👔Business 3: Co Decision Making Flashcards

Question

Admin for SPT

Answer 1

1.BM 1(Board resolve to agree draft terms of contract AND call GM or circulate WR) 2. GM or WR (SH resolve to approve entry into contract) 3. BM 2 (Board resolve to enter contract and to authorise D to execute contract) 4. Admin

Answer 2

Dirs can exercise powers unanimously without meeting as long as they indicate they have a common view ( in form of a resolution in writing or any other method)

Answer 3

CALLING: Any director/o sec may call, usually chair NOTICE: Must give notice ALL directors Length: Reasonable (q of fact, depends on size) Form: any form, inc, virtual as long as Dirs can communicate to the others any info/opinions on an particular item of business Inc: time, date and place MA 9(2)

Answer 4

those not given can demand another meeting be held within a reasonable time

Answer 5

* Min 2 * Cnflict of interest: Dir with cant count in quorum on that specific matter where decision is concerned with actual/proposed transaction with CO in which Dir is interested * Conflict can be authorised by dirs as long as doesn’t count in quorum

Answer 6

Dirs must declare (to other directors) the nature and extent of any direct or indirect interest in a proposed transaction to which Co is party (cant disapply) UNLESS 1. it cannot reasonably be regarded as likely to give rise to a conflict of interest. 2. Other dirs already aware. 3. It concerns terms of a service contract that have been/are to be considered by a meeting of the dirs BUT gd practice to declare

Answer 7

Simple majority (over 50% of those present) by show of hands Dirs with interest cannot vote on that matter unless MA 14 dissaplied

Answer 8

Negative view prevails and res defeated. If chair, they have casting vote and can use in favour

Answer 9

That they considered whether each proposal promotes the success of the company for the benefit of the members of a whole.

Answer 10

BM mins kept at registered office or SAIL for 10y (faliure=criminal offence) See if Co registers need updating, eg register of: 1. members 2. directors 3. directors’ residential addresses 4. PSC External Forms to Companies House? (CA 2006 (depends on transaction)

Answer 11

Public companies

Answer 12

1. Dirs at BM 2. SH with 5% voting rights (dirs call within 21d, occur within 28d notice) * SH can also can require co to circulate statement of up to 1k words on subject matter of res * Request must state the general nature of the business to be dealt with

Answer 13

14 clear days (+48h for email/post) To: Every Dir, SH, auditor if there is one Inc: Time, date, place, general nature of business to be conducted -Exact wording of any special res -Statement notifying every SH of right to appoint poxy Form: written, hard copy, electronic, website, combo

Answer 14

Majority of SH who hold 90% voting rights (95% for public cos/Table A cos)

Answer 15

-loan to dir -buyback of shares -dir long term service contract -removal of dir

Answer 16

* For removal of a director * Given at least 28 clear days before GM * When Co notifies SH of the GM, must also inform of res to remove dir * Co must notify Dir immediately by sending copy * Dir entitled to be heard at GM/send written representations to Co who will send to SH

Answer 17

Min 2 (unless only 1 SH) Can count if have interest

Answer 18

Show of hands (Default)-1 vote per SH Poll vote (overrides show of hands)-1 vote per share, Must be present

Answer 19

Yes EXCEPT casting vote NOT counted if: 1. Res to buy back some/all SH shares 2. OR to ratify Dirs breach of directors duty where they are also SH

Answer 20

No unless articles amended

Answer 21

1. Chair 2. Dirs 3. or more SH with right to vote on the res 4. SH holding at least 10% of the voting rights of SH having right to vote on that res

Answer 22

-Can be called before/during GM.

Answer 23

Internal GM mins kept at RO or SAIL for 10y (s355) (Failure= crim offence Company registers (at RO or SAIL) updated if eg. Register of: * members * directors/dirs residential addresses * PSC External Forms to CH? If special resolution, copies to CH within 15 days

Answer 24

midnight of 28th day from circulation unless articles state otherwise

Answer 25

All SH in unanimous agreement

Answer 26

1. Dirs via board resolution 2. Any SH with at least 5% voting rights can demand board circulate WR (s292) articles can reduce but cant increase above 5%

Answer 27

* SH can inc statement <1000 words on the subject matter * Co must circulate to all eligible SH within 21 days * SH who demanded must pay the cos expenses in complying with the request

Answer 28

in person, post, email, website

Answer 29

all eligible members [and auditors if one] ‘Eligible member’ =the SHs who are entitled to vote on the res as at the circulation date of the res

Answer 30

Passed when the required majority of eligible members have signified agreement (by lapse date) (unlike GM, where only the votes of those PRESENT and VOTING count) 1 vote per shar

Answer 31

1. Adequate accounting records giving a true and fair view of the state of affairs at Co as at end of each financial year 2. Dirs prep directors report for each financial year EXCEPT priv cos classed as small co/micro-entity-co with balance sheet less than £5.1 mill, turnover less than £10.2 mill, less than 50 employees in particular financial y

Answer 32

○ Priv: File to CH within 9mo from end of accounting period ○ Pub: File to CH 6mo from end of accounting period All cos: file confirmation statement on form CS01 within 14d from cos confirmation date (anniversary of incorporation)

Answer 33

□ Resignation □ Dirs can remove by BR (May have contract setting out consequence of removal (ie. Damages for breach of contract))

Answer 34

□ Appointment: AP03 to registration within 14d appointment □ Must keep register of secretaries with specified particulars (if have sec) (Priv Cos can choose to not have their own register of secretaries but ensure info is files/up to date at CH) □ Co must notify Registrar within 14d of change in particular of co sec kept in register of secs

Answer 35

Qualified (certifies/chartered accountant) Independent (not connected with anyone in co)

Answer 36

1. Small company doesnt have to have auditor or directors report balance sheet less than £5.1 mill turnover less than £10.2 mill, less than 50 employees in particular financial y) 2. Cos which don’t trade (dormant cos) permitted to file abbreviated accounts and are exempt from audit

Answer 37

Report must state whether, in the auditor’s opinion, accs have been prepared properly and give a true and fair view of co

Answer 38

prep a report on cos annual accounts, to be sent to its SH

Answer 39

□ Dirs of priv co app first auditor □ SH then have power to app via OR Auditor of priv co deemed to be reappointed automatically annually (unless articles amended)

Answer 40

□ Do NOT owe duty of care to SH/potential new SH when conducting annual audit □ Needs to be proximity between parties for liability to be imposed □ Can be sued for negligence by co □ Criminal offences: 1. knowingly or recklessly including misleading, false or deceptive material in the auditor’s report 2. omitting certain statements from the report which are required to be included by the CA 2006

Answer 41

Resignation at any time by notice in writing to cos RO SH can remove any time via OR (must give special notice)

Answer 42

must deliver statement to co explaining circumstances connected with ceasing to hold office

Answer 43

CONTRACT 1. Seal 2. On behalf of co by person acting under authority (dir/employee if contracts part of their rile) DEED 1. Affixing seal (MA: +signature of at least 1 authorised person n the presence of a witness who attests)) 2. Signatures of 2 authorised signatories (Dir or Sec) 3. Signatures of 1 dir in presence of a witness who attests)