.: '
:ri€-...
.
+.-t
OXfORD
AC I( N O\1 'L E D C IJ M IJ N T S
t \ I \ Lt s tI 1 l , l ( I \ \
Crelt Cl.r r t n c l o nS r r 0 e t(.) x 1 i) r ((l) x2 6 r ) p
O x f brrllr n j v e r s i t Yl ' r e s \i s i ( l e l) a r tr n cnot fth c' tln ive r sity0 l Oxlb r d .
It ti.rfthcrsthr t inivcrsitt,s objcrtivc of exccllcncein rescarth. st lrolarship,
rncl ccluc.ttiortbr' 1;ublishingwot'lclwicle
in
Oxlirrd \crv \brk
r\ uc k lan dC a p e T o w nD a r e sSa la a mHo n g Ko n g Ka r a ch i
Kr.rala
Lumpur Madrid Melbourne MexicoCity Nairobi
New Delhi ShanghaiTaipei Toronto
With offices in
Argentina Austria Brazil Chile CzechRepublic France Creece
Guatemala Hungary Italy Japan Poland Ponugal Singapore
Sor.rthKorea Switzerland Thailand Turkey Ukraine Vietnam
are registeredtrade marks of
oxFoRDand oxFoRD ENGLTSH
Oxford University Pressin the UK and in certain other countrres
@Oxford University Press2oo9
Adapted fronr EnglishforLegalProfesionals
by Andrew Frost
@Cornelsen Verlag GmbH & Co. OHG, Berlin zoo8
The moral rights ofthe author have been asserted
Databaseright Oxford University Press(maker)
First published2oo9
2073 2012 2011 2O7O
709876 5 4 3 2
No unauthorized
photocopying
All rights reserved.No pan ofthis publication may be reproduced,
stored in a retrieval system,or transmitted, in any form or by any
means,without the prior permission in writing of Oxford University
Press,or as expresslypermitted by law, or under terms agreedwith the
appropriate reprographics rights organization. Enquiries concerning
reproduction outside the scopeofthe above should be sent to the ELT
Rights Department, Oxford University Press,at the addressabove
You must not circulatethis book in any other binding or cover
and you nust imposethis samecondition on any acquirer
Any websites referred to in this publication are in the public domain
and their addressesare provided by Oxford University Pressfor
information only. Oxford University Pressdisclaims any responsibility
for the content
rs BN:978o 1 94 5 7 9 1 6z
Printed in China
l'r-cp(r''c'd.lbr
OtlPi'v:Srar{ishDrsigt, Editorial:rndProjectManagenre
nt l.rd.
(rn{ll )rrl rl tshrr
l l hosrrl i o hrryrqi rorl L',j ri ssi r)r
i hc (nrthor-s
trrrgni l L'/ilirr
I(,
i i 'l )rrl l rccl ht'.l i rl |rs
i l l ! frl rl l .l si l I(i rl ri rl l l {l l i o,ts
ofa()|\'n.glDltl
l l l dIi Lti
p25
:
i /rr l intr's1ti Mal'ch200:l"'f ie cascthLowsclresscodcsinto confirsion'
col 'l rcl i rnes/NSI yndi crti ontpp72.,76i l l r.si ndss
l -dl r'D eniK
s ecnan& S rr;th
ItichesBUSINESS
LAW 7th edition, O Pe:lrsontducation Limite(I,200.1:
p36 'lhel irnesSJune 2004" l;lour power and contract law" O fhr,'l rnrcs/
NI Syndicationlpp38,42, 92 contractcl:rusesO Dr Albert Kitzler; pp72.
77 songwdting agreementCultural Foundation/Peter
Bell amended
for the purposeofthe exerciseby kind permissionofCultural
Foundation www.cultfound.org; p46 TheTimes26March 2008 'J.K.
Rowling determined to block RDRBooks' Harry Potter'rip-off"' @The
Times/NISyndication: p47 TheTimes18 October 2007 "Why businesses
should be wary ofgoing after eBayfakes" O Gill Grassie;p56 Letter of
Intent @Beck'sches
Formularbuch
Zivil, Wirtschafis-und Unternehmensrecht
herausgegbenvon Roben Walz (erschienen2007 im Verlag C.H.
Beck, Munchen): p57 "Regarding FairnessOpinions ProsAsk, What's
Faii?" Mergers6 Acquisitions
Joumal,January 2008; p61 contract clauses
@Beck'sches
FormularbuchZivil-, Wirtschafts- und Untentchmensrecht
herausgegbenvon Robert Walz (erschienen2007 im Verlag C.H. Beck,
Munchen): pp65,67 "Creditors - order ofpriority" and tVAsGuide
for Creditors: wrvwberr.govuk/R.eproducedunder the terms of the
Click-UseLicence;p67 Thr'Times
29 December2006 'Lenderswlite offa
record € 1.4bn ofI\A debt" @TTie
Times/Nl
Syndication
Althoaghr1'cr1t'n)ll h(rsbccnnlodeto troceand contoctcopyightholders
beforepultlictttion,
thishdsnot br,enpossibie
in somecases.
Weapologise
for any
apparent infringementoJcoptright and. ifnotified, the publisherwillbe plcased
to rectifyand en'orsor omissions
.rt the eorlLest
opportunity.
