Business Must Remembers

Question 1

Who can request a poll vote of one vote per share?

Answer 1

A single shareholder with 10% or more of the shares or any two shareholders or a director or the chair of the meeting.

Question 2

Who cannot vote on a transaction they are interested in?

Answer 2

Directors cannot.

Shareholders can.

Question 3

What is the notice required for each type of meeting?

Answer 3

Reasonable notice for a board meeting.

14 clear days for a shareholder meeting.

Question 4

What is needed for a ‘general’ shareholder meeting to be held on short notice?

Answer 4

The agreement of shareholders holding at least 90% of the voting shares.

Question 5

What do you need to be a Person with Significant Control (PSC)?

Answer 5

MORE than 25% of shares. Exactly 25% is not enough.

Question 6

What requires a special resolution of the shareholders?

Answer 6

Disapplying pre-emption rights.

Changing the name of a company.

Amending articles.

Question 7

What is the lapse period of a written resolution?

Answer 7

28 regular days.

Question 8

What requires an ordinary resolution of the shareholders?

Answer 8

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.

Question 9

What is a substantial property transaction?

Answer 9

Any transaction with a director worth more than 100k or more than 5k and 10% of net assets.

Question 10

For emails and letters, when does the clock start for the 14 clear days after a general meeting is called?

Answer 10

48 hours after the notice is sent or posted.

Question 11

Do holidays and weekends count in 14 ‘clear’ days for the purpose of a general meeting?

Answer 11

Yes. All days count.

Question 12

When do pre-emption rights not exist?

Answer 12

When the consideration for the shares being allotted is something other than cash.

Question 13

When will a company classify as ‘connected to a director’?

Answer 13

When the director owns 20% of the shares of the company.

Question 14

Do shareholders at a meeting abstaining count in the % of the vote?

Answer 14

No.

Question 15

When is it ok if a director voted to ratify their breach?

Answer 15

If the vote would have passed regardless of their vote.

Question 16

Can someone continue to make a derivative claim after a breach of a director’s duty has been ratified?

Answer 16

No.

Question 17

When is it possible to be a PSC without owning MORE than 25% of voting shares.

Answer 17

When you can appoint or remove a majority of the board of directors.

Question 18

Who are ‘persons connected with directors’ for the purposes of SPTs?

Answer 18

Spouses or partners living with them.

Parents and children.

Question 19

Which type of transactions are directors obliged to declare their interest in?

Answer 19

Proposed AND existing ones.

Question 20

What does a company need to do upon receiving notice from shareholders that they intend to remove a director?

Answer 20

Immediately send a copy of the notice to the director.

Question 21

What is the process of buyback?

Answer 21

If buyback out of profits - ordinary resolution.

If buyback out of capital - ordinary resolution to buyback and special resolution to pay with capital.

Question 22

What is the de minimis exception?

Answer 22

The lower of 15k or 5% of share capital.

Question 23

How far back can you carry back losses?

Answer 23

One year.

This year’s losses can be reduced from last year’s trading profits OR capital gains.

Question 24

How far forward can you carry forward losses?

Answer 24

Indefinitely until loss is wiped out from future TRADING profits NOT capital gains.

Question 25

What is carry-across tax relief?

Answer 25

Trading losses can be deducted from this year’s Capital Gains.

Question 26

How are CGT and income intepreted for the sake of corporation tax?

Answer 26

They are the same thing.

Question 27

What is replacement of business assets relief for CGT?

Answer 27

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.

Question 28

Which companies need to register for VAT?

Answer 28

Taxable supply of goods - worth more than 85k in the preceding 12 months or expects do more than that in the next 30 days.

Question 29

What is the time window for an insolvency-related transaction at an undervalue?

Answer 29

Two years.

Question 30

When are floating charges created before insolvency void?

Answer 30

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.

Question 31

What is an individual voluntary agreement?

Answer 31

An agreement between an someone and his creditors outlining how debts will be paid. 75% of creditors must approve.

Question 32

What must a liquidator prove to render a floating charge void?

Answer 32

Prove that the company was insolvent at the time or became insolvent as a result of the charge.

Question 33

What is the time period for a preference?

Answer 33

Six months prior to insolvency for strangers.

Two years for persons connected.

Question 34

Does preference need to be given with intention to be set aside as a preference?

Answer 34

Yes.

Question 35

What is the order of distribution of assets upon insolvency?

Answer 35

Winding up costs then fixed charges then preferenced debts then floating charges then unsecured creditors then finally shareholders.

Question 36

Who are preferential creditors on insolvency?

Answer 36

Salaried employees.

HMRC with respect to VAT.

Question 37

How many designated members does an LLP need to have?

Answer 37

Two.

Question 38

How many days do you have to update a PSC register?

Answer 38

14.

Question 39

Can capital losses be offset against trading income? Can trading losses be offset against capital gains?

Answer 39

You can offset trading losses against capital gains but not the opposite.