Business Law Flashcards
What does the approval of a Company Voluntary arrangement (‘CVA’) require?
Approval of a CVA requires the agreement of the company’s unsecured creditors holding at least 75% in value of unsecured debt. If such approval is obtained, the Practitioner’s proposals become binding on every ordinary unsecured creditor.
A company has the Companies (Model Articles) Regulations 2008 (unamended) for private companies limited by shares as its articles of association.
They only have one class of shares, and want to allot more shares of this kind.
What resolution(s) must be passed before this can happen?
The directors have the ability to allot shares if the company has only one class of shares. However, they need a shareholders’ special resolution to disapply pre-emption rights. It would take a directors’ resolution to call a general meeting. Thus, we need:
- A board resolution to call a general meeting to disapply pre-emption rights
- A members’ special resolution to give the directors the ability to disapply pre-emption rights, and
- A board resolution to issue the shares.
What is the dividend allowance everyone is entitled to?
£1,000
Note: This is taxed at a nil-rate band.
A company has adopted the Companies (Model Articles) Regulations 2008 (unamended) for private companies limited by shares as its articles of association.
They only have one class of shares, and want to allot more shares of this kind.
What is the correct procedure to do this?
The board can issue more shares without involving the shareholders.
In private companies limited by shares incorporated after 2009, the board has authority to allot the shares itself if the shares are the same class as the shares that have been issued and there are no restrictions in the articles.
Who is required to register for income tax self assessment?
Sole traders
Partners,
Company directors, and
People with interest or dividend income higher than the tax-free thresholds.
What is the Historic test?
Under the historic test, a business must determine whether the turnover for the past 12 months exceeds £90,000. When this happens, the business has 30 days to notify HMRC of their liability to register for VAT.
How far can capital losses be carried forward to offset future gains?
Capital losses can be carried forward indefinitely to offset against future gains of the taxpayer who incurred the loss.
What can capital losses NOT be used for?
Capital losses cannot be used to offset income tax owed and cannot be transferred to a spouse to offset their gains.
