PRLW 4181 German University Nominal Value & Values of Shares Quiz Write the question numbers clearly for each answer in the answer sheetBecause this Quiz i

PRLW 4181 German University Nominal Value & Values of Shares Quiz Write the question numbers clearly for each answer in the answer sheetBecause this Quiz is (open-book exam), the student can use all of his materials. He can use the dictionary too.The duration of the Quiz is (24) hoursDo not write the question on the answer sheet. Write only the number of the questionTo answer the questions, do not copy and paste. You have to write in your own method. The penalties for academic misconduct (copying, cheating etc.) are severe and may include “F” grade for an examination.The questions and the slides are all uploaded below. BUSINESS LAW
Date of submission: 13/06/2020
General Instructions:
•
Write the question numbers clearly for each answer in the answer sheet
•
Because this Quiz is (open-book exam), the student can use all of his materials. He can use
the dictionary too.
•
The duration of the Quiz is (24) hours
•
Do not write the question on the answer sheet. Write only the number of the question
•
To answer the questions, do not copy and paste. You have to write in your own method.
•
The penalties for academic misconduct (copying, cheating etc.) are severe and may include
“F” grade for an examination.
1
SECTION ONE:
MARKS)
(25
Answer the following questions: (Answer all of them)
Note: The answer of each question must not exceed eight lines.
1. Saleh has a small shop. The capital of this shop is (OMR 8000). Is Saleh a trader? Why?
2. In the Shareholding Company, what are the differences between the nominal value and
the market value of the share?
3. Discuss the following statement: (In the Limited Liability Company, the values of the shares
are equalized).
4. In order to apply the bankruptcy rules, there are some requirements should be fulfilled.
What are they?
5. Discuss the following statement: (Omani Commercial Law binds the trader to keep the
day-book and the general ledger book for ten years).
SECTION TWO:
MARKS)
(25
Four fiends (Ahmad, Ali, Salim and Mahmood) established a Joint-Liable Company. The following
box contains part of the contract of the company. Read the contents of the box and answer the
questions.
1. The company is established to work in construction.
2. The name of the company is (the diamond for construction and building materials)
3. Ahmad will introduce (OMR 50.000). Ali will introduce (OMR 50.000). Salim will introduce
a building to be a headquarter to the company. The value of this building is (OMR 50.000).
Because Mahmood is a civil engineer, he will introduce his knowledge and experience in
civil engineering as a share.
4. The profit is distributed according to the percentage of the partners in the capital of the
company.
5. The period of the company is five years. After that, the company terminates.
6. The partners are liable jointly and personally toward the creditors of the company.
7. If one of the partners wants to waive his share to a foreigner person, two of the other
partners must agree.
8. Each partner has right to check and inspect
2 the commercial books of the company.
9. Mahmood will be the manager for the company.
Answer the following questions:
Note: The answer of each question must not exceed five lines.
1) Is there anything wrong in the name of the company?
2) Suppose that the company becomes a debtor and unable to pay its debts to the
creditors. In this case, can the partners agree to terminate the company? Why?
3) After passing the period which is mentioned in the contract (the five years), can the
partners extend this period? Explain.
4) The partners agreed that the profit will be distributed according to the percentage of
the share of each partner in the capital of the company. But Mahmood does not have
percentage in the capital because he introduced service. Does that mean he will not
get profit?
3
BUSINESS LAW
PRLW4181
By
Dr. Maen Mohammad Ali Al-Qassaymeh
What’s included in the quiz?
•
•
•
•
Chapter one (the introduction) is included.
Chapter two (the commercial activities and traders) is included.
Chapter four (the commercial companies) is included.
So, you have to study and focus on three chapters only.”
CHAPTER ONE
INTRODUCTION
Business Law is dedicated to regulate commercial
transactions and relationships. This law is specialized
in traders and commercial activities, i.e. it is different
from the other branches of the law which have
different characters. In order to know the meaning of
business law and the nature of this law, we have to
specify the position of this law among the other
branches of the law. This requires defining the law, in
general, as a first step, and getting a glance about the
divisions of the law.
Definition of the law
Generally, the law is defined as the body of rules and
regulations that is used to govern a society and to control the
behavior of its members.
