Corporate Legal Entities Research Articles

THE CONCEPT OF CORPORATE GOVERNANCE: THE HISTORY OF FORMATION

The purpose of the research. The article is devoted to the study of the history of formation of the concept of corporate governance. The historical period of development of the concept of corporate governance is no less important than the modern concept of corporate governance and it is necessary to study it, analyze the dynamics and trends. The purpose of the study is to analyze the formation of the concept of corporate governance in dynamics. Results. According to the results of the study, the author's view of the history of the emergence and development of corporate governance is presented. It is proved that the concept of corporate governance was not yet formed in the period of the Roman Empire. It seems more correct to define the period when the terminology began to be formed as associated with the beginning of the Industrial Revolution. Modern terminology is formed, but the understanding of the essence of corporate definition is not uniform. In general, opinions are divided into two groups: those who propose to include only participants of the corporation and management, and those who exclude subjects other than participants of the corporate legal entity and persons performing management. The author's conclusion that the expansion of the concept of corporate governance by increasing the subject composition of legal relations does not correspond to the essence, because the participation of other persons in corporate legal relations is secondary, indirect.

Corporate Accountability. Not Moral Responsibility

The aim of this article is to briefly spell out why corporate moral agency is a fallacy and to show how this conclusion should shift the field of business ethics more in the direction of political philosophy and the rule of law. An argument based on a false assumption can be valid, but it cannot be sound. If corporate moral agency is a fallacy, and thus also moral prescriptions for corporations, how do we salvage the field of business ethics? To the extent that business ethics is about corporate behaviour (rather than individual managerial behaviour), the field can shift its foundational paradigm from ethics (which requires the attributes of moral agency) to legal accountability (which can be imposed instrumentally on corporate legal agents). By letting our elected representatives legislate the norms of acceptable corporate behaviour we can hold corporate legal entities legally accountable. What these norms should be then becomes the central focus of business ethics seen through the lens of political philosophy.

Legal Dynamics of Limited Liability Companies: Unveiling the Power of Commissioners and Shareholders to Take Legal Action Against Directors' Negligence

The Limited Liability Company (LLC) is characterized by its distinct juridical entity, effectively segregating its management group from shareholders. Operating as a business entity, the primary goal of an LLC is profit generation. Functioning as a corporate legal entity with legal personality, an LLC comprises three key organizational components: the General Shareholders’ Meeting, Directors, and Commissioners. Directors, or the Board of Directors (BOD), bear the responsibility of managing and representing the LLC both within and outside the legal realm. The position of BOD is mandated to be occupied by a natural person, or 'naturlijk person,' either as a single individual (Director) or collectively by two or more individuals (Board of Directors). Despite a stringent selection process for board positions, the inherent nature of directors as natural persons introduces the possibility of intentional or negligent errors in management, potentially leading to financial losses. In the face of such negligence, the pertinent question arises: can a commissioner (Board of Commissioners) and/or shareholders initiate legal action against a director or BOD, whose legal standing is as the company’s representative? To address this query, a comprehensive library research initiative is undertaken, focusing on the analysis of Article 97 and Article 98 of the Limited Liability Company’s legal statutes. This examination aims to elucidate the viable courses of action that can be pursued against the company in the event of directorial negligence. The research findings reveal that specific commissioners and/or shareholders, in the absence of a director's power of attorney, are granted the authority by the LLC’s legal statutes to initiate legal proceedings against the director or board of directors in a court of law.

Dead souls" as part of a corporate legal entity

The publication reveals the consequences of the loss of legal capacity by a corporation participant: in the event of the death of a member of a business company, the liquidation of a participant-a legal entity or its exclusion from the Unified State Register as invalid. It is concluded that the failure in the implementation of corporate rights and obligations is caused not by the loss of legal capacity by a corporation participant, but by uncertainty about the identity of the owner of corporate rights. The problem of the legal fate of shares or shares in an LLC owned by participants who have lost contact with the business company is resolved. It is concluded that it is impossible to qualify shares or participation interests in LLC as ownerless property. We believe that by analogy of the law, Articles 72 and 75 of the JSC Law cannot be applied to recognize the right of a joint-stock company to shares owned by participants who have lost contact with the corporation. The possibility of recognizing the rights of a business company to its shares or participation shares belonging to «lost» participants on the basis of paragraph.

