Intro to Company Procedure Flashcards
Who is responsible for the day-to-day management of a company?
A) Shareholders
B) Directors
C) Company Secretary
D) Persons with Significant Control (PSC)
B) Directors
(Directors manage the company; shareholders approve major decisions.)
What is the minimum quorum for a Board Meeting (BM) under Model Articles?
A) 1 director
B) 2 directors
C) 3 directors
D) 50% of all directors
B) 2 directors
(Art 11(2) MA – The default minimum quorum is two unless the Articles say otherwise.)
How is a Board Resolution passed at a Board Meeting?
A) By a special resolution (75%) of directors
B) By majority vote on a show of hands
C) By written resolution of shareholders
D) By unanimous approval of shareholders
B) By majority vote on a show of hands
(Art 7 MA – Directors pass resolutions at Board Meetings by a simple majority.)
When must shareholders be consulted before directors can act?
A) When entering into any contract
B) When amending Articles of Association
C) When hiring an employee
D) When approving standard business transactions
B) When amending Articles of Association
(s21 CA 2006 – Only shareholders can amend the Articles via a special resolution.)
What is the minimum notice period for a General Meeting (GM) in a private company?
A) 7 days
B) 10 days
C) 14 clear days
D) 28 days
C) 14 clear days
(s307(1) CA 2006 – Private companies must give 14 clear days’ notice for a GM.)
XYZ Ltd has three directors. Two directors wish to pass a board resolution, but the third director strongly objects. What happens?
A) The resolution fails due to lack of unanimous approval.
B) The two directors pass the resolution as they form a majority.
C) A General Meeting must be called for shareholders to vote.
D) The chairman must give casting vote to break the tie.
B) The two directors pass the resolution as they form a majority.
(Art 7 MA – Board resolutions are passed by majority vote, no need for unanimous approval.)
Olivia is the sole director of a private company. She wants to approve a major contract. What must she do?
A) Call a Board Meeting.
B) Obtain shareholder approval.
C) She can approve it alone without a meeting.
D) Pass a special resolution.
C) She can approve it alone without a meeting.
(Art 7(2) MA – Single-director companies can make decisions without formal Board Meetings.)
ABC Ltd needs to remove a director. Can this be done via written resolution?
A) Yes, if 50%+ shareholders approve.
B) Yes, if 75%+ shareholders approve.
C) No, removal of a director requires a General Meeting.
D) No, only the Board of Directors can remove a director.
C) No, removal of a director requires a General Meeting.
(s168 CA 2006 – Directors cannot be removed via written resolution; a GM is required.)
A shareholder cannot attend a GM but wants to vote. What can they do?
A) They must attend in person to vote.
B) They can appoint a proxy to vote on their behalf.
C) They can submit a vote electronically, even if the Articles don’t allow it.
D) Their vote is automatically counted based on their previous voting history.
B) They can appoint a proxy to vote on their behalf.
(s324 CA 2006 – Shareholders can appoint proxies to vote in their place.)
A private company with only two shareholders needs to amend its Articles. What is required?
A) A simple majority (50%+) vote
B) A special resolution (75%+) vote
C) Approval from both shareholders
D) A Board Resolution
B) A special resolution (75%+) vote
(s21 CA 2006 – Amending Articles requires a special resolution (75%+).)
DEF Ltd issues a written resolution to approve a transaction. One shareholder holds 80% of shares, and two others hold 10% each. What happens if the 80% shareholder votes against it?
A) The resolution passes if the two 10% shareholders vote in favour.
B) The resolution fails because the 80% shareholder rejected it.
C) The resolution must be referred to a General Meeting.
D) The directors can override the shareholder’s decision.
B) The resolution fails because the 80% shareholder rejected it.
(For both ordinary (50%+) and special (75%) resolutions, the 80% shareholder has enough votes to control the outcome.)
A private company wants to hold a General Meeting on short notice. What is required?
A) Majority of shareholders (50%+) must agree.
B) At least 75% of shareholders must agree.
C) At least 90% of voting shareholders must agree (can increase to 95% in Articles).
D) A Board Resolution is enough.
C) At least 90% of voting shareholders must agree (can increase to 95% in Articles).
(s307(5) CA 2006 – A GM can be held on short notice if 90%+ of voting shareholders agree.)
A company fails to file a special resolution at Companies House within 15 days. What are the consequences?
A) The resolution is automatically void.
B) The company faces criminal penalties.
C) The resolution is valid, but only internally.
D) The company must pay a fine but can still implement the resolution.
B) The company faces criminal penalties.
(s29 CA 2006 – Special resolutions must be filed within 15 days, or officers in default may face criminal liability.)
