Lesson 6

20/10 Lesson 6
Part 1
From ILE textbook
Discuss & Check homework
Focus on Letter of advice p. 31
Introduction to Company Capitalization Reading 1 pp. 34-35 ex. 1-3

1- Words in context:
Capitalization refers to the process of raising capital for the company.
Capital includes both money and property (or money that is needed to set up and maintain a business)

How does a company raise money?
- borrowing money (loan capital) attraverso l’emissione di debentures = obbligazioni
- selling ownership rights in the company (shares)
In entrambi i casi vi è la necessità di emettere securities (legally binding certificate) = titoli
Avremmo dunque debt securities for loans and equity securities for shares


SHARES

Ordinary shares = shareholders have voting rights, but are not guaranteed dividends
Preference shares = receive fixed dividends but normally cannot vote

The maximum amount of share capital that a company can issue, stated in the Memorandum of Association is called “the authorised share capital”; instead the amount of shares actually hold by shareholders is called “Issued share capital”.

Existing shareholders have Pre-emption rights = diritto di prelazione (right of first refusal)

2- How do lawyers fit in with the study of Company law i.e. Capitalization
- work closely with their client companies before the shares are issued, to ensure the right balance between shareholder rights and responsibilities;
- advise their clients on the legal procedures for issuing, buying or selling shares;
- draft a shareholders’ agreement ( a contract among shareholders ) and a share certificates;
- advise potential shareholders before they invest in a company;
- be called on by both sides in the event of any conflict or misunderstanding between one shareholder and another, or between shareholders and the company’s management

Part 2
From Grammar book
phrasal verbs pp. 96-97; pp.108-109
Practice: Phrasal verbs in legal English

- set up the company
- take up (accept) their pre-emption rights
- set aside the election of the board of directors