corporate and business law (lw) (eng)4. guide to acca examination assessment acca reserves the right...

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

September 2019 to August 2020

Corporate and Business Law (LW) (ENG)

© 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(ENG) syllabus

5. Relational diagram linking Corporateand Business Law (ENG) with otherexams

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

Corporate and Business Law(ENG) 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 assessedby 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 (ENG) 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 the syllabus is to develop knowledge and skills in the understanding ofthe general legal framework, and of specific legal areas relating to business,recognising the need to seek further specialist legal advice where necessary.



7. Main capabilities

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

A Identify the essential elements of the legal system, including the main sources oflaw

B Recognise and apply the appropriate legal rules relating to the law of obligations

C Explain and apply the law relating to employment relationships

D Distinguish between 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 is dividedinto eight areas. The syllabus starts withan introduction to the overall Englishlegal system such as the court systemand sources of law. It then leads into thearea of the law of obligations includingcontract and tort, which underpinbusiness transactions generally.

The syllabus then covers a range ofspecific legal areas relating to variousaspects of business of most concern tofinance professionals. These are the lawrelating to employment and the lawrelating to companies. These lawsinclude the formation and constitution ofcompanies, the financing of companiesand types of capital, and the day-to-daymanagement, the administration andregulation of companies and legalaspects of insolvency law.

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



9. Approach to examining the syllabus

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 the legalsystem

1. Law and the legal system

2. Source of law

B The law of obligations

1. Formation of contract

2. Content of contracts

3. Breach of contract and remedies

4. The law of torts and professionalnegligence

C Employment law

1. Contract of employment

2. Dismissal and redundancy

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 thelegal system

1. Law and the legal system

a) Define law and distinguish types oflaw. [1]

b) Explain the structure and operationof the courts.[1]

2. Sources of law

a) Explain what is meant by case lawand precedent.[1]

b) Explain legislation and evaluatedelegated legislation.[1]

c) Illustrate the rules and presumptionsused by the courts in interpretingstatutes.[1]

d) Identify the concept and impact ofhuman rights law. [1]

B The law of obligations

1. Formation of contract

a) Analyse the nature of a simplecontract.[2]

b) Explain the meaning of an offer anddistinguish it from an invitation totreat.[2]

c) Explain the termination of an offer.[2]

d) Explain the meaning andconsequence of acceptance.[2]

e) Explain the need for consideration.[2]

f) Explain adequacy and sufficiency ofconsideration.[2]

g) Analyse the doctrine of privity.[2]

h) Distinguish the presumptionsrelating to intention to create legalrelations.[2]

2. Content of contracts

a) Distinguish terms from mererepresentations.[1]

b) Define the various contractualterms.[1]

c) Explain the control over terms inconsumer contracts and theoperation of exclusion clauses innon-consumer contracts.[2]

3. Breach of contract and remedies

a) Explain the ways in which a contractmay be discharged.[2]

b) Explain the meaning and effect ofbreach of contract, and theremedies available in commonlaw.[2]

c) Explain the rules relating to theaward of damages.[2]

d) Analyse the equitable remedies forbreach of contract.[2]

4. The law of torts and professionalnegligence

a) Explain the meaning of tort.[2]

b) Explain the tort of ‘passing off’.[2]

c) Explain the tort of negligenceincluding the duty of care and itsbreach, and the concept of vicariousliability.[2]



d) Explain the meaning of causality andremoteness of damage.[2]

e) Discuss defences to actions innegligence. [2]

f) Explain and analyse the duty of careof accountants and auditors.[2]

C Employment law

1. Contract of employment

a) Distinguish between employees andthe self-employed.[2]

b) Explain the nature of the contract ofemployment and common law andstatutory duties placed on theemployer and employee.[2]

2. Dismissal and redundancy

a) Explain termination of employmentby notice.[2]

b) Distinguish between summary andconstructive dismissal.[2]

c) Explain wrongful dismissal.[2]

d) Explain unfair dismissal, includingthe procedure, and fair and unfairreasons for dismissal.[2]

e) Discuss the remedies available tothose who have been subject tounfair dismissal.[2]

f) Explain what is meant byredundancy and the operation of therules relating to it.[2]

D The formation andconstitution of businessorganisations

1. Agency law

a) Define the role of the agent andgive examples of suchrelationships paying particularregard to partners and companydirectors.[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.[1]



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

d) Illustrate the effect of separatepersonality and the veil ofincorporation.[1]

e) Recognise instances whereseparate personality will be ignored(lifting the veil of incorporation.[1]

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 the rulesrelating to, pre-incorporationcontracts.[2]

c) Describe the procedure for registeringcompanies, both public and private,including the system of streamlinedcompany registration.[1]

d) Describe the statutory books, recordsand returns, including the confirmationstatement and the register of peoplewith significant control, thatcompanies must keep or make.[1]

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

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

g) Explain how articles of associationcan be changed.[2]

h) Explain the controls over the namesthat companies may or may not use.[2]

E Capital and the financing ofcompanies

1. Share capital

a) Examine the different types ofcapital.[2]

b) Illustrate the difference betweenvarious classes of shares, includingtreasury shares, and the procedurefor altering 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 and theregulation 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’ voluntary liquidation.[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 on liquidation.[2]

d) Explain administration as a generalalternative to liquidation.[2]

e) Explain the way in which of anadministrator may be appointed, theeffects of such appointment, and thepowers and duties 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 managementof compliance with, and the internalcommunication of, such policies,controls and procedures[2]

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

e) Discuss potential criminal activity inthe operation, management andliquidation of companies, includingthe failure to prevent the facilitationof tax evasion and the meaning ofrelevant body.[2]

f) Recognise the nature and legalcontrol over fraudulent and wrongfultrading.[2]



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

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 ENG

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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