03 Limited companies: part 1

Question 1

True or False? When setting up a private limited company, it is necessary to adopt the model articles of association

Answer 1

False.

Question 2

True or False? The first directors of a company are automatically appointed on incorporation

Answer 2

True

Question 3

True or False? The directors are responsible for day-to-day decision-making in a company by passing board resolutions in general meetings

Answer 3

False

Question 4

What majority is required to pass an ordinary resolution and is it necessary to file one at Companies House?

Question 5

What notice is required to hold a board meeting?

Question 6

What is required to change the articles of association?

Answer 6

A special resolution is required. A copy of the special resolution and the amended articles must be filed at the Companies House within 15 days

Question 7

What are the requirements relating to directors?

Answer 7

• A private company must have at least 1 director
• Human directors must be at least 16 years of age
• At least one director must be a natural person

Question 8

Who can call a board meeting?

Answer 8

Any director may call a board meeting at any time by giving notice of the meeting to the directors or by authorising the company secretary (if any) to give such notice (MA9)

Question 9

What are the contents of the notice?

Answer 9

Notice contents — date, time, place and means of communication (MA9(2))

Question 10

What is the quorum for a BM?

Answer 10

Two

Question 11

What are the requirements for directors re. conflicts of interest?

Answer 11

s177 and 182 CA require a director to declare a personal interest in a proposed or existing transaction or arrangement
(subject to limited exceptions)

MA14 prevents a director from voting and counting towards the quorum on any decision in which they have a personal interest

If a proposed decision of the directors is concerned with an actual or proposed transaction or arrangement with the company in which a director is interested, that director is not to be counted as participating in the decision-making process for quorum or voting purposes (MA14) (subject to limited exceptions)

Question 12

Who can demand a poll vote?

Answer 12

1) The chairperson
2) At least 2 voting members
3) Any member holding at least 10% of the voting shares

Question 13

What notice is required to call a general meeting?

Answer 13

14 clear days notice
=> In effect 16 days as you do not include date of service and date of meeting

Add an extra 2 days notice if serving by email or post
=> in effect 14 clear days = 18 days

Short notice MAY be agreed by: (1) a majority in number of members (2) holding at least 90% of the company’s voting shares (BOTH conditions have to be satisfied)

Question 14

What are the 2 main ways to call a general meeting?

Answer 14

• The directors may call a GM of the company; or
• Members representing at least 5% of the paid up share capital of the company that carries the right to vote at a GM may require the directors to call a GM. Directors must call a meeting within 21 days from when the members require it. Meeting must be held within28 days from the date the GM is called.

Question 15

What are the majorities required for resolutions passed at general meetings?

Answer 15

OR: more than 50% - simple majority of those voting

SR: 75% or more majority of those voting

Question 16

For how long minutes/records must be kept?

Answer 16

10 years