Investor protection in public companies

Abstract

It is apparent that the area to be covered by this study is potentially vast. Accordingly, the following limitations on the scope of this study have been adopted. First, this study is concerned solely with an examination of shareholder protection in public limited liability companies. It will not deal with other types of partnerships or commercial entities such as unit trusts, syndicates and building societies. Secondly, attention will be mainly focused on the legal controls that exist to protect the investor in the initial issue and sale of securities by companies i.e. with the raising of capital by a public company. Lesser consideration will be given to aspects of continuing protection on the part of company law after the initial sale of securities i.e. the maintenance of capital by public company. Thirdly, this study is not intended to deal at all with an area which is vitally linked to securities regulation, namely, the imposition of some form of control and supervision over the activities of share brokers, investment advisers and others actively engaged in the securities markets. The regulation of these persons, whether by way of licensing, registration or otherwise, is a matter deserving of special consideration and is beyond the scope of this study. Finally, the primary focus of this study is on Maltese company law as supplemented by U.K. company law. No attempt has been made to undertake an extensive analysis of' the regulatory schemes existing to protect the investor in other countries as an end in itself. However, where relevant, an assessment has been made of particular provisions on securities legislation and of company laws of other jurisdictions.