International Business Law: Regulation and Directive - Essay Example

? International Business Law Task a) Regulation: Is a set of principles that become law in the member s automatically once adopted by the council of ministers of the European Community (Andrasi and Mandarassy, 2005). b) Directive Is basically a set of principles that the member states of the European Community are required to enact within their own law. The individual member states are expected to make any necessary adaptations that will facilitate implementation of directives into the member state’s domestic law (Andrasi and Mandarassy, 2005). c) Council (of ministers) Is a community institution composed of a single minister from each of the member states whose main task is to legislate and make decisions for the council although their role in performing these functions is not exclusive (EU Handout). d) Preliminary ruling procedure Demonstrates co-operation between the national courts of member countries and the European Court of Justice and occurs when the national court of a member country is in doubt as to the interpretation of community rules, the national court seeks interpretation from the Court of Justice. After clarification from the Court of Justice the national court is free to proceed with the case (EU Handout). e) Maastricht Treaty This treaty came into force in 1993 and established the European Union and amended the Rome treaties (EU Handout). Task 2 a) Rights and obligations The main contractual obligations of the seller and buyer include; the seller has to cede possession of the thing (car) and transfer ownership, the buyer has to pay the buying price of the thing and take it over. The contractual rights of the seller include a right to cancel a contract and make a claim for damages arising from the purchase of product with encumbrances. The buyer has also got a right to claim for a reduction in the buying price of the product in order to take over the encumbrance. Other rights include pre-emption right, right of repurchase and right of purchase. b) Contractual securities Ownership is reserved until the full payment is finished. In this way the seller does not loose ownership before conclusion of the full payment. The seller can reserve the ownership of car in writing after the conclusion of the contract. This is advantageous to the seller because he is able to prevent the buyer from alienating the car and encumbering it (Andrasi and Mandarassy, 2004). c) Breach of contract This is a defective performance breech of contract. The buyer has guarantee rights. The buyer shall inform the seller of the fault in the car in the shortest time possible. The buyer has a right to chooses whether he wants repair or replacement. If the buyer is not entitled to a replacement or repair or the seller refuses to repair or replace, the buyer can request for a reduction in price, or have the contract rescinded (Andrasi and Mandarassy, 2004). The buyer cannot have the contract rescinded of the fault is minor. d) Defamation The buyer can turn to court and claim for the infringement to be terminated and an injunction issued in order to prevent further injury (Andrasi and Mandarassy, 2004). e) Partial rights and obligations There are three partial rights associated with ownership of the car. They include the right to possess, the right to dispose and the right to use. For example after purchasing the car, I possess it and it is under my power. I have a right to use the car for example as a taxi and collect the money from it (right to use). I can also decide to sell it off and collect the money obtained from the sale of the car (right to disposal). I also have a right to use the car as a security or abandon it (Andrasi and Mandarassy, 2004) Task 3 A. True/False a) True b) True c) True d) False e) False B. Case study a) Company types: The types of companies that exist in Hungary include limited partnership and unlimited partnership, Limited Liability Company and company limited by shares and joint ventures. Foreign investors are free to join a Hungarian company without permission and may freely transfer their dividends in any currency. The foundation of a company requires at least two members except the companies that are limited by shares and Limited Liability Companies. A natural person is only allowed to be a member in only one unlimited liability company. It s is illegal for a limited partnership and an unlimited partnership to be a member with an unlimited liability in a company. A single member company is not allowed to be the sole shareholder or member of a company. It’s illegal for a company to have a sole general purpose. The company will only participate in the activities listed under its list of activities. All member of the company are expected to contribute to the foundation of the company and the amount to be contributed shall be described together with the date when it will be contributed and by what means. These capital contributed will be based on type of company. The supreme body is the main decision maker of the companies. A limited partnership or an unlimited partnership is managed by members (executive officers). A limited liability company is managed by managing directors and the company limited by shares is managed by board of directors. I would advise them to form a limited partnership because its management is by the executive officers who are the members. This way they will have more say and control over the business than in the limited liability company and the company limited by shares. It will also be cheaper to form and run the limited partnership than the Limited Liability Company and company limited by liability (Andrasi and Mandarassy, 2005). b) Supervisory board A supervisory board is a requirement for companies limited by shares and for those limited liability companies that have a subscribed capital in excess of 50M HUF. It is also a requirement for all companies whose full time employees exceed 200. Therefore any company formed that does not meet this criterion will not require supervisory board (Andrasi and Mandarassy, 2005). c) Specialties and legal nature of pre-company The status of the company before registration is the called pre-company and shall be termed “under registration” during the registration period and all its legal transactions and company documents will bear the term “under registration.” The pre-company is allowed to pursue business like activities eg employee hiring, premise renting etc but not enter into contracts that target profit oriented activities. The pre-company is governed by all rules of a registered company. The pre-company shall not change its members, alter