Company Decision Making

Question 1

A private limited company with unamended MA changes it’s registered name. What documents must be filed with the Registrar of Companies?

Answer 1

The special resolution to change the company’s name
Notice of the change of name - form NM01
Change of name fee

Question 2

3 friends have set up a private limited company. The friends are the only directors and shareholders of the company. The company has unamended MQ.

What is the correct procedure on notice for holding a GM and BM?

Answer 2

For a GM - 14 clear days
For a BM - reasonable notice

Question 3

3 friends have set up a private limited company. The friends are the only directors and shareholders of the company. The company has unamended MQ.

What is the correct procedure on voting as directors?

Answer 3

Directors can make decisions by unanimous agreement without calling a BM.

At BMs - directors’ decisions are taken by simple majority

Question 4

3 friends have set up a private limited company. The friends are the only directors and shareholders of the company. The company has unamended MQ.

What is the correct procedure on requesting a poll vote?

Answer 4

A poll vote can be requested by two shareholders with 5% shareholding.

A single shareholder needs 10% of the voting shares to request a poll vote.

Question 5

A private limited company with unamended MA appoints a new director.

What documents must be filed with CH?

Answer 5

The notice of the appointment of the director - form AP01 or AP02

Admin - update registered or directors and register of directors’ residential addresses

BM minutes or BM and GM minutes

Question 6

What are shareholders’ rights in relation to GMs?

Answer 6

Shareholders who either individually or together hold 5% of paid up voting shares in the company may request the company to CALL a GM.

Question 7

Voting requirements for changing a private company’s name?

Answer 7

Special resolution. A special resolution requires 75% of the shareholders to agree.

Question 8

What are the notice requirements when the Board convenes a general meeting? E.g. directors hand notice of GM to all of the shareholders.

Answer 8

14 clear days’ notice (when counting days for these purposes, whether it is a business day or not is irrelevant)

Question 9

Definition of a substantial non-cash asset?

Answer 9

Any property other than cash

Substantial means:
-an asset worth more than 100k
-an asset worth more than 5k but not more than 100k is a substantial asset if worth more than 10% of the company’s NAV

(An asset worth 5k or less is NOT a substantial asset)

Question 10

Authority required for a substantial property transaction?

Answer 10

Shareholder approval by ordinary resolution.

Question 11

SPTs: Definition of a connected person?

Answer 11

Companies in which the director (and others connected to them) hold 20% or more of the shares.
Family - spouse, civil partner, partner, children, stepchildren, children of partners
NOT - brothers, sisters, grandparents, grandchildren, uncles, aunts, nephews, nieces

Question 12

Shareholder shareholding requirements for holding a GM on short notice:

Answer 12

A majority in number of shareholders who between them hold 90% or more of the shares.

Question 13

Formalities required for company contracts:

Answer 13

s43 CA 2006 - a contract may be made:
By a company, by writing under its common seal, or
On behalf of a company, by a person acting under its authority, express or implied.

Question 14

Shareholder approval is required for loans to directors but there are a number of exceptions:

Answer 14

Loans of up to 10k and credit transactions of up to 15k do NOT require shareholder approval
Expenditure on company business
Loans for defending proceedings brought against a director
Loans for defending regulatory actions/investigations

Question 15

When will the change to a company’s registered office address take effect?

Answer 15

On the date when the change is registered by the Registrar of Companies.

Question 16

What is the full notice period for a GM held by a private company?

Answer 16

14 clear days’ notice is required. If the notice is emailed/posted this adds on at least 48 hours.

Question 17

People with Significant Control (‘PSC register’):

Answer 17

Only those with OVER 25% of the company’s shares need to be on the PSC register. Be careful with this - not those with 25% of shares but those with OVER 25% of shares.

Question 18

Requirements for calling a GM to pass an ordinary resolution

Answer 18

The notice must be sent to all shareholders and directors.
Notice can be sent in hard copy or in electronic form or on a website (or a combination of these).
The notice need only state the general nature of the business to be dealt with (unlike a meeting for a special resolution, which requires the exact text of the proposed resolution).
The notice must include a statement of the right of a member to appoint a proxy.

Question 19

Can written statements be included in a poll vote?

Answer 19

No, the shares of a person who makes a written statement confirming their support for a resolution will NOT be included in a poll vote.

Question 20

A company has passed a resolution removing one of its directors. What documents must be filed at CH?

Answer 20

Form TM01 informing CH of the termination of an appointment of a director.

Must be sent within 14 days of the termination.

Question 21

Formalities for removing a director:

Answer 21

A company (shareholders) may remove a director by ordinary resolution.

Special notice (28 days) is required for the meeting at which the removal resolution will be proposed.

Question 22

What is the procedure for removal of a company’s auditors?

Answer 22

An ordinary resolution of the shareholders is required to remove a company’s auditors.

Question 23

What two decisions can’t be passed as written resolutions?

Answer 23

Removal of a director
Removal of an auditor

Question 24

Written ordinary resolution:

Answer 24

Passed by a simple majority of the total voting rights of eligible members.

Question 25

Written special resolution:

Answer 25

Must state that it is a special resolution. Passed by a majority of members representing not less than 75% of the total voting rights of eligible members.

Question 26

When does a written resolution lapse?

Answer 26

28 days after the circulation date

Question 27

What resolution is required to approve a service contract for a guaranteed term of more than 2 years?

Answer 27

An ordinary resolution of the shareholders.

Question 28

What % of shareholders are required to circulate a written resolution?

Answer 28

5% or more

Question 29

What is the quickest method of appointing a director?

Answer 29

Directors can be appointed by the board or by ordinary resolution of the shareholders.

The quickest method of appointment is by board resolution because it means that the board does not have to call a GM or circulate a WR to appoint the new director.