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BLP SQE > 3 - BL - Company > Flashcards

3 - BL - Company Flashcards

1
Q

When did CA 2006 come into force?

A

1 October 2009

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2
Q

What are the constitutional documents under CA 1985?

A

Articles of Association and the Memorandum

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3
Q

What did the memorandum set out under CA 1985?

A

An objects clause setting out the purposes for which the company has been formed. Acting outside of this purpose was described as acting ‘ultra vires’ or outside the company’s capacity.

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4
Q

What are the constitutional documents under CA 2006?

A

Articles of Association only

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5
Q

Is there a need for an objects clause under CA2006?

A

No, unless the objects are specified in the Articles.

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6
Q

Are the objects clauses of a pre CA 2006 company still in force post 2006?

A

Yes unless the articles are amended to remove the clauses.

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7
Q

How can a company amend its articles?

A

By special resolution

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8
Q

Are there any limitations on the extent to which a company can amend its articles?

A

Yes - any alteration must be made bona fide in the interests of the company as a whole.

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9
Q

Who is bound by the articles?

A

The company and its members

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10
Q

Who can enforce the articles?

A

Members will only be able to enforce provisions contained in Articles through the company itself.

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11
Q

Can a member only use his rights under the articles to enforce them in his capacity as a member?

A

Yes

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12
Q

What documents are needed to form a company?

A
  • a copy of the company’s memorandum;
  • Articles (ONLY if the company does not intend to use the Model Articles (MA));
  • the fee (the applicant may pay a higher fee for a same-day incorporation); and
  • an application for registration (Form IN01)
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13
Q

Where are the documents required to set up a company sent?

A

Companies House

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14
Q

What is contained in Form IN01?

A
  • The company’s proposed name and registered office;
  • Whether the company is to be private or public;
  • Whether the company is to be limited by shares (or guarantee);
  • A statement of capital and initial shareholdings (s 10) (or if it is to be limited by guarantee, details must be given of the guarantee (s 11));
  • A statement of the company’s proposed officers (s 12) and persons with significant control (s 790); and
  • A statement of compliance (s 13).
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15
Q

What happens after the Registrar of Companies has approved the application for incorporation of the company?

A

The company is sent a certificate of incorporation authenticated by the Registrar’s official seal.

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16
Q

What is set out in the certificate of incorporation?

A
  • the name of the company. This may be changed at a later date;
  • the company’s registered number.
  • the date of incorporation.
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17
Q

When does a company become a legal entity?

A

From the date on which the certificate of incorporation is issued by Companies House.

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18
Q

When does an ‘off-the-shelf’ company’s name change become effective?

A

From the date on which the new certificate of incorporation on change of name is issued by the Registrar of Companies

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19
Q

Are pre-incorporation contracts enforceable?

A

Yes on the people who proport to act for the comapny.

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20
Q

How are decisions made?

A

Via board resolutions

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21
Q

How many votes does each director have at a board meeting?

A

1

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22
Q

How are board resolutions passed?

A

Simple majority unless the directors have agreed that a particular decision requires unanimity

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23
Q

Do board meetings have to be held to pass a board resolution?

A

No, if the directors are in unanimity there is no requirement for board meetings.

24
Q

What percentage of votes are required to pass an Ordinary Shareholder Resolution?

A

OVER 50%

25
Q

What percentage of votes are required to pass a Special Shareholder Resolution?

A

75% or more

26
Q

How are shareholder votes taken at an AGM?

A

vote on a show of hands or on a poll

27
Q

How many votes does each member get on a show of hands?

A

each shareholder who is present at the meeting will be entitled to one vote, regardless of the number of shares held by that shareholder (provided the share has voting rights under the Articles)

28
Q

How many votes does each member get on a poll?

A

every shareholder has one vote in respect of each share held by them

29
Q

At what time / when can a poll be demanded? (In advance of…)

A
  • in advance of the GM where the vote will take place or
  • at a GM either before a show of hands on that resolution or
  • immediately after the result of that vote.
30
Q

Who can demand a poll vote?

A
  • The chairperson of the meeting;
  • The directors;
  • Two or more persons having the right to vote on the resolution;
  • A person or persons representing at least 10% of the total voting rights of all the shareholders entitled to vote on the resolution
31
Q

What sort of company can pass a shareholders’ resolution by way of a written resolution?

A

only private companies

32
Q

What are the voting rights on a written resolution?

A

every member has one vote in respect of each share held by them when voting on a written resolution

33
Q

What are the two types of written resolutions?

A

1) written ordinary resolution - simple majority of the total voting rights of eligible members

2) written special resolution:

  • must state it is a special resolution, and
  • passed by a majority of members representing 75% or more of the total voting rights of eligible members.
34
Q

What decisions cannot be passed by written resolutions

A
  • removal of a director
  • removal of an auditor
35
Q

Who can call a board meeting?

