corporate and business law (lw) (glo) · the corporate and business law exam is a two-hour...

Corporate andBusiness Law(LW) (GLO)Syllabus and study guide

September 2019 to August 2020

Corporate and Business Law (LW) (GLO)

© ACCA 2019-2020 All rights reserved.

Summary of content

Introduction1. Intellectual levels2. Learning hours and educational

recognition3. Guide to ACCA examination structure4. Guide to ACCA examination

assessment

Corporate and Business Law(GLO) syllabus

5. Relational diagram linking Corporateand Business Law with other exams

6. Overall aim of the syllabus7. Main capabilities8. Rationale9. Approach to examining the syllabus10. The syllabus

Corporate and Business Law(GLO) study guide

11. Detailed study guide



1.Intellectual levels

The syllabus is designed toprogressively broaden and deepen theknowledge, skills and professionalvalues demonstrated by the student ontheir way through the qualification.

The specific capabilities within thedetailed syllabuses and study guides areassessed at one of three intellectual orcognitive levels:

Level 1: Knowledge andcomprehension

Level 2: Application and analysisLevel 3: Synthesis and evaluation

Very broadly, these intellectual levelsrelate to the three cognitive levels atwhich the Applied Knowledge,the Applied Skills and the StrategicProfessional examsare assessed.

Each subject area in the detailed studyguide included in this document is givena 1, 2, or 3 superscript, denotingintellectual level, marked at the end ofeach relevant learning outcome. Thisgives an indication of the intellectualdepth at which an area could beassessed within the examination.However, while level 1 broadly equateswith Applied Knowledge, level 2equates to Applied Skills and level 3 toStrategic Professional, some lower levelskills can continue to be assessed asthe student progresses through eachlevel. This reflects that at each stage ofstudy there will be a requirement tobroaden, as well as deepen capabilities.It is also possible that occasionally somehigher level capabilities may beassessed at lower levels.

2.Learning hours andeducationrecognition

The ACCA qualification does notprescribe or recommend any particularnumber of learning hours forexaminations because study andlearning patterns and styles vary greatlybetween people and organisations. Thisalso recognises the wide diversity ofpersonal, professional and educationalcircumstances in which ACCA studentsfind themselves.

As a member of the InternationalFederation of Accountants, ACCA seeksto enhance the education recognition ofits qualification on both national andinternational education frameworks, andwith educational authorities and partnersglobally. In doing so, ACCA aims toensure that its qualification is recognisedand valued by governments, regulatoryauthorities and employers across allsectors. To this end, ACCA qualificationis currently recognised on the educationframeworks in several countries. Pleaserefer to your national educationframework regulator for furtherinformation.

Each syllabus is organised into mainsubject area headings which are furtherbroken down to provide greater detail oneach area.



3.Guide to ACCAexaminationstructure anddelivery mode

The structure and delivery mode ofexaminations varies.

Applied KnowledgeThe Applied Knowledge examinationscontain 100% compulsory questions toencourage candidates to study acrossthe breadth of each syllabus. Theseare assessed by a two-hour computerbased examination.

Applied SkillsThe Corporate and Business Law examis a two-hour computer-based objectivetest examination for English and Global.For the format and structure of theCorporate and Business Law orTaxation variant exams, refer to the‘Approach to examining the syllabus’ insection 9 of the relevant syllabus andstudy guide.

The other Applied Skills examinations(PM, TX-UK, FR, AA, and FM)contain a mix of objective and longertype questions with a duration of threehours for 100 marks. These areassessed by a three hour computer-based exam. Prior to the start of eachexam there will be time allocated forstudents to be informed of the examinstructions.

The longer (constructed response)question types used in the Applied Skillsexams (excluding Corporate andBusiness Law) require students toeffectively mimic what they do in theworkplace. Students will need to use arange of digital skills and demonstratetheir ability to use spreadsheets andword processing tools in producing theiranswers, just as they would use these

tools in the workplace. Theseassessment methods allow ACCA tofocus on testing students’ technical andapplication skills, rather than, forexample, their ability to perform simplecalculations.

