8 - companies: ownership and management

Question 1

how many directors must public and private companies have

Answer 1

public - 2
private - 1

Question 2

how old must a director be

Answer 2

16

Question 3

what are de facto directors

Answer 3

anyone who acts as one but isn’t validly appointed

Question 4

what is a shadow director

Answer 4

someone who gives directions that directors follow

Question 5

what is an alternate director

Answer 5

if a director cannot attend/vote at board meetings then this person goes in their place

Question 6

how soon does a change in director have to be given

Answer 6

14 days

Question 7

how can a director be removed

Answer 7

by passing an ordinary resolution

Question 8

what is wrongful trading vs fraudulent trading

Answer 8

wrongful trading - where the directors should have known that the company was going into liquidation and stopped trading
fraudulent trading - where the business is carried out with the intent to defraud

Question 9

what is the punishment for a director for fraudulent trading

Answer 9

fine and/or imprisonment for up to 10 years

Question 10

when is a disqualifcation as acting for a director for 15 years brought about

Answer 10

when there is a serious offence
when there is fraudulent trading
when there is wrongful trading

Question 11

when is there a disqualification order for up to 5 years

Answer 11

where any person has been in default in relation to company legislation

Question 12

when is there disqualifcation for between 2-15 years

Answer 12

when conduct as a director caused a company to go insolvent

Question 13

what happens if someone has a bankruptcy order

Answer 13

disqualifies them as being a director or concerned in management of a company

Question 14

when do service contracts require approval of shareholders

Answer 14

if the service contract provides for a directors employment to be guaranteed 2 years or more

Question 15

what are the limits for substantial property transactions for directors

Answer 15

the aggregate value exceeds 10% of the companys asset value and is more than 5,000
exceeds 100,000

Question 16

what is the % of class rights where the minorities have specific statutory rights

Answer 16

holders of 15% or more of a class of shares can apply to the court for cancellation

Question 17

what is the % of members with voting rights that can request a company meeting

Answer 17

5 or more

Question 18

who can prevent the registration of a limited company as unlimited

Answer 18

any individual member

Question 19

who can petition the court for winding up on the case of poor management

Answer 19

any member, providing it is just and equitable

Question 20

which four people can call a general meeting

Answer 20

• the directors
• 5% of members
• the court
• an auditor who gives notice of their resignation

Question 21

what must net assets fall to for a general meeting to be called
is this public or private?

Answer 21

public companies - when net assets fall to half or less of called up share capital

Question 22

within X days of needing to call a meeting, the directors can call one with a Y notice period
what is X and Y

Answer 22

x - 21
y - 28

Question 23

what happens if directors fail to call a meeting when they should have done

Answer 23

members who requested a meeting can call one to take place within 3 months of initial request

Question 24

what is the minimum notice for calling a general meeting

Answer 24

14 days

Question 25

name the agreement % for a shorter notice than the minimum notice period for a general meeting for public and private companies

Answer 25

private - members who hold 90% of nominal value, this can change to 95%
public - 95% of nominal value

Question 26

what is the notice for an AGM

Answer 26

21 days

Question 27

do private companies need to have an AGM?

Answer 27

no

Question 28

when can resolutions be passed for private and public companies

Answer 28

private - written resolution or general meeting
public - general meeting

Question 29

what is an ordinary resolution and what is the majority % for it to be passed

Answer 29

anything that is not a special resolution
50%

Question 30

what is a special resolution and what is the % majority for it to be passed

Answer 30

• change of name/articles
• reduction of share capital
• winding up
  75%

Question 31

how soon do special resolutions have to be filed with the Registrar

Answer 31

15 days

Question 32

which two resolutions need 28 days notice for the GM

Answer 32

• to remove an auditor
• to remove a director