Decisions

Question 1

Loan

Answer 1

Company may not make loan to director of company or holding company unless approved by OR
For a resolution to be approved, there must be a memorandum setting out:

• Nature of the transaction;
• Amount of the loan and its purpose; and
• Company’s liability under any transaction connected with the loan.
• No approval needed from members of holding company if it is wholly owned – s.197 (5) CA

Question 2

SPT

Answer 2

Company needs OR to acquire substantial non-cash asset or from a director or connected person

• Substantial if:
  exceeds 10% of company’s net asset value and more than £5k, or
  exceeds £100k.
• Non-cash asset – property such as land, building, equipment, vehicles.
• Exception for transactions with members or wholly-owned companies

Question 3

Long term service contract 2y+

Answer 3

D must obtain members consent by OR if entering into a director’s contract of employment for a guaranteed term longer than 2 years

2y service contract = BR

Either. If passing as a board resolution it will be passed at a board meeting. If passing as an OR at a GM. It will be quicker to pass at a board meeting as you only need to give reasonable notice and not wait 14 clear days for the GM

Question 4

Change of company name

Answer 4

SR

Question 5

Allot shares

Answer 5

OR to give authority to D

Question 6

Disapplication of pre-emption rights

Answer 6

SR