Strategic ProfessionalStrategic Business Leader is ACCA’scase study examination at StrategicProfessional and is examined as aclosed book exam of four hours,including reading, planning andreflection time which can be usedflexibly within the examination. There isno pre-seen information and all examrelated material, including caseinformation and exhibits are availablewithin the examination. StrategicBusiness Leader is an exam based onone main business scenario whichinvolves candidates completing severaltasks within which additional materialmay be introduced. All questions arecompulsory and each examination willcontain a total of 80 technical marks and20 Professional Skills marks.

The other Strategic Professional examsare all of three hours and 15 minutesduration. All contain two Sections andall questions are compulsory. Theseexams all contain four professionalmarks.

For September and December 2019sessions, all Strategic Professionalexams will be assessed by paper basedexamination. From March 2020, theseexams will become available bycomputer based examination. Moredetail regarding what is available in yourmarket will be on the ACCA globalwebsite.

With Applied Knowledge and AppliedSkills exams now assessed by computerbased exam, ACCA is committed tocontinuing on its journey to assess all



exams within the ACCA Qualificationusing this delivery mode.

The question types used at StrategicProfessional again require students toeffectively mimic what they would do inthe workplace and, with the move toCBE, these exams again offer ACCA theopportunity to focus on the application ofknowledge to scenarios, using a rangeof tools – spreadsheets, wordprocessing and presentations - not onlyenabling students to demonstrate theirtechnical and professional skills but alsotheir use of the technology available totoday’s accountants.

ACCA encourages students to take timeto read questions carefully and to plananswers but once the exam time hasstarted, there are no additionalrestrictions as to when candidates maystart producing their answer.

Time should be taken to ensure that allthe information and exam requirementsare properly read and understood.

The pass mark for all ACCAQualification examinations is 50%.



4.Guide to ACCAexaminationassessment

ACCA reserves the right to examine anylearning outcome contained within thestudy guide. This includes knowledge,techniques, principles, theories, andconcepts as specified. For the financialaccounting, audit and assurance, lawand tax exams except where indicatedotherwise, ACCA will publishexaminable documents once a year toindicate exactly what regulations andlegislation could potentially be assessedwithin identified examination sessions.

For most examinations (not tax),regulations issued or legislation passedon or before 31 August annually, will beexaminable from 1 September of thefollowing year to 31 August of the yearafter that. Please refer to theexaminable documents for the exam(where relevant) for further information.

Regulation issued or legislation passedin accordance with the above dates maybe examinable even if the effective dateis in the future.

The term issued or passed relates towhen regulation or legislation has beenformally approved.

The term effective relates to whenregulation or legislation must be appliedto an entity transactions and businesspractices.

The study guide offers more detailedguidance on the depth and level atwhich the examinable documents will beexamined. The study guide shouldtherefore be read in conjunction with theexaminable documents list.

For UK tax exams, examinations fallingwithin the period 1 June to 31 March will

generally examine the Finance Actwhich was passed in the previous year.Therefore, exams falling in the period 1June 2019 to 31 March 2020 willexamine the Finance Act 2018 and anyexaminable legislation which is passedoutside the Finance Act before 31 July2018.

For additional guidance on theexaminability of specific tax rules andthe depth in which they are likely to beexamined, reference should be made tothe relevant Finance Act article writtenby the examining team and published onthe ACCA website.

None of the current or impendingdevolved taxes for Scotland, Wales, andNorthern Ireland is, or will be,examinable.



5.Relational diagram linking Corporate andBusiness Law (GLO) with other exams

This diagram shows links between this exam and other exams preceding orfollowing it. Some exams are directly underpinned by other exams. This diagramindicates where students are expected to have underpinning knowledge and whereit would be useful to review previous learning before undertaking study.

6.Overall aim of the syllabus

This syllabus and study guide is designed to help with planning study and to providedetailed information on what could be assessed in any examination session.

The aim of this syllabus is to develop knowledge and skills in the understanding ofthe general legal framework within which international business takes place, and ofspecific legal areas relating to business, recognising the need to seek furtherspecialist legal advice where necessary.



