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2022 - GAA II > 2) Companies Act > Flashcards

2) Companies Act Flashcards

1
Q

when is an individual related to a juristic person?

A

when it controls the JP, either directly or indirectly

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2
Q

when is a JP related to another JP?

A

if one controls the other or an individual controls both (directly or indirectly)

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3
Q

when does a person have control over a JP?

A
  • majority voting rights in the company

- right to appoint/elect the directors who control a majority of the votes

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4
Q

when does a company satisfy the solvency and liquidity tests?

A
  • A > L
  • if it appears that the company will be able to repay its debts when they become due for 12 months after test is considered
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5
Q

accounting records must be?

A
  • accurate, complete
  • official language of the Republic
  • accessible from office
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6
Q

offenses for accounting records?

A

(with intention to mislead/deceive)

  • fail to keep accurate complete records
  • keep them other than in prescribed form
  • falsify records
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7
Q

financial statements must?

A
  • satisfy FR standards
  • present fairly company affairs
  • have date they were produced
  • must include info about if they have been audited on first page
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8
Q

financial statements must not be?

A
  • materially false/misleading

- materially incomplete

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9
Q

what are the requirements for annual FS?

A
  • annually, within 6 months of financial year

- be audited or independently reviewed

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10
Q

which reports must AFS include?

A
  • auditor’s report

- director’s report

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11
Q

who must approve AFS?

A

signed and approved by an authorized director

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12
Q

if company is required to audit AFS, what must they show?

A
  • remuneration
  • pensions paid
  • number and class of securities
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13
Q

what does the BOD do?

A
  • manage company affairs

- exercise all powers / perform functions of the company, except where the MOI says otherwise

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14
Q

composition of BoD?

A
  • 1 for private or PLC
  • 3 for public, non-profit
    (MOI can specify more, not less; void if less)
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15
Q

who in the BOD must the SH elect?

A

50% of directors and 50% of alternates

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16
Q

when can an individual not / no longer be ex officio?

A
  • ineligible / disqualified
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17
Q

when does a person become a director?

A
  • appointed and elected according to s66

- delivers written consent note

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18
Q

what are the requirements for election of directors for profit companies in s68?

A
  • elected by those entitled to exercise voting rights

- director must accept election in writing

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19
Q

what if a director becomes delinquent / ineligible?

A

cease immediately to be a director

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20
Q

a person is ineligible to be a director if?

A
  • juristic person
  • unemancipated minor
  • does not satisfy MOI qualification
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21
Q

a person is disqualified from being a director if?

A
  • delinquent
  • unrehab insolvent
  • removed from office of trust for misconduct/dishonesty
  • prohibited by public regulation
  • convicted for theft/fraud
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22
Q

when does disqualification end?

A
  • five years after removal

- at end of extension

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23
Q

what are the standards of director’s conduct?

A
  • good faith
  • best interest
  • degree of care, skill, diligence
  • not use position/info to gain personal advantage or knowingly cause harm to company
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24
Q

what must directors do if info comes to their attention?

A

communicate info the board, unless:

  • immaterial, available to public
  • bound by legal obl / confidentiality
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25
Q

can a disqualified person still act as a director?

A

if they hold all the shares in the company

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26
Q

when would a director satisfy the s76 obligations?

A
  • they have taken reasonably diligent steps to become informed about the matter
  • no personal financial int (nor did they know a related person had one)
  • complied with s75
  • supported board decisions only if they believed it was best interests of the company
27
Q

after how long may proceedings to recover loss not be allowed?

A

more than 3 years after the act

28
Q

what will the liable person(s) be required to pay?

A
  • legal costs of all parties (unless abandoned)

- restore to company any amount improperly paid by company

29
Q

can a director be relieved of liability?

A

yes, if liable but was honest/reasonable or if it is fair

30
Q

what is the MOI?

A

the document that sets out the duties and resp of SH and directors

31
Q

what are the requirements for a rule made by the company that was not addressed in the MOI?

A

must be consistent with both the MOI and the Act

32
Q

when does the company rule take effect?

A

the latter of:

  • 10 business days after publishing
  • a date specified in the rule
33
Q

when will the rule be binding on an interim basis?

A

from the time it takes effect until it is put to vote at the next SH meeting

34
Q

when will the rule be binding on a permanent basis?

A

when it is ratified in the SH meeting

35
Q

between who is the MOI and company rules binding?

