Chapter 7- Companies- consequence of incorporation Flashcards
What is a veil of incorporation
separates a company’s legal identity and liability from its shareholders, treating them as distinct entities.
When is the veil of incorporation lifted
Courts disregard this and hold shareholder liable when used to conceal fraud or injustice
What are the rules for public companies
Capital over £50k and shares must be 25% paid up
What is an off the shelf company
one that is already formed
Who is a promoter
someone who takes necessary actions to establish a company and prepare it for business. They cannot make secret profit
When can secretary of state require change in company name
o Name is same as existing (12 month period)
o Name gives misleading indication of nature of activities
o Misleading info were given when applying for name that req approval (5 years)
What is the articles of association and what is required for an alteration?
Sets out manner which company governed and regulates relationship between shareholders and company
Special resolution and must be shared within 15 days
Who can a secretary be and who needs one?
Satisfy any:
Lawyer/Accountant
Secretary for at least 3 of past 5 years of PLC
Capable of discharging functions by virtue of another position
Public companies need one.
What can private companies do that public companies cannot?
Only private companies can purchase own shares, exclude pre-emption rights and write written resolutions
What statements must a company submit?
Memorandum, articles and statement of:
Capital, guarantee, proposed officer, compliance.
What is a confirmation statement? What is not included?
Statement that nothing has changed in 12 months or what changes are inc business activities, details of officers etc. Does not include details of resolutions
What accounting records should be kept
Detail of income/expenses
Assets and liabilities
inventory at EOY
Who should produce a director remuneration report
Quotes companies only
When does a company provide statement of guarentee
When company limited by guarantee
When must PLC file accounts and reports? When must a private?
6 months and 9 months
