7d Members Flashcards

You may prefer our related Brainscape-certified flashcards:
1
Q

What are the two main documents regulating the relationship between the company and its memebers?

A
  • Articles of association
  • Shareholders agreement
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Does a company need to use a shareholders agreement? Can they?

A

No, but if there are confidential matters the members wish to have confirmed then they can have one and not have to file at CoHo.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

What are the members rights under CA06?

A
  • Be sent a copy of the annual accounts.
  • To vote at a meeting of the members.
  • To appoint a proxy to attend a meeting on their behalf.

Members can choose to take legal action should a company refuse to respect these rights.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

What decisions require shareholder approval to be valid?

A
  • Service contracts
  • Substantial property transactions
  • Loans to directors
  • Loans to directors- exceptions
  • Payments for loss of office
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Re service contracts, when would a decision need member approval?

A

If the company wishes to appoint a director for 2 or more years. If not the contract is deemed to include a term allowing the company to terminate it by reasonable notice at any time.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Re substantial property transactions, when would a decision need member approval?

A

Any asset sold or purchased of substantial value - either more than £100,000 or more than £5,000 and more than 10% of the company’s assets.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Re loans to directors, when would a decision need member approval?

A

If the company plans to make a loan to a director or give guarentee for a loan to a third party on behalf of the director.
Failure to do so makes the loan voidable and Director must pay any gain or repay any loss back to the company.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

What are the exceptions to needing member approval with regards to loans to directors?

A
  • the loan is used to meet business expenses or defending company in legal/regulatory actions.
  • minor amount.
  • loan is between group companies.
  • company’s usual business is lending money and terms are the same as lending tk the public.
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Re payments for loss of office, when would a decision need member approval?

A

Any ex-gratia payments (payments not part of company’s contract) re loss of office or retirement need to be provide members with a memorandum setting out the details for approval.
If not the company can claim it back along with any gains or losses.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly