BLP WK 2 Flashcards
What are the two primary ways a company can be formed?
1.Incorporation from scratch
- Shelf company conversion
What documents are required to incorporate a company from scratch?
○ Memorandum of association
○ Articles of association (unless using the Model Articles)
○ Registration application (Form IN01)
○ Fee
What are the key components of the registration application (Form IN01)?
The registration application includes:
○ Company name and registered office
○ Type of company (private or public)
○ Registered email address for Companies House
○ Statement of capital and shareholdings or guarantee
○ Proposed officers and persons with significant control
○ Statement of compliance and lawful purpose
What happens once the Registrar approves the incorporation application?
The company receives a certificate of incorporation, which includes the company’s name, registered number, and incorporation date. The company officially becomes a legal entity with the issuance of the certificate.
What are some common modifications made during a shelf company conversion?
Common changes include:
○ Company name
○ Registered office
○ Articles of association
○ Officers and shareholders
What factors should be considered when choosing a company name?
Key considerations include:
○ Must not be offensive or suggest inappropriate connections
○ Must not be too similar to an existing company name
○ May need approval for certain words
○ Must comply with ECCTA restrictions
What are some important post-incorporation tasks for directors?
Post-incorporation tasks include:
○ Appointing a chairperson
○ Setting an accounting reference date
○ Appointing an auditor
○ Registering for taxes (corporation tax, VAT, PAYE, National Insurance)
○ Considering a shareholder agreement
Who is bound by pre-incorporation contracts under s 51 CA 2006?
Pre-incorporation contracts bind the individual acting (promoter), not the company. The company cannot ratify the contract. The parties may novate the contract to the company after incorporation.
What are the two main types of resolutions in company decision-making?
- Board resolutions, passed by directors.
- Shareholder resolutions, passed by shareholders.
How are board resolutions passed?
Board resolutions are typically passed by a simple majority vote of directors at a board meeting. They can also be passed in writing if all directors agree.
What are the two types of shareholder resolutions?
- Ordinary resolutions, passed by a simple majority (over 50%) of shareholder votes.
- Special resolutions, requiring at least 75% of shareholder votes to pass.
What are the voting methods for shareholder resolutions?
Shareholder resolutions can be voted on by:
1. Show of hands: each shareholder present has one vote.
2. Poll vote: each shareholder gets one vote per share held.
3. Proxy: shareholders can appoint someone to vote on their behalf.
When can a poll vote be demanded?
A poll vote can be demanded by the chairperson, directors, two shareholders, or shareholders holding at least 10% of voting rights.
What are written resolutions and who can use them?
Written resolutions are a method for passing shareholder resolutions without holding a meeting. They can only be used by private companies.
What are the limitations of written resolutions?
Written resolutions cannot be used to remove a director or an auditor.
What is the effect of shareholder abstention on a written resolution?
Abstentions count as votes against the resolution, so even if the ‘for’ votes have a simple majority, if another shareholder abstains, the resolution won’t pass.
Who can call a board meeting?
Any director can call a board meeting or ask the company secretary to do so.
What notice is required for a board meeting?
Reasonable notice is required for a board meeting. What constitutes “reasonable” depends on the typical practices of the directors.
What is a quorum for a board meeting?
At least two directors must be present for a board meeting to proceed.
How are decisions made at board meetings?
Board resolutions are passed by a majority vote of the directors present. Each director has one vote. The chair may have a casting vote to break a tie.