Drafting - Business Flashcards
Board Meeting Minutes - who will be ‘present’?
Anyone entitled to take part in the meeting
Board Meeting Minutes - who will be ‘in attendance’?
Anyone who is at the meeting but not taking party
- someone who is to be appointed as a director will not be ‘present’ until their appointment has taken effect.
Board Meetings - why are declarations of interest needed?
Required under Companies Act 2006.
Good practice for directors to declare their interest even if the Act provides for an exception because the other directors are aware of that interest, or ought reasonably to be aware of it.
The company’s articles may also require directors to declare an interest (although the Model Articles do not).
What is the checklist of things to consider when looking at directors’ board meetings?
- Notice
- Quorum
- Voting
- Declarations of personal interest (and impact upon quorum/voting)
- Directors’ resolution
- Proposed transactions would promote the business of the company
- Administration required following the meeting
What is the checklist for things to consider when dealing with shareholders’ general meetings?
- Notice/consent to short notice,
- Quorum,
- Resolutions,
- Voting
What is the checklist of things to consider when dealing with shareholders’ written resolutions?
- Circulation,
- Contents - ordinary and/or special resolution(s)
- Voting
- Lapse date
When will special procedures be required if awarding a service contract to a director?
If the service contract is for more than 2 years
What meetings and resolutions are required if awarding a service contract to a director for more than 2 years?
- BM 1 and resolution to approve service contract & give instructions regarding memorandum of contract,
- GM/written resolution and ordinary resolution to approve the term of service contract,
- BM 2 (or reconvene) and resolve to enter the contract + authorise director(s) to sign contract on behalf of the company
What administration/filing is needed for a service contract to a director for over 2 years?
- Memorandum of contract must be at registered office for 15 days prior to GM (or circulated with the written resolution),
- Copy of executed contract must be kept at registered office until 12 months after its expiry.
What is the consequence of failing to obtain shareholders’ approval when entering a service contract with a director for more than 2 years?
The term of the service contract can be replaced with reasonable notice required to remove a director.
When are special procedures required for property transactions?
If the company acquires from or transfers to a director or connected person a non-cash asset worth:
i. more than £5,000 and also 10% or more of the net asset value of the company, or
ii. more than £100,000
What meetings and resolutions are required for a substantial property transaction?
- BM 1 and resolution to approve contract,
- GM/written resolution and ordinary resolution to approve contract,
- BM 2 and resolution to enter into contract & authorise director(s) to sign contract on behalf of the company
What is the consequence of failing to obtain shareholders’ approval before entering a substantial property transaction?
- Transaction voidable at the election of the company, unless transaction affirmed by ordinary resolution within a reasonable period,
- Any director who authorised the transaction and director who entered the transaction must account to the company for any gain they make and indemnify the company for any loss it suffers
When are special procedures required for a loan to a director?
If loan to a director or guarantee or security provided in connection with a loan made to any person to a director over the value of £10,000.
What meetings and resolutions are required for a loan to a director?
- BM 1 and resolution to approve contract and give instructions regarding memorandum of contract
- GM/written resolution and ordinary resolution to approve contract
- BM 2 (or reconvene) and resolution to enter contract & authorise director(s) to sign contract on behalf of company
