INTERNATIONAL ENCYCLOPAEDIA FOR CORPORATIONS AND PARTNERSHIPS
Edited by Prof. Dr. Koen Geens
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OUTLINES
Model Monographs Belgium
Explanatory note on the series of Corporations & Partnership
The title, 'Corporations and Partnerships', will not fit for all countries. In Europe, one might prefer 'Companies and Partnerships'. Both the 'corporation' and 'company' indicate a legal person wherein the liability of the members is limited. It speaks for itself that whenever the word 'corporation' is used in the outline, one may just as well read 'company'. No problem will arise in national monographs since we deem it preferable to refer to each corporate structure by its original name (e.g. société anonyme). In general, the authors of national monographs may freely choose between the terms corporation or company.
General Introduction
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1. General Background of the country
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2. The historical background of corporations and partnerships
In this chapter the author gets the chance to explain how things grew over time. History will help to understand a good deal of what is described in sections 3 and 4 below.
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3. Definitions, notions and structure of corporations and partnerships
I. Different forms of corporations and partnerships
This chapter allows the author of the national report to account for difficulties provoked by differences between his national law system and the structure of the outline. Indeed, the proposed structure will seldom perfectly fit. There is always a price to be paid when different systems of law and different types of corporate structure have to be compared. Therefore, the author has the responsibility, after summing up the different types of corporations/companies and partnerships, to make the reader understand why a certain type will be treated under Part I (Corporations) or Part II (Partnerships).
In some countries the distinction between corporations/companies and partnerships is made between entities with and without legal personality. In some countries various partnerships have legal personality ( as in the USA) and in other countries, such as Belgium they do not. Nevertheless, in those cases, one can usually distinguish partnerships from corporations/ companies whose partners do not enjoy limited liability, not to mention such ambiguous forms as those companies with unlimited liability (UK) or limited partnerships by shares (commandite par actions).
As far as we are concerned, the main difference between a corporation and a partnership lies in the fact that no contractual relationship between the members remains after the formation of a corporation /company, whereas the members of a partnership remain each others' partners.
II. Distinction between structures and consequences
Still more difficulties will arise when one tries to distinguish between the 'big' corporation (public company, share company) and the closely held corporation (private company, limited liability company).
In some countries the designation as a closely held corporation follows solely from the reading of the articles of incorporation and generally no specific statutory consequences are attached to such qualifications (USA). In other countries, characterization or classification of a private company also follows from the reading of the articles, but specific consequences are attached to it (UK).
Last but not least, members can freely choose the legal form of a business entity to be that of a limited liability company, whose character is that of a closely held corporation, as in Western Europe. In this group of countries, a share company is usually chosen, with guarantees for the control on transfer of shares written in the articles of incorporation. Therefore, it is important to mention any legislation circumscribing the activities of the corporation/company according to its designated structure.
III. Commercial and civil corporations and partnerships
In countries where a difference between commercial and civil corporations /companies and partnerships is made, the impact of such a difference should be explained.
IV. Non-profit associations and other corporate legal persons
Non-profit associations, as well as other non-corporate legal persons should be briefly mentioned in the introduction, and not dealt with again afterward.
§4. Sources and hierarchy of the law on corporations and partnerships
The author is urged to describe the relationship between federal law and state law, as well as between statutory law and the articles of a corporation /company. The author should not hesitate to refer to other particularly helpful statutory bodies of law.
§5. International Private Law (Conflict of laws)
The author should discuss the factors used by national law, legislative and case law to determine the law applicable to corporations and partnerships with a foreign element (i.e. place of business, place of incorporation, etc.).
§6. The labour law connection: co-determination and corporate structure
Are corporate structures used by the legislator to install a regime of co-determination for the workers, and if so, to what extent?
In addition, less ambitious co-determination attempts (information, consultation) using the corporate structure should be mentioned here.
