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2K views309 pages(Cambridge Professional English) Amy Krois Lindner, TransLegal - International Legal English-Cambridge
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CAMBRIDGE Seam ue La
International
Legal English
A course for classroom or self-study use
Amy Krois-Lindner
elites
Suitable preparation for the
International Legal English Certificate (ILEC) About the authors
TransLegal’
www.translegal.com
‘TransLegal is Europe's leading frm of lawyer-tinguists,
providing the legal community wit:
(© online legal English courses;
© online legal English testing:
(© online legal Engish dictionary:
(© online legal language resources;
ive legal English courses and seminars;
(© translations of legal and commercial documents;
© legal language consultancy services.
TransLegal has collaborated with Cambridge ESOL, a
division ofthe University of Cambridge, inthe development
of the Cambridge ILEC examination, the world's only
Internationally recognised test of legal English
For more information about TransLegal and for online legal
language resources, sit www.translegal.com.
Author acknowledgements
Robert N. Houser (Contributing Author
and Lawyer-Linguist, TransLegal)
| would lke to extend my gratitude to all my colleagues at
‘TransLegal who have assisted in mary ways in writing this second
{edition and the first edition. Particular thanks are due to Peter
Dahlen and Randy Sklaver for authoring material for the
Intellectual property unit, and Robin Bernstein and Wiliam Yeago,
‘whose valuable insights and dedication over many years are a
part of this book.
| would also ike to thank Michael Lindner and the other partners
‘at TransLegal for giving me the opportunity to work with
Cambridge University Press on this most fulfiling project.
Finally, my warmest appreciation to Helena, Lukas and Liv Houser
{or their patience, understanding and generous love during my
work on both editions of this book.
Publisher's acknowledgements
‘The authors and publishers would Ike to thank the teachers
whose comments have helped in the development of this new
edition: Jeremy Day, Matt Firth, Maria Lombardi, Andrew Nathan,
Sarah Porch and Alison Wiebalek.
‘The authors and publishers would also like to thank once again
the teachers whose comments helped shape the first edition:
Dorthe G.A. Engelnarat, Monica Hoogstad, Michael Thompson, Ji
Northeutt and Caroline Hare; Melissa Good, who provided
guidance on the law content of the book throughout the project:
Craig Duncan, who reviewed the online tasks at their inital
stages; and Matt Firth and John Kokko for their tremendous work
on the online task.
Amy Krois-Lindner
Amy Krois-Lindner has taught language competence at the
English Department of the University of Vienna for many years.
‘She teaches English for Special Purposes and academic wring
and is also @ teacherrainer. In addition, she has played a roe in
the development of a departmental ESP module with certification
{and has been involved in the curriculum development of several
ESP courses at the Vienna University of Applied Sciences and the
‘Vienna University of Technology.
Amy Krois-Lindner
| wou het thank our eter, Carine Tia, fr hr excelent
‘appeal and Coed i lating We agree
| would lo tke to thank ou editor onthe rs etn ofthis
book, Care Sheridan fr he expert guidance fr helping 0 keep
tho whole project on tack for communiating 2 wel and for
rmtnating a of
‘Thanks are due to editor Catriona Watson-Brown for her excellent
‘work. | am also grateful to Annie Broadhead and Joanna Kosta
for ther valuable assistance with the Exam focus section, and to
Joanne Robinson for working hard to obtain permission for the
texts used in the book.
Mary thanks are due to my children, Fabio, Linus and Chiara,
‘and to Martin Brune for his love and unfaling suppor.
This new edition is dedicated to June Lindner and tothe loving
‘memory of George Lindner, my personal proofreader and coach
(on the frst edition. Types of breach
Speaking,
1 Contract remedies
B Interviewing a client
Reading Listening [Writing and | Language
Speaking
i TA Bods ofw [A Dooumers ncout | Speaking
Unit 1 B The adversarial and | B Lawyers A Explaining what a law
Toe prectce ction | chai estone | taps edcaton | sme
pees 8 Tes ow © Lowtimsircture |B Gvicour systems
Ditpecotemut | E Pravtoc ares | C Logal education
E Posonsincout | F Lowtn cutre | D Denbow frm
F Legal Latin
Witz 7 inseducton io Company onavon | Wing © Rayne Rls company
Conearyion |B romnga buiness | Alen eden eget
compa iow: |B Amemerandumot | intneuK © Langinge se Sha and may
‘company formation | association pean © Text analysis: eter of advice
— oe Aa etre preset
page 20, formation eae
0 corporat governance
Unit 2 Language focus page 32
Unit 3 ‘A voducono [A Argiaioowe | Wing © tay ons Sores
company 8 Patong | Summaring © Langunge veh Contrasting
Company os contatatin inormaton
antatsatin |B Staehoers ond seein © tanguge use: ommen
page 34 ‘supervisory boards pend collocations (verb plus noun)
C New legisiation - share ee © Text analysis: Understanding
capt dipper tenes
see
Unit 3 Language focus page a6
Unit 4 FA inroducents [A Bolanng eet | Wing © ay tm Opposing concent
changes in tapes tan | Standard ptrasentor | nconpay tw
company a companies teauttion tpenngendccang | © Tenant Begining
fundamental 8 Spina 8 hcnecit cele preeraton
changestna | C Themes © Language we A Blaaing a
cone ee Some mc | mosore
page 48 D Shareholder rights eenanarte-o © Language use B: Collocations
Unit 4 Language focus page 60
Case study 1: Company law page 62
Unit 5 A avoduion to [A Negtaing Wing © ey ene: etree
contact toaton |B Corbactnegstaton | A Anifomatie memo | convec lrmeton
Contracts: contact_| 5 Acorant B adapting consact | © Tex onan: Understanding
formation © Adapting contract telte contaca
oe temple © language ue hy
lee i Seaking croton :
IR eaeaeing snes | Oa ae
B hegaiangan | © Latdng ne Nearing
l emer © Language use : Adverbs
Unit 5 Language focus page 76
Unit 6 - inveducionto [A ADanshreeay | Witeg © ayer ps of anges
convact remedies | 8 Remedies ralowsn © Language vse Ting aout
contract: medion | © Lieto damages ceapaecem of tat gar Sa a
pose 78 6 Undestndng stent © Language ie: Ung
convect causes repton ad undertanng
°
Text analysis Initial interview
witha client
Unit 6 Language focus page 90
Case study 2: Environmental law page 92 Reading Listening Writing and Language
Speaking
Unit 7 7 invoducionte | A Preaingaavaut | Wet © eye Conran
contract assignation | and developing an | Amemo ving advice | Language use A: Nouns ending
Contracts: 8 Understanding ‘argument Fett in -or and -e@
assignment and contract clauses | B Acosing argument | SPAKE © Language use B: Vero + ing
‘thireparty nights | ¢ AToliowup email Epis tach omey a
pean D Actg went 2 © Tat nat: Penne
E Keeping informed aes we a ‘writing and speaking.
