Chapter 2 - Governance and Management The Significance of...

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Governance and Management The Significance of Constitutions for Corporate Entities - CG is about the way corporate entities are governed - Constitution will define the nature of the governing body, its rights and duties and how its members are elected or chosen - Drivers of CG power: o Shareholder activists o Institutional investor o Corporate raiders o Holders of blocks of shares o Threats of hostile takeover bids Corporate Entity Members Constitution Governing Body LLC Shareholders Memorandum and articles of association Board of directors Professional organization Qualified members of the profession Charter and membership rules Council Trades Union Registered members Constitution and branch rule books General Executive Council Incorporating a Joint Stock Limited Liability Company - The incorporation of a LLC involves the registration of formal documents in line with the company laws of the jurisdiction in which the company is to be incorporated - US: o Companies are incorporated under the laws of one or other of the states - Europe: o The European company enables companies incorporated in different member states of the EU to merge or to form a holding company at the European level o Provides firms with the option of incorporating in other member states o Public + private companies o One tier or two-tier boards are permitted o Participation of employees Public limited company - Shares may be offered for sale to the general public - Member’s liability is limited to any amount unpaid on their shares - Not all public companies are listed on a stock exchange, but all listed companies must be public companies Private company limited by shares - Members’ liability is limited to the amount unpaid on shares they hold Private company limited by guarantee - Guarantor members’ liability is limited to the amount they have agreed to contribute to
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Chapter 2 - Governance and Management The Significance of...

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