Company Law

UNIT 5: COMPANY LAW
Listening:
What is a corporation in simple words?
A large company, big company.
What are the advantages and disadvantages of a corporation?
What is the biggest advantage of a corporation
What are the 3 types of a corporation?
What is a famous corporation that you know?
Shareholder/ stockholders: cổ đông

(creditor) goes after: (nguoi chu no, cho vay) theo sau
Shortfall: thieu hut
Officer: nhan su cap cao
Pass-through entity: cong ty trach nhiem huu han
Tax election: y dinh muon chuyen doi tu cong ty trach nhiem huu han sang S
corporation
Avenues to raise capital: cach thuc gay von
Types of stock with different voting or profit characteristics:
Transfer: chuyen nhuong
(a company’s) assests: tat ca tai san
Unemployment tax (usa):
A shareholder-employee: mot nguoi vua la nhan vien vua la co dong
1. personally liable
2. double taxation
3. pass-through enitity
advantage: self-employment tax savings, shareholders, continuous life, easy
avenues to raise capital, easy transfer
disadvantages: high costs, formal relations, unemployment tax
Reading:
1. Categories/ Types of business entities
Business entities are divided into many categories based on liability (limited
liability and unlimited liability: debt and financial liability)
Limited liability company: in the worst case, the investor/ the owner only loses the
amount of money that they put into the company. (Their liability for the debt is
limited by the amount of money that they invest into the company) => It gives the
investor/the owner financial protection
Unlimited liability company: the owner has to be responsible for the all amount of
debt, and in this case, the money of the company is not enough to pay debts, they
have to pay the debt using the personal asset
2. What type of business entity can a law firm be? Why?
Sole partnership or partnership, limited liability company
3. What does company law mainly deal with ? (What aspects of the company
(person) need to be regulated? )
Birth => formation
Live => operation
Die => dissolve (dissolution) (bankruptcy or the owner doesn’t want to do business
anymore)
Company law is a specialized branch of law that deals with company affairs in
terms of formation, operation, and dissolution. A company compared to a person.
It is called a legal person. The legal person means that the company is not a
natural/biological person. It’s not a human being but it is seen as a person in the
eyes of law, so similar to real human beings, the company can be formed/ given
birth then the company would operate a life as a person (the law regulates how it
operate, how it connect entities like shareholders, directors,..). And finally, it can
be dissolved/ stopped the existence
A legal person (pháp nhân) means that is not a real human being but it is the
person is a person in the eyes of law <> Natural/ biological person
The difference between the company and business entities

Business entities are a form of business organization, is an umbrella term
A company is a legal entity, allowed by law/legislation, which permits a group of

people, as shareholders, to create an organization, which can then focus on
pursuing set purpose/objective. It is empowered with legal rights which are
usually only reserved for individuals, such as the right to pursue and be sued, own
property, hire employee, or loan and borrow money. The primary advantage of a
company structure is that it provides the shareholders with a right to dividends,
and a proportionate distribution of profits, without any personal liability.
There are various forms of legal business entities ranging from the sole
proprietor, who alone bears the risk and responsibility of running a business,
taking the profits, but as such not forming any association in law and thus not
regulated by special rules of law, to the registered company( company
information) with limited liability and to multinational company/ corporation.
In a partnership, members “associate”, forming collectively an association in
which they all participate in the management and sharing profit, bearing the
liability for the firm’s debts and being sued jointly and severally in relation to the
firm’s contract or tortious act.
Limited-liability companies, or corporations, unlike partnerships, are formed not
simply by contract entered into between their founding/first members; they must
also be registered at a public office disginated by law to obtain official
acknowledgement of their existence.
The people who set up a company are often called founding member of the
company. When a compay is set up and registered with Companies House, the
company is known as an incorporated business. This means that the compnay has
its own separate legal personality. Another name that means the same as legal
personality is ‘legal person’. Sole traders and traditional partnership are
unincoporated businesses and do not have their own legal personality. If someone
wants to sue a company, perhaps becauses it did not fulfill its obligation, the
claimnat names the company as the defendant, because a company is a legal entity.
On the other hand, if someone

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UNIT 5: COMPANY LAW

Shareholder/ stockholders: cổ đông

The difference between the company and business entities

A company is a legal entity, allowed by law/legislation, which permits a group of

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