sae or © Language use ©: Phrases
evoluating sources of | "referring to evidence
ee © Language use 0: Informal ste
Unit 7 Language focus page 106
Unit 8 ‘A invosuetiont [A Anemployment | Wilting © ‘Key terms: Employment
employment aw tabunaieiaim | A Atachments and | ©. Language use A Expressing an
Employment low | 8 Asexdscriminaon |B Lib risks fomaity opinion, agreeing and
page 108 case 8 Advising on isagreing
© Ajustied dismissal advertages nd | O Language use B: Partcile
D Unfair cismissal aisadvortages in cfauses with ng
anes
Speaking
Aarecing ond csagrcing
Unit 8 Language focus page 120
Unit 9 A ivduiono to] tgawiing | Willing end Speting —] © oy emo Su of 0
200s egsation | seminar on dating | Presenting a case biet | O Language use Terms and
Sale of goods 8 Retetin of tie ctouses cenlton of sale
age 122 8 Acase bret © Text anatsis: A case bit
© Language use B: Taking about
coesponing lows and
insthutons
Unit 9 Language focus page 12
Case study 3: Contract law page 134
Unie 0 ‘A itduction © A easements Witing © Key tems Paris refered to
property iw B Buying arouse in| A Deserting a fms in real property aw
Real property low | 8 Alaw fms practice | Spain act areas © Language use A: Conasting
page 136 areas 8 Summaising na iaeas
© Understanding 2 requesting © Languoge use &: Cussiving
tease or enan and detngushing ypes or
seem Seating omer
Aanaspectotveat — | (ame og
D Acase review guage use C: ivng a
rope iw
E Areference email
8 A case discussion
presentation - stucturing and
signaling transitions
Unit 10 Language focus page 148
Unit 11
Intellectual property
page 150
' tntroduction to
intellectual property
B The State Stret case
Business method
patents
Trade-mark statutes
2 Training of junior
lawyers
8B Discussing issues -
copyright and fair
Writing
Notes for a case bret
Writing and Speaking
Paraphrasing in pain
language
Speaking
Phrases for discussions
ey terms: intelectual property
Teat analysis: Discourse
markers as sentence openers
Unit 11 Language focus page 162
Case study 4: Intellectual property law page 164 Reading Listening Writing and Language
Speaking
TSS (IC mei
ace earns eer (oan)
Meee cl Rare | Meare |articore 2 | ginny
ae srs
HSiGEN IRN
Ta aoe ra SEL peered Sigueaaes
cece | SY | Re | eae mia
page 178, C Aseminar on revised in secured aes. ‘events and planning.
legislation ‘vansactions Deane contingencies
D An internal email Sonne rte O Text analysis: Formality /-
te peers
information
Unit 13 Language focus page 190
Unit 14 A invoduaonio [A Pateing asst] Wing © ype fen
devor-sreator |" fomjdeaiiens |X Retverngiter | © Ted anabas Acowngleter
Deito-cratar |B Sats goeming | 8 Anbitentew” | 6 Atanu nee
Me ¢ Acoorasan Seeing
: 1 cs tency
isoheny a
prectoner
B Alob interview
ie Ive © Discussion on
E Making a case Somos:
Unit 14 Language focus page 204
Case study 5: Transnational insolvency law page 206
Unit 15 1 troduction to 1 Advising on Writing © Key terms: Ant-compettve
‘competition iw compettion law | A Using passive activity
‘Competition law | & Art-comptitve risks constructions © Language use: Waring cent
page 208 ‘activities ard 8 Merger control | B Aproposal ot sks
antitrust measures © Aninformative emai!__| © Text anabsis: A proposal
© Acartel casein China
D Report on changes in eee
merger equation RDeP EINES:
competitoniaw case
Unit 15 Language focus page 220
7 Invoduction to ‘rafting arbitration | Writing © Key tems: Terms from
init transnational clauses ' Planningthe contents. | — ‘transnational commercial aw
Transnational commercial iow | 8 Acrossborder ‘and structure ofa | O Text analysis: Cohesion
commercial iew | 8 Confictotiawsin | dispute ietor
page 222 private international 8 Textual ransormation
law
‘Speaking
© An article fom the
ee ‘A short presentation
Unit 16 Language focus page 232
Case study 6: Transnational commercial law page 234
Exam focus page 236 Role cards page 301
ILEC practice test page 258 ‘Answer key page 303
‘Audio transcripts page 278 Index page 331
Acknowledgements page 336 The practice of law
1
PART |: THE LEGAL SYSTEM
1 ee etd
1.1 Read the excerpts below from the course catalogue of a British university's,
summer-school programme in law and answer these questions.
1 Who is each course intended for?
2 Which course deals with common law?
3 Which course studies the history of European law?
B
LAW 121: Introduction to English law
LAW 21: Introduction to civil law
This course provides a general overview of
English law and the common-law system. The —
course will look at the sources of law and the
law-making process, as well as at the justice
system in England. Students will be introduced to
selected areas of English law, such as criminal
aw, contract law and the law of torts. The
relationship between the English common law
and EC law will also be covered.
‘The course is designed for those international
students who will be studying at English universi-
ties later in the academic year. Other students
with an interest in the subject are also welcome
to attend, as the contact points between English
‘More individuals in the world solve their legal
problems in the framework of what is called the
civil-law system than in the Anglo-Saxon,
ccase-law system. This course will introduce
students to the legal systems of Western Europe
that have most influenced the civi-law legal
systems in the world, It aims to give students an
insight into a system based on the superiority of
written law. The course will cover the application
and development of Roman law in Europe to the
‘making of national codes all over the worid.
‘The course is intended to prepare students who
are going to study in a European university for the
different approaches to law that they are likely to
law and civil law are numerous. The seminars and
all course materials are in English.
face in their year abroad,
1.2 Match these bodies of law (1-3) with their definitions (ac).
2. civil law a area of the law which deals with crimes and their punishments,
2 common law including fines and/or imprisonment (also penal law)
3 criminal law _b 1) legal system developed from Roman codified law,
established by a state for its regulation; 2) area of the law
concerned with non-criminal matters, rights and remedies
¢ legal system which is the foundation of the legal systems of
most of the English-speaking countries of the world, based
on customs, usage and court decisions (also case law,
judge-made law)
1.3 Complete the text on the next page contrasting civil law, common law and criminal
law using the words in the box.
bound by codified custom
precedents provisions
disputes
rulings
based on legislation
non-criminal ‘The term ‘civil aw’ contrasts with both ‘common law’ and ‘criminal law’. In the first
‘sense of the term, civil law refers to a body of law 1) ...._. written legal codes
derived from fundamental normative principles. Legal 2) _are settled by
reference to this code, which has been arrived at through 3) - Judges are
4) _.. the written law and its 5)
In contrast, common law was originally developed through 6) sata time
before laws were written down. Common law is based on 7) created by
Judicial decisions, which means that past 8) are taken into consideration
when cases are decided. It should be noted that today common law is also
9)... ke. in written form.
In the second sense of the term, civil law is distinguished from criminal law, and refers,
to the body of law dealing with 40) matters, such as breach of contract.
1.4 Which body of law is the basis of the legal system of your jurisdiction?
Reading B: The adversarial and inquisitorial systems
A further difference between the ci
way proceedings are conducted.
aw system and the common-law system lies in the
2.4. Read the text below comparing the two systems and answer these questions.
1 Which system is characteristic of common-law countries?
2 How does the way evidence in a trial is gathered and presented differ in the two
systems?
3 What is the role of the attorney in each system?
4 In your opinion, which system is best suited for arriving at the truth?
with the adversarial system used in the United States and Great Britain. In the adversarial system, two or
‘more opposing parties gather evidence and present it, and their arguments, to a judge or jury. /
The judge or jury knows nothing of the litigation until the parties present their cases to the decision-maker. {
Furthermore, in a criminal trial, for example, the defendant is not required to give testimony. {
The inquisitorial system, which is employed in most civil-law jurisdictions, can be defined by comparison f
}
In the inquisitorial system, the presiding judge is not a passive recipient of information. Rather, he or
she is primarily responsible for supervising the gathering of the evidence necessary to resolve the case.
