Business Must Remembers Flashcards
Who can request a poll vote of one vote per share?
A single shareholder with 10% or more of the shares or any two shareholders or a director or the chair of the meeting.
Who cannot vote on a transaction they are interested in?
Directors cannot.
Shareholders can.
What is the notice required for each type of meeting?
Reasonable notice for a board meeting.
14 clear days for a shareholder meeting.
What is needed for a ‘general’ shareholder meeting to be held on short notice?
The agreement of shareholders holding at least 90% of the voting shares.
What do you need to be a Person with Significant Control (PSC)?
MORE than 25% of shares. Exactly 25% is not enough.
What requires a special resolution of the shareholders?
Disapplying pre-emption rights.
Changing the name of a company.
Amending articles.
What is the lapse period of a written resolution?
28 regular days.
What requires an ordinary resolution of the shareholders?
Removing auditors.
Removing a director (with 28 days of notice)
Giving a director a long term service contract which is GUARANTEED to last more than two years.
A substantial property transaction with a director or a person connected to them.
Loaning more than 10k to a director personally.
Ratifying a director’s breach.
Giving directors authority to allot new type of shares.
What is a substantial property transaction?
Any transaction with a director worth more than 100k or more than 5k and 10% of net assets.
For emails and letters, when does the clock start for the 14 clear days after a general meeting is called?
48 hours after the notice is sent or posted.
Do holidays and weekends count in 14 ‘clear’ days for the purpose of a general meeting?
Yes. All days count.
When do pre-emption rights not exist?
When the consideration for the shares being allotted is something other than cash.
When will a company classify as ‘connected to a director’?
When the director owns 20% of the shares of the company.
Do shareholders at a meeting abstaining count in the % of the vote?
No.
When is it ok if a director voted to ratify their breach?
If the vote would have passed regardless of their vote.
Can someone continue to make a derivative claim after a breach of a director’s duty has been ratified?
No.
When is it possible to be a PSC without owning MORE than 25% of voting shares.
When you can appoint or remove a majority of the board of directors.
Who are ‘persons connected with directors’ for the purposes of SPTs?
Spouses or partners living with them.
Parents and children.
Which type of transactions are directors obliged to declare their interest in?
Proposed AND existing ones.
What does a company need to do upon receiving notice from shareholders that they intend to remove a director?
Immediately send a copy of the notice to the director.
What is the process of buyback?
If buyback out of profits - ordinary resolution.
If buyback out of capital - ordinary resolution to buyback and special resolution to pay with capital.
What is the de minimis exception?
The lower of 15k or 5% of share capital.
How far back can you carry back losses?
One year.
This year’s losses can be reduced from last year’s trading profits OR capital gains.
How far forward can you carry forward losses?
Indefinitely until loss is wiped out from future TRADING profits NOT capital gains.
What is carry-across tax relief?
Trading losses can be deducted from this year’s Capital Gains.
How are CGT and income intepreted for the sake of corporation tax?
They are the same thing.
What is replacement of business assets relief for CGT?
Only for physical property and goodwill.
Example: if you make a capital gain on a business asset of 80k, then replace the property by buying something for 200k, the new purchase price for the new property is 200 minus 80k.
Which companies need to register for VAT?
Taxable supply of goods - worth more than 85k in the preceding 12 months or expects do more than that in the next 30 days.
What is the time window for an insolvency-related transaction at an undervalue?
Two years.
When are floating charges created before insolvency void?
When they are given in exchange for no consideration, AND:
Within twelve months of insolvency if created for strangers.
Within twenty-four months of insolvency if created for persons connected with the company.
What is an individual voluntary agreement?
An agreement between an someone and his creditors outlining how debts will be paid. 75% of creditors must approve.
What must a liquidator prove to render a floating charge void?
Prove that the company was insolvent at the time or became insolvent as a result of the charge.
What is the time period for a preference?
Six months prior to insolvency for strangers.
Two years for persons connected.
Does preference need to be given with intention to be set aside as a preference?
Yes.
What is the order of distribution of assets upon insolvency?
Winding up costs then fixed charges then preferenced debts then floating charges then unsecured creditors then finally shareholders.
Who are preferential creditors on insolvency?
Salaried employees.
HMRC with respect to VAT.
How many designated members does an LLP need to have?
Two.
How many days do you have to update a PSC register?
14.
Can capital losses be offset against trading income? Can trading losses be offset against capital gains?
You can offset trading losses against capital gains but not the opposite.