Thepublisherwouldlike to thank the followingfor their kind permissionto
photographs
reproduce
and othercopyrightmateial: istock ppS (lawyer/
Nicolay Suslov),(law books/SeanNel), 7 (mature woman/Justin
Horrocks), (young man/Ben Blankenburg). (young woman/Jacob
(matureman/JacobWackerhausen),
Wackerhausen),
(Asianwoman/
emilyzK),13 (projectorpresentation/Sean
Locke),16 (matureGerman
man/DuncanWalker),(maturewoman/PaulKline),(youngwoman/
Dmitriy Shironosov),(medium-agedman/lan McDonnell),(ltalian man/
lzabelaHabur),(medium-agedwoman/MichaelDeleon),18 (intervieW
SeanLocke),22 (woman/SeanLocke),23 (contract/Nielslaan), 25
(formal/informal couple/Dmitry Sagalaev),26 ($oup meeting/Marcus
Clackson),33 (digital camera/JakubSemeniuk), 37 (perfume/PaliRao),
(chocolate/Pederk),(pills/Yin Yang),(leaning tower of Pisa/JimTardio
Photogaphy), 48 (young man/Peter Finnie). (old man/Justin Horrocks),
(young woman/jacob Wackerhausen),(medium-agedman/JasonYork),
(CEOon phone/Mario13).58 (businessmanfillicole
49 (CEO/Mario13),
Waring), 61 (businesswoman/Acilo),65 (businessman/FrancisBlack).
nlustrationsW : Stephen May
a MultiROM
Engtlshfur Legal Prohssionalsis accompaniedby a
MuttiROMwhich has a numberof features.
lnteracdyeqxerclsesto practiseuseful phrases,vocabulary,
and communication
throughyour computer.
Listeningextracts.Theseare in enhancedaudio formatthat
can be playedon a conventionalCD-player
or throughthe
audio playeron your computer.
lf you haveany problems,pleasecheckthe technicat
supportsectionof the readmefi[e on the MuttiROM.
l3
Tableof contents
TOPtCS
USEFUTtAilGUAGEAlID SKItts
SeftinElup a
business
typesof business
the rightbusiness
choosing
type
tiabitity
company
givingadvice
m a k i n gr e c o m m e n d a t i o n s
e n u m e r a t i n rge a s o n s
explainingstepsof a procedure
tro,"r.ngpeople
employment
contracts
amendments
to contracts
letter of resignation
referring
t o l e g a ld o c u m e n t s
statingrightsand obligations
reportingoutcomes
writingformallettersand emails
26
Buyin$ and selling
Eoods and scrviees
preambles
commoncontractterminoLogy
i n t e r a c t i nw
g itha client
agreements
andcontracts
of sale
contractual
disputes
a d v i s i n go n a c o u r s eo f a c t i o n
commonlegaltermsandconditions
37
Protectingl
intellectual property
copyright,patent,trademark
landmarklP cases
rightsagreement
lP rightson the internet
negotiatingan agreement
a m e n d i n ga n a g r e e m e n t
l i n k i n gi d e a si n w r i t i n g
48
Merglers and
acquisitions
planning
anacquisition
M & A procedure
articlesof association
financinga takeover
lettersof intent(LOl)
c o m p a r i n ga n d c o n t r a s t i n lge g a l
structures
vocabularyof companyprocedures
languageof meetings
expressions
usedin takeovers
58
Risk management
and insolvency
legaIrisk
insolvency
terminologv
assessing
of insolvencye m p h a s i z i nag p o i n t
causesandimplications
insolvencyprocedures
h y p o t h e s i z i nagb o u tp a s ta c t i o n s
creditors'rights
personalinsolvency
PAGE
APPENDIX
68
7o
75
Test yourself!
Partner files Partner A
Partner liles Partner B
8o
a7
Transcripts
Answer key
PA6E U]IIT
t6
I
4l
About the book
Englishfor LegalProfessionals
hasbeendesigned
to provide
anyonewhoneedsto speakaboutthe
lawin a business
environment
withthe language
theyneedto be ableto operatewithconfidence.
Thesixunitscoverselectedbasicareasof Commercial
Law:companylaw,employment
[aw,contract
patent
law,
andcopyrightlaw,mergersandtakeovers,
riskmanagement,
andbankruptcy
law.
pointsof lawdesigned
Eachunithasits ownstoryline
whichthrowsup interesting
to placethe
experienced
legalprofessional
in a position
to adviseclientson suitablecourses
of legalactionin
English.
A clientis givenadviceon startingup a company
in Unitr, employees
arehiredandcontracts
of employment
negotiated
in Unitz, andcontracts
withpartners
arefinalized
in Unit3. Successful
protecttheirproducts
companies
in Unit4; somearein a position
to takeoversmallerfirmsin Unit5;
perhaps
othershaveto takea closerlookat theirtiabilities,
because
theyareon the brinkof
progression
bankruptcy,
in Unit6. Atthoughthereis a logicaI
fromstart-upto bankruptcy,
the units
canbeapproached
in anyorder.
Eachunitbeginswitha Starter.a \riarm-Lp
activitythatintroduces
thethemeof the unitand
the studentto refresh
encourages
existirgxro'.'rledge.
Newoccupational
vocabulary
is acquired
by
ThereareVocabulary
analyzing
authentic
documents.
Assistants
for manyexercises,
whichprovide
definitions
of important
wordsandphrases.
Ne,,.figuresof speecharepractised
in listening
and
speaking
exercises.
Language
boxesprovideadviceon the correctusageoflegalandgeneral
Engtish
you
language
structures,
whilethe Did
know?boxesintegrate
usefulprofessionaland
linguistic
information
for English-speaking
legaIexperts.
role-plays
Realistic
usedwithrole-play
cardsfromthe PartnerFitesallowstudents
to practise
what
theyhavelearntin authentic
legalsituations.
An Outputcloseseveryunitwitha demanding
and
authentic
textfromthetradepressandstudents
pointsofview
areencouraged
to takepersonaI
throughthe accompanying
Overto you discussions.
