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The Law of Corporate Finance

Module description

The raising, maintenance and strategic application of capital is essential to the long-term prosperity of any large corporate venture. Whether it is expanding into a new market, enabling a merger or acquisition, launching a new product, building financial resilience or any other motive for corporate restructuring, companies of all types constantly need to access different sources of finance swiftly, safely and smoothly. Given that raising capital is a risk-prone activity, with the potential to cause widespread consequences for stakeholders, as well as for wider society, it is a very heavily regulated aspect of corporate governance, with many rules and laws in place to manage and minimise risk the capital raising, maintenance, expenditure and reduction processes.

This module introduces students to the two primary sources of finance for companies outside of the company’s own profits – being equity and loan capital – exploring the different strategic options for companies and the optimum systems of corporate financial structuring. It then builds on each of these by exploring some of the risk, practical management and policy challenges surrounding different aspects of corporate finance, explaining the rationale for different legal rules controlling each process and the broader requirements for corporate and controller compliance. It therefore explores issues such as the law and rules governing different share types and classes, issuing shares, loan security and charges, capital maintenance, capital reduction, financial assistance, and on managing liability in corporate insolvency.

While students may benefit from having previously studied Corporate Law, Theory and Governance (LAW3195C), it is certainly not a pre-requisite, as this module will assume no prior knowledge of company law.

Module aims - intentions of the module

The module provides a solid foundation in the complexities of corporate finance and its regulation, enabling you to both understand both the nature and strategic role of different financing options, as well as understanding some of the key laws and rules governing how finance is managed within a company and the financial liability of different stakeholders and agents in the event of corporate insolvency. In addition to an end of module exam, the course also continually assesses students through frequent mini-exams testing them on their reading, to truly ensure that students completing this module have a stronger command of the breadth of the law, practice and rules in this field.

This module is designed to students with a clinical and practice-oriented understanding of corporate finance law, in order to prepare them for a career in the commercial, legal or financial sector.

Intended Learning Outcomes (ILOs)

ILO: Module-specific skills

On successfully completing the module you will be able to...

• 1. Evidence detailed knowledge and understanding of the principal features and key rules of corporate finance law;
• 2. Identify, critically appraise and explain issues and legal rules arising in the key areas of corporate finance law;
• 3. Provide accurate, detailed and reasoned advice in relation to different issues and challenges in corporate finance law.

ILO: Discipline-specific skills

On successfully completing the module you will be able to...

• 4. Understand and access a range of different sources of law and learning materials, using them appropriately to explain issues, critique arguments or provide answers;
• 5. Select, integrate and present coherently and reflectively, relevant law and legal/theoretical arguments from various sources;

ILO: Personal and key skills

On successfully completing the module you will be able to...

• 6. Manage relevant learning resources or learning strategies to develop own arguments and opinions with minimum guidance;
• 7. Communicate and engage in written arguments effectively and accurately in a manner appropriate to the discipline or in different contexts.

Syllabus plan

Whilst the module’s precise content may vary from year to year, it is envisaged that the syllabus will cover some or all of the following topics:

• Equity and Loan Capital
• Share Types and Shareholdings
• Raising Equity and Issuing Debentures
• Capital Maintenance & Reduction
• Share Buy-Backs
• Rules Against Financial Assistance
• Loan Security (Registration and Priority of Charges)
• Insolvency and Mechanisms of Corporate Rescue
• Swelling Assets for Distribution on a Winding Up
• Priority of Distribution on a Winding Up
• Director Liability on Insolvency
• Liability, Procedural Safeguards and Remedies

Learning activities and teaching methods (given in hours of study time)

Details of learning activities and teaching methods

Formative assessment

Summative assessment (% of credit)

Details of summative assessment

Details of re-assessment (where required by referral or deferral)

Indicative learning resources - Basic reading

Hannigan, B., Company Law (Oxford 6^th Edn, 2021)

French, D. et al, Mason, French and Ryan on Company Law 38th ed. (Oxford) 2023.

Moore, I. Q&A Company Law 3^rd ed. (Oxford) 2020.

Key words search

Company Law