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BUSINESS LAW AND PRACT > COMPANY DECISION MAKING > Flashcards

COMPANY DECISION MAKING Flashcards

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1
Q

Can members be directors in big companies?

A

No. Only smaller companies

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2
Q

How long can a directors service contract be?

A

2 years.

Can be changed by shareholders approval

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3
Q

What is a board meeting?

A

A meeting for the directors of a company

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4
Q

What is a general meeting?

A

A meeting for the shareholders of a company
- for company matters
- make decisions that require shareholders approval

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5
Q

Where can you find a list of the directors powers?

A

The model articles (articles of association if amended)

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6
Q

How long must companies keep written records of every decision made by directors?

A

10 years

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7
Q

Can directors make decisions without formalities?

A

Yes.
- so long as the decision is unanimous
- (not good practice)

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8
Q

How can a director call a board meeting?

A

Giving reasonable notice to board members
- date
- time
- place
- location

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9
Q

Do directors have to give written notice for a board meeting to be held?

A

No
- can be oral but, must be REASONABLE

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10
Q

What does it mean for a board meeting to be quorate?

A

When you have a
- minimum number of attendees
- in accordance with the Articles of Association

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11
Q

What is the quorum number for a board meeting?

A

2
- unless Articles of Association say different

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12
Q

Do board meetings have to be held in one room?

A

No.
You can still be counted in quorate:

  • they can be over the phone
  • Video call
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13
Q

What 11 things can shareholders (members) pass resolutions to do?

A
  1. Alter articles
  2. Change company name
  3. Approve reg status of company
  4. Remove directors
  5. Appoint directors
  6. Approve transactions involving directors
  7. Appoint new share issues
  8. Approve buybacks of shares
  9. Agree to wind up company
  10. Direct directors to refrain from making certain decisions
  11. Act where directors are unable (eg. Board deadlock)
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14
Q

What 3 ways can members pass resolutions?

A
  1. At general meeting: either ordinary or special
  2. Written res : ordinary or special
  3. Unanimous consent
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15
Q

What 4 types of transactions require shareholder approval?

A
  1. Director service contracts over 2 years
  2. Substantial property transactions
  3. Loans, quasi loans, credit transactions
  4. Compensation for directors loss of office
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16
Q

What is an ordinary resolution?

A
  • most common type of shareholder res
  • gives shareholder approval for decisions taken by company
  • too important for the board to make independently

(Passed by simple majority)
51% members in favour

17
Q

What is a special resolution?

A
  • req for major company decisions
  • only used where expressly required under CA 2006 / articles

75% shareholder approval

18
Q

How can shareholders force a general meeting to be held?

A
  • 14 clear days notice must be given
  • must provide agenda:
  • time date, date, place
  • notice to all company members
  • exact wording of SR
19
Q

What are the minimum execution formalities in order for a loan of £50,000 from the bank to be binding on a company?

A

Loan agreement must be
- signed by
- the company
- through a person acting under its authority, express or implied

20
Q

What is the quickest way to appoint a new director?

A

By the board
- ordinary resolution

Why?

  • because shareholders would need to call a general meeting or circulate a written res first
21
Q

Is there a limit on the number of times an accounting period can be changed?

A

No.
- can be decided at board meeting
(- extension must not result in a new period exceeding 18 months)

22
Q

Who has the casting vote in a board meeting?

A

The chair

23
Q

What type of resolution will be passed for a director to receive a service contract of over 2 years?

A

Ordinary resolution
- by shareholders

24
Q

What are the requirements of a substantial property transaction? (SPT)

A

Something is a substantial property transaction if
-it exceeds £100,000 OR
- exceeds 10% of company’s asset value and is more than £5000

25
Q

Once a general meeting is held to pass a resolution to remove a director, what documents must be sent to companies house?

A

Form TM01 (termination of appointment of director)
- within 14 days

26
Q

A general meeting is held to terminate a director, where must the meeting minutes and resolution be filed?

A

At the companies reg office or is single alternative inspection location ( SAIL)

BUSINESS LAW AND PRACT (2 decks)

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