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BLP > 2.1 Companies: Intro to Companies > Flashcards

2.1 Companies: Intro to Companies Flashcards

1
Q

What determined the internal management of a company

A

The AoA

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2
Q

When is a company a subsidiary?

A

Other C holds majority of voting rights, or can appoint/remove majority of BoD, or controls voting rights

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3
Q

Part of CA on PLC at end of name

A

s.58

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4
Q

What must PLCs have at the end of their name

A

Public Limited Company or p.l.c

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5
Q

What type of offence is it not to identify or notify of a PSC

A

Criminal offence

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6
Q

When can PubC shares not be paid in cash

A

When there has been an independent valuation

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7
Q

S.763 says what

A

PubC needs minimum share capital

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8
Q

What is ‘floatation’

A

Process of obtaining a listing (usually accompanies by an IPO)

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9
Q

How do shareholders get a financial return on their shares - three ways

A

Dividends, sale and winding up

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10
Q

Who is the main regulator of financial services in the UK

A

FCA

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11
Q

How can creditors get around a company being limited liability?

A

Require a personal guarantee from shareholders

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12
Q

What is another name for shareholders

A

Members

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13
Q

Part of MA on BM quorum

A

Article 11

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14
Q

What kind of tax is paid on the sale of shares

A

CGT

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15
Q

What must a public company be listed on to issue shares

A

LSE

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16
Q

What companies are excluded from the PSC regime

A

PubCs listed on LSE, as subject to similar regulations

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17
Q

Minimum director for PubC

A

2

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18
Q

What does a company have to deliver to CH annually

A

Annual confirmation statements + annual accounts

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19
Q

What MA gives shareholders powers to remove/appoint new Ds

A

Article 17(1)(a)

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20
Q

Who must notify the company of the status of PSCs, and what time period

A

The PSC themselves, within 1 month

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21
Q

Does a company have a separate legal personality?

A

Yes

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22
Q

What type of company need not have an AGM

A

Private

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23
Q

At what point in time can a poll vote be demanded

A

In advance of GM, or before/after SoH

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24
Q

What are the time periods to give notice for changes to the PSC register (to change reg + to tell CH)

A

14 days to change the register, and a further 14 to tell CH

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25
Q

What happens if A tries to enter into C for company pre-incorporation

A

A is personally liable

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26
Q

Where are the statutory duties of a director in CA

A

171 - 177

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27
Q

What was an objects clause

A

Restricted the power of C to deal w/ 3rds

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28
Q

What part of CA demands Ds comply with AoA

A

S.171

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29
Q

How are BRs usually passed

A

Simple majority

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30
Q

Where are the conditions for PSC in CA

A

Part 1 Schedule 1A

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31
Q

Can C enter into contract pre-incorporation? CA provision

A

No 51(1)

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32
Q

Who must a company register with

A

CH

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33
Q

What are Ds statutory duties

A

Act within powers; avoid conflicts; independent judgment; promote success of C for benefit of M; not accept benefits from 3rd; declare interest in transactions

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34
Q

171 - 177 CA covers what

A

Statutory duties of directors

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35
Q

Why do 3rd make contracts with a company and not its directors?

A

Company has separate legal personality

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36
Q

What section governs how shares must be paid in Privc

A

s.582

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37
Q

What two certificates for a PubC require

A

Trading + certificate of incorporation

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38
Q

What company only requires a certificate of incorporation

A

Priv

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39
Q

What used to be contained in the memorandum of association

A

Objects clause + statement of authorised capital

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40
Q

s.755 covers what

A

PrivC cannot offer to public

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41
Q

Can the nominal value of share capital be discounted?

A

No

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42
Q

Who deals with the s-to-day management of a company

A

Directors

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43
Q

Who exercises ultimate control over a company

A

Shareholders

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44
Q

How must PubC shares be bought

A

In cash

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45
Q

For what two reasons can the sale of shares in a private company be difficult

A

AoA may restrict sale to non-Ms, and there is no public market

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46
Q

What is the contract of membership, essentially

A

The AoA

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47
Q

How many clear days notice to call AGM

A

21 for PubC

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48
Q

S.270 covers what

A

Privy need not have CS (but can)

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49
Q

Majority for SR

A

At least 75%

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50
Q

What kind of company must have CS

A

Pub

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51
Q

S.171 says what

A

Ds must company with AoA

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52
Q

What type of company must have an AGM and what section

A

Pub, s.336

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53
Q

51(1) on what

A

Company cannot enter into contracts pre-incorporation - instead, A is personally liable

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54
Q

Who do directors owe a duty to

A

The company

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55
Q

Example of criteria for LSE MM

A

3 years trading record

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56
Q

Two ways a director can be appointed

A

OR or by Directors

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57
Q

What is the principle of maintenance of share capital?

A

Share capital if a permanent fund for creditors, so must be maintained and only returned to shareholders in limited circumstances

58
Q

Majority for OR

A

More than 50% (simple)

59
Q

Article 42 MA applies to what

A

Poll demand

60
Q

Minimum number of shareholders to form a company

A

1 or more

61
Q

How are the objects clause and statement of authorised share capital now treated

A

Part of AoA

62
Q

What can directors be liable for if they exceed their powers or breach their duty

A

Loss

63
Q

Ds usually vote by collectively by simple majority - part of MA

A

Article 7(1) MA

64
Q

Two ways shareholders exercise ultimate control over a company

A

Determining the company’s constitution, and voting

65
Q

Where must an ‘objects clause’ now be under CA ‘06

A

In AoA

66
Q

How are NEDs paid

A

by directors’ fees.

67
Q

Minimum director for PrivC

A

1

68
Q

What kinds of companies have continuing obligations

A

Listed public companies

69
Q

Can shares be issued at a discount, or at a premium?

