Business Law Flashcards by Sarah Blanchard

How many votes are per person at a board meeting?

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What type of votes can be at a general meeting?

Hands - 1 per person

Poll - % share

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How long notice to call a general meeting?

14 days

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How many days before special resolution is filed at Companies House?

Within 15 days

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Can a director be dismissed by written resolution?

No - oral only

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When can poll vote be demanded?

5+ members

Or holder of 10%+ can demand a poll (not when selecting a chair or to adjourn)

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What can a 5%+ shareholder do?

Require circulation of a written resolution and can require GM to be held

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What can a 15%+ shareholder do?

Can apply to court to object to a variation of a share class

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What can a 10%+ shareholder do?

Demand a poll vote at a GM

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When can a court order a business to be wound up?

Sum exceeds £750 and written demand on company - does not pay within 3 weeks
Creditor gets judgement against company and tries to enforce but debt remains unpaid
Asset is less than liabilities (creditor may not know this)

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How is a company wound up by choice?

Special resolution

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What is the order of creditors on liquidation?

Fixed charge holder
Luiqidator expenses
Preferential creditors(employees)

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What is cash flow test of insolvency?

Company unable to pay debts when they fall due - can cash / liquid assets be sold to pay any debt

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What is the balance sheet test of insolvency?

More liability than asset on balance sheet

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What is members voluntary liquidation and creditors voluntary liquidation?

Members - members choice to wind up

Creditors - members wind up company in response to creditors

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When are resolutions needed to wind up company (when voluntary)

Special resolution to wind up company and ordinary resolution to appoint a liquidator

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How long after liquidation is company dissolved?

3 months

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What is needed for a CVA?

75% (by value) of unsecure creditors to vote and not less than 50%

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Benefit of CVA?

Quick
Cheap
For small companies
Binds all unsecured creditors

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What happens if a charge is not registered?

Void against company liquidator, administrator, and other secured creditors

Contract is still valid between lender and company just mot between receiver

// court has power to rectify (will not do if bone fide purchaser interest before)

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What form is needed to transfer shares?

Stock transfer form

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How are loans to director passed?

Ordinary resolution

Unless(no SH approval needed):

No more than 10k
No more than 15k if acquiring goods/services from company
Spending no more than 50k on behalf of company
To fund civil/criminal proceedings (unsuccessful must lay it back)
Defence proceedings in relation to regulatory investigation

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When must new allotment of shares be offered to existing SH?

If wholly cash consideration
21 days given before offered elsewhere

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What percentage most vote in favour for short notice meeting to be held?

75%

What is the minimum qurom for a meeting?

What are the exceptions to the rule that if a director has an interest he cannot be counted in vote?

No reasonable conflict Interest is guarantee for obligation of company Interest is contract to buy shares

What happens if the notice of a meeting is wrong?

Resolution is invalid

Shat requires a special resolution?

Change articles Change company name Amend articles Disapply pre-emption rights

What is required for a change of office?

Board resolution - 50% Takes effect on notice to registrar (14days)

What is needed to appoint new director

Board resolution (Directors or Shareholders) - 50% - must notify registrar within 14 days or will receive a fine

Steps to remove a director?

1- notice 2- GM notice (after 28 days) 3- GM

How can shares change hands?

1. Allotment 2. Transfer 3. Buy -back

What resolution is used to remove preemption rights?

75%

Two types of financing for a company?

1. Selling shares = equity finance 2. Borrow money = debt finance

What rate must you register for VAT with taxable supply?

Taxable supply in 12 months was £85k+

What resolution is needed to remove a director?

Special notice of Ordinary resolution

Can shareholders/ directors vote on matters they have an interest in?

Shareholder - yes (unless buyback shares or ratify a breach) Director - no

how much must owner invest for public limited company?

Specified amount - currently 50k

What type of loan is a partnership not eligible for?

Floating loan

What % shares does a person of significant control have?

25% (no more than 50%)

When does a partnership dissolve?

1. Partner retires 2. Expiry of fixed terms 3. Death 4. Bankruptcy 5. Give notice

When can a company make a loan to a director?

Only when approved by shareholder resolution UNLESS under 50k and for company business

What does ATE cover?

Disbursement liability and opponent costs

What is rule in Caparo v Dickman?

Accountants to firm owe duty of care to company not third parties. Not liable for third party loss umless 1. Knew 2. Knew would be relied on 3. Relied on to detriment

Who is a salaried member of LLP?

Individual whose contribution is less than 25% of disguised salary

Do LLPs pay income or corporation tax?

Income

Steps to incorporate an LLP?

File form LL1N01 at Companies house + fee

Steps to incorporate Private limited company?

File IN01 at Companies House + fee + memorandum of association + articles (unless default articles used)

Public limited company steps to incorporate?

File 1N01 at CH + small fee + memoradum of association + articles (unless using default) + 50k minimum alloted share capital

What is minimum allotted share capital of a public limited company?

50k

What type of board resolution is needed to enter simple contract

mA3

What form is needed to change accounting period?

AA01

Rules for changing accounting reference period?

Must not be extended for more than 18months Cannot be altered twice in 5 year period

How long do you have to file AP03(individual) or AP04 (company) for appointing a new secretary?

14 days of appointment

How long to issue share certificate?

2 months

What is quickest means to appoint a new director?

Board resolution by directors

When can directors/ shareholders approve service contract?

2 years less - D 2 years more - S (ordinary resolution)

What are the exemptions to shareholders not approving a loan to director(usually ordinary resolution)

1. Loan up to 10k 2. Credit transaction up to 15k 3. Loans up to 50k for company expenditure 4. Loans to fund defence against breach of duty 5. Loan between group company