Company Formation (SGSs 1,4,6) Flashcards
Private company must end with ‘limited’ or ‘ltd’
s.59(1) CA 2006
Public companies must end with ‘public limited company’ or ‘plc’
s.58(1) CA 2006
Minimum number of shareholders is 1 (for both public and private companies)
ss. 7(1) and 8(1) CA 2006
Company secretary required for public company
s.271 CA 2006
Company secretary not required for private company
s.270(1) CA 2006
Certificate required for private company before commencement of trading
Certificate of incorporation (s.15(4) CA 2006)
Can commence as soon as incorporated
Certificate required for public company before commencement of trading
Certificate of incorporation (s.15(4) CA 2006)
Cannot commence until trading certificate issued by Registrar (s.761(1)(2) CA 2006)
Minimum share capital required for private company
Must have at least one share (s. 8(1)(b) CA 2006)
Minimum share capital required for public company
Minimum of £50,000 (s.763(1)(a) CA 2006) or prescribed euro equivalent (s.763(1)(b) CA 2006)
Private companies are prohibited from offering shares to the public
s.755(1)(a) CA 2006
Methods of payment allowed for share capital for private companies
No restriction on method of payment (s.582(1)(2) CA 2006)
Method of payment allowed for share capital for public company
Payment must be in cash or where consideration has been independently valued (s.593(1) CA 2006)
Minimum amount payable for share capital of private company
Shares can be issued without immediate payment
Minimum amount payable for share capital of public company
25% of nominal value must be paid on allotment plus the whole of any premium (s.586(1) CA 2006)
A company cannot enter into contract pre-incorporation as it is not a legal identity yet
s.16(3) CA 2006
Does concept of agency apply before a company is incorporated?
No, as they are not a legal identity yet
If a contract is agreed with a third party on behalf of a company that is not yet formed, contract is carried out on behalf of the person dealing in negotiations and they are personally liable
s.51(1) CA 2006
A change of a company’s name has effect from the date on which the new certificate of incorporation is issued
s.81(1) CA 2006
Relevant legislations regarding choice of company name
ss.53-59 and 66 CA 2006
A company can change its name by SR
s. 77(1)(a) CA 2006
Once a company is incorporated, they become a separate legal person, capable of entering into contracts and being sued in its own right
Salomon v Salomon
Post-registration, the directors are required to appoint auditors unless they reasonably resolve that audited accounts are unlikely to be required
s.485(1) CA 2006
The directors are able to change the company’s accounting reference date
s.392(1) CA 2006
Termination of a director
s.18 CA 2006
The Model Articles will apply automatically unless the company expressly includes amended articles
s.20 CA 2006
Articles can only be amended by SR
s.21(1) CA 2006
Where the MA are amended using s.21, a copy of the amended articles must be filed with CH within 15 days
s.26 CA 2006
Legality Test key questions to ask
Does the CA refer specifically to the issue at hand? Do they conflict?
If so, CA takes precedence.
Articles cannot exclude the written resolution procedure
s.300 CA 2006
A Director cannot entrench their position to prevent them being removed by an OR
s.168 CA 2006
Commerciality Test key questions to ask
Does the proposed article suit the company - will it be commercially effective?
Minimum number of directors for a private company
1 - s.154 CA 2006
Minimum number of directors for a public company
2 - s.154(2) CA 2006
Limited company to have a registered office
s.86 CA 2006
Change of Company name requires a SR
s.77(1) CA 2006
Director can be appointed by OR of the members or by board resolution
MA 17(1)
Definition of subsidiaries
s.1159(2) CA 2006
Receive and approve transfer of subscriber shares
s.771 CA 2006
MA 26
Instruct secretary to enter new SH names on register
s.112(2) and s.113(2) CA 2006
