Business law

Question 1

Names the types of companies

Answer 1

Sole trader, partnership, limited partnership, company,limited liability partnership

Question 2

What is a sole trader

Answer 2

Self employed, unlimited personal liability, no legal filing required

Question 3

What is a standard partnership

Answer 3

Minimum two members, joint liability, profit and loss shared, partners are not employees

Question 4

What is a limited partnership

Answer 4

At least one partner has unlimited liability. Not common

Question 5

What is a company

Answer 5

May be limited, unlimited, private or public. Separate legal personality, higher level of admin regulations

Question 6

What is a limited liability partnership LLP

Answer 6

Hybrid of company and general partnership, separate legal entity, accounts submitted to companies house

Question 7

Where are companies registered

Answer 7

Companies house. Belfast, Cardiff, Edinburgh

Question 8

How can applications be made

Answer 8

Post, online or companies house software

Question 9

How much is an online company incorporation

Answer 9

£12

Question 10

How long does incorporation typically take

Answer 10

5 days

Question 11

What form is submitted to name a company

Answer 11

IN01

Question 12

What act regulates company names

Answer 12

Companies, limited liability partnerships and business (names and trading disclosures) regulations 2015

Question 13

What goes in the IN01 form

Answer 13

Registered office, first directors, directors addresses, company secretary and address, first shareholders

Question 14

What is a person with significant control

Answer 14

More than 25% shares and voting rights. Forms must state % of control

Question 15

What act governs LLPs

Answer 15

Partnership act 1890

Question 16

What’s in a partnership agreement

Answer 16

Roles, decision making, financial contributions, methods of sharing profits and losses, ownership of losses, dissolution of partnership, dispute resolution clause

Question 17

What regulation governs LLP agreements

Answer 17

LLP regulations 2001

Question 18

What regulations govern LLP persons of significant control

Answer 18

LLP (register of people with significant control) regulations 2016

Question 19

What do shareholders do

Answer 19

Changing articles of association, changing name, directors cannot reverse decisions

Question 20

What are the types of shareholder resolutions

Answer 20

Ordinary and special

Question 21

At what notice can a general meeting be called

Answer 21

14 days

Question 22

What rights do shareholders have when voting

Answer 22

Right to send a proxy to a general meeting on their behalf
Right to a poll vote
Right to receive notice of general meetings
Right to requisition a general meeting
Right to apply to the court to call a general meeting
Right for a shareholder with 5% of more of the voting rights in the company to require the circulation of a written statement with respect to any resolution
Right for shareholders holding 5% or more of the company’s shares to require the company to circulate a written resolution and accompanying statement.

Question 23

What is a written resolution

Answer 23

The written resolution will include information on the ordinary and/ or special resolution which the board is proposing.
Shareholders will have to sign and return the written resolution if they wish to vote in favour of it.
As per section 291(2) of the CA, written resolutions must be circulated to every eligible member.

Question 24

What protection is there for minority shareholders

Answer 24

Unfair Prejudice Actions (s994 CA’2006)
Any shareholder may apply to the court by petition for an order on the following potential grounds:
• The company’s affairs have been conducted in a manner that is unfairly prejudicial to the interests of the members generally, or some part of its members.
• An actual or proposed act or omission of the company is or would be prejudicial.

Question 25

What is a derivative claim

Answer 25

derivative claim is instigated by a shareholder for a wrong done to a company which has arisen from an actor omission of a director. A derivative claim may only be brought in relation to a cause of action arising from an actual or proposed act or omission involving negligence, default, breach of duty or breach of trust by a director.

Question 26

When can a general meeting be
called?

Answer 26

At any point, and any number of times in a year so that members can pass resolutions. Must also comply with any requirements outlined in its articles of association.

Question 27

Who can call a general meeting

Answer 27

Directors and company secretary (if this is authorised by the directors)

Question 28

Who is entitled to receive notice of a general meeting?

Answer 28

The members, directors and auditors. Also worth checking the company’s articles as well.

Question 29

What information should a notice of general meeting contain?

Answer 29

Date, time, place and general business of the meeting.

Question 30

What articles govern board decisions

Answer 30

Articles 7-16 of the Model Articles govern board decisions. Article 7 provides for two methods of decision making by the director

Question 31

What internal records must be kept up to date for a company

Answer 31

• Register of members (registers are also known as statutory books). • Register of directors
• Board minutes for every meeting which takes place
• Minutes of every general meeting
• Record of the outcome of any written resolutions.

Question 32

What must be kept up to date with company’s house for a company

Answer 32

• Public information regarding directors, shareholders and significant decisions. • Must notify the Registrar of Companies when certain decisions are made.
• Copies of all special resolutions must be filed at Companies House.
• Some ordinary resolutions must also be filed.