TheMuttiROMcontainsall the Listeningextractsfromthe book.Thesecanbe ptayedthroughthe
audioplayeron yourcomputer,
or througha conventional
CDplayer.In orderto giveyourselfextra
practice,
listening
listento it in yourcar.TheInteractive
exercises
let you reviewyourlearningby
doingUsefuIphrases,
VocabularyandCommunication
exercises
on yourcomputer.
Thiswittbe
particularly
valuableif youareusingthe bookfor self-study.
Thereis alsoan A-Z wordlistwith a[]the
keywordsthat appearin Engtishfor LegalProfessionals,
as wellas a glossaryof UsefuIphrasesand
Thewordlistincludesa columnof phonetics
vocabulary.
anda spacefor youto writethe translations
of the wordsin yourown language.
ls
Settin€ up a business
Lawyersoften haveto use these terms when talking about
businesslaw. Howmanyof them are you familiar wlth?
Canyou explain any of them?
r soletraderr
articlesof association
capital. tangible
assets.
equity/ company
. unlimited
companies
liability
registerof
Forfurtherhelp,lookat the termsin the text below.
t
for the firm's
Deborah
Eyans,
a solicitorin the lawflrm GarfleldBrown,is writinga brochure
clientsaboutthe differentbuslnessstructuresin the UnitedKingdom.Fill the gapswith the
wordssuppliedbelow.
INFORMATION
FORINVESTORS
AND ENTREPRENEURS
FROMABROAD
in theUnitedKingdom
Legalstructures
i
:. :::l :.:1,:
'
:..
.
. caSt.:
t',.debtsr onyourown . owners.
agreement
.,'.pr9fitsr publicly. separate. shareholding
personaflyliable
Workingfor yourself
as a sotetrader.Youdo not
andaredescribed
lf youworkfor yoursellyou areself-employed
you
your
the
start
tradingandmanage
business
in
order
to
set
it
up:
simpty
haveto register
makesa certainamountof
onceyourbusiness
business
'. However,
year,
you
authority.
As
a
sote
trader,thereis no limitto the
mustregisterwiththe tax
moneyevery
buton theotherhand,youhaveunlimited
amountof capitalyoucantakeout of the business,
your
for
tiability
6 | UNIT1
Settingup a business
Partnerships
Therearetwo maintypesof partnership
partnership.
in the U.K.Theotdestis thegeneral
This
business
vehicledoesnot havea separatelegalidentityfromthe peoplewho formit. This
I withoutlimitfor thedebtsof thefirm.
meansthatthe partners
are
a
A writtenpartnership
is recommended
but is notrequired
by taw.
partnership
A generaI
private.
cankeepits partnership
agreement
andits financial
information
Partners
do not haveto provide
a minimum
amountof equityby lawbuttheyusuallyagreeto
paycapitalintothefirmwhentheyjointhe partnership.
Thesecondtypeof partnership
in the
partnership
(LLP).
U.K.is the timitedliabitity
partnership,
Untikea general
the partners
are
I of the business,
calledmembers.
Thevarestillthe
buttheirliabitity
for
the debtsof the firmis timited.However,
everyLLPmustpublishregularfinancialinformation
aboutitself.
Limitedcompanies
Thesebusiness
mustbe registered
structures
on the Register
of Companies
andhavea
b legalidentity.
Thismeansthe members
areonlytiabteto payfortheir
z in thecompany.
lt is the company
thatis liabteto its creditors.
Whena
is formed,its ownerswillnormally
putcapitaIintoit. However,
company
thiscompany
capital
8- tangibleassetse.g.machinery
doesnot haveto consistentirelvof
canalsobe contributed.
Limitedcompanies
mustalsohavea writtenagreement
- calledthe
articlesof association.
Thetwo maintypesof limitedcompanyarethe privatecompany(which
hasLimitedor Ltd in its name)andthe publiccompany,
or plc.
plc
A
is often- but not always- a companywhosesharesaretraded
i.e.anyoneis allowedto buythem.Forthesecompanies
thereis a minimum
amountof capital
andtherearedifferentrequirements
procedures.
regarding
directorsandaccounting
DtDYOUrlOW?
TheBritishandAmerican
Engtish
termsfor business
structures
vary.Theestablished
in the
structures
UnitedKingdom
aresoletraders,generalpartnerships,
andtimitedcompanies.
Soletradersand
partnerships
areoften(butnotalways)smallbusinesses.
Limitedcompanies
areusedby businesses
of
all sizes,fromtheverysmallto the verylarge.Thesmalleronesareoftenprivatecompanies
andhave
Ltdor Limitedin theirname.Largerlimitedcompanies
oftenchooseto be publiccompanies
andhaveptc
in theirname.Sincezoorin the U.K.,a fourthbusiness
structure,
the limitedliabititypartnership
or LLP,
hasexisted.
ln the U.S.,the abbreviations
lnc andCorpareverycommon,buttheyarejustthe abbreviations
acceptabte
in attU.S.statesfor a company
that hasregistered
itselfas a separate
legalidentity.
TheU.S.
limitedliabititycompany
or l[C is a differenttypeof company
whichcombines
thetaxflexibitity
of a
partnership
withthe personal
liabitityprotection
of a corporation.
Besureto checkandusethe correcttermin the rightjurisdiction:
exercise
1 on pages5-6 witl helpyou
do t his .
U N I T1
2
S e t t i n gu p a b u s i n e s s| 7
Hereare somepoints of view about dlfferent legal aspectsof the companytypes presented
above.What do you think?
A limited liability partnershipis a reallygood ideo nowadays.
Youcan't expectlaw firms, orchitects,tox advisersand so on to
acceptunlimitedliability in traditionalpartnerships.lf a big
contractgoeswrong,it cancosttensof millions.
It's veryimportantfor a public companyto
haveminimumequitytHowcan onyone
haveconfidence
in a companyof thissort
if it doesn'thoveony capitalof its own?