He or she actively steers the search for evidence and questions the witnesses, including the respondent or |
defendant. Attorneys play a more passive role, suggesting routes of inquiry for the presiding judge and
following the judge’s questioning with questioning of their own. Attorney questioning is often brief because |
the judge tiesto skal relevant questions. The gol ofboth the adversarial sytem andthe inquisitorial
system is to find the truth. But the adversarial system seeks the truth by pitting the parties against each other
in the hope that competition will reveal it, whereas the inquisitorial system seeks the truth by questioning f
those most familiar with the events in dispute. The adversarial system places a premium on the individual {
rights of the accused, whereas the inquisitorial system places the rights of the accused secondary tothe
search for truth. ‘
2.2 Underline the verbs in the text above that appear with the nouns below (1-3). Then
combine the verbs in the box with the three nouns to make word partnerships. Some
of the verbs go with more than one noun.
dismiss gather give hear present provide —_recant
reject support uncover
evidence 2 testimony 3 arguments
2.3 Make sentences about the role of the judge in the inquisitorial system and the role of
the attorney in the adversarial system using some of the verb-noun collocations from
Exercise 2.2.
Unit The practice of law y) 2)
3 er
Cm Ne Cl)
The word law refers generally to legal documents which set forth rules governing a particular
kind of activity.
3. Read these extracts, which each contain a word used to talk about types of law.
Where did each appear? Match each extract (1-5) with its source (a-e)..
a Te 2
“The new EU Working Hours Directive is ‘When a statues plan and unambiguous, the
reported tobe causing controversy amongst court must give effect to the intertion ofthe
the medical profession legislate as expressed, rather than determine
‘what the lw should or should not be.
3
The purpose of this Ordinance i to 4
regulate traffic upon the Streets and Public ‘These workplace safety and health
Places in the Town of Harwile, New regulations are designed to prevent
Hampshire forthe promotion ofthe safety personal injuries and ilnesses from
and wetare of the pubk. ‘Securing inthe workplace.
5
Mr Speaker, | am pleased to have the opportunity to present the Dog Control
‘Amendment Bill to the House. Itis a further milestone in meeting the changing
expectations we have about what is responsible dog ownership.
fpr ty ene
UK) bya/tyetaw
a court ruling © newspaper e brochure for employees
b local government document d parliamentary speech
3.2 Find words in the extracts in Exercise 3.1 which match these definitions.
1 rules issued by a government agency to carry out the intent of the law; authorised
by a statute, and generally providing more detail on a subject than the statute
2 law enacted by a town, city or county government
3 draft document before itis made into law
4 legal device used by the European Union to establish policies at the European level
to be incorporated into the laws of the Member States
5 formal written law enacted by a legislative body
3.3 Complete the sentences below using the words in the box.
bill directive ordinance __ regulations _ statutes
1. The Town Council will conduct a public hearing regarding a proposed
‘concerning property tax.
2 According to the concerning working time, overtime work is work which is
officially ordered in excess of 40 hours in a working week or in excess of eight
hours a day.
3 Early this year, the government introduced a new on electronic commerce
to Parliament.
4 Anumber of changes have been made to the federal governing the seizing
of computers and the gathering of electronic evidence.
5 The European Union ‘on Data Protection established legal principles aimed
at protecting personal data privacy and the free flow of data. @ Speaking A: Explaining what a law says
There are several ways to refer to what a law says. Look at these sentences:
The law stipulates that corporations must have three governing bodies.
The law provides that a witness must be present.
The patent law specifies that the subject matter must be ‘useful’.
‘These verbs can also be used to express what a law says:
The law states / sets forth / determines / lays down / prescribes that ...
Choose a law in your jurisdiction that you are familiar with and explain what it says using
the verbs listed in the box above.
J Reading D: Types of court
Courts can be distinguished with regard to the type of cases they hear.
Match each of these types of court (1-9) with the explanation of what happens
there (ai.
1 appellate court (or court of ‘a This is where a person under the age of 18 would be tried.
appeals, appeals court) b This is the court of primary jurisdiction, where a case is
2 crown court heard for the first time.
3 high court This is where small crimes are tried in the UK.
4 juvenile court d This is where law students argue hypothetical cases.
5 lower court (or court of first € This is where a case is reviewed which has already been
instance) heard in a lower court.
6 magistrates’ court f This is where cases involving a limited amount of money are
7 moot court handled.
8 small-claims court & This is where serious criminal cases are heard by a judge
9 tribunal and a jury in the UK.
fh This is where a group of specially chosen people examine
legal problems of a particular type, such as employment
disputes.
i This is usually the highest court in a jurisdiction, the court of
last resort
J Speaking B: Ci ourt systems
Work in small groups and discuss these questions.
1. Describe the different types of court in your jurisdiction and the areas of law they
deal with
2 Select one type of court in your jurisdiction and explain what kinds of case it
deals with.
Unit The practice of law ) @ Reading E: Persons in cou
Complete this diagram with the words and definitions below (a-f).
oa ~~
(/~ public official who has,
( Ae authority to hear and) —
decide cases Lt person who EN
a, (
initiates a civil
ae eres a J
/ defendant a
Ys ee Guage ) (tian)
I SS
reasonably
prudent person
—
person who esl
/- specialised knowledge
of a particular subject
= who is called ea
testy in cn
= who a is \ person who ae
(__ records, files papers 9) A ) appeals a decision
Sais processes Scel— ee ee
expert witness
appellant?
person who is sued in a civil lawsuit
officer of the court whose duties include keeping order and assisting the judge
and jurors
person who pleads cases in court
hypothetical person who uses good judgment or common sense in handling
Practical matters; such a person’s actions are the guide in determining whether an.
individual's actions were reasonable
(U9) asuaty plait
2 (US) also poutoner
8 RSL cena
8.1 4: Listen to a lawyer telling a client about some of the documents involved in his
case and answer these questions.
aor
°
1. What claim has been filed against the client?
2 What does the lawyer need from the client to be able to prepare his defence?
3 Will the case go to trial? 8.2 Match these documents (1-9) with their definitions (a-i).
2 affidavit ‘aa document informing someone that they will be involved in
2 answer a legal process and instructing them what they must do
3 brief b a document or set of documents containing details
4 complaint about a court case
5 injunction ¢ a document providing notification of a fact, claim or
6 motion proceeding
T notice d a formal written statement setting forth the cause of action
8 pleading or the defence in a case
9 writ! e a written statement that somebody makes after they have
‘sworn officially to tell the truth, which might be used as proof
in court
fan application to a court to obtain an order, ruling or
decision
& an official order from a court for a person to stop doing
something.
hin civil law, the first pleading filed on behaff of a plaintiff,
which initiates a lawsuit, setting forth the facts on which the
claim is based
i. the principal pleading by the defendant in response to a
‘complaint.
+ singe the 1999 reform rules, the term cla form i used inthe UK.
8.3 4 Listen again and tick the documents that the lawyer mentions.
a affidavit [1 4 complaint [J 7 notice Qo
2 answer OS injunction Ol 8 pleading O
3 brief OD 6 motion D9 writ
8.4 Match each verb used by the lawyer (1-5) with its definition (ae).
1 to draft a document a to deliver a legal document to someone, demanding,
2 to issue a document ‘that they go to a court of law or that they obey an
3 tofile a document with an authority order
4 to serve a document on someone b to produce a piece of writing or a plan that you
(or to serve someone with a document) intend to change later
5 to submit a document to an authority _¢ ‘to deliver a document formally for a decision to be
made by others
d to officially record something, especially in a court
of law
@ to produce something official
8.5 Decide which of the documents in Exercise 8.2 can go with these verbs. The first one
has been done for you.
1. draft an answer, a brick a complaint, a motion, a pleading,
2 issue
3 file (with)
4 serve (on someone)
5 submit
Unit
‘The practice of law 1) oR eee ee
Lawyers use Latin words and expressions when writing legal texts of every kind, from
statutes to emails. The excerpt below is from the legal document known as an ‘answer’.
twas submitted to the court by the defendant from Listening A.
9.4 Underline the common Latin words and phrases in the excerpt. Do you know what
they mean?