A

Premium

70
Q

What is the aim of continuing obligations of listed companies

A

Full info disclosure, allowing shareholders to object to large/sensitive transactions

71
Q

S.154 covers what

A

Minimum directors for pub and priv

72
Q

What is a statement of authorised share capital

A

Places a cap on shares that could be issued

73
Q

What parts of CA impose MA by default

A

s.9(5)(b) + s.20

74
Q

s.8(1)(b) applies to what

A

Privy must have at least 1 share in issue

75
Q

What are PSCs

A

Persons with significant control

76
Q

What method of appointing directors is easier and why

A

Directors as quick

77
Q

What is the minimum quorum for BM, and what is it presumed to be if not fixed

A

2 Ds

78
Q

What type of company must have at least 1 share in issue

A

Private

79
Q

Part of CA on calling GMs

A

307

80
Q

What were MA previously called under CA ‘85

A

Table A

81
Q

307 CA covers what

A

Notice for calling GMs

82
Q

Can an unlimited C be created?

A

Yes

83
Q

Two examples of when shareholder consent is required

A

Loans to director, long-term service Cs of D

84
Q

What company need not have CS

A

Priv

85
Q

Section of CA on PubC needing minimum share capital

A

s.763

86
Q

Type of res to change C name

A

SR (or other means in AoA, or in CA ‘06 provisions)

87
Q

How many clear days notice to call a GM

A

14 for Priv and Pub

88
Q

s.1159 applies for what

A

Definition of subsidiary

89
Q

s.582

A

shares in PrivC must be paid ‘in money or money’s worth’

90
Q

MA on appointing directors (two ways)

A

Article 17(1)

91
Q

What part of CA covers OR

A

282

92
Q

What MA allows a poll to be demanded

A

Article 42 MA

93
Q

Who has a casting vote in the BM

A

Chairman

94
Q

What are shareholders liable for in a company

A

Only liable for their share subscription

95
Q

s.271 covers what

A

PubC must have CS

96
Q

Two kinds of lists at LSE

A

Main Market or AIM

97
Q

Who can be appointed as a director

A

Anyone who is willing

98
Q

Two ways to remove a statement of authorised share capital (For company incorporated under CA ‘85)

A

Altering AoA by SR (s.21(1)), or by OR under the transitional provisions

99
Q

What sections govern payment for shares in PubC

A

586 & 593

100
Q

Why is a breach of the AoA by a director not a BoC?

A

Directors are not privy to the contract

101
Q

Part of CA on certificate of incorporation

A

S.15

102
Q

7(1) and 8(1)

A

Two sections say one or more persons to form a company as minimum shareholders

103
Q

What part of MA lets any D call BM

A

Article 9(1)

104
Q

What must Private Limited Companies have at the end of their name

A

LTD or limited

105
Q

How must shares be paid in a private company

A

‘Money or money’s worth’

106
Q

Part of CA on Ltd at end of name

A

s.59

107
Q

What two sections say one or more persons to form a company (minimum shareholders)

A

7(1) and 8(1)

108
Q

Section on ‘subsidiary’ definition

A

s.1159

109
Q

S.59 and 58 cover what

A

PLC and LTD at end of the name

110
Q

What kind of company cannot pass SRs by WR

A

PubC

111
Q

What is required to agree on form of notice for calling GM

A

Board Resolution

112
Q

What is an IPO

A

Initial public offering

113
Q

Who must take reasonable steps to identify PSCs

A

The company: 790D

114
Q

What part of MA details who can demand a poll vote

A

Article 44 MA

115
Q

What are the essential conditions to become a PSC

A

Holds more than 25% of either shares or voting rights, or has the power to appoint/remove majority of BoD, or exercises significant control

116
Q

Part of CA on SRs

A

283

117
Q

What liability is there for shareholders in a company

A

Limited

118
Q

If D is also S, are they the same role?

A

No, analysed separately

119
Q

S.336

A

PubC to have AGM

120
Q

s.593 & 586 govern what

A

Payment for shares in PubC

121
Q

What is the normal voting method at GMs

A

Show of hands

122
Q

What does AIM stand for

A

Alternative Investment Market

123
Q

How much of the value of PubC shares must be paid + premium

A

1/4 of NV + 100% of premium

124
Q

What must a company be when winding up for a shareholder to get a financial return

A

Solvent

125
Q

What is the effect of a PrivC being prohibited from offering to the public

A

Limits investor base + access to international debt capital markets

126
Q

What section governs changing the name of CA

A

77

127
Q

Why might a company list on AIM instead of MM

A

Smaller, can’t fulfil MM criteria or for less regulations

128
Q

How are EDs paid

A

By salary

129
Q

What part of MA applies to BRs by unanimity

A

MA 8

130
Q

What section of CA governs PSC (notification requirements etc.)

A

790

131
Q

For what company’s shares is there no restriction on the method of payment, and no need for immediate payment

A

PrivC

132
Q

What must a PSC also be, if it is a C/LLP, beyond meeting the conditions in CA

A

A registrable entity

133
Q

What kinds of companies cannot generally offer shares to the public

A

PrivC

134
Q

What suggests PubCs can offer to the public

A

Not mentioned in prohibition against PrivC in s.755

135
Q

Two kinds of shareholder resolution

A

Ordinary and special

136
Q

What kind of tax is paid on dividends

A

Income

137
Q

What section requires PubC shares to be in cash

A

593

138
Q

When is a company wholly owned?

A

Only the parent company (+ its wholly owned subs) is a shareholder

139
Q

Who, under Article 44 MA, can demand a poll vote

A

Chairman, 2 or more w/ right to vote, or person(s) w/ at least 10% of total voting rights

140
Q

What is the minimum share capital for a public company

A

Share capital with nominal value of at least £50k or euro equivalent

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