I can't see why the law in the U.K.requiresa company
to registeritself beforeit startstrading,but doesn't
requirea sole traderor a partnershipto registerat
that paint. They'reall businesses,aren't they?
I feel verysorryfor entrepreneurswho form a limited company.
Theideabehindthistypeof companyis that yourpersonal
as soonos the ownersgo to
assetsshouldn'tbe at risk.However,
the bonkfor stort-upcapital,the banksecuresany loonsit makes
ossets- usuallytheirhome.
againstthe owners'personal
AUDIO
g\
v}
3
DeborahFlynnhas a meetingwith her client Miya Osborne,a fapanesewomantiving in the U.K.
andanswerthequestions.
Partr: Listento the firstpartof the meeting
r
Whendid sheformhercompany?
business?
z Whatis the natureof MivaOsborne's
doesshenowwantto moveintoandwhy?
3 Whatareaof business
4 Whatplansdoesshehavefor oneor two of hercolteagues?
advicefromDeborah?
5 Whatotherreasondoesshehavefor seeking
8 | uNlTl'
Settingup a business
AUDIO
a
Partz: ListenandcompleteDeborahFlynn'swrittennotesfromthe meeting.
7
lvltya Osborrtt u currextly ruvutivg her ivnport bwinus as a soletraobr and has
2 ernployu^r.
Shz has fauvtd a possible v1r.wproperty to ure ar a shtp owd wants to yrwke aw
ffir to buy tt imnediatdy. Rtskt We dow't Ww whether shc.wLu be oillav,led
to
chavge its we/rorn an
^ buildivg to a shtp. Ne*d to find o,tt
tnore.
She'sftwrved tUz bwLnzrsup ta wv,/wtvg the
! of tt^e
bwirizss and satu&sawvEs.she has 3 rusow
for formtvg ot coynpqnyww:
1. to rev'/ardthe loyalty of h", Z stdf by gtivtg thzm a
thz bwivtzss
,Lw
2. otko
toreNard
thLym;trffi:tr-fuure bymakbs
them
3. thz. bwLnzs.ryrxds to apand qnd thue b a possihlencw
who wowtt share^sin thz bwirizrs
She doerw't woM, to borrow monzyfrorn the bank becausethe bq* wiil qsk hr-r
f the toawpersavuillyand that wtII put her htme
at rirk qs
thz laqyLwill be seturd ovt,her hnwe.
4
In prlncipte, lllya Osbornehas a potentiatly good ldea, but there are a lot of issues to consider.
Work in smatl groupsand discussthese quest:ons.
. ShouldMiyaOsbornegivesharesin the newcompanyto hertwo loyalemptoyees?
Whatarethe
risky?
rewarding
loyalty
that
are
less
other
ways
of
for
her?
Are
there
any
risks
r Whatotherstructures
Whydo youthinkDeborahdid not suggest
for Miya'sbusiness?
areavailable
them?
. lf youwereadvisingMiyain yourowncountry,
wouldyouradvicebe the sameor differentfrom
Why?
Deborah's?
Lookat Deborah'slist of issues.What should tlya do and why? Usethe following phrases:
I would(wouldn't)adviseherto ....
| (don't)thinksheshould....
oughtto ....
She(realty)
Shecouldalways....
UNITl
5
S e t t i n g u p a b u s i n e s| s9
A daylater DeborahFlynnsendstliya Osbornethe followingtetter. Putthe six paragraphsinto
the correctorder.
Dear Mrs Osborne
New businessproposals
a) Accordingly,I must stressthat a bank will usuallyask you to guaranteethe loan personally,which
it might make to your companyand take your houseas security.This would mean that, if the
companydefaultedon the loan, the bank would requireyou to repayit. If you could not afford
to do so,the bank would take legalproceedingsto sellyour houseand recoverits money.
b) I look forward to meetingyou againnext weekasarranged.Meanwhileif you haveany questions
about the mattersI haveraisedin this letter,pleasedo not hesitateto contactme on my direct ling
which is setout at the top of the page.
c) Following our meetingthis morning, I write to summarizemy adviceand setout the stepswhich
you shouldtake now.
d) As you explained,your businesshas now reacheda point wheie it needsto expandand requires
externalfunding to do this. Your choicesare betweendebt (that is, a bank loan) and equity (that
ig financingthrough sharesbought by an investor).Bank loansareavailableto you asa soletrader
and would also be availableif you wereto form a company.You explainedinitially that you were
interestedin obtaining a bank loan to pay for someof the expansion,but that you wereworried
about the effectthat this might haveon your personalassets,particularlyyour house.
e) If you decideto incorporatethe businessas just described,then you will be under more legal
obligationsthan you wereas a soletrader.Theseobligationsrelateto the waysin which you can
take money out of the company,and the waysin which you make valid decisionson behalf of
the company.I enclosea copy of our firm's booklet Runningyour newcompanywhich givessome
examplesof theseobligationsand explainsa little about the constitution of the company.
f) Turning to financingthroughshares, this option is not availableto soletradersor partnershipsand
is only possibleif you form a company.Sincean externalinvestoris alreadyinterestedin investing
in your business,I would advisethe formation of a privatecompanyasthe most practicaloption.
The assetsof the businesswould be transferredfrom you astheir ownerto the companyand shares
would be issuedto you and the other shareholders.
Yours sincerely
Deborah Flynn
Solicitor
A n s w e r sr I:
z[
3I
rl
\i
6I
10 | UNII1
O
settingup a business
Work In small groupsand discussthese questions.
r Howdoesthis advicecomparewith the adviceyou gavein exercise
4?
z WhatphrasedoesDeborahuseto meana bankloan'tWhatadvantages
does
anddisadvantages
Deborah
mentionin relation
to thistypeof finance?