Outline for National Monographs
Table of Contents
List of Abbreviations
Preface
General Introduction
§1. The general background of the country
I. Geography
II. Cultural composition
III. Political system
IV. Population and employment statistics
V. Enterprise, corporations, and partnerships statistics
VI. Social and cultural values
VII. Privatization efforts and golden shares
§2. The historical background of corporations and partnerships
§3. Definitions and structure of corporations and partnerships
I. Different forms of corporations and partnerships [sub-section for each]
II. Distinction between structures and consequences
III. Commercial and civil corporations and partnerships [if applicable]
IV. Non-profit associations and other corporate legal persons
§4. Sources and hierarchy of the law on corporations and partnerships
I. International sources (for European countries, one may refer to the section of the Encyclopaedia that
deals with the EEC)
II. National sources
A. Legislation [federal and state law, if applicable]
B. By-laws or articles
C. Relationship between by-laws or articles and legislation
III. Hierarchy of the law on corporations and partnerships
§5. International Private Law (Conflict of laws rules)
§6. The labour law connection: co-determination and corporate structure
Selected Bibliography
Part I. Corporations / Companies
Chapter 1. Big Corporation - Public Corporation - Share Company
§1. Characteristics
§2. Formation
I. Formal requirements (e.g. notarial record) and minimum content of articles
II. Notification, registration, incorporation and publicity
III. Contracts made on behalf of a corporation /company in formation
IV. Number of subscribers
V. Initial share capital
VI. Contributions in kind
VII. Other material formation requirements
§3. Essential elements of the legal person: seat, name, objects clause and (in some civil law
countries: commercial or civil) character
§4. Capital and shares
I. Different concepts of capital
A. Nominal, issued, paid up, minimum and authorized capital (a sub-heading for each)
II. Alteration of capital requirements
III. Preferential right of subscription
IV. Issues of shares at a premium and at a discount
V. Public issue requirements (prospectuses) and promoters
VI. Stock exchange introduction requirements
VII. Forbidden reductions of capital and acquisition of shares by the corporation itself
VIII. Classes of shares
A. Bearer-nominative
B. Preferred stock
C. Deferred
D. Non-voting
E. Multiple voting
F. Certificate and warrant shares
G. Others (a sub-heading for each)
IX. Transfer of shares
A. Registration
B. Gift-sale
C. Stock exchange
D. Protection of shareholders in case of tender offer
E. Insider trading
F. Etc.
X. (Mortgage) debentures and other securities which do not (yet) represent capital
§5. Shareholders, management and control
I. Shareholder control mechanisms/Shareholders
A. Shareholders meeting (kinds, convening, proxies, powers)
B. Majority rule: legal and statutory protection of minority and majority
C. Annual account and report; profits and dividends
II. Administrative or management body
A. Directors and administrative board (appointment requirements, remuneration,
dismissal)
B. Powers of management and representation
C. Duties of directors to the company (conflict of interest) the shareholders
and third parties
D. Liability of directors
III. Auditor (appointment, powers, duties)
IV. Workers' participation (e.g. via two-tier board structure or auditor appointment)
§6. Liquidation of the corporation / company
I. Grounds for winding up (court decision, shareholders' meeting)
II. The effect of winding up: liquidation
§7. Mergers and takeovers
I. Restrictions on mergers & takeovers
II. Regulation
III. Protective measures
§8. Holding companies and subsidiaries
§9. Taxation of corporations and shareholders
Chapter 2. Closed Corporation - Private Company - Limited Liability Company
§1. What makes this type of corporation different? (e.g. the content of the articles, the form chosen)
§2. In what respect is there a different legal treatment of this corporation? (e.g. type of shares, limited
transferability, limited number of shareholders, taxation)
Part II. Partnerships
Chapter 1. Different types [For each type, one chapter, with the following subdivisions]:
§1. To what extent does this type enjoy legal personality?
§2. Nature of the unlimited liability
§3. Contributions and division of profits
§4. Management
§5. Transferability of partnership interests
§6. Liquidation
§7. Taxation (in brief)
Index
