A person can become a member of the company by (i) allotment, (ii) transfer, (iii) transmission, (iv) subscribing to the memorandum and (v) estoppel (holding out). Except in the case of subscription, there are two conditions of membership: agreement to become a member, and entry on the register of members. Transmission is where the shares are passed to another on the death of a former shareholder and estoppel arises where a person allows his name to appear in the register of members without requesting a correction of the register.
Ceasing to be Member
A person ceases to be a member of the company by: (i) transfer, (ii) forfeiture or surrender, (iii) sale by the company under its power of lien, (iv) transmission and (v) redemption of redeemable shares.
Transfer of Shares
Unless the company’sarticles provide otherwise, every shareholder has a right to transfer his shares freely. A share certificate is prima facie evidence of title.
The company has a duty to have ready for delivery a certificate of all shares within two months of allotment or of the date of the lodging of a transfer.
Restrictions on transfers
The articles of private companies may allow the directors to refuse to register transfers of shares.
Public companies can have restrictions on free transferability except if their shares are dealt with on the Stock Exhange or the Alternative Investment Market (AIM). The most frequent restriction is the preemption clause which provides that shares cannot be transferred to a non-member as long as there is an existing member prepared to purchase them at a fair price.
The Register of Members
Every company must keep a register of members. The register must be kept at the registered office or at the place where it is made up; the Registrar of Companies must be informed where it is kept. The register must be available for inspection and members may obtain a copy of the register or part of it on the payment of the appropriate charge.
3. Questions.
1. What is a share?
2. What the principal right of a shareholder?
3. What is the difference between registered and bearer shares?
4. What are the main classes of shares?
5. How can a person become a member of the company?
6. In what cases does a person cease to be a member of the company?
7. How can transfer of shares be restricted?
8. Where must the register of members be kept?
Find the following sentences in the text.
1) Акционеры – владельцы компании, но они владеют активами компании, которые принадлежат компании, как отдельной независимой правовой единице.
2) Акция – это единица измерения интересов члена компании.
3) Акции могут быть заложены в качестве обеспечения для получения ссуды.
4) Прежде всего, все акции обладают одинаковыми правами.
5) Привилегированные акционеры всегда имеют приоритет перед обычными акционерами на выплату фиксированного дивиденда.
6) Существуют два условия членства: согласие стать членом и занесение в список членов.
7) Устав закрытых акционерных компаний может позволять директорам отказаться регистрировать передачу акций.
8) Каждая компания должна вести список членов.
Recite the main point of the text.
Unit 6. Consumer Protection
Words to be remembered.
merger – поглощение, слияние компаний
rogue – жулик, мошенник
contravention – нарушение (закона, права), противоречие (закону,
праву)
assurance – заверение, гарантия
accessory – соучастник (преступления)
contempt – неуважение, оскорбление (органа власти)
punish – наказывать
punishable – наказуемый
imprisonment – тюремное заключение
fine – штраф
void – недействительный
injure – причинять вред
refrain – воздерживаться от чего-либо
injury – вред, ущерб
Text for reading.
Aims of Competition Law
Competition law regulates the market power of companies and individuals, restraining them from entering agreements restricting competition by fixing the price of goods or services and dividing the available market between them. It also regulates mergers and prevents dominant companies from abusing their position through excessive pricing or discrimination against customers. This interference with the free market is in the interests of the consumer.
The Fair Trading Act 1973
This has been called the most comprehensive measure ever passed to protect the economic interests of the consumer. The Act establishes the position of the Director General of Fair Trading (DG), the Consumer Protection Advisory Committee (CPAC) and reconstitutes the Monopolies and Mergers Commission (MMC).
Under the Fair Trading Act the DG has the following main duties:
(i) regulating monopolies, mergers and restrictive and uncompetitive practices;
(ii) supervising trading practices;
(iii) reporting bad trading practices to the DTI and making recommendations;
(iv) taking action against traders who are persistently unfair to the consumer;
(v) encouraging trade associations to produce voluntary codes of practice;
(vi) publishing information and advice to consumers.
Control of Rogue Dealers
Under Part III of the Act the DG has a “bloodhound” as well as a “watchdog” function with regard to persons carrying on a business who persist in a course of conduct which (a) is detrimental to the interests of UK consumers, whether economic or relating to health, safety or otherwise, and (b) is to be regarded on the criteria stated as unfair to consumer. These criteria involve either contraventions of duties, prohibitions or restrictions imposed by the criminal law and also breaches of contract, or other breaches of duty enforceable by civil proceedings.
The DG’s first line of attack is to obtain a satisfactory written assurance that the trader will refrain from continuing the course of conduct and from carrying on any similar course of conduct in the course of that business. Should the DG fail to achieve the written assurance or if such an assurance is broken, he may either bring proceedings in the Restrictive Practices court or, in smaller cases, in the county court for the district in which the practice is carried on. The power of the courts specified include (a) the obtaining of an undertaking to refrain from the specified course of conduct or (b) the making of an order on similar terms. The court also has power to obtain undertakings from or make orders against accessories, directors or officers of companies and other members of a group of interconnected bodies corporate. Legal aid is generally available to defend these actions and appeals lie to the Court of Appeal. Breach of an undertaking given or order made constitutes contempt of court punishable by imprisonment or a fine.
Monopolies
The whole area of the law is now within the Fair Trading Act 1973 under control of the DG and the MMC. This consists of not less than ten and not more than 27 members appointed by the Secretary of State. Its principal functions are to investigate and report on any question referred to it under the Act.
Mergers
The power to order that a merger shall not go ahead lies with the Secretary of State; the duty to keep situations under review where there might be a merger situation calling for investigation is on the DG. Many companies seek the confidential guidance of the OFT as to whether the DG might advise the Secretary of State to make a merger reference to the Commission. It is the duty of the DG to make a recommendation to the Secretary of State, who will in turn make any reference to the Commission – the DG may not refer merger situations personally. The Secretary of State may make a reference when it appears to him that two or more enterprises (one at least in the UK) have ceased to be distinct enterprises. He must also be of the view that, as a result, either a monopoly situation is or would be created (that is, one-quarter of the market would be supplied) or the value of the assets taken over exceeds £5m. If the merger has already taken place, it must have been within the six months prior to the reference.
The procedure is that the DG as Chair of the Interdepartmental Mergers Panel is normally able to complete his preliminary investigations and advise the Secretary of State within four weeks. If the Secretary of State decides to make a reference, the Commission must report within six months, with a possible extension of a further three months. It normally reports within three to four months. The Commission must then both establish that a merger situation exists and that it operates or may be expected to operate against the public interest. The Secretary of State has power to make orders as a result but more usually the DG is requested to obtain undertakings.
As regards newspaper mergers, the transfer of a newspaper or its assets to a newspaper proprietor whose own newspapers have an average daily circulation of 500 000 (including that of the newspaper concerned in the transfer) is unlawful and void unless written consent is given by the Secretary of State.
The Consumer Protection Act 1987
Under the Act a person who is injured by a defective product has a right of action against the manufacturer irrespective of whether or not the manufacturer was negligent. The basis of the claim is s.2, which requires the plaintiff to establish four things:
(a) that the product contained a defect,
(b) that the plaintiff suffered damage,
(c) that the damage was caused by the defect,
(d) that the defendant was producer, own-brander or importer into the EC of the product.
Defective product
A product is defective ‘if the safety of the product is not such as persons generally are entitled to expect’. Safety includes risks of death or personal injury but also extends to cover risks of damage to property. In determining whether a product is defective all the circumstances must be taken into account including:
(a) the manner in which, and purposes for which, the product has been marketed, its get-up, the use of any mark in relation to the product and any instructions for doing or refraining from doing anything with the product;
(b) what might reasonably be expected to be done with or in relation to the product; and
(c) the time when the product was supplied by its producer to another; and nothing in this section shall require a defect to be inferred from the fact alone that the safety of a product which is supplied after that time is greater than the safety of the product in question.
Products are widely defined and include goods, electricity, gas and vapours. There are three exceptions: land, primary agricultural products and unprocessed game. The definition of land includes “things comprised in land by virtue of being attached to it”. This includes buildings and excludes builders from liability under the Act for any defects. Agricultural products are excluded from liability unless they have undergone an “industrial process” giving them “essential characteristics”. This presumably includes any processing of the product such as freezing, canning or otherwise transforming the product – meat into sausages, potatoes into frozen chips – when the processor is the producer for liability purposes, not the farmer.
Questions.
1. How does Competition law protect the interests of the consumer?
2. What are the main duties of the Director General of Fair Trading (DG)?
3. How does DG act to control rogue dealers?
4. How many members does the MMC consist of?
5. In what situations may the secretary of State make a merger reference to the MMC?
6. What things must be established by the plaintiff in order to make a claim under the Consumer Protection Act 1987?
7. In what case is a product considered defective?
8. What products are excluded from liability under the Consumer Protection Act?