‘The claim for breach of contract fails inter alia to state facts sufficient to constitute a cause {
of action, is uncertain as to what contract plaintiffs are suing on, and is uncertain in that it?
cannot be determined whether the contract sued on is written, oral or implied by conduct.
The complaint alleges breach of contract as follows: ‘At all times herein mentioned,
plaintifis were a part [sic] to the Construction Contract, as well as intended beneficiaries
to each sub-contract for the construction of the house. In light of the facts set out above,
defendants, and each of them, have breached the Construction Contract.” d
On its face, the claim alleges only that defendants “breached the Construction Contract’
But LongCo is not a party to the Construction Contract. Therefore LongCo cannot be liable {
for its breach. See e.g. GSI Enterprises, Inc. v. Warner (1993).
}
‘9.2 Match each Latin word or expression (1-8) with its English equivalent and the
explanation of its use (ah).
1. ad hoc a thus (used after a word to indicate the original, usually incorrect,
2 etalii(etal) spelling or grammar in a text)
3 et cetera (etc.) b for example (used before one or more examples are given)
4 exempli gratia (e.g.) _¢ for this purpose (often used as an adjective before a noun)
5 id est (ie.) against (abbreviated to ‘v.’ in case citations, but to ‘vs.’ in all other
6 perse instances)
7 sic and others (usually used to shorten a list of people, often a list of
8 versus (vs. oF v.) authors, appellants or defendants)
and other things of the same kind (used to shorten a list of similar
items)
by itself (often used after a noun to indicate the thing itself)
fh that is (used to signal an explanation or paraphrase of a word
preceding it)
9.3 Match each Latin term (1-10) with its English equivalent (a-)),
1 de facto a among other things
2 ipso facto b per year
3 inter alia © number of shareholders or directors who have to be
4 per annum present at a board meeting so that it can be validly
5 pro forma ‘conducted
6 pro rata d infact
7 quorum e of one’s own right; able to exercise one’s own legal
8 sul juris rights
9 ultra vires proportionally
10 videlicet (viz.) & by that very fact itself
h asa matter of form
I as follows
J beyond the legal powers of a person or a body PART |
A CAREER IN THE LAW
fs) Listening B: Lawyers
110.4 4: Listen to this discussion between Javier, a Spanish student taking part in a
university's summer school programme in the UK, and Robert, an English student. Match
the words to describe lawyers (1-5) with the definitions (a-c) and usage notes (df.
aadvcate [1] 4 tawer ag
2attomy LO Ssotctor LO
3 banister =O O
Definitions
‘a general term for someone whose job is to give advice to people about the law
and speak for them in court
b more specific term for someone who is trained to prepare cases and give advice
on legal subjects and can represent people in lower courts
‘© more specific term for someone who is qualified to give specialist legal advice
and can argue a case in both higher and lower law courts
Usage notes
mostly US term
@ used in Scottish law
mostly UK/Australian/Canadian term
10.2 Look up the terms counsel, counsellor and paralegal and their definitions and
usage. Complete this table that Javier drew up after talking to Robert.
Core Se terns
counsel | wera wo gine achice, Counsel for the defence | collecation: egal counsel’ can We wsea to
copecialy in legal matters: | argued that his chent was | vefer to one or move lawvisters pleading,
(wow) a lawyer who pleade | not quity a. cane, Often wad to address a lawyer
cases in court in court in the thivd person: ‘Counsel mag
present the evidence’
‘counsellor
paralegal
110.3 Another type of lawyer found in many civil-law jurisdictions is called a notary. Below is
brief comparison of the civiklaw notary with its US counterpart, the notary public,
which appeared on the website of a law firm. Complete it using the verbs in the box.
administer authenticating drafting executes._ performs
serving take —_verify
notary in civiblaw systems - notario in Spanish-speaking countries, notaire in French-speaking,
Countries, symvoulographos in Greece - 2)
a very different function than does a notary
public in the United States. The civilaw notary is an attorney who has undergone special training
{and performs the following three basic functions: 2)
contracts and deeds; 3) legal instruments; and 4)
vw legal documents such as wis,
1s a public repository of legal
instruments. By contrast, a notary public in the US need not be an attorney. The functions of a US
notary public are basically to 5)
identity of @ person who 8)
oaths, 6)
vw @ legal document.
‘sworn statements and to 7) the
Unit 1 The practice of aw x) 10.4 Discuss these questions.
1. Does your native language have more than one word for lawyer? Do they
correspond to the different English words for lawyer mentioned on the
previous page? If not, how do the concepts differ?
2 What is each type of legal practitioner in your jurisdiction entitled to do?
3 What English term do you use to describe your job or the job you would like to do?
4 What legal services can a notary render in your jurisdiction?
110.5 Combine the nouns in the box with the verbs below (1-6) to make combinations to
describe the work lawyers do. Some of the verbs go with more than one noun,
cases clients, contracts corporations. decisions. defendants
disputes lay legislation
1 advise
2 draft
3 litigate
4 practise
5 represent
6 research
110.6 Choose three ‘verb + noun’ pairs from Exercise 10.5 and write sentences using them.
110.7 Choose the words from the box which can be combined with the word lawyer to
describe different types of lawyer. Say what each one does.
bar corporate defence government ~—_patent-_—_ practitioner
public sector sole’ tax trial
Listening C: Legal education
In English-speaking countries( the Bar is a term for the legal profession itself, while a
bar association is the association which regulates the profession. A person who qualifies to
practise law is admitted to the Bar; in the US, a law-school graduate must pass the
bar examination.
You are going to hear a German law student speaking to a group of other students at a US
law school. He describes the education and training a law graduate must complete to enter
the legal profession in Germany.
14.4 «= Listen and decide whether these statements are true or false.
1 In Germany, a student requires a university degree to study law.
2 Attendance is obligatory at the-introductory lectures at a German law faculty.
3 German students of law learn to apply the relevant statutes to the cases they
analyse in their coursework.
4 In Germany, the bar examination is administered in two parts.
14.2 Discuss these questions.
1. Is legal education in your country more similar to the US or the German model?
2 What does the speaker mean by ‘the Socratic method"? What do you think the
advantages and disadvantages of using thi method might be? fs) Speaking C: Legal education
Describe the education of a lawyer in your country and include these points.
* Prerequisites for studying law + Bar examination
* Main subjects covered at law school * Student clerkships
fs Listening D: Law-firm structure
13.1.4: A young British lawyer, Linus Walker, has applied for a position at a law firm.
Listen to his job interview and answer these questions.
1 What does Mr Nichols say about the atmosphere of the firm?
2 What are the full partners responsible for in the firm?
3 What does Linus say about the size of the firm?
13.2 4: Listen again and complete this organigram of the firm using the words in the box.
Associate Full partners Mr Robertson Paralegal _—Real Property
Salaried Lawyer
Mr Michaels )
Senior Partners.
ae
(Ms Graham, Mr Nichols )
\ 2)
r Department |_(Seseuny) (DeberCredior Department) (Sama)
(Geoominipeteemnits) 2) (cera y ieee.)
5)
(_ Parategat pa
Ses DECOR Ie
Paralegal }_I
fs? Speaking D: Describing a law firm
14.1 Look at these phrases used by Mr Nichols to describe the firm in Listening D. Which
can be used to speak of a department or company, and which of a person? Which
can be used for both?
is/are headed by ... .. is/are responsible for
.. is/are assisted by ... is/are in charge of
is/are managed by + Feport to ..
14.2 Using the phrases in Exercise 14.1, describe the structure of a law firm with which
you are familiar or the one just described in Listening D. Refer to the positions and
duties of the personnel.
Unit The practice of law wD) f Listening E: Practice areas
15.4 4: Listen to five lawyers talking about their firms, practice areas and clients. Tick
the information you hear about each speaker.