Canyouaddanymorefromyourexperience?
phrase
What
Deborah
mean
money
raised
does
use
to
by sellingsharesin a company?What
3
advantages
anddisadvantages
doesDeborah
mentionin relation
to thistypeof finance?
Canyou
addanymore?
letterwarnsthatrunninga company
is morecomplicated
thanbeinga soletrader.From
4 Deborah's
yourexperience,
canyousuggestwhyshesaysthis?
0tD:YOUlKr{tU?
of a company
consists
of its memorandum
of association,
which
r In the U.K.,the constitution
givesinformation
aboutthe locationof the company
andits objectsor legalpurposes,
and
r its articlesof association,
whichcontaininternalrulesabouthowthe companyis
Boththe memorandum
organized.
andthe articlescanbe readby the publicat Companies
House,the centralregister
of companies.
In the U.S.,the articlesof incorporationis the documentthat hasto be filed with the
relevant
state.Thisdocumentis requiredof incorporated
firmsalike.
andnon-incorporated
7
f n her letter DeborahFlynn uses some verb + noun pairs, e.g. to set out detoJls.The following
yerb + noun pairs are commonwhen tettlng started in buslness.Try to makepalrs.
VERB
r register/ run
z raise/ contribute
3 submit/ reject
4 drawup
5 impose
6 incur
7 view/inspect
8 obtain
9 issue/ hold
10 conduct
8
NOUN
a restrictions
b debts/ costs
c the register
of companies
d business
e capital
f shares
g acompany
h a certificate
of incorporation
(forentryin a register)
i an application
j acontract/apartnershipagreement
Hll In the gaps using the verb + noun pairs above.Youmay haveto modlfy the verb.
r
Inthe U.K.anymemberof the publicis allowedto
Companies
Houseto getinformation
abouta particular
company.
z A plccanextendits equitybaseby
a company
shouldnotcommence
tradinguntilit has
3 Undernormalcircumstances
4 A soletraderdoesnot needto registerhisor heractivitiesin orderto
at
UNITt
S e t t i n g u p a b u s i n e s| s11
Housecan
for registration
if the proposedname
5 TheCompanies
is too similarto a namethatalready
of the company
exists.
partnership
in a general
to
6 Thelawdoesnotrequirepartners
wouldrecommend
this.
but mostsolicitors
triesto
any
, the bankofteninsistson securing
7 Whena company
assetsof thecompany's
owners.
loanagainst
the personal
partnership,
the partners
bearpersonal
tiability
for any
8 In a general
whichthe
partnership
might
GIVIt{G ADVtCEA1lD tAr !il G RECO
ll t{ E1{DAT|O1lS
for givingadviceandmakingrecommendations
requirea gerundandsomean infinitive.
Someexpressions
phrases
whenspokenbut arenotappropriate
NB:Some
areappropriate
in a formatwritten
context.
Gerund(-ing)
lnfinitive
I (would/wouldn't) suggest/recommendmoking
an offer at this stage.
How/What about talking to a prapertyexpert
aboutthis?(spoken)
lthink you should tell me a bit moreabout the business.
I (strongly)odviseyou to talk to a propertyexpert
about this.
Youcouldalwaysmokean offerwhenyou knowa
bit more.(spoken)
Youought to make an offer whenyou know a bit more.
(spoken)
Whydon't you makean offerwhenyou knowa bit
moreT(spoken)
lf you arediscussing
what
NB:All the abovephrases
canbe usedwhenyouareadvisingsomeone
directly.
he I she I they shoulddo, usethe phraseslistedin exercise4.
lf you wouldliketo userecommendandsuggestfor a third party,the structureis as fotlows:
I recommend
/suggestthat he /she should+ infinitive
9
look at an ext]actfroma letter froma client whosepartnershlphasgot into difficulty,to
their lawyer.
De a r ...
... I formed an accountancypartnership with David B. five years a-eo.
specializingin accountancy servicesand tax advice for small businesses.
My partner has now informed me he wishesto leaveour firm in order to
accept a partnership with a large firm specializingin accountancy for large
corporations. My problem is that I do not think I can afford to buy him out
right now. What is more, the new firm is not very far away.I mention this
becauseour partnership agreementstatesthat if a partner leaves,he should not
do businesswithin a S-mileradius of his old firm. I am. of course.worried that
David B. misht take someof our existinsclientswith him to his new firm. ...
1 2 | U NIT l
Se tting up ab us ines s
tlatch the beginningsin A with the endingsin B to rebuild the lawyer'ssuggestionsbelow:
AB
Youcouldalways...
...worryaboutthecostof buyingyourpartneroutyet.Your
partnership
agreement
statesthatthispayment
wouldonlybe
I suggest...
year.
dueat theendofthe nextfinancial
Youreallyought...
...ascertain
the precise
valueof thefirm.Thenyouwil[know
howmuchit wiltcostto buyyourpartnerout.
I wouldn'tadviseyou...
...tryingto cometo a bindingagreement
aboutexisting
clients.
Youwilllosesomeclients,
but don'twantto losetoo many.
5 I don'tthinkyoushould...
partnership
...to terminate
theexisting
withimmediate
effect.
6 I don'trecommend...
DavidB.is notgoingto actin yourfirm'sinterests
anymore.
...bringing
in a newpartnerstraightaway.Waitandseehow
youhavebeforeyourushintosuchan
muchbusiness
imoortant
decision.
...to invokethe five-mileradiusclause.lt's probablynot
enforceable
anyway.
ls there any adviceyou don't agreewith? Doyou haveany other advicefor the client?
.
