Fundamentals of Company Law
Welcome to the “Fundamentals of Company Law”. This lecture gives you a comprehensive overview on legal forms, governance matters and liability risks of both directors and shareholders in various countries. In addition, your learn more about M&A and selected legal issues in this regard. Furthermore, equity solutions like IPOs, DPOs, capital increases or convertibles and debt solutions such as syndicated loans, bonds or private placements are being discussed. We also have a deeper look into cash pooling, tax, accounting and compliance matters. Last but not least, you learn more about financial restructurings, i.e. standstill agreements, restructuring loans, debt equity swaps and distressed M&A.
“Characteristics of Companies”
In this first part of the lecture, you learn basics of legal forms and minimum capital requirements in different countries (e.g. Private Limited, Stock Corporation). In addition, we look at corporate bodies in various countries, i.e. Board of Directors, Supervisory Board and Shareholders’ Meeting including different roles, e.g. executive directors and non-executive directors. Moreover, we analyze the differences between the one tier board and the two tier board system.
“Formation and Capitalization of Companies”
In this second part of the lecture, you learn more about a typical company formation process: which steps are required in order to establish a Private Limited in Germany and which resolutions need to be taken. In this respect, we take a closer look at cash contributions and contributions in kind. In addition, we discuss about balance sheet components and the legal characteristics of equity, mezzanine and debt.
“Legal Framework for Boards & Shareholders”
During the third part of the lecture, you learn more about the “piercing the corporate veil” doctrine concerning the external liability of shareholders — for instance, in France, Finland and Germany. In addition, we go through the legal prerequisites of the “Business Judgment Rule” and the structured process in order to come to an informed decision. Furthermore, we discuss about fiduciary duties of the senior management and also about shadow directors.
“Mergers & Acquisitions”
As M&A plays an important role for corporate growth, this part of the lecture focuses on structures and processes related to the acquisition of companies. Firstly, we take a look at major differences between and legal aspects of share deals and asset deals. Secondly, you learn more about a typical sell-side process and important legal issues in terms of share purchase agreements, merger control and foreign investment law. In the end, we focus on directors’ duties related to the due diligence and take-over defense.
This part of the lecture is about equity capital, i.e. funds that are available to the company in the long term, non-repayable and that include a profit distribution and participation in the equity upside in return for the entrepreneurial risk. First of all, we look at the share capital requirements in different countries and how capital increases and capital reductions work. We also look at Initial Public Offerings as well as the underlying processes and formal aspects.
This part of the lecture you learn details about debt capital, i.e. repayable funds which are usually interest-bearing. For example, we look at the details and differences between bilateral loans, club deals and syndicated loans. We also look at leveraged finance and the practical structures of a leveraged buyout such as debt push down or jumbo dividend. Furthermore, you learn more about German Private Placements (also called Schuldscheindarlehen) and the legal challenges of this instrument when it comes to a corporate crisis.
This part of the lecture is about mezzanine capital, which includes subordinated loans and shareholder loans. We also look at how convertible bonds work, what processes are required for the issuance, and how these financial instruments can be used as poison pills against hostile takeover attempts.
In this part of the lecture, we first look at cash pooling, which is mainly used by large caps and blue chips in order to save interest costs by bundling liquidity of all group companies on a daily basis. We look at how physical and virtual cash pooling works and what formal issues arise. We also look at factoring, forfaiting and digital supply chain finance as solutions for optimizing liquidity.
“Financial Restructurings — Debt”
This part of the lecture is about solutions for financial restructurings. First of all, we look at the different phases of a corporate crisis and what measures are applicable at which stage. You will also learn more about financial covenants, legal consequences of a covenant breach and how to get to a waiver. Finally, we take a closer look at selected debt restructuring solutions such as Standstill Agreement, Restructuring Loan or Letter of Comfort.
“Financial Restructurings — Equity”
This part of the lecture deals with solutions for financial restructurings by strengthening the equity or changing the shareholder structure. In this respect, we look first at capital increases and in detail at the conversion of liabilities into new shares by way of a so-called Debt Equity Swap. In addition, we discuss about Distressed M&A and the underlying corporate law and capital market law aspects.
This part of the lecture deals with the legal duties of the management in case of a corporate crisis. After an international overview, we look at Germany as an example of what executives are obliged to do in which situation. This includes, for example, the obligation to file for insolvency or the prohibition of payments. You will also learn what liability risks exist and how to mitigate them. [Video to follow]
This part of the lecture gives more colour on what compliance means and how exactly a compliance management system can be implemented in a company. We look at selected instruments such as the Code of Conduct and the legal obligation of management to take care of compliance. You will also learn more about whistleblowing and the European directive in this regard. [Video to follow]
In this part of the lecture we look at basics of corporate tax law, i.e. types of taxes such as corporate tax or commercial tax. We also look at selected tax matters that are always important for companies: for instance, loss carry-forwards or the interest limitation rule. [Video to follow]
This last part of the lecture deals with selected questions of accounting law. You will learn more about the differences between IFRS and local GAAP, about principles of accounting law in Germany and the obligations of the management with regard to book-keeping. [Video to follow]
Overall, this lecture addresses the following fundamentals of company law: