Companies Flashcards
Date company comes into existence
Date of the certificate of incorporation
Who needs to approve short notice period for shareholders meeting?
If a majority in the number of shareholders who hold at least 90% of the shares agree, the notice period may be shortened from the statutory notice period.
How do percentage preference shares work? How about cumulative % shares?
If a company has preference shares, the preference must be paid before any dividend may be distributed to the ordinary shareholders.
IF cumulative preference shares - then preference adds up each year even when there is no profit available for the purpose. Paid out next time profits are available.
Eg the company has 2,000 £100 shares with a 5% preference.
That means that each of the 2,000 preference shares is entitled to receive 5% of £100 before the company may make a distribution to the ordinary shareholders. So, the first £10,000 (£5 x 2,000 shares) must be distributed to the preference share owners.
The rest is then distributed to the ordinary shareholders.
Resolution to change name of company
Special resolution - at least 75%
Minimum roles for private limited company
1 director
1 shareholder
no need for a secretary
Procedure for appointing new director (Model Articles)
In a company which has the Model Articles, a director can be appointed by either the board or by an ordinary resolution of the members.
Service contracts are awarded by the board; however, if the term of a service contract is longer than two years, it must first be approved by ordinary resolution of the members.
FILE - Appointment of Director Form at CH within 14 days
Notice period for special resolution
21 days
Registration of Company at Companies House
(11 reqs)
- memorandum of association - contains a statement of the initial subscribers’ intent to form a company and that they agree to become members.
- proposed name of the company,
- the location of the registered office,
- details of the company’s business activity and SIC (Standard Industrial Classification) code,
- whether the company will be limited by shares or guarantee,
- whether the company is private or public,
- a statement of share capital and initial shareholdings,
- a statement of the proposed directors (and company secretary, if applicable),
- details of persons with significant control (PSCs),
- a statement of compliance with the terms of the Companies Act 2006, and
- payment of the relevant fee.
What is the process required for amending Articles of Association
- Only by special resolution (75% or more votes in favour).
- Only if amendment is bona fide in the interests of the company as a whole
What 3 things must be filed at CH to register a new charge? What is the deadline
Following the grant of a charge, the company must file
(1) the fee,
(2) a copy of the charge, and
(3) the requisite form
at Companies House within 21 days.
What must be filed a CH if directors want to allot ordinary shares to new shareholder?
(1) The Return of Allotment of Shares form;
(2) Any necessary shareholders’ resolutions.
**When a company issues additional ordinary shares for cash after the initial share allotment, the existing shareholders have a pre-emption right to purchase a proportional amount of the new shares to allow them to maintain their current ownership interest in the company. Where the shares are issued to a new investor, the members have to pass a special resolution to disapply the statutory pre-emption rights. That resolution has to be filed.
Single class of shares directors can allot without approval from the shareholders. In other situations, will need approval by ordinary resolution
What is the procedure for entering into a loan agreement and granting a charge?
Only board resolution is required - no shareholder resolution necessary.
What are the filing requirements for:
the appointment of a new director
(internal + external)
Internal: Update Register of Directors & Directors’ Residential Addresses
External: File Appointment of Director Form at CH within 14 days
What must be filed at Companies House following a change of address?
The Change of Registered Address form only.
When will a floating charge be automatically void?
A floating charge is automatically void
IF
it was created for no consideration within 12 months ending with the onset of insolvency
OR within 2 years if to a connected person
AND
at a time the company was insolvent or became insolvent as a result.
Filing requirements: Change of Address of Registered Office
Internal: Change company documentation/letterhead/website etc
External: File Change of Registered Office Address form at Companies House
Filing requirements: Change of Accounting Reference Date
External: File a Change of Accounting Reference Date form at Companies House
When are annual general meetings required, adn what is the relevant notice period?
Annual Meeting of a Public Limited Company Public limited companies (but not private limited companies) are required to hold an annual general meeting.
An annual general meeting requires 21 clear days’ notice rather than the 14 clear days’ notice required for other general meetings.
What is the minimum shareholding for public limited companies?
Minimum nominal value of £50,000
What are minimum roles for a public limited company?
- two directors
- one shareholder
- one company secretary
What are the accounts and auditing requirements for public and private limited companies?
Private - Accounts must be filed w/in 9 months of accounting reference date
Public - Accounts must be filed w/in 6 months of the accounting reference date and MUST be audited
What’s included in the accounts:
- Balance sheet
- Statement of profits and losses
- Must give “true and fair view” of the financial year
What is the difference between ordinary shares and preference shares?
ORDINARY
- Paid AFTER preference;
- Comes with VOTING rights;
- Surplus paid AFTER preference at winding up
PREFERENCE
- Paid BEFORE preferece;
- Usually NO VOTING;
- Surplus capital paid BEFORE ordinary at winding up
Who can decide to circulate a written resolution?
Board of directors; or
Shareholders w 5% of voting rights
Who can call a general meeting?
Board of directors; OR
Shareholders with 5% paid up voting capital - and Board must subsequently call meeting within 21 days to be held within 28 days.