Speaker 1...
has a few years’ working experience.
works as a clerk at a mid-size commercial law firm.
will get to know other departments of the firm.
meets with clients regularly.
plans to specialise in commercial litigation,
anon
o0000
Speaker 2...
1. is a sole practitioner.
2 works in the area of employment law.
3 deals with wage disputes.
4 represents clients in mediation.
5 has many clients who are small businesses.
oo0000
Speaker 3...
works in the area of secured transactions.
carries out trade-mark registrations.
assists clients who are in artistic professions.
serves as an expert witness in court.
is a partner in a large IP firm.
aseone
oo0000
Speaker 4 ...
1. isa senior partner in a mid-size law firm.
2 specialises in competition law.
3 represents clients before the employment tribunal.
4 deals with infringements of the Competition Act.
5 has clients in the telecommunications sector.
oo0000
Speaker 5
1. owns shares in his firm.
2 argues cases in court.
3 works in the area of real property law.
4 represents landlords but not tenants.
5 teaches courses on litigation at the law university.
oo0o000
15.2 Discuss these questions.
1. Which kind of firm do you work in or would you like to work in?
2 Which areas of the law have you specialised in or would like to specialise in? fs) Listening F: Law-firm cultur
16.4 Read this excerpt from an article in a law-school newspaper about law-firm culture,
Which type of firm would you prefer to work for? Why?
ne factor which plays an important
role in the culture of a law firm is its
size. Law firms can range from a one-person
solo practice (conducted by a sole practi-
tioner) to global firms employing hundreds
of attomeys all over the world.
A small law firm, which typically engages
from two to ten lawyers, is sometimes
known as a ‘boutique firm’, as it often
specialises in a specific area of the law. A
mid-size law firm generally has ten to 50
lawyers, while a large law firm is considered
to be one employing 50 or more attorneys
16.2 4: You are going to hear Richard Bailey, a law student, talking to a group of first-
year law students at an orientation event at law school. He tells them about his
experience as a clerk in different law firms. Listen and answer these questions.
1. Why do the professors encourage students to do work experience?
2 How long have Richard's clerkships generally lasted?
3 What kind of work did Richard do at the larger law firms?
4 What is Richard's final piece of advice?
16.3 4: Listen again and tick the advantages of small and large law firms Richard
mentions. In some cases, he says both types of firm have the same advantage.
Ci Ea
more autonomy and responsibility
‘opportunity to work on prestigious cases |
chance to rotate through different practice areas
asked to write briefs and letters
allowed to conduct research and manage court books
opportunity to make many contacts
more training offered
made to feel part of a team
ited to participate in social events
|famitylike atmosphere
made good use of time
16.4 Discuss these questions.
1 Do you have any experience working as a clerk in a law firm? In what ways was it
similar to or different from Richard's experience?
2 What kinds of tasks and responsibilities do clerks in your firm have?
3 Do you agree with the way Richard characterises small and large law firms?
Unit 4
‘To improve your web-based research skills, visit www.cambridge.org/elt/ile2, click on Research
\ Tasks and choose Task 1.
=
Unit The practice of law 20)
2} Company law: company
formation and management
1 ete
oduction to company law
This text provides an introduction to the key terms used when talking about companies as
legal entities, how they are formed and how they are managed. It also covers the legal duties
cof company directors and the courts’ role in policing them.
Read the text below quickly, then match these phrases (a-f) with the paragraphs (1-6).
a directors’ duties © company definition € partnership definition
b management roles d company health company formation
| 1 Acompany: is a business association which has the character of a legal person,
distinct from its officers and shareholders. This is significant, as it allows the
‘company to own property in its own name, continue perpetually despite changes in
‘ownership, and insulate the owners against personal liability. However, in some
instances, for example when the company is used to perpetrate fraud or acts ultra
vires, the court may ‘lift? the corporate veil’ and subject the shareholders to
personal liability
2 By contrast, a partnership is a business association which, strictly speaking, is
not considered to be a legal entity but, rather, merely an association of owners.
However, in order to avoid impractical results, such as the partnership being
precluded from owning property in its own name, certain rules of partnership law
treat a partnership as if it were a legal entity. Nonetheless, partners are not
insulated against personal liability, and the partnership may cease to exist if a
change in ownership occurs, for example when one of the partners dies.
3 A.company is formed when a certificate of incorporation® is issued by the
appropriate governmental authority. A certificate of incorporation is issued when
the constitutional documents of the company, together with statutory forms, have
been filed and a filing fee has been paid. The ‘constitution’ of a company consists
of two documents. One, the memorandum of association’, states the objects of
the company and the details ofits authorised capital, otherwise known as the
nominal capital. The second document, the articles of association®, contains
provisions for the internal management of the company, for example shareholders’
annual general meetings®, or AGMs, and extraordinary general meetings’, the
board of directors, corporate contracts and loans.
4 The management of a company is carried out by its officers, who include a
director, manager and/or company secretary. A director is appointed to carry
out and control the day-to-day affairs of the company. The structure, procedures
and work of the board of directors, which as a body govern the company, are
determined by the company’s articles of association. A manager is delegated
(us) corporation 4 (US) artetes of incorporation or certteate of incorporation
2s) perce 5 (US) bylaws
3 (US) Generaty no offic! certiteate is issue © (US) annual mestings ofthe shareholders
companies reformed when the arcle/cerificate (US) special meetings of the shareholders
of Incorporation are fed (see footnote 4), supervisory control of the affairs of the company. A manager's duties to the company
are generally more burdensome than those of the employees, who basically owe a duty
of confidentiality to the company. A company's auditors are appointed at general
‘meetings. The auditors do not owe a duty to the company as a legal entity, but, rather,
to the shareholders, to whom the auditor's report is addressed,
The duties owed by directors to a company can be classified into two groups.
The first is a duty of care and the second is a fiduciary duty. The duty of care
requires that the directors must exercise the care of an ordinarily prudent and
diligent person under the relevant circumstances. The fiduciary duty stems from
the position of trust and responsibilty entrusted to directors. This duty has many
aspects, but, broadly speaking, a director must act in the best interests of the
‘company and not for any collateral purpose. However, the courts are generally
reluctant to interfere, provided the relevant act or omission involves no fraud,
illegality or conflict of interest.
Finally, a company’s state of health is reflected in its accounts’, including its
balance sheet and profit-andtoss account2. Healthy profits might lead to a
bonus or capitalisation issue® to the shareholders. On the other hand, continuous
losses may result in insolvency and the company going into liquidation.
+ (Us) nancial statements
2 (US) prefitandoss statement or income statement
3 (US) stock avin
@ Key terms: Roles in company managemen'
2.1 Some of the important roles in company management are discussed in Reading A
above. Which roles are mentioned?
2.2 Here is a more comprehensive list of roles in company management. Match the roles.
(4-10) with their definitions (aj).
2. auditor a person appointed by a shareholder to attend and vote at a meeting in
2 company secretary his/her place when the shareholder is unable to attend
3 director 'b director responsible for the day-to-day operation of the company
4 liquidator © person elected by the shareholders to manage the company and decide
5 managing director its general policy
6 official receiver person engaged in developing or taking the initiative to form a company
7 promoter (arranging capital, obtaining personnel, making arrangements for filing
8 proxy corporate documentation)
9 receiver © person appointed by the company to examine the company’s accounts
20 shareholder and to report to the shareholders annually on the accounts
f company’s chief administrative officer, whose responsibilities include
accounting and finance duties, personnel administration and
compliance with employment legislation, security of documentation,
insurance and intellectual property rights
& member of the company by virtue of an acquisition of shares
h officer of the court who commonly acts as a liquidator of a company
being wound up by the court
{person appointed by creditors to oversee the repayment of debts,
J person appointed by a court, the company or its creditors to wind up the
‘company's affairs
Unit 2 Company law: company formation and management x) STIRS ‘company formation
ig
Lawyers play important roles in the formation of a company, advising clients which entities
are most suited to their needs and ensuring that the proper documents are duly filed.
