For each gap 1-8, choose the best sentence A-H to fill it. Do not use any letter more than once. There is one extra sentence which you do not need to use.

 

A. To do this the business lawyer must be experienced in all aspects of company activities.

B. In a limited company, on the other hand, the shareholders are only liable for company debts for the extent of any unpaid sums due on their shares.

C. Besides the lawyer must be a drafter. He drafts documents for the firm.

D. Of course, the opponent’s lawyer will do the same.

E. A lawyer has overall conduct of a case and develops working relationship with the client.

F. If one partner goes bankrupt, although the debt will be written off for the partner, creditors can still pursue the remaining partners (or former partners) for the whole debt.

G. In some cases, the company pays for the firm’s entire cost of operations.

H. The inside lawyer can quickly identify and react to potential legal pitfalls and render advice just at once.

 

UNIT 4

FUNDAMENTAL CHANGES IN A COMPANY

 

ACTIVE VOCAVULARY

minority shareholders – миноритарные акционеры statutory regulations – нормативно-правовые акты   alterations - изменения constitutional amendments – внесение изменений в устав акционерного общества merger - слияние consolidation – укрупнение sale of substantially all assets – продажа существенной части активов acquisition of controlling shares – приобретение контрольного пакета акций liquidation - ликвидация submit special resolution – представить решение, принятое квалифицированным большинством голосов Registrar of Companies – бюро по регистрации акционерных компаний Companies House – регистрационная палата Certificate of Incorporation on Change of Name – свидетельство о перерегистрации в связи с изменением наименования Articles of Association – устав компании increase in share capital – увеличение акционерного капитала consolidation of shares – консолидация/укрупнение акций division of shares – дробление акций subdivision of shares – более мелкое дробление акций cancellation of shares – погашение акций reduce share capital – сокращать акционерный капитал court confirmation – судебная санкция object clause – статья в уставе, формулирующая цель компании   at its discretion – по своему усмотрению European Community competition authorities – антимонопольная служба европейского сообщества   anti - competitive concentrations of market power – ситуация на рынке, мешающая свободной конкуренции clearance – разрешение, свидетельство regulatory authorities – контрольно-надзорные органы unanimous shareholder approval – единодушное одобрение акционеров purchasing of company’s assets – покупка активов компании

controlling portion of outstanding shares – контрольная доля акций, находящихся в обращении takeover bid – предложение о присоединении компании acquiring company=acquirer=offeror – поглощающая компания acquired company = target = offeree – поглощаемая компания hostile takeovers – недружественное поглощение   friendly takeovers – дружественное поглощение City Code of Takeovers and Mergers –Кодекс Сити по правилам слияний и поглощений   Panel of Takeovers and Mergers – коллегия по слияниям и поглощениям abide by this Code – подчиняться Кодексу breach of the Code – нарушение кодекса disclose dealings in relevant securities – предоставление информации о сделках с ценными бумагами winding - up – ликвидация компании compulsory winding - up – принудительная ликвидация insolvent – неплатежеспособный voluntary liquidation – добровольная ликвидация debts or liabilities – долги или обязательства   assets and available cash – активы и свободные денежные средства re - negotiate debt – провести новые переговоры по долгам realize assets to discharge debt – реализовать активы, чтобы выплатить долг borrow money – заимствовать деньги increasing the liabilities – увеличение заемного капитала impose obligations – налагать обязательства company officers – руководящее звено компании secured creditors – кредитор по обеспеченному долгу lending – предоставление займа security over the company ’ s assets – обеспечение в виде активов компании unsecured creditors – кредитор по необеспеченному долгу initiate action – начать судебный процесс preferential creditors – кредитор с преимущественным правом требования

 

 

At some point at the life of a company, the owners may wish to make fundamental changes to the company. Some of these changes may merely be basically administrative, such as changing the company’s name. Other changes may entail alteration of the company’s structure. These changes sometimes place the rights of creditors and minority shareholders at risk and are thus subject to special statutory regulations. The main examples of the types of alterations which fall into this group are constitutional amendments, mergers, consolidations, sale of substantially all assets, acquisition of controlling shares and liquidation.

