Gaps Flashcards
What is a body corporate
This means it is incorporated
Separate legal personality
Do directors need permission to allot shares?
Directors of private companies incorporated with model articles have automatic authority to allot shares- S550 CA
When a company’s stock is sold by a shareholder to a new shareholder, what must the company do
Issue share certificate within two months of registration
May refuse to register shares
If they own more than 25% (not 25% but MORE THAN) then update PSC register
Who is entitled to receive a copy of a written resolution
Directors, members and auditors
Are written resolution records and general minutes to be kept in the same way
Yes
How are profits and losses shared in a partnership
Equally unless agreement to the contrary - S24(1) PA1890
How can a partnership be ended
A partnership at will can be brought to end immediately by giving notice
Liabilities of a new partner
A new partner does not become liable for anything done by the partnership before becoming a partner
How to authorise a loan to a director
A loan to a director will not always need a resolution of the members it depends on the amount of the loan and other factors in S204 CA
Who decides whether to purchase machinery
The directors
Who authorises a substantial property transaction
Ordinary shareholder resolution
What is a substantial property transaction?
- a non-cash asset
- from a director, director of holding company or person connected with such a director.
- Over £100,000 OR over 10% of the company’s asset value and is more than £5000
How to register a share transfer
A directors board resolution
Does a shareholder need permission to transfer their shares
No
Is a stamped instrument of transfer needed for stock transfer
Not if the sale proscenium is £1000 or less
No signature is needed if the shares are full paid
How to expel a partner
They must all agree including the partner that the others want to expel
How to calculate net current assets
Subtract current liabilities from current assets
How to calculate net assets
Subtract current liabilities and long term liabilities from fixed and current assets
Difference between profit and loss reserve and net profit entry
Profit and loss reserve is the cumulative profit since the business started trading whereas the net profit entry shows only profit from the current financial year
Liability of partners in an LLP
Partners in an LLP do not have any personal liability for the LLPs debts
Can a company be liable for fraudulent or wrongful trading
No, only a director can
What kind of resolution is needed to buy back shares out of capital
Ordinary and special shareholder resolution - s693,694,709 and 716 CA
What documents should be filed at CH after the members authorise a buy back out of capital
Copy of resolution authorising buyback with capital Statement of solvency Auditors report SH03 SH06 Statement of capital
What if the votes for and against a board resolution are equal
MA13(1) allows chair of the board or directors to use casting vote to achieve simple majority
When is a written resolution passed
As soon as the required majority of eligible member have signified their agreement (50 or 75%) even if not all members have returned their resolution
When must a written resolution be passed by
28 days after circulation date
Start counting on day of distribution so if sent on 1st of month it ends on 28th. The day it is sent is day one of 28
When should a member be registered on a PSC register (person with significant control)
If they have over 25%
OVER so not included if you have 25%
What is a non-executive director?
A member of the board of directors but not a member of the executive management team. Not employees of the company but may get a fee. Independence. Vote at the board meetings but do not involve themselves with day to day management.
Legal duties of non-executive directors
The same as executive directors
What is an executive director
A member of the board who is also an employee with a senior role in managing the company.
What can the holder of a non-voting share do?
Entitled to a portion of the company’s capital but is not able to take part in general meetings. Cannot vote. E.g. preference shares are often non-voting
what is the company’s asset value (regarding substantial property transactions)
Either
- the value of the company’s net assets determined by most recent statutory accounts OR
- if no statutory accounts then the amount of the company’s called up share capital.
What happens if a substantial property transaction is not authorised
it might be recinded but this might not always be possible.
What is called-up share capital
The amount of share capital shareholders owe, but have not paid
What is paid-up share capital
Any amount of money that has already been paid by investors in exchange for shares of stock
