Formation of a company

Question 1

What is the difference between documentation requirements of the CA 1985 and CA 2006?

Answer 1

CA 1985: Articles of Association and memorandum are required as the constitutional documents
CA 2006: Articles of Association is the only constitutional document - memorandum is only used for part of the procedure to register at Companies House

Question 2

What does s31 CA 2006 state?

Answer 2

That companies formed under CA 2006 have unrestricted objects unless specifically restricted in the Articles.

Question 3

What does s28 CA 2006 say?

Answer 3

• Relates to companies formed under CA 1985
• Any provisions in a memorandum must be treated as provisions of the company’s Articles

Question 4

What does s18 CA 2006 say?

Answer 4

All companies must have an Articles of Association (the Articles)

Question 5

What is the purpose of the Articles?

Answer 5

To regulate the relationship between the shareholders, directors and the company

Question 6

Name some examples of the type of provisions that can be found in the Articles

Answer 6

• Number of directors required to transact business
• Method of appointing directors
• Power of directors
• How board meetings are conducted
• Any special rights attached to shares
• How shareholder meetings are to be conducted
• How and to whom shareholders may transfer their shares

Question 7

What are the three ways that a company can be incorporated?

Answer 7

• Incorporation from scratch
• Submitting relevant information to Companies House/online
• Shelf company conversion

Question 8

When incorporating from scratch, what 4 things need to be submitted to Companies House?

Answer 8

• Company’s memorandum
• Articles (if no intention to use MA)
• The fee
• An application form for registration (Form IN01)

Question 9

What information must be in the IN01 form?

Answer 9

• Company’s proposed name and registered office
• Whether the company is public or private
• Company’s registered appropriate email address for Companies House use (s9(5)(aa))
• Whether company is to be limited by shares (or guarantee)
• A statement of capital and initial shareholdings (s10) (or if to be limited by guarantee, details must be given of the guarantee (s11))
• A statement of company’s proposed officers (s12) and persons with significant control (s790)
• A statement of compliance (s13)
• A statement of lawful purpose (s9(e)) - added by ECCTA March 2024

Question 10

What is set out in the certificate of incorporation?

Answer 10

• Name of company
• Company’s registered number

Question 11

What changes must be made to a shelf company?

Answer 11

• Name
• Registered office
• Articles
• Members, directors and company secretary

Question 12

What form needs to be filed showing the registered office?

Answer 12

AD01

Question 13

What does form AP01 lay out?

Answer 13

The company directors

Question 14

What does form AP03 lay out?

Answer 14

The company secretary

Question 15

What do forms TM01 and TM02 lay out?

Answer 15

The company’s first directors (01) and first company secretary (02)

Question 16

What is MA13?

Answer 16

Provides for the chairperson to have the casting vote in the event of a tied board resolution

Question 17

What is s391(4) CA 2006?

Answer 17

Defaulting accounting reference date will be the last day of the month in which the company was incorporated.

Question 18

What is s51 CA 2006?

Answer 18

It seeks to protect third parties who believe they are entering into a contract with a company which is incorporated and registered by making pre-incorporation contracts enforceable as personal contracts against the persons purporting to act on the company’s behalf.

Question 19

How many votes does each director get in a board resolution?

Answer 19

One each

Question 20

What does MA7 say about passing a board resolution?

Answer 20

Board resolutions are passed by a simple majority

Question 21

When can a shareholder resolution not be passed in writing?

Answer 21

When the resolution is to remove either a director or an auditor

Question 22

How many votes are needed to pass an ordinary resolution?

Answer 22

A simple majority - so over 50%

Question 23

How many votes are needed to pass a special resolution?

Answer 23

A majority of 75% or over

Question 24

How many votes does each director have when the votes are on a show of hands?

Answer 24

One vote each

Question 25

How many votes does each director have when the votes are on a poll?

Answer 25

Each shareholder has one vote per share held by them

Question 26

What does MA44(1) say about poll votes?

Answer 26

A poll on a resolution can be demanded either in advance of the GM where the vote will take place, or at the GM before a show of hands on that resolution or immediately after the resolution of that vote

Question 27

Who can demand a poll vote under MA 44(2)?

Answer 27

• Chairperson of that meeting
• The directors
• Two or more persons having the right to vote on that resolution
• A person or persons representing at least 10% of the total voting rights of the shareholders entitled to vote on the resolution

Question 28

What does s281(1) CA 2006 say about written resolutions?

Answer 28

That only private companies can pass shareholder resolutions by way of the written resolution procedure