The most common constitutional alterations in a company include alteration of the company’s name, capital or object. According to English law, a change of name can be made by special resolution at a general meeting, or all the members must sign a written resolution that the name of the company be changed to the new name. A signed copy of the resolution containing the new name must then be submitted to the Registrar of Companies. If the submission is in order, Companies House will issue a Certificate of Incorporation on Change of Name.

A company may alter its capital structure, provided that the Articles of Association grant such power. Such an alteration may entail such things as an increase in share capital, a consolidation or division of shares, a subdivision of shares or cancellation of shares. A company may only reduce its share capital following court confirmation. A company may alter its object clause by special resolution. However, the court may at its discretion set aside such a resolution upon application by a small group of minority shareholders.

A merger takes place when one company is absorbed into another company. Where company X is merged into company Y, company Y is the acquiring company and survives, while company X is the acquired company and disappears. In a consolidation, both companies X and Y disappear and a new company Z is formed. The freedom of companies to merge is controlled by various statutes, European Community competition authorities (known as anti-trust regulators in the US), and the courts, which regulate anti-competitive concentrations of market power. If a merger is permitted, clearance is given by the regulatory authorities.  

A company may also gain control of another company by purchasing substantially all of the other company’s assets. At common law, a sale of this kind normally requires unanimous shareholder approval. However, today such sales may take place upon approval of some majority of the shareholders. Acquisition of shares is another method of gaining control of another company. This is achieved by purchasing all or the controlling portion of outstanding shares in a company. Many times this is achieved through a takeover bid, whereby company Y (the acquiring company or acquirer or offeror) makes a public offer to shareholders of company X (the acquired company or target or offeree) to sell their stock, generally at a price above the market price. The offer is made subject to the condition that it will only be effective in the event that a specified percentage of shareholders accept the offer. There can be hostile takeovers and friendly takeovers. In the former, the takeover is opposed by the target’s company management, while in the latter the action is supported by management. The conduct of takeovers is controlled by rules set out by the City Code of Takeovers and Mergers. The Code is administered by the Panel of Takeovers and Mergers, an independent body which draws its members from major financial and business institutions. UK companies have to abide by this Code. Disciplinary action may result from certain breaches of the Code, for example, failing to disclose dealings in relevant securities of the offeree company. The guiding principles behind the Code are that shareholders are treated fairly and are not denied an opportunity to decide on the merits of a takeover, and that shareholders of the same class are afforded equivalent treatment by an offeror.

Finally, winding-up or liquidation of a company is the process by which the life of a company is brought to an end. Compulsory winding-up is ordered by the court when the company is insolvent. However, a voluntary liquidation refers to a process which may be initiated by the members of the company where the company is solvent. Insolvency describes the financial state of a company when its debts or liabilities exceed its assets and available cash. As soon as a company is insolvent, it must take action to resolve the situation. This may include re-negotiating debt, realizing assets to discharge debt or even borrowing more money and increasing the liabilities. There is a lot of legislation that imposes obligations on company officers in relation to the interests of creditors. There are secured creditors, whose lending is protected by security over the company’s assets, for example banks, and there are unsecured creditors, often suppliers, who may initiate action to achieve repayment. There are also preferential creditors, such as the company’s own employees, for example in cases where wages haven’t been paid, and occupational pension schemes. The options available to an insolvent company will be affected by the position taken by its creditors.

 

 

LANGUAGE FOCUS

1. Give Russian equivalents for the following English words and phrases:

to abide by the Code to breach a Code to negotiate debt to discharge debt to borrow money to impose obligations to lend  to initiate action to purchase to disclose dealings in securities  Registrar of Companies Companies House insolvent debts or liabilities merger consolidation of shares division of shares cancellation of shares

secured creditors preferential creditors hostile takeovers friendly takeovers compulsory winding-up available cash minority shareholders constitutional amendments sale of assets acquisition of controlling shares share capital regulatory authorities unanimous approval outstanding shares takeover bid acquiring company acquired company company officers

 

Word formation.