..a..|:l
;4pefruunvrsSfrfr
.,,,...i11
ascertainfind out
binding (odj)whichmustbe obeyedbecauseit is acceptedin law
buy s.o. out to poy s.o.for theirsharein a business,usuallyin orderto
get controlof the businessyourself
due owed,payable
enforceable(odj)a clausewhichis enforceobleis one whichcanform the
bosisof a court action,if the promisecontainedin the clauseis broken
with immediateeffect ot once,immediatelv
DtDYOUrlOW?
Lawyeris a generaltermwhichwe useto referto someone
who has
learntthe lawandhasa licenceto practise.
Inthe U.S.,lawyersare
oftencalledattorneysor attorneys-at-law.
In EnglandandWales,the
legalprofession
is not unified,so a distinction
is drawnbetween
solicitors,who haverightsof audience
in onlysomecourts,and
(i.e.the art of presenting
barristers,
whospecialize
in advocacy
cases
in court)andwho havea rightof audience
in all courts.Generally,
a
soticitor
will consultwith hisor herclientandpreparea brief.Thisbrief
is thenpassedon to a barrister
whowill oresentthe casein court.
Successful
anddistinguished
barristers
areofteninvitedto becomea
Counsel.
Suchbarristers
alwaysuseQCaftertheirname.
Queen's
1O
A clientconsultsa lauryeraboutforminga company.
Beforeyoubeginyourconsultations,
agree
the countryof jurisdictionwith yourpartner.
P artnerA Fi l eor, p.7o
PartnerB Fiteor, p.75
Uselanguagefor making recommendations
and giving advicein your consultation.
After you have finished the activitn telt the class what you agreedto do.
U N ITl S etti ngupabusi ness
| 13
'
GIVIl{G
REASOTS
ATD
E)(PtAllAiloils
It is oftenimportantto givereasons
andexplainthingsstepby step.
Note:Wordslikefirstlyandfirstof all aren'tusedin the sameway.
reasons
Enumerating
ExplainingthestepsInvolvedin a procedure
Firstly, the companyis investingwith minimum
Firstof oll, we need to discussthe business
relationship between ...
Next, I wouldsuggestdepositing...
Following that, it would be yourjob to persuade....
Lostof oll, we would notify the tax office...
risk...
Secondly,the investorreceives757oof any rent
obovetheminimum.
Thirdly,...
Finolly,...
NB.Becarefulwithat first.Weusethisto express
the factthatwe thoughtsomething
initiattyandthen
c hanged
ourmi n d s .
Example:At first it seemeda good idea to form a company.Laterwe realizedthat this would be too
expensiveand too complicated.
tl
Readthe extractsfroma presentation
aboutbusinessformatsin the U.K.Gomplete
the gaps
with expressions
for orderinganexplanation
fromthe languageboxabove.
on
' I'dliketo provideyouwith a bit of background
formatsin this countrvandthe rationalebehindthesedifferent
business
formats.
', I'dliketo go on to lookin moredetailat the plc
or to giveit its moreformalname,the publiccompany.
I'dliketo lookat thetimescalefor converting
a privatecompany
intoa
q,ld liketo discuss
publiccompany.
withyousome
of listedplcs:oneswhichcanselltheirshareson globalstock
examples
exchanges.
I....t
ld liketo moveon nowto talkaboutthe plcin moredetail.
t, youmightthinkthattherearen'tmanyadvantages
to
legislation
becoming
a plc.Butwhenyoureadcompany
andthe rulesof
the LondonStockExchange,
therearethreeclearreasonsfor doingso.
" it'sillegalto
z,
Investment
Market
the Alternative
offersharesto the publicif youarenot a plc.
(wheresharesin youngcompanies
for
more
aretraded)is onlyopento plcs.
',
is alsoonlyopento plc
companies,
the MainMarketof the London
StockExchange
established
e,somemightsaythatbecoming
And
a ptcis goodfor marketing.'
shares.
t2
a plc in the U.K.,
Thespeakersaysin herpresentation
that therearethreereasonsfor becoming
but it is not a sultableformatfor everybusiness.Howslmilaris this situationto theiurisdlction
In yourcountry?
1 4 | uN lT l
t3
Se tting up ab us ines s
Herels a comparlson
tableshowingthe fourformsof businessstructurein the U.K.Comptete
a-f In the tableuslngthe notesbelow.
* Two
- Snallbusiness
6anklaansor profrlaof bueiness
* Ke1ianratlonfee. k1ietaalion formahties.
documentsrequiredand muel beopento public.
Canatibutional
- Yes
Unlimited
Business
structure
Raising
money
Sole tnder
' Bankloansor profits
of business
Limitedcompany
: (Ltd or ptc)
LLP
Generalpartnerchip
Bankloansor profits
of business
Bankloans,profits
of business
or
I sellingsharesin the
j company
NB:onlyplcscan
selltheirshareson a
largescale
Suitablefor
Anysizebusiness
(largerbusinesses
chooseplcs)
Anysize
Anysize
Minimu mn um berof
peopte
O ne
One
Two
C
Minimumcapital
requirement?
No
d
Yes
No
Setup costsand
formalities
Noregistration
fee.
i Noformalities
to set
up.Noconstitutional
required.
i documents
i
Liabitity
Limitedto capitaI
contribution
f
No registration
fee.
No registration
formalities.
Constitutional
not
document
required
but if one
is used,thereis no
obligationto makeit
opento public.
Registration
fees;
administrative
costsgreaterfor
plcs.Registration
formalities.
Constitutional
required
documents
andmustbeopento
public.
Limitedto capital
contribution
Unlimited
Completethe advantagesand disadvantagesof eachbusinessstructure.
ano
havefewformalities
but areliableto the
debtsof the business
withouttimit.
2
ano
havelimitedtiabitity
andbankloansmaybe
easierto obtainbuttherearemoreformalities.
t4
A lawyerglyesa cllentlnformationon forminga company.
tYorkwith a partner.
PartnerA Fiteoz, p.7o
PartnerB File02, p.75
UNITl
Settingup a business| L5
Readthese readers'letters to the editor of the law supplementof TheTlmesnewspaper.
What advlcewould you give them?
Letterr
Dear Sir
After I was made redundant from a job in a luxury hotel three years ago, I started
doing some work with an ex-colleague.We agreed to work part-time for the
businessbecauseboth of us were already working separately on other projects.We
invested several thousand pounds each in our new business and agreed to divide
the responsibilities between us. I dealt face-to-facewith customersand he worked
mostly with our suppliers and did the paperwork.
Things went smoothly at first, but when my colleague'sother projects started to do
better, he just stopped doing any work for our business and handed everything back
to me. I took over his responsibilities, but it was too much for one person to manage.
As a result I lost two major customers and had to wind the business up, losing all
of my capital investment.
Can you advise?
Yours faithfully
Simon Braithwaite
Letter z
Dear Sir
My husband and I were partners in a small manufacturing business until our
retirement, The business is still going strong in the hands of the remaining two
partners, but we have not had any involvement in it, financially or managerially,
for over a year. We have now found out that a claim is being made against the
firm in relation to a debt incurred just after the date of our retirement. We have
been named in the claim along with the other two partners, because our narnes
were not taken off the firm's letter head until two months after we retired, even
though we repeatedly asked for this to be done earlier.
'vVhatdo you advise?
Yours faithfully
Ann Richardson
Nowgo to page96 andreadat the bottomthe repliesto theselettersthatwerewrittenby experts.
. Doyouthinkthe lawis beingfairto thetwo peoplewhowrotethe letters?
o Arethereanydifferences
in the two repliesandthe legal
betweenthe legatpositionas exptained
positionin yourownjurisdiction?
16 I
Employingpeople
Thesepeopleare talking about different aspectsof their contractsof employment.
Workwith a partner and makea list of the points they are sure or unsureabout.
If I want to earnsome
moneyon the side doing call centre
work at the weekendsor workingin a
baf there'snothingmy employercan
do to stop me.
As far as l'm
awore,my employerhas
no controloverwho I go
to work for if I leavethe
company.
lf I wantedto
leavethe company,I would
haveto tell my employera
month
in advance.Or is it two
I alwoysmanageto
months?
use up all my holiday by the end
ofthe year,so I don't know what
I actuallycan't
happensif you'vegot somedaysleft
rememberif my contractsaysanything
over.I imagineyoujust carrythem
about componysecrets,taking
documentshomeand oll that kind of
thing. I supposeit does though.
p
rl
lf I work overtime,
I try to take that extratime off beforethe end
of the yeor.Otherwise,I lose it. ldon't have
any right to be paid for overtimethat
I have worked.
l{owlookat yourlist again.What,in yourexperience,
doesa standardcontractof employment
usuallysayaboutthesepoints?Discuss
thiswith othermembers
of thegroup.
DrDYOUKI{OW?
followed
A commercial
contractusuatlystartswith its owndescription,
for example,
THISAGREEMENI,
by the partiesandthe date.Nextusuallycomethe definitions
of wordsusedrepeatedty
in the contract,
andthenrecitals,givingdetailsofthe historyor purposeofthe contract.
Theoperativepart (theterms
of the contract)
thenfottows.
An employment
contractcontainsinformation
on salaryor pay.Theheadingfor this partof the contract
(BE)
(AE).
or clauseis usuallycalledRemuneration or Compensation
(BE)
(AE)
A severance or separabitity/ severability
clauseis verycommon.lt ensuresthat the contract
as a wholeremains
validevenif oneor two clausesin it becomeinvatid.
Thetwo partiesaresimply
quickly
possible.
required
to renegotiate
the invalidclausesas
as
U N I T 2 E m p l o y i npge o p l e| 1 7
t
Beloware someclauseheadingstaken from a standardcontractof employment.
tlatch them with the correctclauses.Oneheadingdoes not fit anywhere.
Absence. jpplieabterl'aw'. Competitiono Confidentialityo Durationof contract/
o Dutiesr Leaveentitlement
. Severance
. Workinghours
Termofemployment
Clauses
I
The Employeeshallnot makeknown to any third party any informationin respectof
patents,know-how,trade secretsor other confidentialmatterswhich relateto the
Companyor its clientsor its suppliersor its co-operationpartners.The originalsof any
documents relating to such information are to be surrenderedto the Company
immediatelyupon terminationof employment.
For the durationof this contractof employmentand for a period of two yearsthereafter
the Employeeundertakesnot to be employedin any way eitherby firms which compete
with theCompanyor conductsimilarbusiness
to that of theCompanyor by firmswhich
with suchfirms without the consentof the Company.
areconnectedto or associated
The Employee'sservicewith the Companycommences
on April I't 20... and continues
for an unlimited period of time, but until no laterthan the statutoryretirementage.
Shouldthe Employeebe unableto work on accountof certificatedillness,full pay will
continue accordingto the length of servicescalesset forth in the attachedStaff
Handbook.Irrespective
of thelengthof service,
thereis a minimumfull payentitlement
of 30 days.
The Employeeis entitledto 30days'paidleavein thecalendaryearpluspublicholidays.
In arrangingthedatesof this leave,the Employeeshallgiveproperconsideration
to the
needsof the Company.
The Employeeshall,as ExternalProjectCoordinator,managethe Company'sprojects
with externalpartnersin the field of telecommunications
softwaredevelopment.
Applicable law
The construction,validity and performanceof this contractshall be governedin all
respects
by Englishlaw.