Divisions of the Law
The law is divided into two sections; public law and private law.
The public law means the law which regulates the legal
relationships in which the state is a party. Meanwhile, the
private law is defined as the law which regulates the legal
relationships among citizens and individuals. Thereby, the
criterion which distinguishes between the public law and the
private law is the existence of the state in the relationship, i.e.
if the state is a party in the legal relationship, the rules of public
law are applied. Meanwhile, if the state is not a party in the
legal relationship, the rules of private law are applied.
Divisions of Public Law:
Public law contains several sections. They are:
Public International Law:
It is the law which regulates the relations among states. It also
regulates the relations with the international organizations. It is
interested in several points such as; the elements of the states, the
state sovereignty, how to form the international treaties, the
effects of the international treaties, termination of the
international treaties, international organizations, etc.
Constitutional Law:
It is the law which regulates the form of the state, regime of the
state, the public authorities in the state, the relation among these
public authorities, the rights of the citizens, etc. Thus, it clarifies if
the state is kingdom, republic, or sultanate. It also clarifies if the
state is democratic or non- democratic. Besides, this law regulates
the three authorities inside the country; judiciary, legislature and
the government.
Administrative Law:
It is the law which regulates the performance of the
government, the bodies inside the state, the rights
and the duties of the employees, etc.
Criminal Law:
This law contains rules and regulations for the crimes
and the sanctions for these crimes. This law contains
a famous and known principle provides “no crime
and no sanction without a provision”. Thus, this law
is interested in crimes and criminals. It regulates the
elements of these crimes and the sanctions for them.
Divisions of Private Law:
Private law contains several sections. They are:
Civil Law:
It is the law which regulates the relationships among
individuals. It is considered a background to the all issues which
are not regulated by a special law. Therefore, if there is no rule
regulates a specific issue, the Civil Law is a reference. for
example, in the commercial law, if there is legal vacuum, we
have to refer to the civil law to search for a rule regulates that
vacuum.
Civil Law regulates two types of issues; the first type is the
issues which relate to private aspects of the individuals such as
marriage, divorce, inheritance, etc. The second type is the
issues which relate to financial transactions such as the
contract and the negligence. The second type is the main axis in
Omani Civil Law.
In Oman, the Civil Law, which takes the number 29, was issued in
2013. It contains 1086 Articles. They are distributed among four
books and preface. While the first book regulates the sources of
obligations, the second book regulates the nominated contracts.
The third and the fourth books are dedicated to regulate the
rights in rem.
Commercial Law:
It is the business law. It is defined as the body of rules which
regulates the commercial activities and the relationships among
traders, or among traders and their dealers. This shows that the
main axes in commercial law are the traders and their activities.
Omani Commercial Law Number 55 was issued in 1990. It
contains 786 Articles distributed in five books. The first and the
second books regulate the activities of the trader and his tradehouse (shop). While the third book regulates the commercial
contracts, the fourth book is assigned to the bills of trade. The
fifth book is devoted to the rules of bankruptcy.
Beside this law, there are some other laws which are
considered supplementary laws. The followings are the
supreme:
• Company Law No. 18 of 2019.
• Commercial Registry Law No. 3 of 1974.
• Commercial Agency Law No. 26 of 1977.
• Insurance Companies Law No. of 12 of 1979.
• Maritime Law No. 35 of 1981.
• Capital Market Law No. 53 of 1988.
• Industrial Property Law No. 67 of 2008.
Thus, Omani Commercial Law No. 55 of 1990 and these
laws are assigned to regulate the trader relationships and
transactions. Accordingly, the sum of these laws is the
business law.
Private International Law:
It is the body of the rules which governs the
relationships which contain a foreigner element, i.e. this
law appears as a result of existence of relations
between national person and foreigner person. For
example, if an Omani trader sold goods to an Egyptian
trader, which law governs this relation? Is it Omani Law
or Egyptian Law? In addition, if a dispute arises between
the parties, which court is competent to judge? Private
international law focuses on these two questions; which
law should be applied and which court is competent to
judge. Besides these two questions, this law regulates
the issue of nationality and the issue of domicile.