The concept, legal nature and features of the founding agreement

The doctrinal understanding of the concept of «founding agreement» was studied. The author supports the position that the founding agreement is not a contract of a simple partnership, but is a subtype of a contract on joint activity. An analysis of the legal characteristics of the founding agreement was carried out and it was determined that it is consensual, named, multilateral, fiduciary, aleatory, free of charge, concluded for the benefit of third parties.The article provides a comparative legal analysis of the founding agreement with related legal structures, in particular with the joint activity agreement, the simple partnership agreement, the reorganization (merger) agreement and the corporate agreement.The author’s definition of the founding agreement is proposed. It is emphasized that the concept of the founding agreement should contain only defining characteristics, be based on a more general concept of the agreement and not contain unnecessary features. The author’s definition of the studied concept is follow: а founding agreement is an agreement between two or more natural and/or legal entities (founders) about their joint organizational and property activities aimed at establishing a certain legal entity.It is claimed that there are no corporate relations when concluding the founding agreement. The author believes that the relevant relations are contractual, because the founding agreement is a civil law one.The author argues for the necessary definition of a single «founding agreement» to regulate the stage of creation of any corporate-type legal entity. It is also appropriate to define the charter as the only founding document of corporate legal entities. It is emphasized that with this separation of the functions of the founding agreement and the statute, the issues of inconsistency in terminology, the dispute regarding the understanding of the place of the founding agreement in the system of treaties, and many others will disappear.

State-Owned Enterprise’s Debt in the State Financial Regime

Several Indonesian State-Owned Enterprises (SOEs) have had very high debts recently. Several reasons, such as government assignment projects, the impact of the Covid-19 pandemic, and corrupt management behaviour, have caused the increase in liability. There is a fierce debate among academics and legal scholars regarding whether the SOE’s debt is state debt. A state company is an independent legal entity separate from the state and obtains capital from separated state assets. Besides, the state, as the majority shareholder, assigns SOEs to projects that support government programs even though they are not profitable. In addition, several SOEs often receive State Equity Participation to survive bankruptcy caused by running out of capital or large debts. This paper will analyse the country's debt status from the perspective of public finance by taking the case of Indonesia. Moreover, it will explore the theoretical and empirical aspects of SOE’s debt from a state finance point of view. This study will use doctrinal legal research to interrogate the law as it is and should be. Although this research concludes that SOEs' finances are a state financial regime, the supervision of SOEs is not Government Judgment Rules but Business Judgment Rules. SOE's debt is the responsibility of SOE as a corporate legal entity. In the case of Indonesia, the government often rescues SOEs that have failed to pay their debts through State Equity Participation and/or privatisation while maintaining most state ownership shares, for instance, Garuda Indonesia, a national airline. Finally, state accountability for SOE's debt only occurs indirectly because of the financial separation between the state and companies. The Indonesian government saved Garuda Indonesia's finances to protect national assets and continue to control vital businesses. However, the state must also reform the management of SOEs so as not to harm state finances by upholding good corporate governance and preventing fraud and corruption.

Methods of notarial defense of corporate rights under the legislation of Ukraine

In the conditions of functioning of modern social relations the processes of creation of various corporate legal entities have acquired the special intensity. In the course of establishment, activity and termination of such subjects of civil relations the issues of proper defense of corporate rights of their participants have become relevant, and consolidation of necessary effective mechanisms of such defense has always been a guarantee of business development in general and investment climate in our country. At the same time, methods of notarial defense of corporate rights require a special attention and research.
 Article 18 of the Civil Code of Ukraine provides that a notary has the right to defend civil rights by making a writ of execution on the debt document in cases and in the manner prescribed by law. It follows that at the level of the codified act it has been actually defined only one way of notarial defense of civil rights – the execution of the writ of execution.
 As of today, the notarial form of defense of the right to dividends by making a writ of execution on the documents is provided only for shareholders. We believe that an appropriate mechanism for defehding the right to dividends should be introduced for participants of other corporate legal entities.
 The established list of types of notarial acts in its absolute majority provides for notarial protection, in particular, preventive function, rather than defendive in its traditional sense. Notarial protection and notarial defense of corporate rights are often inextricably linked. Methods of notarial defense of corporate rights may be: execution of the writ of execution by a notary; imposition and lifting of a ban on the alienation of immovable property (property rights to immovable property), which is subject to state registration and acts as a contribution to the authorized capital of legal entities of corporate type; imposing a ban on the alienation of monetary amounts that will be credited to the applicant requirements, determined in accordance with Part 4 of Art. 65-2 of the Law of Ukraine "On Joint Stock Companies", on account of conditional storage (escrow), opened in accordance with the law, etc.