You are going to hear a conversation between an American lawyer, Ms Nortis, and her client,
Mr Herzog. The lawyer describes how a specific type of corporation is formed in the state of
Delaware.
3.4
Listen to the conversation and tick the documents required for formation that the
lawyer mentions.
4 DBA Tiling
2 articles of incorporation
3 stock ledger
4 general partnership agreement
5 stock certificates
6 IRS and State S Corporation election
7 bylaws
8 organisational board resolutions
Oo000000
3.2
{Listen again and answer these questions.
1 According to the lawyer, what is the advantage of incorporating an entity in the
state of Delaware?
2 What information is included in the articles of incorporation?
‘3 What happens at the first organisational meeting of a corporation?
3.3 Company types (USA) Look at this table, which provides information on the
documents required to form and operate the different company types in the United
States. Based on what you heard in Exercise 3.1, which type of business association
was the lawyer discussing with her client?
(es Ce ke eee
sole proprietorship DBA filing
general partnership General Partnership Agreement, local flings if partnership holds real estate
limited partnership Limited Partnership Certificate, Limited Partnership Agreement |
C corporation ‘Articles of incorporation, Bylaws, Organisational Board Resolutions, |
‘Stock Certificates, Stock Ledger |
corporation ‘Articles of Incorporation, Bylaws, Organisational Board Resolutions,
Stock Certificates, Stock Ledger, IRS and State S corporation election
3.4 Company types (UK) The table on the next page contains information about five
types of common UK business associations, covering the aspects of liability of
‘owners, capital contributions and management. (In many jurisdictions in the world,
there are entities which share some or all of these characteristics.) Look at the table
and decide which entity (ae) is being described in each row (1-5).
private limited company (Ltd)
b general partnership
© public limited company (PLC)
d limited partnership
e sole proprietorship Entity Liability of owners Cie oes
|)... | Unlimited personal liability for | Capital needed is contributed by | Business is managed by the sole
| the obligations of the business. | sole proprietor. proprietor.
2) su. | Generally no personal liability of | No minimum share capital Company is managed through
the members for obligations of | requirement. However, capital | its managing director or the
the business. ‘can be raised through the board of directors acting as a
issuance of shares to members _| whole.
or through a guarantee.
3)... | No personal liability; lability is |The minimum share capital _| Company is managed by the
generally limited to shareholder | of £50,000 is raised through _| board of directors; shareholders
| contributions (i. consideration | issuance of shares to the public | have no power to participate in
[erature deere. | meecet
4)... | Unlimited personal liability of |__| Partners contribute money or _| The partners have equal
the general partners forthe __| services to the partnership; they | management rights, unless they
obligations of the business. share profits and losses. agree otherwise.
'5)..... | Unlimited personal liability of | General and limited partners __| The general partner manages
the general partners forthe | contribute money or services _| the business, subject to any
obligations of the business; _| to the limited partnership; they _| limitations of the Limited
limited partners generally have | share profits and losses. Partnership Agreement.
no personal liability. :
@ Reading B: A memorandum of association
{An important document in company formation is the memorandum of association (UK) or
articles certificate of incorporation (USA). This document sets forth the objects of the
company and its capital structure; as such, it represents a legally binding declaration of
intent to which the members of the company must adhere.
4.1. Below is an extract from the articles of incorporation of a US company. Read through
the extract quickly and tick the issues it addresses.
1 appointing members of the board of directors = LJ]
2 changing corporation bylaws QO
3 procedures for holding a vote of the shareholders L]
4 stipulations for keeping corporation records
‘The power to alter, amend or repeal the bylaws or to adopt new bylaws shall be vested in the Board |
of Directors; provided, however, that any bylaw or amendment thereto as adopted by the Board of |)
Directors may be altered, amended or repealed by a vote of the shareholders entitled fo vote for the
election of directors, or a new bylaw in liew thereof may be adopted by vote of such shareholders.
5. No bylaw which has been altered, amended or adopted by such a vote ofthe shareholders may be)
altered, amended or repealed by vote of the directors until two years shall have expired since such
action by vote of such shareholders. [..] 4
‘The Corporation shall keep as permanent records minutes of all meetings of its shareholders and
directors, a record of all action taken by the shareholders or the directors without a meeting, and a
10 record ofall actions taken by a committee ofthe directors in place ofthe Board of Directors on |
Bein af he Coren, The Conportonsal lo mat ppopinescomtg eerss. J
‘The Corporation, or its agent, shall maintain a record of its shareholders in a form that permits
preparation of alist ofthe names and addresses of all shareholders, in alphabetical order, by class
fares showing the ber and elas of shares held by ech, f
Usit2 Company law: company formation and management ©) 4)
4.2 Read the extract again and decide whether these statements are true or false.
1 The board of directors only has the power to change the bylaws if the shareholders
in turn have the power to amend any changes made by the board of directors.
2 The board of directors is proscribed at all times from changing any bylaw which
has been altered by a vote of the shareholders.
3 Records must only be kept of decisions reached by shareholders and proscribe
directors in the course of a meeting. act
4 Records of the shareholders must list the number Ped
of shares they own. ere
4.3. For each of these words or phrases, find the italicised word(s) in the extract that
most closely matches its meaning.
1. passed 3 instead 5 cancelled 7 given to
2 who have the right to 4 oncondition 6 revised 8 these
J Language use: Shall and may
Read through the extract on page 23 again, noting how shall and may are used, and
answer these questions.
1 Which of these words most closely matches the meaning of shail in each case?
a) will b) must
2 What do you notice about the use of shail in line 6?
3 Which of these words most closely matches the meaning of may in the text?
a) can b) could
In legal documents, the verb shall is mainly used to indicate obligation, to express.
‘a promise or to make a declaration to which the parties involved are legally
bound. This use differs from that in everyday speech, where it is most often used
to make offers (Shall | open the window?) or to refer to the future (/ shall miss
you), although this latter use is less frequent in modern English.
In legal texts, shall usually expresses the meaning of ‘must' (obligation):
Every notice of the meeting of the shareholders shall state the place, date and hour.
or ‘will’ (in the sense of a promise):
The board of directors shall have the power to enact bylaws.
Shall can also be used in legal texts to refer to a future action or state:
Until two years shall have expired since such action by vote of such
shareholders.
In everyday speech, this future meaning is commonly expressed using only the
present perfect (.. until two years have expired
‘Another ver commonly found in legal documents is may, which generally expresses
permission, in the sense of ‘can’ (this use is less common in everyday English):
. any bylaw or amendment thereto as adopted by the Board of Directors may be
altered, amended or repealed by a vote of the shareholders.
In everyday English, may is sometimes used as a substitute for might, indicating
probability (He may want to see the document).
Learners of legal English should be aware that the use of shail in legal texts has been
criticised in recent years, particularly with regard to what some consider its inconsistent and excessive use. Language reformers point out that in many instances, shall does
not express obligation, but rather is used solely to give a text a ‘legal fee’. This
tendency, which can in part be attributed to the conservative nature of legal writing,
can lead to undesirable consequences, ranging from legal disputes arising from the
‘ambiguous use of shall in contracts to difficulties in translating English-language
legislation into other languages. Furthermore, the fact that shail is often used in legal
‘texts in ways which differ from general English usage serves to make these texts harder
to understand and less transparent to the average person. For this reason, supporters
of the Piain English Movement even recommend replacing shall with must to express
obligation (see Unit 3). At the very least, learners of legal English should know about
the issues surrounding the use of shall and exercise care when writing.