A
  • company and SH
  • among SH
  • company and board/comm members
36
Q

when may the MOI be amended?

A
  • in compliance with court order

- proposed by at least 10% voting rights and approved by special resolution and adopted at next SH meeting

37
Q

what must a profit company do if it changes its category?

A

also change its name to reflect the change

38
Q

how many SH are needed to propose a resolution?

A

2

39
Q

what is required for the proposed resolution?

A
  • sufficient clarity and specificity

- be accompanied by sufficient info to allow SH to determine should participate and vote

40
Q

what is the process if SH believes that the resolution being passed does not satisfy the requirements?

A

anytime before start of meeting where res will be considered, SH may seek leave to apply for a court order restraining the company from putting it to vote until all requirements are met. it will also require the company / SH who proposed it to alter it so that requirements are met and compensate the applicant for cost of proceedings.

41
Q

can a resolution be challenged once it has been approved?

A

no, not on the grounds that it did not satisfy requirements

42
Q

can the MOI permit a lower % for special resolution?

A

only allowed if there is a margin of at least 10% between ordinary and special resolution

43
Q

when may the board authorize financial assistance for security subscription?

A
  • if part of employee share scheme / due to special resolution within the 2 previous years
  • the board is satisfied that the company will satisfy the S&L test immediately after and terms are reasonable and fair to the company
    (UNLESS MOI SAYS OTHERWISE)
44
Q

when will a financial assistance decision be void?

A
  • if the provision is inconsistent with the Act
45
Q

is there director liability for financial assistance?

A

if present at meeting, failed to vote/against despite knowing…

46
Q

what may financial assistance/loans not be granted to a director for?

A

if it is for:

  • advance payment to meet legal expenses in relation to a matter concerning the company
  • expenses relating to if they are being removed at company’s request
47
Q

what are the requirements before the board can approve financial assistance/loans to a director?

A
  • if part of employee share scheme / due to special resolution within the 2 previous years
  • the board is satisfied that the company will satisfy the S&L test immediately after and terms are reasonable and fair to the company
  • provide written notice of resolution to all SH and to any trade union representing its employees
48
Q

which companies is it compulsory for to have a social and ethics committee?

A

SOC, listed public, company with PIS > 500 in two of the last 5 years

49
Q

who may the auditor not be?

A
  • PO/director/secretary
  • regular accountant/bookkeeper
  • person who maintains the FS
  • any person who did these in the previous 5 years or a related person thereof
50
Q

how often must auditors be rotated?

A

cannot be auditor for more than 5 years

51
Q

if the auditor serves for more than 2yrs then ceases, when can he be auditor again?

A

wait another 2 years

52
Q

which companies are required to have an audit committee?

A

public and SOC

53
Q

what should the MOI say about shares?

A
  • classes
  • voting rights
  • descriptions of classes
  • authorized number
54
Q

what are the rules for issuing shares?

A

can be done at any time but must keep in mind the limits of the authorized share capital

55
Q

when can a company make a distribution?

A
  • in terms of legal obl/court order OR auth by board res
  • company will satisfy S&L test immediately after
  • the board, by resolution, has acknowledged tat it has applied the S&L test and will satisfy the requirements
56
Q

what summaries must the FS include?

A
  • if FS have been audited/reviewed

- name of individual who prepared the FS

57
Q

whose AFS MUST be audited?

A
  • public company

- any other company required to be regulations if their AFS are in public interest

58
Q

whose AFS MAY be audited?

A
  • voluntarily if required by SH, board, MOI

- independently reviewed

59
Q

what does remuneration include?

A
  • fees to directors
  • salary, bonus
  • pension scheme
  • FA to directors
60
Q

which BOD members can be elected by the MOI?

A
  • directors named in the MOI
  • ex officio directors
  • alternate directors
61
Q

what powers do an ex officio have?

A

all those of a director, except where the MOI says otherwise

62
Q

what are the requirements for paying remuneration to a director?

A
  • must be authorized by special resolution within the previous two years
  • unless MOI says otherwise
63
Q

can the board appoint a temporary director?

A
  • yes, until the vacancy has been filled

- this temp will have all the regular powers of a director

64
Q

when may a director be held liable?

A
  • acted without authority, bound company
  • party to an act/omission that was calculated to defraud
  • authorized/signed misleading FS
  • present at meeting but failed…

2022 - GAA II (21 decks)

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