General terms of corporate law. Sources of corporate legislation - Лекция

Lecture 1. General terms of corporate law. Sources of corporate legislation The modern world is developing towards a global economy. This process gives a powerful development impulse to the integration of economic activity of businesses, while a growing level of international competition makes businesses look for ways to consolidate potentials in their struggle for survival and market cooperation. Corporate integrated structures are the foundation of modern economics. Considering the concept of corporate law, it should be noted that there is one single definition of it, as there are various opinions and views to this issue, including identification of corporate law with company law, attributing to corporate relations the issues of regulation of internal rules of certain organization, which is based on membership and pooling of capital. First of all in order to study these issues it is necessary to analyze the history of origination of corporate law and corporate relations. It should be noted that the United Kingdom is the pioneer of modern corporate law, whose legal institutions formed the basis of modern corporate law in most countries. Ukraine is not an exception. The prototype of modern legal entities was so-called “companies”, which later became known as “corporations”; to obtain a legal status, such corporation was subject to registration. Corporations were based on the norms governing relations of companies’ founding, their activities, reorganization order, classification of companies, legal standing, legislation concerning company’s securities, insolvency and bankruptcy of companies. The corporate movement in Ukraine started mainly in the form of joint stock companies. There were and still are many obstacles in the development of joint stock companies; the biggest one being actual legal inconsistency of relations between subjects of corporate rights. Until recently the concept of corporate law was absent in the Ukrainian legislation and was only met in law books. The Economic Code currently in force gives the official concept of corporate relations as relations which arise, change and stop. It should be noted that the existing legislation is quite controversial, as most of the legal rules governing the corporate law in Ukraine were borrowed from certain foreign laws which do not always match the realities of the economic development of Ukraine. First of all, the Ukrainian process of formation of a mature national economy foresees an efficient management, so the attention of legislators to the corporate relations has increased recently. corporate law legislation The appearance of corporate relations in Ukraine is related to economic reforms, consolidation of human rights and freedoms in the basic regulatory acts, including the right to create a legal person and the right to conduct business activity by creating legal entities of various kinds. The corporate law is a set of interrelated legal norms fixing and regulating a special sector of social relations which constitute its subject. Pursuit to combine these social relations into one independent kind which requires a separate legal governing, leads to an inevitable separation of corporate law from other branches of law. Part 1 of Article 167 of the Economic Code of Ukraine, which came into force on January 1, 2004, defines the concept of corporate law, namely: “Corporate law is the right of the person whose part is determined in the statutory fund (property) of an economic organization, including legal capacity of this person to participate in the management of the economic organization, to receive certain part of the profits (dividends) of this organization and its assets in case of liquidation of the latter in accordance with the law, and other powers foreseen by the law and the statutory documents”.