7.Main capabilities

On successful completion of this exam, candidates should be able to:

A Identify the essential elements of different legal systems including the mainsources of law, the relationship between the different branches of a state’sconstitution, and the need for international legal regulation, and explain the rolesof international organisations in the promotion and regulation of internationaltrade, and the role of international arbitration as an alternative to courtadjudication

B Recognise and apply the appropriate legal rules applicable under the UnitedNations Convention on Contracts for the International Sale of Goods, andexplain the various ways in which international business transactions can befunded

C Recognise different types of international business forms

D Distinguish between the alternative forms and constitutions of businessorganisations

E Recognise and compare types of capital and the financing of companies

F Describe and explain how companies are managed, administered and regulated

G Recognise the legal implications relating to insolvency law

H Demonstrate an understanding of corporate fraudulent and criminal behaviour

This diagram illustrates the flows and links between the main capabilities of thesyllabus and should be used as an aid to planning teaching and learning in astructured way.



8.Rationale

Corporate and Business Law Global isdivided into eight areas. The syllabusstarts with an introduction to differentlegal systems, different types of law andthose organisations which endeavour topromote internationally applicable laws.It also introduces arbitration as analternative to court adjudication. It thenleads into an examination of thesubstantive law as stated in UNConvention on Contracts for theInternational Sale of Goods, whichrelates to the formation, content anddischarge of international contracts forthe sale of goods.

The syllabus then covers a range ofspecific legal areas relating to variousaspects of international business ofmost concern to finance professionals.These are the law relating to thefinancing of international transactions,and the various legal forms throughwhich international businesstransactions may be conducted.Particular attention is focused on the lawrelating to companies. Aspectsexamined include the formation andconstitution of companies, the financingof companies and types of capital, andthe day–to-day management, theadministration and regulation ofcompanies and legal aspects ofinsolvency law.

The final section links back to all theprevious areas. This section deals withcorporate fraudulent and criminalbehaviour.



9.Approach to examining the syllabus

Examination Structure

The syllabus is assessed by a two-hour computer-based examination.

The examination consists of:

Section A

- 25 x 2 mark objective test questions 50%

- 20 x 1 mark objective test questions 20%

Section B

- 5 x 6 mark multi-task question 30%

100%

All questions are compulsory.



10.The syllabus

A Essential elements of legalsystems

1. Business, political and legal systems

2. International trade, internationallegal regulation and conflict of laws

3. Alternative dispute resolutionmechanisms

B International businesstransactions

1. Introduction to the UN Conventionon Contracts for the InternationalSale of Goods and ICC Incoterms

2. Obligations of the seller and buyer,and provisions common to both

C Transportation and payment ofinternational businesstransactions

1. Transportation documents andmeans of payment

D The formation and constitution ofbusiness organisations

1. Agency law

2. Partnerships

3. Corporations and legal personality

4. The formation and constitution of acompany

E Capital and the financing ofcompanies

1. Share capital

2. Loan capital

3. Capital maintenance and dividendlaw

F Management, administration andthe regulation of companies

1. Company directors

2. Other company officers

3. Company meetings and resolutions

G Insolvency law

1. Insolvency and administration

H Corporate fraudulent and criminalbehaviour

1. Fraudulent and criminal behaviour



11.Detailed StudyGuide

A Essential elements of legalsystems

1. Business, political and legalsystems

a) Explain the inter-relationship ofeconomic and political and legalsystems.[2]

b) Explain the doctrine of theseparation of powers and its impacton the legal system.[2]

c) Explain the distinction betweencriminal and civil law.[1]

d) Outline the operation of the followinglegal systems:[1]

i) Common lawii) Civil lawiii) Sharia law.

