Public companies financial aims in Colchester and the rest of the UK are impacted upon by the fact that public companies are corporate vehicles for raising finance in the capital markets. However, the essential social activities with which we are concerned with in this specific blog post are the raising of capital for the pursuit of commercial ends. The focus and context of study is the stock market which brings together those with surplus funds to invest and companies that require investment in their businesses in order to flourish.
The major theme follows from the premise that it is corporate finance. We are concerned primarily with the public company as a vehicle for raising large pools of investment capital in the primary capital market either in the form of equity (through issuing shares) or debt (through issuing bonds). We are concerned with how law (company law, contract law, property law) facilitates, guarantees and regulates these valuable commercial practices. We are concerned also with how the law seeks to strike a balance between the facilitation of desirable business activity and the protection of investors. All investment has some degree of risk attached to it. Some investments are more risky than others. However, securities law in its regulatory aspect is founded on the principle that investors should at least have some guarantee that the investment risks that they take are fully informed. Securities regulation (the law/regulation governing the issuance of shares/bonds and the dealing in such instruments) seeks to provide this guarantee. Indeed, securities regulation should properly be seen as part of the wider process of financial services regulation governing sales of and dealings in any kind of investment (not just stocks, shares and bonds but also financial products such as life insurance or long-term savings or pension plans). In this context, securities regulation can be seen as a means of facilitating and regulating corporate finance activity.
The second theme is the operation of the secondary market. We explore why a secondary market in which shares and bonds can be traded is desirable, how that market functions and the role played by law in fostering confidence in the market as a safe place to do business. Linked to these first two themes is a minor theme concerned with the role of the City of London in the United Kingdom’s financial system.
The third theme is corporate governance. One entrenched view of public companies is that they are widely-held funds of assets administered and run by specialist managers characterized by the separation of ‘ownership’ from ‘control’. This gives rise to the concern that the directors who manage public companies may have considerable freedom to act with regard to their own self-interest. There are also wider questions that have been the subject of extensive debate concerning the nature of corporate power and accountability. For whose benefit should public companies operate? Should they only exist to serve the private interests of their investors or should the interests of other stakeholders (employees, creditors, community) be taken into account? What is the proper role of law in regulating the exercise of corporate power by directors?
Contact Andrew Douglas Wills and Legal Services today via www.andrewdouglaswills.co.uk to see how we could help you to set your public companies financial aims in Colchester and throughout Essex.
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