ИНСТИТУЦИОНАЛЬНЫЕ ПРЕОБРАЗОВАНИЯ КОРПОРАТИВНОГО СЕКТОРА В СОВРЕМЕННЫХ УСЛОВИЯХ

The article analyzes the institutional transformations of the corporate sector in the context of reforming the system of legal entities, the essence of which was a change in the basic forms of doing business. Discussion of the results of reforming the system of corporate legal entities is acutely relevant due to the expiration in 2020 of the deadlines in which business entities had to decide on the choice of their organizational and legal form in the new conditions. The article studies the features of the legal regulation of the forms of doing business in modern conditions, identifies the reasons for choosing one or another business model. The article concludes that, despite the fact that public forms of doing business are attractive in terms of attracting investments, increasing credit rating, increasing resource mobilization, economic agents choose non-public forms, since the determining motive is not investing, but maintaining control over assets, moreover, for this, forms atypical for large businesses are used, which gives rise to the problem of a discrepancy between form and content, when limited liability companies, in fact, do not have an investment nature, are characterized by indicators amounting to hundreds of billions of rubles. To change the situation, it is necessary to improve the institutional environment for the activities of companies; improve the institutions of the financial market and its regulatory mechanisms; create such institutional conditions under which economic agents will show interest in open investment in the economy.

ПРАВОВИЙ СТАТУС АСОЦІЙОВАНОГО ЧЛЕНА КООПЕРАТИВУ

The article is devoted to the study of the legal status of associate members of the cooperative. The article examines in detail the legal status of associate members of the cooperative in accordance with the Law of Ukraine «On Cooperation», the Law of Ukraine «On Agricultural Cooperation», the Model Statute of the Agricultural Production Cooperative, the Model Statute of the Agricultural Service Cooperative, the Model Statute of Consumer Cooperative. The rights and responsibilities that a person acquires in connection with joining the associate members of the cooperative are analysed. Based on the analysis of current legislation of Ukraine, it is found that the rights of an associate member of the cooperative are the following: the right to an advisory vote, and in some cases the right to vote on the issues established by the statute; the right to receive payments on shares; the right to withdraw from the cooperative in the prescribed manner; the right to receive complete information about the activities of the cooperative; preferred in comparison with the members of the cooperative the right to receive a share in the liquidation of the cooperative; other rights, in particular, but not exclusively those directly related to participation in a particular type of cooperative. Based on the legislative study, it is established that the responsibilities of an associate member of the cooperative are as follows: to comply with the terms of associate membership in the cooperative in accordance with its charter; to pay statutory contributions; to reimburse the cooperative or other members for material and non-material damages caused by their actions or omissions; not to disclose trade secrets about the activities of the cooperative. It is analysed that the rights and obligations of associate members are very similar to the corporate rights acquired by the members of such corporate legal entities as companies. The opinion is expressed that the legislative approach to the possibility of acquiring associate membership in service and consumer cooperatives is incorrect. It is proven that associate members are by nature depositors who, upon joining a cooperative, expect to make a profit. Since among all the types of cooperatives only a production cooperative is for profit, it is proposed to amend the current legislation of Ukraine establishing the provision that only in production cooperatives associate membership can be acquired.

