contract against the other party?

Unit 19

Corporate Management and Shareholder Control

Управление корпорацией и акционерный контроль

Высшим органом управления акционерным обществом является общее собрание его акционеров (глава 4 ГК РФ). К исключительной компетенции общего собрания акционеров относятся: 1) изменение устава общества, в том числе изменение размера его уставного капитала; 2) избрание членов совета директоров (наблюдательного совета) и ревизионной комиссии (ревизора) общества и досрочное прекращение их полномочий; 3) образование исполнительных органов общества и досрочное прекращение их полномочий, если уставом общества решение этих вопросов не отнесено к компетенции совета директоров (наблюдательного совета); 4) утверждение годовых отчетов, бухгалтерских балансов, счетов прибылей и убытков общества и распределение его прибылей и убытков; 5) решение о реорганизации или ликвидации общества.

В обществе с числом акционеров более пятидесяти создается совет директоров (наблюдательный совет).

Исполнительный орган общества может быть коллегиальным (правление, дирекция) и (или) единоличным (директор, генеральный директор). Он осуществляет текущее руководство деятельностью общества и подотчетен совету директоров (наблюдательному совету) и общему собранию акционеров.

List of key terms and word combinations:

– cumulative voting – метод голосования акционеров путем сложения голосов по акциям

– derivative suit – производный иск

– direct suit – прямой, непосредственный иск

– insider trading – продажа акций лицами и учреждениями, располагающими конфиденциальной информацией

– managerial control – контроль менеджеров над компанией

– pooling agreements – объединение (напр. прибылей)

– preemptive right – преимущественное право покупки

– proxy – представитель; доверенный; полномочие; доверенность; голос держателя акции, поданный по доверенности или через уполномоченного представителя

– proxy solicitation – ходатайство о представлении доверенности на голосование

– shareholder of record – владелец именной акции, зарегистрированный в книгах компании

– trustee – доверительный собственник; лицо, распоряжающееся имуществом на началах доверительной собственности

– voting trust – аккумуляция в одних руках акций различных лиц на началах доверительной собственности для распоряжения голосами в целях установления контроля над делами компании