Corporate Law, Business Ethics & CSR

A comprehensive set of practice flashcards covering key concepts from Corporate Law, Business Ethics, and CSR as presented in the lecture notes, formatted for quick Q&A review.

What are the three broad types of legal systems in the world discussed in the notes?

Common law, civil law, and Sharia law.

What is private international law?

Domestic rules to determine jurisdiction and applicable law in international contracts; not international law; also deals with enforcement and recognition of foreign judgments.

What does the UNCITRAL Model Law on International Credit Transfers cover?

Defines credit transfers, allows agreement-based modification of rights, and provides definitions such as payment order and sender.

What are Incoterms and how are they categorized?

11 standard terms for the international sale of goods published by ICC, divided into four categories: E terms (departure), F terms (main carriage unpaid), C terms (main carriage paid), D terms (arrival).

Explain EXW (Ex Works).

Seller makes goods available at their premises; buyer bears all costs and risks from collection onward.

Explain FOB (Free on Board).

Seller delivers when goods pass the ship's rail at port; seller clears export; risk transfers to buyer when on board.

Explain CFR Incoterm.

Seller must pay the cost and freight to a named destination; risk passes to the buyer when the goods are placed on the ship.

Explain CIF Incoterm.

Same as CFR, but the seller must pay for insurance to cover the goods in transit; insurance is minimum unless the buyer stipulates more.

Explain DDP Incoterm.

Delivered Duty Paid: seller delivers the goods, clears for import, and pays duties; buyer bears minimal risk and cost.

What is UNCCISG Article 33 about?

Delivery timing: if the contract specifies place/time, deliver then; if not, deliver within a period or within a reasonable time.

What is UNCCISG Article 34 about?

Handing over of documents: must be done as required by the contract; allows corrections of document discrepancies before the required handover.

What is UNCCISG Article 35 about?

Conformity: goods must be fit for ordinary purposes and any explicitly or implicitly stated purposes; seller liable for lack of conformity unless exceptions apply.

What do Articles 55 and 56 of UNCCISG cover?

Article 55: price is as contractually fixed or, if not fixed, implied reference to generally charged price; Article 56: net weight is used if price is determined by weight.

What does Article 78 cover in UNCCISG?

Interest on overdue payments; rate determined by applicable law.

What is a Bill of Lading and its key types?

A document issued by a carrier acknowledging receipt of goods; types include inland bill, ocean bill, through bill, and airway bill; can be negotiable or non-negotiable.

Differentiate negotiable vs non-negotiable bills of lading.

Non-negotiable bills are receipts; the carrier must deliver to the named consignee. Negotiable bills confer ownership rights to the holder and require endorsement for transfer.

What is a letter of credit?

Bank’s undertaking to pay a named beneficiary within a specified time upon presentation of compliant documents; four parties: applicant, issuing bank, beneficiary, and advising/confirming bank.

What is a letter of comfort?

A non-binding assurance by a parent company to back a debtor; generally not a binding contractual promise and not legally enforceable if the parent later withdraws.

Define an agent and a principal in agency law.

An agent is authorized to act for a principal; contracts are between the principal and third parties; agency can be express, implied, or arising by necessity, ratification, or estoppel.

Name the five ways an agency relationship can arise.

Express agreement, implied agreement, necessity, ratification, estoppel.

What is the fiduciary duty of an agent?

To act in the best interests of the principal, avoid secret profits, and account for money and property received.

What is the difference between a disclosed and an undisclosed principal in agency liability?

A disclosed principal's contract is with the principal, and the agent is not liable; an undisclosed principal can bind the third party to the principal or the agent, depending on circumstances.

What is the basic definition of a partnership under PA 1890?

A relationship between two or more persons carrying on a business in common with a view to profit.

What characterizes a limited partnership under the Limited Partnership Act 1907?

At least one unlimited liability partner; limited partners cannot participate in management; must be registered; limited partners cannot bind the firm.

What is the doctrine of the veil of incorporation?

The company is a separate legal entity; courts may lift the veil to hold shareholders/directors personally liable in certain circumstances, under statutory or common-law grounds.

What are model articles?

Prescribed model articles for private and public companies; a company may adopt them wholly or partly or draft its own articles; if not excluded, they are deemed adopted.

Distinguish issued share capital from paid-up/called-up capital.

Issued share capital: shares that have been issued; paid-up capital is the amount shareholders have paid; called-up capital is the amount that has been called but not yet paid.

What are pre-emption rights and their key features?

New shares offered to existing shareholders pro rata; typically a 21-day period; rights can be disapplied by articles or by special resolution.

What is a debenture?

A long-term debt instrument; may be secured over the company’s assets or unsecured.

Explain fixed vs floating charges.

A fixed charge attaches to a specific asset retained by the company; a floating charge is on a class of assets that can change in the ordinary course of business.

What is the purpose of capital maintenance rules?

To protect creditors by preventing the company from returning capital to shareholders; generally, a company cannot reduce share capital except under specified exceptions.

What is the duty to promote the success of the company (s172)?

Directors must act in good faith to promote the company's long-term success, considering employees, suppliers, community, environment, reputation, and fairness.

What is the duty to act within powers (s171)?

Directors must act within the company’s constitution and for the purposes for which powers were granted; act bona fide in the company’s interests.

What is the triple bottom line (TBL) in CSR?

Economic, social, and environmental dimensions used to measure a company’s overall performance and sustainability.

How is CSR different from philanthropy?

CSR is integrated into a company’s core strategy, focusing on long-term sustainable impact; philanthropy is charitable giving and often not integrated into strategy.

List some major global CSR guidelines and frameworks.

UN Global Compact (UNGC), ISO 26000, Global Reporting Initiative (GRI), OECD Guidelines for MNEs, UDHR, ILO Core Conventions, SDGs.

What is a CSR audit?

A structured evaluation of a company’s CSR activities against predefined criteria, including stakeholder engagement, data collection, reporting, and recommendations for improvement.

What is corporate citizenship?

A holistic approach beyond compliance that includes voluntary environmental, social, and governance actions; aims for long-term sustainable contributions to society.

What is the debate between profit maximization and social responsibility about?

Profit maximization focuses on shareholder wealth, often with short-term goals; social responsibility emphasizes the triple bottom line and balancing stakeholder interests for long-term value.

Name a key difference between business ethics and morality from the notes.

Business ethics focuses on moral principles in the business context; morality is broader, applying to life in general and across contexts.

What are common elements of ethics in business dealings (examples from the notes)?

Honesty, integrity, fairness, respect, confidentiality, conflict of interest management, compliance with laws, social and environmental responsibility.

What is the purpose of whistleblowing mechanisms in business ethics?

To report unethical behavior safely and protect those who report from retaliation; supports accountability and corrective action.

What is meant by ‘transparency’ in business ethics and CSR?

Open and clear communication about actions, impacts, and progress to stakeholders, enabling informed evaluation and trust.