Chapter 3: The Members Flashcards
What two conditions must be met for a person to become a member?
They must agree to do so.
Their name must be entered into the register of members.
How many members must a company have?
At least 1
Who is entitled to become a member of a company?
Any person or legal entity.
Why should a partnership, club or association not be accepted as a member?
Because it is not a legal entity.
When were “share warrants to bearer” abolished?
May 2015
Why share warrants to bearer abolished?
- companies like to know who holds shares
- transfer by delivery is not very secure against theft
When does a person cease to be a member?
When they cease to be registered in the register of members.
When would a member be removed from the register of members?
- voluntary share transfer (i.e. selling or giving)
- transmission of shares on death/bankruptcy/mental health
- compulsory transfer due to the articles
Which model article for a public company provides for compulsory transfer of shares?
Article 60 - if a member’s shares are not fully paid up.
Why should companies seek to understand the policies of their major shareholders?
In order to gain insight into how they are likely to vote at general meeting.
What are the 8 main principles of the stewardship code?
1 Responsibility to make considered use of votes
2 Reasons for voting against a resolution or withholding a vote should be made know to the board ahead of time
3 Ensure voting intentions are being translated into practice.
4 Eliminate unnecessary deviation in the ways they apply their criteria to the companies they invest in.
5 Be ready to enter into dialogue with companies based on the mutual understanding of objectives
6 Take an interest in the board of directors
7 Make information on company votes available to clients
8 Attend AGMs where appropriate.
What is a nominee shareholder?
Someone who is registered in the register of members of behalf of the beneficiary owner.
When must the true beneficiary of shares be revealed? (2 scenarios)
1 On request of the company (s 793 CA)
2 Under the PSC regime.
What is the usual limit on the number of joint holders of a single share?
4
Who is the “senior joint holder” when shares are jointly held?
The person with their name entered first on the list of joint holders.