Business Flashcards

1
Q

different classes of shares

A

Ordinary shares - voting rights

Preference shares - Usually no voting rights, often entitled to fixed dividend

Deferred shares - no right to dividend until certain conditions met.

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2
Q

What is required for share buy-back out of capital?

A
  • Directors statement of solvency
  • report by the company auditors
  • notices in the London gazette.
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3
Q

De minimus cash exemption for share buy back out of capital

A

Company can purchase shares out of capital up to an aggregate purchase price in any financial year of the lower of
A) 15k or
B) nominal value of 5% of company fully paid share capital as at the beginning of financial year.

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4
Q

What is required for share buy-back out of profits?

A

Ordinary resolution.

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5
Q

Procedure for registering a charge?

A

21 days - otherwise not enforceable against liquidator.

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6
Q

what is a floating charge?

A
  • Charge over a class of assets of company
  • The composition will change
  • Until crystallisation (even stipulated to occur).
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7
Q

some debt options?

A
  • Overdraft - like usual bank.
  • Term loan - fixed term loan
  • Revolving credit facility - borrow pay it back and borrow it again
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8
Q

Advantages and disadvantages of debt equity?

A

Advantage = flexible to arrange in terms of process + maintain control over company + tax efficiency

Disadvantage = cost of finance + risk if you default on a loan

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9
Q

Advantages and disadvantages of Equity finance ?

A

Advantages = brings ash into business without risk of losing assets + potentially valuable new members

Disadvantages = lose control + requires approval for granting shares.

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10
Q

What is required for directors to pass written resolution?

A

Unanimous decision.

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11
Q

What is required for short notice?

A

actual majority and 90% or 95% for public.

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12
Q

What is the special notice of 28 days required for resolutions for?

A
  • Remove a director
  • Appoint an auditor
  • Remove an auditor before expiration of his term.
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13
Q

What does statute require special resolutions for ?

A
  • Altering articles
  • Changing the name of the company
  • Dis-apply statutory pre-emptive rights on issue of new shares.
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14
Q

What are required for shareholders to pass written resolutions?

A

simple majority.

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15
Q

What is a substantial property transaction?

A

non-cash asset from director or person connected that:
- Exceeds £100k or
- 10% of net asset value and more then £5k.

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16
Q

What is required for a SPT

A

Declaration of interest and ordinary resolution of shareholders.

17
Q

Consequences of not gaining approval?

A

Director must account to company for any gain made and transaction is voidable.

18
Q

When is an ordinary resolution required for director loans?

A
  • Over 10k for personal loans
  • Over 50k for business loans.
19
Q

What is required to appoint a director?

A
  • Ordinary resolution by shareholders
  • AP01
20
Q

How to appoint director without ordinary resolution?

A

By granting them a service contract of less than 2 years.

21
Q

What % is required for short notice meeting?

A

90% for model articles Private.
95% for model articles public.
95% for Table A articles both.

22
Q

Process of events in board meeting ?

A

Board meeting notice - board meeting - general meeting notice - general meeting - board meeting