Company decision making

Question 1

A private limited company looks to change it’s registered name. What must be filed with registrar of of companies?

Answer 1

A prescribed form, the shareholders’ special resolution to change the name and the prescribed fee.

Question 2

What must a company do to amend its articles of association?

Answer 2

Shareholders must pass a special resolution which must be sent to registrar of companies. Changes will be effective immediately.

Question 3

What needs to be filed with the Registrar of Companies following the appointment of the new director and what is the relevant deadline

Answer 3

A copy of the relevant form within 14 days of the appointment.

Question 4

What must a director do when they call a board meeting ?

Answer 4

They must give notice to the other directors

Question 5

Who must be present at board meetings ?

Answer 5

A quorum of two directors

Question 6

When may a director not count in a quorum or vote on decision ?

Answer 6

If decision is concerned with a transaction or arrangement with the company which the director is interested.

Question 7

How are board resolutions passed ?

Answer 7

By simple majority (over half)

Question 8

Can shareholders vote on decisions they have an interest in ?

Answer 8

Yes shareholders often have an interest.

Question 9

What can directors use unanimous decisions for ?

Answer 9

Can use unanimous decisions to pass board resolutions without a meeting in form of written resolution or any method to show eligible directors have common view

Question 10

What is required for an ordinary resolution to be passed at shareholders general meeting ?

Answer 10

Over half votes cast in favour of resolution

Question 11

What is required for a special resolution to be passed in shareholders general meeting?

Answer 11

75% or more votes must be in favour

Question 12

What is the minimum notice required for a general meeting ?

Answer 12

14 clear days

Question 13

What is the quorum number required for a general meeting ?

Answer 13

A quorum or two

Question 14

What is a poll vote ?

Answer 14

Vote based on one vote for each share that shareholders own instead of one vote per person.

Question 15

Who can demand a poll vote ?

Answer 15

• The chair of the meeting,
• The directors
• Two or more persons having the right to vote
• A person representing 10% or more of total voting rights

Question 16

What is required for a general meeting to be held on short notice ?

Answer 16

• A majority in number of company shareholders.
• who between them hold 90% or more of company voting shares (95% for public companies)

Question 17

What are written resolutions and how are they passed ?

Answer 17

If not time to attend meeting hand out or post written resolution + Passed by majority of eligible members signifying agreement to the resolution

Question 18

What is required for a shareholder to require company to circulate a written resolution ?

Answer 18

A shareholder must have 5% or more of the voting rights in the company

Question 19

Can shareholders require the directors to hold a general meeting ?

Answer 19

Yes - must state the general nature of the business to be discussed.

Must be called within 21 days of request and must be held no later then 28 days after notice of meeting.

Question 20

How long are companies required to keep board minutes and minutes of general meetings along with outcome of written resolutions

Answer 20

10 years

Question 21

What are ordinary shares ?

Answer 21

Give the right to attend meetings and vote

Question 22

What are preference shares ?

Answer 22

Enhanced right such as guaranteed dividend payment

Question 23

What is a substantial property transaction ?

Answer 23

Where director or person connected buys from or sells to the company, a non- cash asset of substantial value (100k or more then £5k and 10% of asset value).

Question 24

Who needs to be on PSC register for company ?

Answer 24

Anyones with more then 25% interest

Question 25

What is required to remove an auditor ?

Answer 25

Requires an ordinary resolution

Question 26

Can companies change accounting reference periods ?

Answer 26

Yes there is no limit on number of times it can be changed - but it is not effective if notice is given less then 5 years after the end of an earlier accounting reference period

Question 27

If there is a deadlock what will be favoured ?

Answer 27

The negative vote