Key Sections of CA2006 and Model Articles (For Private Companies Limited by Shares) Flashcards
A client is incorporating a private limited company and asks about the legal documents required for incorporation.
Which of the following must be submitted to Companies House?
A. The memorandum of association, Articles of Association, and Form IN01.
B. A declaration of compliance signed by all shareholders.
C. A certificate of solvency confirming the company has funds to trade.
D. A statement of good standing from a solicitor.
A. The memorandum of association, Articles of Association, and Form IN01.
Explanation: Under Section 9 of the Companies Act 2006, the required documents for incorporation include:
Memorandum of association
Articles of Association (unless using Model Articles)
Form IN01 (which includes company name, registered office, directors, and shareholding details)
XYZ Ltd wants to appoint a new director. The Articles of Association are silent on the process.
Which of the following is correct?
A. The new director must be approved by at least 75 percent of shareholders.
B. The board can appoint the director unless the Articles require shareholder approval.
C. The appointment is valid only if filed with Companies House within seven days.
D. The appointment is invalid unless made by unanimous shareholder vote.
B. The board can appoint the director unless the Articles require shareholder approval.
Explanation: Under Model Article 17(1), directors can appoint other directors unless the company’s Articles state otherwise. This must be notified to Companies House within 14 days (Section 167).
Which of the following applies?
A. The shareholder must obtain the board’s approval before transferring shares.
B. The transfer is valid only if the company issues new shares instead.
C. The transfer is valid once the new owner is entered in the register of members.
D. The transfer must be approved at a general meeting.
C. The transfer is valid once the new owner is entered in the register of members.
Explanation: Under Sections 112 and 113 of the Companies Act 2006, a share transfer only becomes effective when the transferee is registered as a member in the company’s register of members.
A company wants to change its name and asks about the legal process.
What is required to change a company name?
A. The board can change the name without shareholder approval.
B. A special resolution must be passed to change the company name.
C. The company name change takes effect immediately after a vote.
D. The company must get approval from HMRC before changing its name.
B. A special resolution must be passed to change the company name.
Explanation: Under Section 77 of the Companies Act 2006, a company name can be changed by a special resolution (75 percent approval) or another method specified in the Articles. The change takes effect when Companies House issues a new certificate of incorporation (Section 81).
A company needs shareholder approval to issue new shares but does not want to hold a physical meeting.
How can the company approve the share issue?
A. The company must hold a general meeting.
B. A written resolution can be used if the required majority approves it.
C. The resolution must be passed unanimously.
D. Only directors can approve share issuance.
D. Only directors can approve share issuance.
Explanation: Under Section 551 of the Companies Act 2006, directors have the power to issue new shares unless shareholder approval is required by the Articles. If approval is needed, it can be obtained through a written resolution or general meeting.
A board meeting is being held to approve a new contract. One director is abroad and cannot attend.
Which of the following is correct?
A. The meeting must be postponed until all directors are present.
B. The contract can be approved if a quorum is present and a majority vote in favor.
C. The absent director can veto the decision remotely.
D. A board meeting cannot be held if one director is missing.
D. A board meeting cannot be held if one director is missing.
Explanation: Under Model Article 11, a board meeting is only valid if a quorum is met. The standard quorum is two directors, so if there is only one, the meeting cannot proceed.
A company has failed to keep minutes of its board meetings.
Which of the following is correct?
A. Board minutes are not legally required.
B. The company must keep board minutes for at least 10 years.
C. Board resolutions are invalid without minutes.
D. The company must file board minutes with Companies House.
B. The company must keep board minutes for at least 10 years.
Explanation: Under Section 248 (board meetings) and Section 355 (general meetings) of the Companies Act 2006, minutes must be kept for 10 years.
XYZ Ltd, a corporate shareholder in ABC Ltd, wants to vote at a general meeting.
How can XYZ Ltd vote?
A. XYZ Ltd cannot vote because it is not an individual.
B. XYZ Ltd must appoint an authorized representative to vote on its behalf.
C. XYZ Ltd can vote only if all its directors attend the meeting.
D. XYZ Ltd can vote only through a written resolution.
A. XYZ Ltd cannot vote because it is not an individual.
Explanation: Under Section 323 of the Companies Act 2006, a corporate shareholder must appoint a corporate representative to vote at general meetings
A private company wants to pass an ordinary resolution without holding a meeting.
Which of the following is correct?
A. A written resolution must be signed by at least 75 percent of shareholders.
B. A written resolution can be used if more than 50 percent of shareholders agree.
C. Written resolutions are not legally allowed for private companies.
D. Written resolutions must be approved by directors first.
D. Written resolutions must be approved by directors first.
Explanation: Under Section 281 of the Companies Act 2006, a written resolution can be used in private companies. However, resolutions removing a director or auditor cannot be passed this way (Section 288).
XYZ Ltd wants to replace its company secretary. What is required?
A. The new secretary must be approved by a simple majority of shareholders.
B. The change must be recorded in board minutes and filed with Companies House within 14 days.
C. The resignation of the secretary must be approved by Companies House.
D. The appointment must be made by a special resolution.
B. The change must be recorded in board minutes and filed with Companies House within 14 days.
Explanation: Under Sections 275 and 276 of the Companies Act 2006, a change of secretary must be recorded and filed at Companies House within 14 days. There is no requirement for shareholder approval.
ABC Ltd wants to change its registered office address. What is required?
A. The board must approve the change and notify Companies House within 14 days.
B. The company can change the address without informing Companies House.
C. A general meeting must be held to approve the change.
D. The registered office can only be changed if approved by the company secretary.
A. The board must approve the change and notify Companies House within 14 days.
Explanation: Under Sections 86 and 87 of the Companies Act 2006, a company must always have a registered office and must notify Companies House of any changes within 14 days.
Which shareholder resolutions must be filed at Companies House?
A. Only resolutions related to director appointments.
B. Only resolutions that involve changing the company’s Articles.
C. All special resolutions and certain ordinary resolutions.
D. No resolutions need to be filed unless the board decides.
C. All special resolutions and certain ordinary resolutions.
Explanation: Under Sections 29 and 30 of the Companies Act 2006, all special resolutions must be filed at Companies House, along with certain ordinary resolutions (such as those granting directors authority to allot shares).
XYZ Ltd’s directors are holding a board meeting, but no chairperson is present. What should they do?
A. The most senior director automatically becomes chair.
B. The directors may appoint a chair for the meeting if one is not already appointed.
C. The meeting cannot proceed without a chairperson.
D. A chair must be appointed by a special resolution before the meeting.
B. The directors may appoint a chair for the meeting if one is not already appointed.
Explanation: Under Model Article 12, directors can appoint a chair for board meetings if no chairperson is already designated. The chair does not have to be a permanent role.
