Chapter 13 Company Formation Flashcards
What is the primary remedy of the company when promoters make wrongful profit or do not make proper disclosure of legitimate profit?
The company can rescind the contract and recover its money
Can promoters recover preincorporation expenses from the company?
No(also preincorporation contracts can’t be ratified by the company). The solution is Novation of the contract
When is a company formed and registeted under the Companies act?
When it is issued with a certificate of incorporation by the registrar.
What are the advantages of buying an off the shelf company?
1)Time and money saved.2)Less documentation required
What are the requirements for a private company to trade as public company?
To have a minimum capital of $50000 and have a trading certificate.
What are the procedures for reregistration as a private or public company?
1)Special resolution 2)Application 3)Approval 4)Compulsory reregistration
Is it compulsory for a private company to reregister as a public company when its share capital rises over £50000?
No, there is no compulsion
What is the requirement for a limited company to be unlimited?
Approval of all the members of the company and only permitted if the company has not previously re registered as a limited company
What is needed for a public company to trade or borrow?
Trading certificate
What are the important procedures for a private company to follow after registration?
1)First meeting2)Return or allotments3)notice to registrar of accounting reference date
What are the basic sources of information on UK companies?
1) Companies House
2) Registered office(or SAIL)
3) London gazette
4) Company’s letterhead
People with significant control own how many percent of company’s shares?
25% or more
Within how many days changes in PSC(people with significant control) have to be notified to the registrar?
Within 14 days
What is the purpose of confirmation statement?
To keep the registrar informed about certain changes to the company
How many days before meeting annual accounts should be sent to the members and debentureholders in case of public companies?
At least 21 days before meeting
