Corporate law

If corporate law is a set of general and special rules of private law and corporate rules that mediate corporate relations, then corporate law is a set of regulations containing the rules of different branches of law (private and public) that regulate relations within the corporation and outside.

Corporate law is broader than corporate law, since corporate law includes corporate rules that may not be expressed in any regulatory legal acts.

Corporate law as a science

The science of corporate law is quite young and is in the process of its formation. Science studies the features of the legal regulation of corporate relations. In addition, the subject of science includes the doctrine of corporate law, namely: various legal structures, definitions, concepts and theories, as well as the practice, primarily of arbitration courts, related to the consideration of corporate disputes.

Due to the youth of the science of corporate law, today there are still few deep, fundamental works devoted to the problems of corporate law. At the same time, among such works we can mention the works of T.V. Kashanina, G.S. Shapkina, D.V. Lomakina, V.V. Dolinskaya * (41).

Corporate law as an academic discipline

With regard to corporate law as an academic discipline (training course), today many legal and economic educational institutions include courses in corporate law or corporate governance in their curricula.

The academic discipline of corporate law is complex, as it teaches both the features of private law regulation of corporations and the features of public law regulation of their activities.

The corporate law course systems taught today in various curricula may be different. As a rule, within the framework of the course, the issues of the doctrine of corporate law, the features and state of corporate legislation are studied. Further, the issues of creation and establishment of joint-stock companies, formation of the authorized capital of a joint-stock company, securities of a joint-stock company and the procedure for their issuance are considered. A separate block in the course of corporate law includes issues of corporate governance related to the formation and competence of the board of directors (supervisory board) of the company, the executive bodies of the company, the procedure for holding a general meeting of shareholders. Issues related to the rights of shareholders and ways to protect their rights and interests are considered separately. Finally, the course examines issues related to the commission of major corporate actions by the company, namely: major transactions; transactions in which there is an interest; reorganization and liquidation of the company.

Chapter 2. Sources of corporate law

The concept and types of sources of corporate law

Under the sources of law in a special legal sense is understood the external form of expression of law. The sources of corporate law are the external form of expression, the method of fixing corporate legal norms, in other words, where the norms of corporate law are contained.

Regulations

First of all, the sources of corporate law are normative acts, which express the features of the legal regulation of corporate relations. A set of complex regulations, i.e. normative acts containing the norms of different branches of law (private and public) governing corporate relations is corporate legislation.

Legislation is built, as a rule, on the basis of practical interests and needs, therefore, it includes norms that are different in their sectoral nature in order to take into account certain connections between various social relations (civil, administrative, etc.) and regulate them comprehensively. This rule also applies to corporate law, which by its very nature is complex. It includes normative acts that contain the norms of different branches of law.

Corporate law combines primarily the rules of private law. They form the basis of corporate law. At the same time, it also includes the norms of public law related to state regulation of corporations. Legislative regulation of corporations should take into account the interests of not only shareholders, but also other persons (employees, partners, state and local authorities, the population), society and the state as a whole. In the system of “society-business” relations, the activity of the corporation contributes to the increase of general wealth and the optimization of production, and serves the interests of society as a whole.

Corporate legislation therefore contains the norms of public law. For example, the law obliges open joint-stock companies to conduct an annual audit and disclose information to the extent and in the manner prescribed by regulations on information disclosure. Joint-stock companies are obliged to follow these norms, and in case of their non-fulfillment, they will be liable under administrative and criminal legislation.

Speaking about corporate legislation as a source of corporate law, one should pay attention to the regularity that is typical for the legal regime of entrepreneurship in general, namely: the less legal regulation of commercial relations, the more opportunities for self-regulation of these relations. Normative-legal forms should define only the necessary requirements for entrepreneurship, leaving a wide scope for the sole discretion of the entrepreneur * (42). Entrepreneurship and its form, as the pooling of capital, just belong to the field of activity where self-regulation (self-government) is decisive.

Therefore, there must be a certain balance between legislative regulation and corporate self-regulation. It is necessary to keep in mind two trends in the regulation of corporate relations. The first is that legislation establishes and should establish only general, binding rules. This is the so-called “hard” regulation of corporate relations, which is expressed in the presence of stable legislation at the level of federal laws. This regulation is mainly imperative, but is not without dispositive norms.

For example, the amendments to the Federal Law “On Joint Stock Companies” * (43), introduced by the Federal Law of August 7, 2001 N 120-FZ, were aimed at reducing the “statute-making”, reducing the number of dispositive norms. If in the original version of the law of 1995, many articles provided that “other may be provided for by the charter”, then in the version of the Federal Law “On Joint-Stock Companies” of August 7, 2001, this possibility was excluded in many cases, it was provided, that only the rule of law applies. If initially cumulative voting in the election of members of the board of directors was mandatory only for joint-stock companies with more than 1000 shareholders owning voting shares, and could be provided for by the charter in joint-stock companies with the number of shareholders owning voting shares of 1000 or less, then the version of this federal law dated February 24, 2004 N 5-FZ contains an imperative rule providing that the election of members of the company’s board of directors is carried out by cumulative voting (clause 4, article 66 of the Federal Law “On Joint Stock Companies”).

Legislation creates the basis for the legal regulation of corporate relations, but it cannot and should not seek to regulate in detail all issues of the company’s activities. Therefore, it either does not contain the norms regulating the relevant relations at all (and the absence of regulation is far from always a gap in the legislation), or establishes a general rule, leaving the participants in such relations the opportunity to choose a behavior option * (44). In other words, there must be the right balance between government regulation and the freedom of the corporation.

The second trend in the regulation of corporate relations is the growing role of the so-called “soft” regulation, or self-regulation. The fact is that the norms of the law cannot always ensure proper corporate behavior and the resolution of possible corporate conflicts. Therefore, the role and importance of internal local acts of a joint-stock company, which are an integral part of the sources of joint-stock (corporate) law, is increasing.

Corporate regulations

Corporations themselves establish rules of conduct that are obligatory for their participants – corporate norms. Basically, they are based on the general principles of good faith, reasonableness and fairness, taking into account the interests of all participants in the corporation. If such a corporate norm takes into account the interests of all (or most) participants in the corporation, then it is an expression of their will. The will formed in the society is the legal norm, which is recognized by the general will of the participants in the corporate association * (45). Therefore, the moral and ethical standards of reasonableness, fairness and good faith are also considered as an integral part in the regulation of corporate relations and are becoming increasingly important in the activities of joint-stock companies. Such ethical norms governing corporate relations are set out in the Code of Corporate Conduct recommended for use by joint-stock companies.

Thus, the ethical standards used in the business community and based on the principles of reasonableness, fairness and good faith are an integral part of the sources of corporate law and form stable stereotypes of behavior common to all participants in corporate relations.

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