Corporate Law in the UK and France

INTERNATIONAL COMPANY LAW
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Table of Contents
INTRODUCTION...........................................................................................................................1
LO 1.................................................................................................................................................1
1.1 Difference between various international sales contract..................................................1
1.2 Forms and functions of EU companies............................................................................1
1.3 Comparing historical development of British Corporate Law and France Corporate Law. .2
LO 2.................................................................................................................................................2
2.1 Corporate governance issues surrounding limited liability arising in financing of
corporation..............................................................................................................................2
2.2 Legal framework and common law position in the UK...................................................3
LO 3.................................................................................................................................................3
3.1 Stakeholder’s rights in corporate governance..................................................................3
3.2 Duties of directors towards company...............................................................................4
3.3 Assessing instances of breaches of corporate and director duties....................................5
3.4 Administrative remedies available for breach of corporate duty.....................................5
LO 4.................................................................................................................................................6
4.1 Information available for identifying financial distress of company...............................6
4.2 Role of company director in avoiding and managing distress situations.........................6
4.3 Recommendation for creditors on financial health of company......................................7
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
Big organizations always emphasise on expanding their business across the world. When
entity makes commercial transactions with other nations then it becomes essential for the firm to
follow international company’s principles and regulations. Present report will discuss differences
between various international sales contracts. It will compare historical development of British
Corporate Law. Furthermore, assignment will discuss stakeholder’s rights in the corporate
governance. Study will describe duties of directors towards company. In addition, it will discuss
information available for identifying the financial distress of enterprise.
LO 1
1.1 Difference between various international sales contract
There are two main sales contract : CISG (United Nations Convention on Contracts for
the International Sale of Goods) and the English law act 1979. Article 31 of CISG explains sales
remains silent at the time of delivery. This contract describes that goods will be delivered when
buyer is available to collect them. Whereas section 29 of English law explains that it is essential
to deliver goods at seller's place of contract remains silent on this matter. English law of 1979
act describe that it is very important to deliver goods within reasonable hours (Contracts for
international sale of goods. 2017). Whereas CISG has no such type of provision. Article 33 of
CISG declare that seller has to present products as per provision of contract of sale but reactive
nature of 1979 act gives right to buyer to claim against seller if there is non delivery of products
on time.
1.2 Forms and functions of EU companies
Corporate business forms give in-depth description on technical matters such as capital
increase/ decrease. Public and private limited as well as partnership are three main forms of EU
companies (Koutsias, 2017). Private limited entities work for raising their profit and expansion
of business unit. On the other hand, public limited organization works for improving the
economic condition of nation and providing satisfactory goods to consumers. Partnership firms
have function to generate reasonable profit. Section 2, clause 68 of Companies Act 2013 state
that private firm needs to have minimum £100 share capital. All these businesses have to follow
legal requirements of company act 2006. This act reduces the burden of directors and helps in
conducting operations in other nations effectively (Donovan and et.al, 2016).
1

1.3 Comparing historical development of British Corporate Law and France Corporate Law
At the end of 19th century, France was allowed to incorporate in England freely because
of free registration system. In medieval times, traders were following common law. In the year
1820, industrial revolution has made changes in corporate law. Limited liability act 1855 was
formed that describe investors to limit their liabilities (Duncan, 2015). In 20th century,
Companies Act 1948 has been made. Foreign investments in France are free from restrictions. In
the year 1791, France revolution has created situation when private companies were free to trade.
But in the year 1793 and 1796, this law was modified. New law was consolidated by using
concession system. In the year 1867, under Loi Sur les Societes, France has adopted new system
of free registration of companies. Whereas, in the UK, initially government has created Royal
charter. At that time, British East Indian Company has got permission to trade with other
countries. In 1719, London assurance corporation act was made by authorities (Hannigan, 2015).
In the year, CA 1948 was formed in which it was declared that director can be removed by
stakeholder’s voting system.
French limited firms protect directors from certain liability claims. Whereas, UK
companies do not protect directors from liabilities and if director makes some mistakes or
breaches duties then individuals will be responsible to get punishment for the same. Corporate
tax rate is lower in UK than to France. In the year 2013, authorities have declared that companies
will have to pay 20% of profit for tax (Coffee Jr, Sale and Henderson, 2015). Whereas, it is
33.1% in France.
LO 2
2.1 Corporate governance issues surrounding limited liability arising in financing of corporation
One of the strategic major issues faced by company surrounding limited liabilities is to
add value by changes in financing. As if condition of financial market gets changed then it
becomes difficult for entity to manage its operations properly. Corporate governance makes
decision of making financial innovation and economic closures in market. For that, authorities
make rules and regulations (Bayern and et.al, 2017). Financial innovations create issues in
capital structuring and financial strategies of business. In such condition, overall profit of the
firm gets reduced.
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