Arbitrage spaces in the offshore world: Layering, ‘fuses’ and partitioning of the legal structure of modern firms

In this article, we discuss the way offshore financial centres are used by the multi-subsidiary, multi-jurisdictional group structure known as the ‘multinational enterprise’ to arbitrage between social geographies of political jurisdictions. We define arbitrage as the use of corporate legal entities located in diverse jurisdictions to arbitrate a third country's rules and regulations. Using a new method to categorize firm-level data from Van Dijk’s Orbis, we operationalize the notion of arbitrage to systematically detail and compare the structural sequencing choices firms are making, likely in part for reasons of arbitrage. We base our techniques on legal theory of the firm, acknowledging the underpinning of social technologies of law and accounting by which business enterprises are constructed and maintained. We conclude that two specific types of entities, ‘standalones’ versus ‘in-betweeners’, are qualitatively different from others in the activities they perform. We also highlight the existence of liability structures, or ‘fuses’, which typically take the form of a split ownership arrangement. Ultimately, we demonstrate that the position of a firm’s subsidiary within the overall network ecology of that firm is as important as its jurisdictional registration location.

Peranan Hukum Kepailitan Menghadang Potensi Kepailitan Dalam Industri Keuangan Syariah

Dispute resolution in sharia economics can be pursued through litigation. If referring to Article 2 passage (1) of Law No. 37 of 2004 concerning Liquidation and Delay of Obligation Installment Commitments, it is expressed that a debt holder who has at least two lenders and doesn't pay off somewhere around one obligation that is expected and can be If the case alluded to is a sharia monetary chapter 11 case, the court alluded to in this Law is the Strict Court. The exploration technique utilized is standardizing lawful examination. However, along with the growth of ordinary companies and companies that act as financial institutions, both banks and non-banks, the government should respond by providing a special court to resolve commercial cases committed by Islamic companies. Thus, it is necessary that the Commercial Court within the Religious Courts be established in order to fulfill legal certainty, usefulness and elements of justice for corporate legal entities that run their business with sharia principles.

The right to information in the legislation on corporate relations: national and foreign regulation experience

The purpose of the article is to carry out a theoretical and legal analysis of the right to information in national and foreign legislation on corporate relations and to develop substantiated theoretical conclusions on the improvement of national corporate legislation. Methodology. The following general scientific methods were used in the process of research object analysis: the method of analysis, synthesis, deduction, abstraction, comparison, system-structural, structural-logical methods. Comparative legal and formal legal methods have become the basis for the analysis of national and foreign corporate legislation, identification of similarities and differences in the general principles of respective legal relations regulation. Results. The study found that the right to information is a guarantee of corporate rights and legally protected interests of corporate legal entity (corporation) members, as information enables corporation members to exercise their corporate rights properly. The analysis of national legislation gives grounds to state that the legal norms enshrining the right to information in corporate legal relations and the order of its realization, are formulated unsystematically and in an abstract way. National corporate legislation acts do not contain a detailed list and types of information to which a corporation member is entitled. Scientific novelty Analysis of the main corporate legislation acts of the United Kingdom of Great Britain and Northern Ireland, the Commonwealth of Australia and Canada gives ground to state that the right to information in corporate relations is considered to be the right to any information about the corporation in the Anglo-Saxon legal family. Practical significance. The need of making changes to national corporate legislation acts in the process of recodification of the civil legislation of Ukraine has been proven. It has been proposed to recognize any information about the corporation and its activities as an object of corporate relations whether this information directly or indirectly concerns the exercise of members’ corporate rights or performance of respective duties, and to detail the way of the right to information realization in corporate legal relations.

Individual Companies as New Legal Entities in Law Number 11 of 2020 on Job Creation

The government, through Law Number 11 of 2020 on Job Creation encourages the ease of doing business for Micro and Small Business actors with the formation of individual corporate legal entities. This policy of forming a private company is a new breakthrough from the government and can be used as a stimulus to restore economic conditions. The establishment of this individual company is further regulated in Government Regulation Number 8 of 2021 on Company Authorized Capital and Registration of Establishment, Amendment and Disbanding of Companies that Meet the Criteria for Micro and Small Businesses. The type of research used is normative juridical. The data analysis was conducted in a descriptive qualitative manner. The results show that this individual company is a new legal entity created by the rolling of the Job Creation Law. Business actors who will register an individual company must meet the criteria for micro and small businesses as stipulated in the provisions of laws and regulations regarding micro and small businesses regulated in the Law Number 20 of 2008 on Micro, Small and Medium Enterprises. Various facilities are provided to business actors, such as registering individual companies by filling out electronic forms and not requiring a notary deed. Business actors are facilitated by the existing regulations in the management of the company because as the sole owner, the existence of financial reporting obligations makes it easier to monitor the company's financial governance which is useful, especially for access to capital loans to banks.

