BL - 3 - Companies (1) Flashcards
Are the first directors of a company automatically appointed on incorporation?
Yes
What must the name of a company end with?
- “Ltd” for private limited companies
- “PLC” for public limited companies
What are the limitations on company names?
A company name cannot be:
- the same as that of an existing registered company
- offensive of a criminal offence
- include words suggesting a connection with the Government or a local authority / particular “sensitive” words
Why should the trademarks register be checked before the incorporation?
To avoid a possible trademark infringement.
Complete the phrase:
If the company’s name is the same as, or similar to, that of an existing business and the business is likely to be affected by the similarity, the company may be subject to a…
passing off action in tort.
This is an action against someone who is misrepresenting himself as being the same as / connected to another business.
How can a company change its name?
Through a special resolution
What must the company file with the Companies House to change its trading name?
Nothing.
A trading name can be changed by a board resolution.
What are the Articles of Association from a legal perspective?
They are a contract between
(i) a shareholder and the company; and
(ii) a shareholder and the other shareholders
What are the articles of association?
They are the company’s internal rulebook dealing with directors, shareholders, meetings and key administrative requirements.
How can the articles be changed?
Through a special resolution. Thereafter, the copy of the special resolution and the amended articles must be filed at Companies House.
How many directors must a company have?
Private company: 1
Public company: 2
Who can be a director?
Human directors must be at least 16 years of age.
Corporate directors are permitted, but at least one director must be a natural person
Can a director also be company secretary at the same time?
Yes
Is there a limit of the number of directors?
No
Who falls under the category “people with significant control”?
Anyone meeting at least one of the following conditions:
- holds more than 25% of the shares
- has more than 25% of the voting rights
- has the right to appoint or remove the majority of the board
What registers do the statutory books contain?
- register of secretaries
- register of directors
- register of directors’ residential addresses
- register of members
- persons with significant control (PSC) register
What steps are recommended post-incorporation?
- ordering the company seal (optional)
- publicising the company’s name outside the office
- have the correct particulars on business stationery
- registering vor VAT with HMRC (His Majesty’s Revenue Customs)
- …
What is the accounting reference date of a company?
Unless provided otherwise, the last day of the month of incorporation
What is a board meeting?
It is a meeting of the directors, who pass board resolutions to make decisions
What is a general meeting?
It is a meeting of the members (shareholders), who pass ordinary and special resolutions to make decisions
A director is prevented from voting and counting towards the quorum on any decision in which he…
has a personal interest
What must a director do when there is a conflict of interest?
He must declare the conflict. However, that does not necessarily mean that he cannot vote.
Who needs to hold an AGM?
- Companies formed before 1 October 2006, whose articles haven’t been amended
- Companies formed after 1 October 2006 if their articles require an AGM
Which shareholders can call a GM?
Members cannot call a GM.
However, directors must call a GM when members holding at least 5% of the company’s paid-up share capital with voting rights demand so.
Which shareholders can require directors to call a GM?
At least two members holding at least 5% of the company’s paid-up share capital with voting rights.
Who can call a short notice for a GM?
(i) a majority in number of members
(ii) holding at least 90% of the voting shares
What is a small company?
It satisfies at least two of:
- turnover not more than GBP 10.2M
- balance sheet of no more than GBP 5.1M
- not more than 50 employees
What are the benefits of a small company?
- they are not required to have their accounts audited.
- their directors do not need to prepare a financial report
What must the company file with the Companies House every year?
- accounts (do not need to be audited for small companies)
- a confirmation statement