The invalidity or unenforceability of individual provisionsdoes not affect the validity
or enforceability of the contract as a whole. In lieu of any such inoperative provisions,
agreement shall be reached by the parties on replacement provisions which approximate
as closely as possibleto the stated commercial intentions of the partres.
18 | UNIT2 Emplo yi ngpeople
2
ilatch the words or expressionshighlighted in the contracton page1Z(columnA) with wordsor
expressionsthat havea similar meaningin plain English(cotumnB).
A contractvocabulary
1 SUrrenoer
z duration
3 undertake
4 COnSenr
5 COmmence
6 leave
7 be entitledto
8 provisions
9 in lieuof
10 inoperative
B
a
b
c
d
e
f
g
h
i
i
ptainEngtish
agreement
hotiday
havethe rightto
terms
promise
in placeof
tength(oftime)
invalid
giveback
begin
AUDIO
a
4
3
Twodays ago CathyO'Brienfrom Dublin, lreland was offeredthe position of softwaredeveloper
company.Todayshe has a meeting
at Softline l,td, the U.K.subsidiaryof a Luxembourg-based
with the Headof HumanResources,Thierry Schwarz,to go over someof the details of her
contract.Listento the conversationand decideif the statementsbeloware true or false.
assumethinkthat somethingis correctwithouthaving
checked
clarify makecleor explain
draft a rough written versionof somethingnot yet in its
final form
entitlementa legalright to haveor do something
to that effect a phraseusedto showthatyouaregiving
thegeneralmeaningof somethingheardor read,and not
using the exactwordswhichthe speakeror writer used
u
n
T
n
According
Schwarz,
the normalworkingweekisn'tMondayto Friday.
to Thierry
nowandthen.
Cathyis prepared
to workweekends
?
year.
Thierry
statesthatit is unusual
to carryoverannualleaveintothefollowing
prepared
pay
might
to
accept
extra
in
compensation
for
annual
leave.
be
unused
4 Cathy
As a seniormemberof staff,Cathywitl not be entitledto receiveanypayfor overtime.
in hercontract
6 Cathywantssomething
thatentitlesherto be paidfor anyovertime
doneif herlinemanager
agrees.
Thierry
tetlsCathythatit wil[be possible
to change
theovertime
ctausein the contract.
1
2
T
I
T
OID:YOOKf,OU?
Thewordsclause,section,andparographcanoftenbe confusing.Contracts
and agreements
consistof clauses,subclouses,andparagraphs.Sections,subsections,andparagraphsare used
In eachcase,youcanusethe generalwordprovisionto
to referto partsof nationallegislation.
describewhatsomethingin the documentsays.Forexample,Sectionj subsection4 paragraph
a [writtens.f (+)(a)]of theAct containsa provisionaboutdirectors'remuneration.
U N I T 2 E m p t o y i npge o p l e| 1 9
TOA LEG AT
DO CUM EI { T
REFERRIT{G
The followingexpressionsare usefuIwhen referringto a legaIdocumentor explainingits content.
It says in clouse3 thot ...
Theterminationclauseclearlystotes/ stipulatesthot ...
4
Accordingto clause5 the employeemust ...
It mys here ...
Thissimply meansthot ...
Workwith a partnerto discusssomeproblemsrelatingto a contractof employment.
PartnerA
Partner B
5
Fite 03, p. 70-71
tile q, p.75-76
Thierry speaksEnglishvery wel[, but has difficulty finding the right tone in letters and emails.
Hewould like to write his email in a friendly but formal style. Fill the gapswith the words
below.
contactingo discuss r gettingin touchwith o got back . hereare,. I am attachingr
lapologise.3just o pleasso prettt o reasonablyo resolve: returned.
sort out r sorrV o talk about ' unfortunatelyo yy"n, . wish . you see
!l
ro: catrv.obrk
[email protected]
Subject: amendments to contract
=
DearMrs.O'Brien
Regardingour meetinglastweek,
3,our solicitorwas in courtfor mostof lastweekand only
5 the amendmentsto yourcontractas suggestedby him.
I thinkyou'llfindthatoverallthey
6 the issuesyou raisedwith me last
Couldyou havea look at them and let me knowme by the end of the weekat the latestif thereare
!? | canthentry to
have the contract ready for signing by the middle of next week.
In the meantime, if there are any other matters where I can be of help.
give me a call.
I look forward to hearing from you soon.
Best regards
Thierry Schwaa
people
20 | UNIT2 Employing
6
ThierrySchwarz
sentanddiscusswith a partnerthe two questionsbelow.
Readthe attachment
to Cathy OoBrien'scontract
Suggested
amendments
of employment
Pteasenote: the suggestedamendmentsto the contract havebeen added in italics.
1.2 Working Hours
The length of the standard working week will be 38 hours. Weekendwork will be
necessaryfrom time to time.
6.2 Leare Entitlemeot
The Emplol'ee has an entitlement to compensationfor up to and no more than
l5 days of unusedleavebasedon the basic salary amount as defined in 4.1.
Unused annual leavemay be carried over into the following year, up to a
maximum of sevendavs Anl'leave carried over must be taken before lst March.
4.5 Remuneration
There is no claim tofinancial comp€nsationfor overtimg weekendor holiday work
or other work performedin addition to the qorking hours as set out in 1.2.Overtime
worked may be taken as time off in lieu at the discretion of the line manager.
1
2
Onwhatpoint(s)hasCathygot whatshewanted?
Onwhatpoint(s)hasshegot lessthanshewanted?
g!!i+ir:.:-:;
consistentwith (adi) in agreementwith
detrimentalto (adDharmfulto
express clearlyand openlysoid or written down
(in controcts,the oppositeof implied)