2. International trade, internationallegal regulation and conflict oflaws

a) Explain the need for internationallegal regulation in the context ofconflict of laws.[1]

b) Explain the function of internationaltreaties, conventions and modelcodes.[1]

c) Explain the roles of internationalorganisations, such as the UN, theICC, the WTO, the OECD,UNIDROIT, UNCITRAL and courtsin the promotion and regulation ofinternational trade.[1]

3. Alternative dispute resolutionmechanisms

a) Explain the operation, and evaluatethe distinct merits, of court-basedadjudication and alternative disputeresolution mechanisms.[2]

b) Explain the role of the internationalcourts of trade including theInternational Court of Arbitration.[1]

c) Explain and apply in detail theprovisions of the UNCITRAL ModelLaw on International CommercialArbitration.[2]

d) Describe the arbitral tribunal.[2]

e) Explain arbitral awards.[2]

B International businesstransactions

1. Introduction to the UN Conventionon Contracts for the InternationalSale of Goods and ICC Incoterms

a) Explain the sphere of applicationand general provisions of theConvention.[1]

b) Explain and be able to apply therules for creating contractualrelations under the Convention.[2]

c) Explain the meaning and effect ofthe ICC Incoterms.[1]

2. Obligations of the seller andbuyer, and provisions common toboth

a) Explain and be able to apply therules relating to the obligations of theseller under the Convention:[2]

i) delivery of goods and handingover documents



ii) conformity of the goods and thirdparty claims

iii) remedies for breach of contractby the seller.

b) Explain and be able to apply therules relating to the obligations of thebuyer under the Convention:[2]

i) payment of the priceii) taking deliveryiii) remedies for breach of contract

by the buyer.

c) Explain and be able to apply therules relating to the provisionscommon to both the seller and thebuyer under the Convention:[2]

i) breach of contract and inparticular anticipatory breachand instalment contracts

ii) damagesiii) interestiv) exemptionsv) effects of avoidancevi) preservation of the goods.

d) Explain and be able to apply therules relating to the passing of riskunder the Convention.[2]

C Transportation andpayment ofinternational businesstransactions

1. Transportation documents andmeans of payment

a) Define and explain the operation ofbills of lading.[1]

b) Explain the operation of banktransfers.[1]

c) Explain and be able to apply therules of UNCITRAL Model Law onInternational Credit Transfer.[2]

d) Explain and be able to apply therules of the UN Convention onInternational Bills Of Exchange AndInternational Promissory Notes.[2]

e) Explain the operation of letters ofcredit and letters of comfort.[2]

D Formation andconstitution of businessorganisations

1. Agency law

a) Define the role of the agent and giveexamples of such relationshipspaying particular regardto partners and company directors.[2]

b) Explain the formation of the agencyrelationship.[2]

c) Define the authority of the agent.[2]

d) Explain the potential liability of bothprincipal and agent.[2]

2. Partnerships

a) Demonstrate a knowledge of thelegislation governing the partnership,both unlimited and limited.[1]

b) Discuss the formation of apartnership.[2]

c) Explain the authority of partners inrelation to partnership activity.[2]

d) Analyse the liability of variouspartners for partnership debts.[2]

e) Explain the termination of apartnership, and partners’subsequent rights and liabilities.[2]



3. Corporations and legalpersonality

a) Distinguish between sole traders,partnerships and companies.[1]

b) Explain the meaning and effect oflimited liability.[2]

c) Analyse different types ofcompanies, especially private andpublic companies.[1]

d) Illustrate the effect of separatepersonality andthe veil of incorporation.[2]

e) Recognise instances whereseparate personality will be ignored(lifting the veil of incorporation).[2]

4. The formation and constitution ofa company

a) Explain the role and duties ofcompany promoters, and the breachof those duties and remediesavailable to the company.[2]

b) Explain the meaning of, and therules relating to, pre-incorporationcontracts.[2]

c) Describe the procedure forregistering companies, both publicand private, including the system ofstreamlined company registration.[1]

d) Describe the statutory books,records and returns, including theconfirmation statement and theregister of people with significantcontrol, that companies must keepor make.[1]

e) Analyse the effect of a company’sconstitutional documents.[2]

f) Describe the contents of the modelarticles of association.[1]

g) Explain how the articles ofassociation can be changed.[2]

h) Explain the control over the namesthat companies may or may notuse.[2]