ПЕРСПЕКТИВЫ РАЗВИТИЯ ГРАЖДАНСКОГО ЗАКОНОДАТЕЛЬСТВА РЕСПУБЛИКИ УЗБЕКИСТАН ПО ОРГАНИЗАЦИОННО-ПРАВОВЫМ ОТНОШЕНИЯМ

This article analyzes the widespread development of corporate relations as a result of expanding thelimits and areas of activity of legal entities, the development of legislation aimed at regulating their activities. Also, special attention is paid to corporate relations as the most important and basic part of organizational and legal relations, and a proposal is made to divide legal entities into corporate and unincorporated legal entities in order to determine their legal status and activities in this aspect

Changes in the Legal Agency Status of the Pakuan Bogor Regional Legal Company in Improving Drinking Water Services in Bogor City based on Government Regulation Number 54 of 2017 Concerning Local Government Owned Enterprises (BUMD)

The idea of establishing a Local Government-Owned Enterprise (BUMD) departs from an ideological perspective regarding the concept of a welfare law state that emerged after the 19th century. The teaching emphasizes that the state must intervene in the socio-economic life of society for the welfare of its citizens. One form of intervention is through the authority to form State-Owned Enterprises (BUMN) at central level and Local Government-Owned Enterprises (BUMD) in local level. The purposes of this research are, first, to determine the urgency of changing the status of a legal entity at the BUMD PDAM Tirta Pakuan of Bogor City into the form of Local Government Public Company (PERUMDA) in terms of Government Regulation Number 54 of 2017 concerning Local Government-Owned Enterprises (BUMD). Second, this study aims to find out the prospects for changing the status of Local Government corporate legal entities drinking water from Tirta Pakuan Bogor in order to improve drinking water services in the city of Bogor. This study was carried out using two types of research method, which are: (1) normative juridical research by examining library materials which are secondary data and also called library research, and (2) empirical juridical research, also called as field research, which is conducted through the means of interviews as primary data.

Disposal of corporate rights of spouses

The article is devoted to the analysis of ways to dispose of corporate rights of spouses. It is determined that the alienation of corporate rights, withdrawal from the company and exclusion of a participant from a legal entity of corporate type is a form of realization of subjective corporate law of the spouses by an order aimed at terminating corporate relations between the participant and corporate legal entity. It is proved that in case of alienation of corporate rights and withdrawal from a corporate legal entity by one of the spouses - a participant of a corporate legal entity, consent to termination of corporate relations between the participant and the legal entity of the other spouse is not required. Such consent is presumed by law. The other spouse agrees to contribute the property that is jointly owned by the spouses to the authorized capital of the corporate legal entity, as a result of which the latter has either the right to claim the property obtained as a result of alienation of corporate rights or withdrawal from the legal entity. The other spouse may also be entitled to compensation for half of the share in the authorized capital of the respective legal entity and half of the share of income received from its activities (in the case of division of joint joint ownership). It is determined that if one of the spouses is registered as a shareholder of a joint-stock company and the other of the spouses is not, then the alienation of corporate rights (shares), including redemption of shares by the company, may occur without the consent of the other spouse; if both spouses are registered as co-owners of the company's shares, their consent to the alienation of corporate rights (shares), including the repurchase of shares by the company, must be mandatory subject to the law in this area.

Правовое регулирование корпоративного договора в контексте корпоративной культуры акционерного общества

The relevance of this article is due to the need to study legal nature of the corporate contract in the field of corporate culture and the system of corporate governance in modern conditions. The subject of the study is regulatory legal acts governing corporate contracts conclusions, as well as doctrinal sources and interpretations. The purpose of the work is to conduct a study of the corporate contract institution and to identify its legal nature and significance for corporate governance. The author shows various points of view on the nature and content of the corporate contract, examines the positions of legal scholars on its binding or dual nature, including applying this design in corporate legal relations. The article also considers certain issues of corporate governance, effective tools in the management system and analyzes the possibility of applying a corporate contract in the framework of governance in corporate legal entities. One of the main points is the justification of the corporate contract essential role in regulating the business companies` corporate governance system, since it can determine the structure of corporate bodies, their competence, which are reflected both in the charter of a corporate legal entity and directly in the corporate contract itself. The author concludes that there is a need to further improving this contractual design in order to increase its enforceability and attractiveness in various economic societies.