A

any director

36
Q

How much notice is required for a board meeting?

A

Reasonable notice of the BM was necessary, and that this would be whatever notice is usual for the directors to give

37
Q

What is the quorum for a board meeting?

A

two directors (unless the articles provide otherwise).

38
Q

Who calls the General Meeting?

A

The Board

39
Q

What is the notice period required for a GM for a private company?

A

14 clear days’ notice - in counting the days of the notice period, the day of the meeting and the day the notice is given are both excluded.

40
Q

When is an email notifying of a Board Meeting deemed to have been served?

A

48 hours after sending

41
Q

What is the Quorum for a GM?

A

Generally two shareholders, although it is one shareholder for single member companies

42
Q

What is the process for calling a GM?

A
  • A BM is first required in order to call the GM;
  • A GM is then required for the shareholders to vote on the resolution;
  • A further BM is then required to put into effect the outcome of the shareholder vote, and
  • There may be post meeting matters (PMM) to attend to such as filings at Companies House.
43
Q

What are the timings for a full notice General Meeting?

A

BM1 To be held on “reasonable” notice

GM to be held at least 14 clear days from BM1

GM

BM2 To be held on “reasonable” notice

PMMs

44
Q

What are the requirements for voting in a short notice for a General Meeting ?

A

for a private company, a GM may be called on short notice if this is agreed to by:

  • a majority in number of the members
    WHO
  • together hold shares with a nominal value of not less than 90% of the total nominal value of the shares which give the right to attend and vote at the GM.

This percentage may be increased to up to 95% by a provision in the company’s articles of association but there is no such provision in the MA.

45
Q

What are the timings for a short notice General Meeting?

A
  • A BM is held to resolve to convene the GM, to approve the form of notice for the GM and the form of consent to short notice, and to authorise their circulation to the shareholders.
  • The notice of the GM and the form of consent to short notice are then given to the shareholders who indicate their agreement for the GM to be held on short notice by signing the form of consent to short notice. The BM is then adjourned to enable the GM to take place.
  • The GM takes place immediately following the adjournment of the BM and the shareholders vote on the resolutions set out in the notice.
  • The BM is then reconvened. The directors are informed as to how the shareholders voted and they authorise one of their number to take the relevant action and deal with the post-meeting matters.
  • The PMMs will then be carried out.
46
Q

Who can propose a written resolution?

A

The directors or the members of a private company and is passed when the required majority of the eligible members signify their agreement to it.

47
Q

After what period does a proposed written resolution lapse if it does not have enough support?

A

28 days. A company can choose another period of time in its Articles if it so wishes.

48
Q

Can resolutions be passed to remove a director or auditor by written resolution?

A

No

49
Q

What is the process for a Written reolution?

A

A BM is held to resolve to propose the use of the WR procedure and to approve the form of wording of the WR and to circulate the WR.

The WR is then circulated to the shareholders (eligible members) with details of how to signify their agreement and when to respond by ie the lapse date.

  • There are two options to proceed:
  • If the shareholders are present (available immediately), the BM is adjourned. The approval of the WR takes place immediately following the adjournment of the BM and the shareholders vote on the resolutions set out in the WR by signing to signify their agreement, or not signing or abstaining (both of which constitute votes against the resolution); or
  • If shareholders are not present, WR is circulated to shareholders. Company awaits approval from the required % of shareholders. WR lapses after 28 days (MA Co)

*The BM is then reconvened if the first option was used or a second BM is called if the second option was used. The board are informed as to how the shareholders voted and they authorise one of their number or the company secretary to take the relevant action and deal with the post-meeting matters. The PMMs will then be carried out.

50
Q

How long should minutes of board meeting be held?

A

10 years

51
Q

Which resolutions must be filed at companies house?

A

Special resolutions

52
Q

What is the legal effect of the Articles?

A

The Articles take effect as a contract between the company and its members. Members will only be able to enforce provisions contained in Articles against other members through the company itself.

53
Q

When does your client gain control of the new company in the process of converting a shelf company?

A

Your client gains control of the new company once they are entered as the sole shareholder on the register of members.

54
Q

What is the minimum shareholder requirements for public and private companies?

A

1

55
Q

What is the minimum capital to be issued?

A

Private: at least one share, same for incorporation.
Public: minimum of £50,000

56
Q

Certificate required before commencement of trading?

A

Private: Certificate of Incorporation, can commence trading as it is incorporated.

Public: Certificate of Incorporate, cannot commence until a training certificate is issued by Registar showing that the company’s allotted share capital is not less than the minimum.

57
Q

what type of company can use written resolutions?

A

Only private companies, not public companies.

BLP SQE (15 decks)

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