the article of association, initiate exclusion of a member, and be terminated or changed into another from. If their application is rejected, the company has to terminate its operation and the members are held liable for company obligations. If there are outstanding claims and members liability is limited, then the company executive officers shall bear, joint, unlimited liability towards the creditors (Andrasi and Mandarassy, 2005). Task 4 A. Persons: The Hungarian law recognizes certain persons. They include the state, cooperatives, business organizations, associations, foundations, and others. The state is a legal person represented by minister of finance. The states capacity to act in relations of civil law is separated from its power functions. Cooperatives have a common purpose and goal which is closely associated with members. These are governed by the Company Act and include limited liability companies, partnerships and shareholding companies. The non profit organizations are established for the sole purpose of pursuing society goals. The associations are self governing organizations, whose purpose is as defined in their statutes, and are established voluntarily. They organize their members’ activities in an attempt to achieve the goals that they have set. The foundations assign a certain amount of money to the curatorium for use to achieve a public goal. Other persons include political parties, churches etc. The rule of equality guarantees that every one has an equal legal capacity. For example every member of a partnership will have the same rights and obligations when it comes to winding up the business. The commencement and presumption rules may affect the business in such a case as when an owner of a company dies and has left ownership to an unborn child. In case the company name has been damage in a professional journal, the company can claim for a correction from the journal. If the journal agrees to do the correction, it does the correction in the newspaper, if the journal refuses the business of free to turn to court and get a statement of injury, followed by restitution by declaration if need be at the expense of the journal (Andrasi and Mandarassy, 2004). The legal personality of a company affects a company’s liability in the following ways: the organization shall be separate from the founding members, it shall have its own assets, shall appoint a representative who shall act on its behalf and shall be recognized by the state through registration. B. Property Things have been classified into movable/immovable, negotiable/non negotiable, consumable/non consumable, substitutable/non substitutable. Movable are those things that are easily moved from point A to point B without damaging their structure. The immovable things on the other hand are those that cannot be moved from point A to point B without destroying their structure. A good example of an immovable thing is a building while a good example of a movable thing is a car. Moving a building will destroy it while moving a car would not. Negotiable things are those things that are freely bought and sold eg cars, houses, etc. These are things that are freely traded. On the other hand things like rivers, lakes, natural treasures are property of the state and cannot be traded. They are non negotiable. Consumable things like stationery are intended for short term consumption, while the non consumable things are those things intended for long use in the long term e.g. buildings etc. Things which are substitutable are those things which are easily replaced by another thing which is similar. For example, a car destroyed can be easily replaced. Things like paintings are non substitutable meaning that when one is destroyed getting another is difficult (Andrasi and Mandarassy, 2004). Ownership refers to having total power over a certain thing and having the ability to do anything with the property as long as nobody’s right is violated in the process. The three partial rights associated with ownership include the right of procession, the right of use and the right of disposal. The right of disposal means that the owner of a property has a right to use, transfer ownership of the thing to another person. The right of use refers to the right of the owner of a thing to use it in a way that will not infringe other people’s rights. The right to possess on the hand means that an individual has a right to possess the thing with the certain exceptions e.g. tenant who possess a house but do not own it (Andrasi and Mandarassy, 2004). In Hungary there exist two methods of owning property. One can either own via original acquisition or derivative acquisition. The original acquisition means that the person in question is the first owner and that he or she is not a legal successor of someone else. In this case, when the thing is transferred, the rights to ownership are easily acquired and are not connected to the rights of the previous owner. Original acquisition types include auctions, finding, accretion etc. In the case of a derivative acquisition, the new owner / legal successor acquires ownership rights from the previous owner. Derivative acquisition types include successions, transfers etc. The principle of nemo plus iuris applies in this case. No one can transfer more rights to another individual than what he has (Andrasi and Mandarassy, 2004). The Hungarian law provides for protection of rights. The owner is free to claim property for as long as possible. The law permits a person to use his or her own power to physically defend his or her property. This means that the owner protects her property without using legal means. The law also allows an individual to use the court to claim back property. In the case where the real estate is the property, an owner who had acquired the real estate but failed to indicate it the registry of land, she/he can claim registration. Good faith buyers are allowed to acquire ownership from previous registered owner (Andrasi and Mandarassy, 2004). If for example a business man purchases a business premise like a building for running the business and does not ensure that the building is registered under his name there is a great probability he can loose procession. Without knowledge of property law and the legal requirements needed in order to own a building it is possible to loose the property to fraudulent owners of property. References Andrasi, G., and Madarassy, T., 2005. International Business Law, Business. International Business School, unpublished. Andrasi, G., and Madarassy, T., 2005. General and International Business Law, Business Law. International Business School, unpublished. EU handout. Read More