Sources of the Law:
After we got a glance about the division of the law, a
question arises; where do the rules of the law come
from? In other words, if a dispute arises between two
parties, how can the court find the rule which should
be applied between them?
In order to answer this question, it is important to
mention that there are several sources to the rules of
the law and each of these sources has position
different from the other. Accordingly, some sources
take the main role and others take secondary role.
They are as follow:
1) Legislation:
Legislation is considered the main source in Oman and also in
Arabic countries. It means: setting the legal rules in a written form
by the competent authority. This procedure should be done
according to the rules which are mentioned in the constitution of
the state. Legislation is divided into three types. The first one is
the constitution. It is the most important law in the country. All
other laws must agree with it. If there is any rule in any law
contradicts with the constitution, that rule must be canceled or
amended. The second type is the normal legislation which is
issued by the legislature. The third type is the regulations which
are issued by the government.
2) Islamic principles and jurisprudence
Omani legislature sets the Islamic principles and jurisprudence as
a secondary source. This is mentioned in Art (1) of Omani Civil
Law. It is also mentioned in Art (5) of Omani Commercial Law. But
this Art mentions Islamic principles as a forth source after the
contract, legislation and custom.
3) Custom:
It is the binding habits which people accustomed to do. Thus, the
custom comes from habits. But the difference between them is that the
custom takes an obligatory character, i.e. if any person does not follow
its rules, he will be punished. This source is also mentioned in Art (1) of
Omani Civil Law.
These three sources are considered general sources for the law.
However, Omani Commercial Law arranged them in a different manner.
This appears clearly in Art (4 and 5) of this law which arranged them as
follow: the first source is the contract, the second source is Omani
Commercial Law and its supplementary laws, the third source is
custom, the fourth is Islamic jurisprudence and the last is the rules of
justice.
Thus, the contract is the first source in Omani Commercial Law. The
legislature in Oman steps out of the general policy in other countries
which usually sets the legislation before the contract. Besides, the
mentioned Articles render the rules of justice as a last source to which
the court may refer if there is no rule in the other sources.
CHAPTER TWO
COMMERCIAL ACTIVITIES AND TRADERS
SECTION ONE
COMMERCIAL ACTIVITIES
It is important to distinguish between the commercial
activities and the civilian activities. This is because there
are legal effects built on this distinction. But what are the
criteria to distinguish the commercial activities from
others, and what are the legal effects which result from
this distinction? In order to answer these questions, this
part is divided into two sections; the first is about the
concept of commercial activities and the second is about
the effects of distinction between the commercial activities
and the civilian activities.
Concept of commercial activities
There are several criteria to distinguish between the
commercial activities and the civilian activities. But Art (8)
of Omani Commercial Law adopted one of them. It is the
speculation criterion. Speculation means achieving profit.
So, if a person does an activity with intention to achieve
profit, this activity is considered commercial activity and
the commercial law governs it. But if that person does not
aim at achieving profit, his activity is considered civilian
and the Civil Law governs it. Accordingly, the criterion to
distinguish the commercial activity from civilian activity is
the intent to achieve profit, regardless of who does that
activity.
Beside this criterion, Art (9 and 10) of Omani Commercial
Law mentioned some activities and rendered them
commercial activities.
According to Art 9, The following activities in particular shall be
deemed to be commercial activities:
1. The purchase of commodities and other movable materials
and non-movable materials with intent to sell them and
achieve profit whether sold in their original condition or after
manufacture or conversion.
2. The purchase of commodities and other movable materials
and non-movable materials with intent to hire them. Or, lease
them with intent to sub-leasing them.
3. The sale, rent or sub-leasing of the commodities purchased or
leased in the aforementioned manner.
4. The purchase of real estate with intent to achieve profit from
the sale in its original condition or after division. And the sale
of real estate purchased with such intent.
5. Supply contracts.
6. Employment contracts.
7. Public and private banking transactions, money-changing
activities and financial dealings.
9. Commercial papers such as bills of exchange, promissory
notes and checks. (all activities such as drawing,
acceptance, endorsement, guarantee, etc)
10. The establishment of commercial companies and the
sale or purchase of their shares or bonds.
11. Public warehouses and pledges on property deposited
therein.
12. The extraction of minerals, oils, rocks and other natural
resource.
