Corporate Law Coursework Example | Topics and Well Written Essays - 3000 words

Corporate Law - Coursework Example However, by virtue of a floating charge, the charge is for the most part treated as unsecured allowing the company to deal with the asset or assets to which the charge is attached as if it was not subject to a loan.9...... Should DART fail to satisfy the terms of the loan agreement, the lender will have the right to take possession of the asset subject to the fixed charge. This limits the extent to which the company may deal with the asset subject to a fixed charge until such time as the loan is discharged. However, by virtue of a floating charge, the charge is for the most part treated as unsecured allowing the company to deal with the asset or assets to which the charge is attached as if it was not subject to a loan.9 In addition or as an alternative, lenders may insist on including a clause in the loan agreement allowing them to have a measure of control over the business transactions of the company. This kind of an arrangement involves an obligation on the part of corporate management to obtain the lender’s consent prior to conducting specific business transactions.10 There are other mechanisms that lenders may use that go beyond that which is typically characteristic of a simple loan agreem ent. One of these mechanisms is the attachment of larger than usual interest payments or the retention of title to an asset purchased by virtue of a loan until such time as the loan is discharged.11 Essentially, the various mechanisms of going beyond the simple loan agreement for additional lender protection are known as â€Å"creditor self-help†.12 C. If new ordinary shares were to be issued, to raise additional capital, the entitlement of each of the existing shareholders to these shares Ordinary shares confer upon the owner the right to dividends as well as voting entitlements.13 When a company contemplates issuing new ordinary shares it must first offer those shares to existing shareholders under the right of pre-emption.14 However, since the statutory provision prescribing pre-emptive