Director, Shareholders and Company Decision Making

Question 1

Executive directors have what

Answer 1

service contract, day to day running of the company, employment contract

Question 2

Non-Executive directors have what

Answer 2

no service contract, no day to day running, no employment contract

Question 3

3 things needed to be a director:

Answer 3

• 16+
• Not bankrupt or mentally incapable
• Not disqualified
• AP01

Question 4

Fixed term contract 2+ years the TERM MUST BE APPROVED BY

Answer 4

Ordinary Resolution

Question 5

Procedure for ‘The Removal of a Company Director’ [count]

Answer 5

• Majority vote at board meeting

or

• Ordinary resolution at least 28 days notice of the meeting, no written resolution, director given copy of notice and can make representations for their case, get rid of Bushell v Faith clause. TM01

Question 6

After removing a director, what should be sent to the Companies house

Answer 6

JUST FORM TM01 within 14 days

Question 7

A director has a duty to avoid conflicts of interest. Does this duty apply even after the director ceases to be a director?

Answer 7

Yes if it is regarding any information/opportunities he became aware of when he was director.

Question 8

If a company wants something done as ‘soon as possible’ what is the best way to resolution?

Answer 8

a written resolution

Question 9

A director has a duty not to accept 3rd party benefits due to him being a director, or his conduct as a director - what are the exceptions?

Answer 9

Where there are provisions permitting it within the articles
Where the shareholders approve

Question 10

Director has an interest in a proposed transaction [s177] he must…

Answer 10

Declare the nature and extent
Failure - breach of duty
Cannot vote on the transaction or take part in quorum unless this has been dissaplied by an ordinary resolution

Question 11

When is an exception where a director can vote when they have an interest in a proposed transaction?

Answer 11

Where this has been dissaplied by an ordinary resolution
When it cannot be reasonably regarded as being a conflict of interest
If a specified exemption applies

Question 12

What if there is an equal number of votes for and against a resolution

Answer 12

The negative view will prevail unless the Chairman has a casting vote.
It counts as the chairman having one extra vote.

Question 13

How long are MINUTES kept after board meetings

Answer 13

10 years baby !

Question 14

3 things that make up a substantial property transaction:

Answer 14

• Director or a person connected to a director
• Acquires a NON CASH asset
• Over 100,000 or exceeds 10% of company net value and is over 5k

Question 15

Resolution for a SPT:

Answer 15

Ordinary

Question 16

Who is a NOT a connected person:

Answer 16

brothers, sisters, grandparents, grandchildren, uncles, aunts and nieces.

jazz, phoi, nanie, sienna

Question 17

Loan of more than 10,000 to director must be

Answer 17

approved by Ordinary Resolution

Question 18

When a director loses office, they can be entitled to a payment of £200, but anything over £200 must be approved by:

Answer 18

Ordinary Resolution

Question 19

What is a shareholders liability limited to

Answer 19

Paying the agreed price for his shares

Question 20

When is a derivitive claim bought?

Answer 20

By a shareholder when there has been negligence, omission against the COMPANY.
2 hearings, firstly a preliminary one then a full hearing.

o Things that can stop the claim: company approved directors actions, shareholder not acting in best interests of the company, another lawsuit already happening
o Shareholder pays costs if courts reject
o Company pays costs if theirs lose

Question 21

When is an unfair prujudice claim bought?

Answer 21

A shareholder feels the companies affairs are carried out in a manner which is prejudicial.

o Minority shareholders can apply if they feel unfairly prejudiced for being small
o Must cause harm to one or more shareholders and be unfair
o Remedies to pay the shares back, restrictions on the companies, high threshold

Question 22

Pass what resolution to authorise a ‘buyback’ contract:

Answer 22

Ordinary

Question 23

Demand a poll vote:

Answer 23

10%

Question 24

Short notice of meetings

Answer 24

90% priv
95% pub

Question 25

Block a special res

Answer 25

25%

Question 26

Circulate a written res

Answer 26

5%

Question 27

2 ways a shareholder's meeting can be called

Answer 27

Directors call a general meeting or Members with 5% of the paid up share capital CALL a general meeting and then directors have to within 21 days.

Question 28

Notice of a board meeting

Answer 28

To every director reasonable notice of the time, date and subject matter and where the meeting is. Need not be in writing.

Question 29

Notice of a general meeting

Answer 29

14 Clear days to every shareholder of the time, date, place and nature of business. State the text of the resolution. Right to proxy.

Question 30

Notice of general meeting by email

Answer 30

Add 48 hours onto 14 days

Question 31

Time limit for sending back a written resolution

Answer 31

Within 28 days of the circulation date

Question 32

What resolution should be applied to dissaply premption rights

Answer 32

Special resolution

Question 33

Signing a contract formalities:

Answer 33

Signed by a company or a person acting under its authority express or implied

Question 34

Regarding formalities for appointing and removing a director, what is the only thing that is needed

Answer 34

Legit only the notice of the appointment of director

Question 35

Where are stock transfer forms registered to

Answer 35

the registar of companies

Question 36

Resolution to change the companies name

Answer 36

Special resolution Sent to Registrar Immediately takes effect

Question 37

Amount which falls under the exception for expenditure on company buisness for the purpose of enabling a director to properly perform his duties

Answer 37

under 50,000

Question 38

Which resolution needs to be passed to ratify a breach

Answer 38

Ordinary

Question 39

If you enter into a substantial property agreement without the correct resolution what can happen?

Answer 39

Be fined

Question 40

Do shareholders need to account for their personal interests in a general meeting vote

Answer 40

No

Question 41

What can be quite difficult as a minority shareholder, to bring an unfair prejudice claim?

Answer 41

Finding enough evidence

Question 42

Special resolution must be filed within how many days?

Answer 42

15 days

Question 43

Can written resolutions be used to remove a director ?

Answer 43

NO

Question 44

De fact director

Answer 44

Acts as if appointed but not

Question 45

Shadow director

Answer 45

Directors of company accustoned to act in accordance with their instructions but not appointed

Question 46

Can be disqualified within ...

Answer 46

2-15 years

Question 47

Must file accounts every year at Companies House except small companies. How long do Private and Public have to...

Answer 47

Priv - 9 months from end of accounting ref period Pub - 6 months Newly incorporated - 3 months

Question 48

Charge,s, what take priority?

Answer 48

fixed charges take priority over floating. If two fixed/floating on same asset, priority is awarded on date of creation not registration. Floating can have a negative pledge to alter order of priority (prohibits C creating later charges with priority over floating without charger’s permission).

Question 49

Who are dividends reccomend by and what res?

Answer 49

Ordinary resolution Reccomended by directors

Question 50

What is a poll vote

Answer 50

show of hands only those whose hands are up count, if people abstain then they dont count

Question 51

For service contracts of a director, if it states 'a 5 year contract with 6 months notice' what is needed to pass it

Answer 51

No shareholder approval - just a board meeting. As the guaranteed term is 6 months which is under 2 years.

Question 52

Does The duty to avoid conflicts of interest does apply to conflicts which arise in respect of transactions with the company

Answer 52

No .The conflict here is in respect of a transaction with the company (the payment of a percentage of profits by the company to the restaurant owner). Does not apply to wife owning a restaurant and receiving money from the company.

Question 53

Does a conflict of interest apply to limited corporate hospitality

Answer 53

No

Question 54

For a derivative claim - when will the courts permission not be granted

Answer 54

If it can be easily ratified by a shareholders resolution

Question 55

An unfair prejudice claim is based on a what test?

Answer 55

objective