13. The various types of insurance.
14. Public sites and premises such as public playgrounds,
cinemas, hotels, restaurants and auction rooms.
15. Public utility concessions such as the distribution of
water, electricity, gas, postal communications,
telecommunications and the like.
16. Transportation via land, sea and air.
17. Business agencies, tourism offices, import and
export offices.
18. Activities related to printing, publishing, the press,
broadcasting and television, news or picture
transmission, advertisements and the sale of books.
19. The establishment of factories, even if related to
agricultural investment, and undertaking to establish
and manufacture.
20. Activities related to building and construction and
to altering, renovating and demolishing buildings.
In addition, According to Art 10, all activities related to
maritime and air navigation shall be deemed to be
commercial activities, particularly:
1. The construction of ships or aircrafts and the sale,
purchase, hire, leasing or repair of them.
2. Contracts pertaining the wages and salaries of a ship’s
master and crew navigators of aircraft and all those
employed thereon.
3. Lending and borrowing
4. Maritime and air transportation and all related
processes such as the purchase or sale of the requisites
thereof in terms of supplies, tools, stores, fuel, ropes,
sails provisions and aircraft supply materials
5. The various types of sea and air insurance
Thus, these two Articles specified precisely the commercial
activities regardless of the person who does them, namely,
whether he is trader or civilian. But besides these activities,
there are some transactions shall be considered
commercial activities. They are the activities linked with, or
facilitating the activities mentioned in the previous Articles.
They are called subsidiary commercial activities.
The subsidiary commercial activities, generally, have a
civilian nature. But they acquire the commercial character
because they issue from a person who has commercial
character and they relate to his commercial business. In
other words, these activities are deemed to be commercial
if two conditions are fulfilled. First, the activity should issue
from a trader. Second, the activity should be linked with
the commercial activities of that trader.
According to that, if a trader works in clothes bought sofas to his shop,
this transaction is considered commercial activity. This is because this
transaction is done by a trader and his purpose is to improve his shop,
i.e. the transaction is linked with his business. But if this trader bought
the sofas to his house, this transaction is considered civilian activity.
Effects of distinction between the Commercial activities and the
civilian activities.
There are some results come from the distinction between the
commercial activities and the civilian activities. They are as follow:
1) The debtors are jointly-liable in the commercial debt.
This means that the creditor in the commercial activity can ask any of
the debtors about his right. He also can ask all of them together. So, if
any of them bankrupted, the other debtors will pay instead of him and
the creditor will not bear this bankruptcy. But in order to apply the
joint-liability rule, the debt should be common among the debtors, i.e.
the source of the debt should be unified for the debtors. However, the
Art shows that the joint-liability is not an obligatory rule. So, the parties
can agree otherwise.
2) Rules of evidence:
The rules of evidence in the commercial transactions are
different from those in the civilian transactions. This is because
commerce is based on credit and speed. Accordingly, the
parties, in commercial activities, have freedom in the issue of
evidence, i.e. they can prove the transaction by any method of
evidence. Meanwhile, the civilian transaction is proven only by
writing if the value of the transaction exceeds a specific limit.
3)No donation in commercial activity:
It is abovementioned that the purpose of the commercial
activities is to achieve profit. Because of that, there is no
donation in the commercial activities. Thus, if the parties of the
contract overlooked to mention consideration, that does not
mean they intend to make donation. Meanwhile, if they
overlooked to mention the consideration in a civilian contract,
that may mean that the parties intend to make donation.
4) Acquisition of the trader character:
If the person practices the commercial activities, he may
acquire the commercial character. If he acquires this
character, then he has to do some legal obligations. For
example, he has to keep commercial books, record in the
commercial registrar, etc.
5) Statute of limitation:
Statute of limitation means that the court will not receive
any claim after passing a specific time, i.e. no legal action
will be brought before the court if a specific time lapses.
This time differs in commercial activities from that in
civilian activities. In commercial activities, it is ten years.
Meanwhile, in civilian activities, it is fifteen years.
SECTION TWO
TRADER
The trader is defined in Art (16) of Omani Commercial
Law as “Any person who engages in commercial
activities in his name, has the requisite capacity and
adop…
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