Восстановление корпоративного контроля в системе способов защиты гражданских прав

The article discusses the innovation of legislation in the protection of the rights of participants in corporate legal entities. Special attention is paid to the issue of determining the place in the system of ways to protect civil rights for the restoration of corporate control, provided for by paragraph 3 of Art. 65.2 of the Civil Code. The conclusion is substantiated that the use of traditional methods of protection-oriented or obligatory legal relations, in relation to corporate relations is not always justified. It is proposed to understand the “share of participation” as a special object of civil rights, generating the effect of corporate control. The point of view is argued that the restoration of corporate control should be considered within the framework of the “restoration of the provision that existed before the offenses”, as a universal and basic way to protect the civil rights listed in Art. 12 Civil Code of the Russian Federation.

Non-property corporate rights as the object of notary protection under the civil legislation of Ukraine

Derevyanko D. S. Non-property corporate rights as the object of notary protection under the civil legislation of Ukraine. – Article.
 In modern conditions of progress of market economy the activity of corporate legal entities has acquired the special value. In this regard, as well as taking into account the need to improve the investment climate in Ukraine, it is advisable to pay special attention to the issues of effective protection of the rights of participants of such legal entities. At the same time, it is difficult to deny the fact that the corporate relations are not limited to property. As of today, the problems of notarial protection of non-property corporate rights are still relevant. Corporate rights have a dual structure and have been divided into non-property and property rights, although this issue has been still controversial among the scientific community, and some researchers generally deny the non-property nature of corporate rights or point to their derivative nature and interdependence on property. The scientific search for the content of corporate relations allows us to state the dichotomous division of corporate rights into non-propert and property and at the same time come to a reasonable conclusion that despite the fact that there is a connection between these rights, non-property rights have become the independent category.
 The prevailing position in scientific doctrine is that non-property corporate rights include: the right to participate in the management of a corporate company, the content of which covers a number of powers; the right to withdraw from the corporate company; the right to information about the activities of the corporate company. The scope and content of non-property corporate rights granted to participants (shareholders, members) differ depending on the type of organizational and legal form of the corporate organization.
 It has been indicated in the article that the notarial form of protection of corporate rights is an integral attribute of ensuring the observance and inviolability of the rights and legitimate interests of corporate entities, as well as protection against abuse and illegal actions during the certification of local documents of corporate entities.

Корпорации и корпоративные финансовые инструменты в российском и зарубежном праве

Introduction: the paper investigates the legal regime of corporate financial instruments in the context of the convergence of the world legal systems taking into account historically determined national differentiation. We study the legal regime of corporate financial instruments with respect to the status peculiarities of a corporation as a subject of legal relations and the regime characteristics of a financial instrument as a legal object. The purpose of the study is to analyze and generalize the legal experience of economically developed countries and to explain the modern legal content of the concept ‘corporate financial instrument’ against the related legal terms ‘securities’, ‘financial instrument’, ‘corporation’; to reveal major problems in the doctrine and positive legal regulation. Methods: comparative-legal, formal-logical, historical, analytical, empirical methods, and legal modeling. Results: the analysis of Russian and foreign experience made it possible for us to explain the specific nature of the legal status of corporation as the main component of modern economic systems, which determines special legal regimes of financial instruments that provide certain corporate rights. Conclusions: in terms of comparative analysis, of special interest is legal experience of such countries as Germany, France, Great Britain, and the USA since these countries show a higher level in the development of corporate legal forms and financial markets. Since early 1990s, Russia has been demonstrating high rates in the formation of the system of financial instruments circulation, which, with respect to the legal development of the corporate legal entity doctrine, brings Russian legal system closer to the world major legal systems. In the light of the focus on the sustainable economic development and defense of state interests with the use of modern digitalization methods, this also objectifies and makes currently relevant the development of the national legal regime of the corporate financial instrument based on the international legal experience.