6 BEG
us
You are going to hear a phone conversation in which a lawyer, Mr Larsen, discusses some of
the characteristics of two business entities with Mr Garcia, a client who is interested in
forming a company in the UK.
64
CMC a)
= Listen to the phone conversation and decide whether these statements are true
or false.
1 The client has not yet decided what type of company he wants to form.
2 The client has never founded a company before.
3 The lawyer points out that the two types of company differ with regard to the
matter of personal liability
4 The shares of a US C corporation can be freely traded on a stock exchange.
5 Both company types mentioned by the lawyer can be formed by a person who is a
citizen of another country.
6 The UK company type discussed places a restriction on the number of people
permitted to buy shares in the company.
7 The fastest way to form a company is to submit the documents directly to
Companies House.
6.2 In the conversation, the lawyer compares and contrasts two company types.
Complete the sentences below (1-4) using the phrases in the box (a-d).
| a are like each other b aresimilarto _¢ differs din both
1. C corporations... private limited companies in the UK in many ways,
particularly in respect of liability.
2 Shareholders are not personally liable for the debts of the corporation
C corporation and a private limited company.
3 In this respect, a private limited company ........ Its shares are not available to
the general public.
4 The two types of company ........ in that both can be founded by persons of any
nationality, who need not be a resident of the country.
6.3 Compare and contrast two types of company from the table on page 23 using these
phrases.
X differs from Y in that
X resembles Y in that ...
EXAMPLE: A Sle proprietorship fers fiom a priate lite company in that iis managed ly the sole
pepretor wither than ly a managing dector ov a vowel of vectors.
Unit 2 Company Law: company formation and management 2) 2)
@ Speaking: An informal presenta
in: a type of company
When speaking briefly about a topic of professional interest, experienced speakers
will organise their thoughts in advance. A simple but effective structure divides
information into three parts:
4 introductory remarks 2 main points 3 concluding statement
The main points are also best limited to three, as this is easy to remember.
Notes for a response to the exercise below might look like this:
Introductory remarks
A publikt aktiebolag is the closest Swedish equivalent to a public limited company -
most common form for major international businesses in Sweden.
Main points
1 liability: no personal liability
2 management: board of directors (Swedish equivalent, styrelsen) has power to
make decisions; shareholders don't participate in management
‘3 needed for formation: memorandum of association (stiftelseurkund) and articles
of association (bolagsordning)
Concluding statement
‘An aktiebolag is similar to a public limited company, with the most significant
difference being that its shares do not need to be listed on an exchange or
authorised marketplace.
Which types of companies are there in your jurisdiction? Choose one and describe it as.
you would for a client from another country. In your description, refer to some of the
features given in the UK company table on page 23. Tell your client which documents,
must be filed to complete the formation process. Wherever relevant, compare and
contrast your company type with a UK business entity.
J Reading C: Russ y formation
Law firms often publish informative articles on their websites which they believe will be of
interest to their clients. Typically, these articles deal with areas of the law in which the firm
has particular expertise. The text on the next page, which appeared on the website of a US
law firm, deals with entity formation in Russia, and contrasts a Wholly Foreign-Owned Entity
{WFOE) with a representative office.
8.4. Read the first paragraph. Which three types of business enterprise are mentioned?
8.2. Read through the entire article and decide whether these statements are true or false.
1. The option of forming a WFOE to do business in Russia has existed for many years.
2 Establishing a representative office is not recommended for merchants unless
they are primarily interested in engaging in marketing activities.
3 Since an 000 has the status of a legal person, itis fully liable for its own
obligations, and the foreign entity is free from all liability.
4 Regarding employee permits, the same requirements apply for both business types.
5 The tax and reporting requirements connected with a WFOE are disadvantages
that should be weighed against the advantage it offers with regard to the freedom
to carry out business in Russia
8.3 Is there a comparable WFOE in your jurisdiction? Describe its features with regard to
the points listed in the table in the article. (One of the most common requests our law fim gets regarding Russia comes from a non-Russian company
‘seeking assistance in setting up a Russian joint venture or a representative ofice. When we tell them in response
to their queries that only rarely does it make sense to go into Russia with a joint venture or a representative
office, they commonly respond either with surprise that there are other alternatives or by telling us that this is.
how their very well-run competitor entered the Russian market. When we explain that Russia now allows
‘Wholly Foreign-Owned Entities (WFOE), they quickly realise the benefits of not getting enmeshed with a Russian
joint-venture partner. However, the benefits of a WFOE over a representative ofice are more dificult to explain.
‘The purpose ofthis article and the accompanying table isto briefly compare the advantages and disadvantages
of a representative office and of a limited liability company (known as an Obschtschestvo s Ogranitschenno)
COtvetstvennostju, or 000) wholly owned by a foreign entity in terms of those characteristics that are relevant for
‘companies interested in establishing and running a business in Russia. At the outset, however, it must be made
clear that if your intention is to buy or sell goods in Russia, you cannot legally goin as a representative office,
‘A representative office is limited to representing or marketing for a foreign-owned entity In the past, many foreign
‘companies would go into Russia by way of a representative office and then conduct business within Russia, but
‘only because they had no other real choice. Companies have that choice now.
Comparison Representative office Limited liability company (000)
Legal status Not an independent iegal entity. | Can act only through a manager authorised to
All property would be owned by | act for and on behalf ofthe foreign entity
the foreign (non-Russian) entity. | pursuant to power of attorney. All the rights of a
Not allowed to conduct commercial | Russian company. Managing director elected by
‘activity, soit doesn't technically | the foreign company can act on behalf of OOO
‘generate profits. Limited to without a power of attorney within the framework
Negotiating contracts, marketing or | provided by Russian legislation, OOO corporate
‘conducting other supporting ‘documents and agreements concluded between
activites for the foreign entity. 000 and the director.
abiity Foreign entity would be liable for | OOO is liable for its own obligations. The
‘acs ofits representative office | foreign entity’slibilty generally limited to its
‘done pursuant to the power of |_| contribution to charter capital.
attorney.
Charter capital | None “Approximately $330 minimum charter
capital required
Fees and costs | $10,000-$18,000 '$3,500-$6,500
Foreign employee | Foreign employees must obtain | In order to employ foreign employees, a
issue personal work permit ‘company must obtain an employment permit
‘Atterwards, every foreign employee must
‘obtain a personal work permit.
Taxation Subject to payrolretrement,road_| Subject o same taxes at same rates as
and social security taxes. representative office, but also subject to
income tax, VAT (e.9. equipment shipped for
sale to Russia is subject to VAT, property
taxes and transportation taxes (i OOO owns
vehicles). The foreign entity dividends
received from OOO may be subject o either
US or Russian taxation according to the
Treaty signed between USA and Russia
ragarding double taxation
In the course of deciding whether to establish a representative office or a WFOE, the investor must balance the
‘convenience of a representative ofice withthe ability to conduct business in Russia through a WFOE.A representative
office in Fussia can be opened and closed with relatively litle formality. Since the office isnot a Russian legal person,
itis not subject to many of the burdensome regulations that apply to legally established Russian companies, such as
tax and reporting requirements. However, the business activities of a representative office are severely restricted, to
the point that it usually can do litle more than act as a company’s marketing arm in Russia. On the other hand, a
\WFOE entity in Russia is considered to be a legal person, and as such, it enjoys both the rights and obligations of
any other Russian company. Thus the scope of business operations for a WFOE in Russia is nearly always equivalent
to that of any other Russian company. But a WFOE in Fussiais also subject to the same taxation, reporting and
‘company regulation requirements of any Russian company. The burden of these obligations for a WFOE must be
balanced against the freedom to conduct real business in Russia.
Unit 2 Company law: company formation and management cD) oT acc irate
Lawyers often assist their clients in handling legal disputes involving corporate governance.
The letter of advice below addresses one such dispute.
