7 - companies: the consequences of incorporation

Question 1

what is the difference between a company limited by shares vs a company limited by guarantee when it comes to amounts owed by members at winding up

Answer 1

limited by shares - any outstanding amount of nominal value must be paid
limited by guarantee - the amount they guaranteed to pay must be paid

Question 2

how many times can a company alter its status

Answer 2

once

Question 3

how can a company go from limited to unlimited

Answer 3

with consent of all members

Question 4

how can a company go from unlimited to limited

Answer 4

by passing a special resolution and saying whether the company is limited by shares or guarantee

Question 5

what is min share capital for a private and public company

Answer 5

public - 50,000
private - none

Question 6

which types of companies need a trading certificate?

Answer 6

public

Question 7

how many directors must a private and public company have

Answer 7

public - two
private - one

Question 8

which companies need a secretary?

Answer 8

public

Question 9

what are the accounts deadlines for private and public companies

Answer 9

public - 6 months
private - 9 months

Question 10

what is the memorandum of association

Answer 10

a memorandum saying that the subscribers wish to form a company and agree to become members

Question 11

what five things must a company application state

Answer 11

the companys proposed name
whether it is limited liability, and if it is shares or guarantee
whether it is private or public
where the registered office is
the intended address of the registered office

Question 12

what four things must the initial statement of capital show

Answer 12

• total number of shares
• aggregate nominal value
• details of individual classes
• the amount paid and unpaid on each share

Question 13

what happens if there are problems with a company after the certificate of incorporation has been given

Answer 13

nothing

Question 14

what are the two things needed for a trading certificate application

Answer 14

• application stating that nominal value is not less than minimum
• statement of compliance

Question 15

what is a promoter

Answer 15

anyone who makes business preparations for a company

Question 16

what happens if a promoter makes money from preparing a company

Answer 16

they have to disclose it
if not disclosed, it must be surrendered

Question 17

how does a company change its name

Answer 17

passing a special resolution

Question 18

how soon must amended articles be sent and who are they sent to

Answer 18

the registrar within 15 days

Question 19

who are people with significant control of a company

Answer 19

people who own 25% of a companys shares or more

Question 20

how long must records or resolutions and minutes of meetings be kept for

Answer 20

10 years

Question 21

what four items does the ‘register’ include

Answer 21

certificate of incorporation
trading certificate
certificate of registration of charges
annual accounts and return

Question 22

what are the four requirements that could be used for a secreatry

Answer 22

employment as a plc secretary for three out of 5 years preceeding
membership of ACCA, CIMA, ICAEW, ICAS, ICAI or CIPFA
qualification as a solicitor, barrister or advocate in the UK
employment in a position of a professional body

Question 23

how long do underlying accounting records have to be kept for a private and public company

Answer 23

3 years for private, 6 for public

Question 24

which companies must produce a strategic report

Answer 24

large and medium sized companies

Question 25

what are the two compulsory notes to the accounts for micro-entities

Answer 25

advances to directors
financial commitments

Question 26

what two of three requirements do microentities need to hit

Answer 26

• turnover less than 623k
• balance sheet less than 316k
• employees less than 10

Question 27

what two of three requirements do small companies need to hit

Answer 27

• turnover less than 10.2 mil
• balance sheet less than 5.1 mil
• employees less than 50

Question 28

what two of three requirements do medium companies need to hit

Answer 28

• turnover less than 36 mil
• balance sheet less than 18 mil
• employees less than 250

Question 29

which four companies do not have to carry out an audit

Answer 29

• micro and small
• dormant companies
• non profit making companies
• subsidiary companies

Question 30

what % of members can request an audit

Answer 30

10