LA0899 - Corporate Finance

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SYNOPSIS OF MODULE

This module is one of the electives available to students during Stage 2 of the Legal Practice Course.

The diverse content of this module covers some of the issues relevant to conducting business successfully in the modern world and will be of interest to any students entering commercial / corporate practice.

The aim of this module is to provide students with an appreciation of the legal and practical issues:
• arising when a company seeks debt financing; and
• arising when seeking to raise equity finance.

The legal skills of negotiating, drafting and practical research are also further developed in a commercial context.

This module is delivered by a combination of large group sessions, small group sessions and directed and independent learning. The module is assessed by examination.

INDICATIVE READING LIST OR OTHER LEARNING RESOURCES

Main Texts:
Banking and Capital Markets 2019, David Adams, CLP.
Public Companies and Equity Finance, 2019, Alexis Mavrikakis, CLP
e-Learning Portal and Materials
A range of materials to support both large and small group sessions and to facilitate directed learning will be provided via the Corporate Finance e-Learning Portal site.

OUTLINE SYLLABUS

OUTLINE SYLLABUS

Element 1: General considerations in corporate finance transactions
Students should develop an understanding of the law and practice involved in, and should be able to identify the legal principles governing, the financing of companies formed under the Companies Act 2006 or former Companies Acts, and should be able to:
1. identify and advise upon legal, practical and commercial issues involved in raising corporate finance, noting the key differences between private and public companies (building on knowledge gained in BLP);
2. understand and advise on the advantages of having public limited company status when wishing to raise capital;
3. note the distinction between being a public company and being a listed public company;
4. understand and advise upon the nature and effect of raising capital; and
note the key differences between equity finance and debt finance.

Element 2: Equity finance and listing
Students should develop a knowledge and understanding of the raising of capital on the Stock Exchange and the role of the Financial Conduct Authority (acting as the UK Listing Authority (UKLA)) in this process. In particular students should be able to:
1. understand what the Stock Exchange and the market place are;
2. understand the working of both the Main Market and AIM and understand and be able to explain the key differences between the two;
3. identify who are the major investors in the market and why they invest in this way;
4. understand and explain the function of the Stock Exchange;
5. understand the role of the UKLA, what the UKLA does and the relationship between the Stock Exchange and the UKLA; and
6. understand and explain the Prospectus Regulation, Listing and Disclosure Rules and the UKLA Knowledge Base.

Element 3: Corporate Borrowing
Students should develop a knowledge and understanding of the legal and commercial issues relevant to raising money through debt and should be able to:

1. Understand the nature of different types of structure for corporate borrowing;
2. Understand and be able to explain the key terms in a loan agreement;
3. Draft, review, amend and advise upon the key provisions in a loan agreement;
4. Understand the impact of the loan agreement on existing borrowing.

Element 4: Taking Security
Students should develop a knowledge and understanding of the legal and commercial issues involved in the creation of different types of security that can be created under English law and should be able to:

1. Identify different types of security that may be required and understand their relative advantages and disadvantages;
2. Identify and advise up on when appropriate security should be used in a simple secured loan facility;
3. Appreciate the different methods of perfecting security;
4. Understand the principles of law on priority of security;
5. Consider the principal terms of a debenture document.

AIMS OF MODULE

The elective aims to provide students with:

1. An appreciation of the law which forms the foundation of commercial practice with particular reference to corporate finance;
2. An awareness of drafting issues in financial contracts;
3. A knowledge and understanding of different forms of security required by lending institutions;
4. A knowledge and understanding of issues relating to commercial risk, conduct and regulation;
5. An appreciation of the international dimension to commercial finance.


It is also designed to enable students to further develop:

1. Practical legal research and drafting skills acquired during Stage 1;
2. Negotiation skills;
3. An appreciation of the financial and commercial constraints on commercial clients and how they influence the role of the solicitor.

LEARNING OUTCOMES

On completion of the Corporate Finance vocational elective, students should:

1. Understand the different types of structures used by companies to raise capital and the rationale behind these structures;
2. Demonstrate a knowledge and understanding of the rationale behind a flotation, either as an initial public offering (IPO) or a secondary offer;
3. Understand the legal and regulatory requirements of an IPO and the effect of this on the company and its directors;
4. Understand the continuing obligations of listed companies after an IPO;
5. Demonstrate a knowledge and understanding of different types of corporate borrowing;
6. Demonstrate a knowledge and understanding of different forms of security;
7. Analyse and advise upon issues relating to financial risk and identify conduct and regulatory issues as they arise.

PREREQUISITES

Business Law and Practice

COREQUISITES

None

DISTANCE LEARNING DELIVERY

N/A

LEARNING AND TEACHING STRATEGY

The module will be delivered through a combination of large and small group sessions, directed learning and independent learning.

The large group sessions will be delivered to the entire module cohort and will be used in part to introduce students to the major principles of each Element. They will place these principles in context by examining them against relevant factual scenarios.

The small group sessions (which will consist of between 16 – 20 students) will, in conjunction with the directed and independent learning, expand on the material covered in the large group sessions with emphasis on the use of practical scenarios as the basis for relevant skills based and interactive sessions to apply that material to the scenario. For example, some of the sessions will include the opportunity to participate in role play negotiations involving contractual terms as one of the legal advisers involved. Other sessions will require problem solving skills to identify key issues, plan strategies for taking problems forward and drafting aspects of the necessary documentation to do so. Where appropriate to the subject area, students will be required to analyse and critique relevant legal material.

Students will be given directed learning which will both expand on the materials provided in the large group sessions and cover specific topics not dealt with in those sessions. This will be supported by formative self-test and multiple choice questions. Students will also be expected to carry out independent learning to both expand on the materials covered in the large group sessions and directed learning and to prepare for the tasks in the small group sessions. Examples of independent learning will include locating and reading relevant legal source material.

Experiential learning is prevalent in the simulated practice exercises that take place in most of the small group sessions.

ASSESSMENT AND FEEDBACK STRATEGY

a Summative assessment and rationale for tasks

Summative assessment will be provided by an examination made up of a one hour closed book multiple choice paper plus a two hour open book practical paper based on advance documents. The use of advance documents allows the subject team greater opportunity to test knowledge and application in the examination and allows greater use of realistic legal scenarios.


b. Additional formative assessment – detail of process and rationale

Formative assessment will be provided by a combination of self-test questions and multiple choice questions which students will complete through the module e-Learning Portal site and in small group sessions.
Students will also have the opportunity to complete practice exam questions.


c. Indication of how students will get feedback and how this will support their learning

Detailed answers to the self-test questions and multiple-choice questions will be available on the e-Learning Portal and feedback on any practice questions will be given via the e-Learning Portal and in a large group session.

IMPLICATIONS FOR CHOICE

None

Course info

Credits 1

Level of Study Postgraduate

Mode of Study 2 years part-time
1 other options available

Department Northumbria Law School

Location City Campus, Northumbria University

City Newcastle

Start September 2020

Fee Information

Module Information

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