8)
9.4. Read the first three paragraphs of the letter. What does the dispute specifically
involve?
Re: Special shareholders’ meeting of Longfellow Inc.
| have now had an opportunity to research the law on this point and | can provide
you with the following advice.
Firstly, to summarise the facts of the case, a group of shareholders of Longfellow
Inc. has filed an action in the district court seeking to set aside the election of
5 the board of directors on the grounds that the shareholders’ meeting at which
they were elected was held less than a year after the last such meeting.
The bylaws of the company state that the annual shareholders’ meeting for
the election of directors be held at such time each year as the board of directors
determines, but not later than the fourth Wednesday in July. In 2009, the meeting
10 was held on July 17th. At the discretion of the board, in 2010 the meeting was
held on March 19th. The issue in this case is whether the bylaws provide that
no election of directors for the ensuing year can be held unless a full year has
passed since the previous annual election meeting.
The law in this jurisdiction requires an ‘annual’ election of the directors for
15 the ensuing ‘year’. However, we have not found any cases or interpretation of
this law which determine the issue of whether the law precludes the holding of
an election until a full year has passed. The statutes give wide leeway to
the board of directors in conducting the affairs of the company. | believe that it is
unlikely that a court will create such a restriction where the legislature has not
20 specifically done so.
However, this matter is complicated somewhat by the fact that there is currently
‘a proxy fight underway in the company. The shareholders who filed suit are also
alleging that the early meeting was part of a strategy on the part of the directors
to obstruct the anticipated proxy contest and to keep these shareholders from
25 gaining representation on the board of directors. It is possible that the court will
take this into consideration and hold that the purpose in calling an early meeting
was to improperly keep themselves in office. The court might then hold that,
despite the fact that no statute or bylaw was violated, the election is invalid on a
general legal theory that the directors have an obligation to act in good faith
30 Nevertheless, courts are usually reluctant to second-guess the actions of boards
of directors or to play the role of an appellate body for shareholders unhappy with
the business decisions of the board. Only where there is a clear and serious
breach of the directors’ duty to act in good faith will a court step in and overturn
the decision. The facts in this case simply do not justify such court action and |
35 therefore conclude that it is unlikely that the shareholders will prevail. 9.2 Read the whole letter and choose the best answer to each of these questions.
1. On which grounds did the shareholders file the action?
a on the grounds of their rights as shareholders
b on the grounds of a violation of the bylaws.
¢ on the grounds of an ongoing proxy fight
d on the grounds of their lack of faith in the board of directors
2 What does the writer identify as the issue in the case?
‘a whether the annual shareholders’ meeting determines the term of the board of
directors
b whether the election of the board of directors requires a quorum
© whether the annual shareholders’ meeting must be held a full year after
the last one
d whether the bylaws define the term ‘full year’
3 What does the writer say regarding earlier cases related to this one?
a They provide for an analysis in favour of the shareholders.
b They give the board of directors the freedom to run the company as they see fit.
¢ They have merely provided an interpretation of the legislative intent. 3
They do not address the issue involved.
4 What does the writer conclude?
a Itis dubious that the shareholders will prevail.
b The facts of the case do not support judicial intervention.
© Acourt of appeal will only look at the facts of the case.
The board of directors has a duty to act in good faith.
9.3 Choose the best explanation for each of these words or phrases from the letter.
1. on the grounds that line 5)
a inthe area of
b on the basis of the fact that
© despite the fact that
2 at the discretion of (line 9)
‘a according to the decision of
b through the tact of
© due to the secrecy of
8 the ensuing year (line 11)
a the past year
bb the present year
© the next year
4 statutes give wide leeway (line 16)
a statutes can easily be avoided
b statutes allow considerable freedom
¢ statutes restrict extensively
5 alleging (line 20)
a stating without proof
b_ making reference to
© proposing
6 to act in good faith (line 26)
a to act from a religious belief
b to do something with honest intention
¢ to plan for the future carefully
Unit
Company law: company formation and management 29) 2»)
9.4 Answer these questions.
1 What do the bylaws of the company stipulate concerning the date of the election
of company directors?
2 What do the shareholders claim was the reason why the annual shareholders’
meeting was held early?
3 What role might the concept of ‘good faith’ play in the court's decision?
9.5 What is your opinion of the case? Do you think the shareholders’ claim is justified?
9.6 In the letter, different verbs are used to refer to what the company bylaws and the
relevant legislation say. Complete these phrases using the appropriate verbs from
the letter.
1. The bylaws of the company...
2 The law in this jurisdiction
3 The law...
LORSTEUE Ea GCma Cc)
10.4. Look at the letter on page 28 again and discuss these questions.
1. What is the purpose of the letter?
2 Who do you think might have requested it?
3 Looking at the letter carefully, what would you say is the function of each
paragraph?
The text in Reading D represents a letter of advice, a type of text written by a
lawyer for a client.
The function of a letter of advice is to provide an analysis of a legal problem so
that the client can make an informed decision concerning a course of action.
Another type of text which should be mentioned here because of its similarity to a
letter of advice is a legal opinion. While the language of this type of text is similar,
a legal opinion is generally much longer, as it entails thorough research and
covers the issues in greater detail. A legal opinion also carries much more weight
and greater potential liability for the lawyer or firm issuing it.
Regarding the contents, we can say that, in general, a letter of advi
© identifies the legal issue at stake in a given situation and explains how the law
applies to the facts presented by the client;
© indicates the rights, obligations and liabilities of the client;
outlines the options the client has, pointing out advantages and disadvantages
of each option;
© considers factors such as
factors;
© makes use of facts, relevant law and reasoning to support the advice.
The structure of the letter can be made clear by using standard signalling phrases.
The table on page 31 provides examples of phrases used to structure the
information in a text. These phrases serve as signals, pointing to information
before it is presented, thus increasing the clarity of a text.
k, delay, expense, eto., as well as case-specific 10.2 Read through the letter once again and look for 11 phrases with a signalling
function. Add them where appropriate to this table.
Referring to the subject | Thank you for instructing us in relation to the above matter. You have requested
matter advice concerning
a)
‘Summarising facts | Our opinions and advice set forth below are based upon your account of the
circumstances giving rise to this dispute, a summary of which is as follows. Based on
information provided to us, we understand that
2)
Identifying legal issue _| The legal issue seems to be
3)
Referring to relevant __| The section which is relevant for present purposes provides that.
legislation/regulations | The section makes express reference to ..
As the law stands at present,
4
5)
6)
Referring to previous _| The court has held that...
court decisions We have (not) found cases or interpretation of this law which argue that ..
Drawing conclusions | We therefore believe that...
7
9).
10)
a4) ses i
Indicating options In light of the aforesaid, you have several courses of action / alternatives / options
‘open to you.
[Closing await further instructions at your earliest convenience.
Please contact us if you have any questions about the matters here discussed, or any
other issues.
OM lea Uc
A client who is the managing partner of a Mexican eneray-drink firm has asked you for
information about establishing a business in Russia, with a view to launching a chocolate-
flavoured energy drink called Xocoatl.
Write a letter of advice in which you should:
© say what a WFOE is;
© list advantages and disadvantages connected with it;
(© recommend the best course of action for his firm.
Before you write, consider the purpose, the expected contents and the standard structure
of a letter of advice. Refer back to Reading C for information about WFOEs in Russia and
make use of signalling phrases from the table above to help structure the information in
your letter.
CL) uni 2
=
‘To improve your web-based research skills, visit www.cambridge.org/elt/ile2, click on Research
Tasks and choose Task 2.
Unit2. Company taw: company formation and management 3) 2)
Language focus
1. Vocabulary: distinguishing meaning Which word in each group is the odd one out?
You may need to consult a dictionary to distinguish the differences in meaning,
1 stipulate specify