E Capital and the financingof companies

1. Share capital

a) Examine the different types ofcapital.[2]

b) Illustrate the difference betweenvarious classes of shares, includingtreasury shares, the procedure foraltering class rights.[2]

c) Explain allotment of shares, anddistinguish between rights issue andbonus issue of shares.[2]

d) Examine the effect of issuing sharesat either a discount, or at apremium.[2]

2. Loan capital

a) Define companies’ borrowingpowers.[1]

b) Explain the meaning of loan capitaland debenture.[2]

c) Distinguish loan capital from sharecapital and explain the differentrights held by shareholders anddebenture holders.[2]

d) Explain the concept of a companycharge and distinguish betweenfixed and floating charges.[2]



e) Describe the need, and theprocedure for, registering companycharges.[2]

3. Capital maintenance and dividendlaw

a) Explain the doctrine of capitalmaintenance and capital reduction.[2]

b) Explain the rules governing thedistribution of dividends in bothprivate and public companies.[2]

F Management,administration andregulation of companies

1. Company directors

a) Explain the role of directors in theoperation of a company, and thedifferent types of directors, such asexecutive/ non-executive directors orde jure and de facto directors, andshadow directors.[2]

b) Discuss the ways in which directorsare appointed, can lose their officeand the disqualification ofdirectors.[2]

c) Distinguish between the powers ofthe board of directors, the managingdirector/chief executive andindividual directors to bind theircompany.[2]

d) Explain the duties that directors oweto their companies, and the controlsimposed by statute over dealingsbetween directors and theircompanies, including loans.[2]

2. Other company officers

a) Discuss the appointment procedurerelating to, and the duties andpowers of, a company secretary.[2]

b) Discuss the appointment procedurerelating to,and the duties and rightsof, a company auditor, and theirsubsequent removal or resignation.[2]

3. Company meetings andresolutions

a) Distinguish between types ofmeetings:general meetings andannual general meetings.[1]

b) Distinguish between types ofresolutions: ordinary, special andwritten.[2]

c) Explain the procedure for calling andconducting company meetings.[2]

G insolvency law

1 Insolvency and administration

a) Explain the meaning of, andprocedure involved, in voluntaryliquidation, including members’ andcreditors’ voluntaryliquidation.[2]

b) Explain the meaning of, the groundsfor and the procedure involved, incompulsory liquidation.[2]

c) Explain the order in which companydebts will be paid off onliquidation.[2]

d) Explain administration as analternative to liquidation.[2]

e) Explain the way in which anadministrator may be appointed, theeffects of such appointment, and thepowers and duties of anadministrator.[2]



H Corporate fraudulent andcriminal behaviour

1 Fraudulent and criminalbehaviour

a) Recognise the nature and legalcontrol over insider dealing .[2]

b) Recognise the nature and legalcontrol over market abuse.[2]

c) Recognise the nature and legalcontrol over money launderingincluding the following policies,procedures and controls:i) risk management practices:ii) internal controls:iii) customer due diligence:iv) reliance and record keeping;v) the monitoring and management

of compliance with, and theinternal communication of, suchpolicies, controls andprocedures.[2]

d) Recognise the nature and legalcontrol over bribery.[2]

e) Discuss potential criminal activity inthe operation, management andliquidation of companies.[2]

f) Recognise the nature and legalcontrol over fraudulent and wrongfultrading, including the failure toprevent the facilitation of tax evasionand the meaning of relevant body [2]



Summary of changes to Corporate and Business Law(LW) (GLO)

ACCA periodically reviews its qualification syllabuses so that they fully meet theneeds of stakeholders such as employers, students, regulatory and advisory bodiesand learning providers.

There have been no deletions from the syllabus.

The areas where there have been additions to the syllabus are shown in Table 1below:

Table 1 – Additions to LW GLO

Section and subject area Syllabus content

H1c) Fraudulent and criminalbehaviour

The following policies, proceduresand controls in relation to moneylaundering:i) risk management practices:ii) internal controls:iii) customer due diligence:iv) reliance and record keeping;v) the monitoring andmanagement of compliance with,and the internal communicationof, such policies, controls andprocedures.

H1e) Fraudulent and criminalbehaviour

The failure to prevent the facilitation oftax evasion and the meaning ofrelevant body.

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