Key terms and Legislation Flashcards
What are the Articles of Association?
The Articles are a company’s internal rulebook. They govern a wide range of matters e.g.
- The powers of the directors
- When dividends are paid
- How shares can be transferred
What does AGM stand for?
The Annual General Meeting of Shareholders
What is the Board?
The board of directors of a company - its operational governing body.
What is a Board Meeting?
A Board Meeting is a formal meeting of a company’s board of directors at which policy issues and problems are considered, and decisions (known as board resolutions) are taken.
What are Class Rights?
Class Rights are the rights enjoyed by particular members of a company by virtue of their ownership of a particular class of shares.
What is the Companies House?
The Companies House is a body responsible for registering and dissolving companies, storing company info, and making some of it publicly available.
What is a Company?
A Company is an incorporated entity with its own distinct legal personality.
- They may be private,
public, or public and
listed.
- Private companies may
have, or not have a
share capital and their
members may have
limited or unlimited
personal liability
What is a Corporate Veil?
This relates to the separate legal personality of the company. There is said to be a symbolic veil between the company and its owners and operators.
What is the CVA?
The CVA is the Creditors’ Voluntary arrangement; a statutory restructuring procedure under the Insolvency Act (IA) 1986 which binds creditors.
What is the CVL?
The CVL is the Creditors Voluntary Liquidation; a statutory procedure under the IA 1986 for liquidating an insolvent company.
What is a Director?
A director is an officer of the company. This means having responsibility for corporate governance in an exec or non-exec role.
- a company must have at least 1 director.
- members can be directors
What is a dividend?
A dividend is a distribution of a company’s profits to its shareholders.
What is a GM?
A GM (General Meeting) is a meeting that all of a company’s ordinary shareholders are entitled to attend.
- Shareholders with
voting rights will be
able to vote upon any
shareholder
resolutions put before
them
What is the difference between GM’s and AGM’s?
GM’s can take place at any point whilst AGM’s only occur yearly. AGM’s are more relevant for public companies.
What is an IPO?
An initial Public Offering, or a “flotation” on the stock market.
** flotation - When a private company first sells shares of stock to the public
What does LLP stand for?
A Limited Liability Partnership
What is a (Company) Member?
Finish the sentence:
A company must have at least …. member(s)
A member is a shareholder (i.e. the owner of some or all of a company’s shares).
- A company must have
at least 1 member
What is the MVL?
The MVL is the Member’s Voluntary Liquidation; a statutory procedure under the IA 1986 for liquidating a solvent company.
What are the Model Articles (MAs) ?
They are a standardised set of Articles which govern a company unless its shareholders choose to adopt different Articles.
NOTE: There are different MA’s for private companies limited by shares, private companies limited by guarantee, public companies
What is an Ordinary Resolution (OR)?
An OR is the resolution used to give shareholder approval for decisions taken by the company that are too important for the board to make independently.
- An OR can be passed by a simple majority (more than 50%).
- The OR is the default/most common type of resolution to use where the CA or Articles simply require a “resolution of the shareholders”
What is the ‘Nominal Value’?
The nominal value of a share is the figure attributed to each share on incorporation (or for subsequent shares when those shares are later issued).
- This is simply a nominal value, i.e. £ or penny
NOTE: Nominal Value is NOT the same as the commercial value of the company.
What is the most common type of shareholder resolution?
The Ordinary Resolution (OR)
What is the PSC Register?
The PSC register is the Register of Persons having significant control over a company.
- This is those who own more than 25% of shares in a company and/or more than 25% of voting rights and/or those who have the right to appoint or remove the majority of the board.
What is the job of the Registrar of the Companies?
The Registrar is the official responsible for all filings with CH relating to the Companies Act 1985 to 2006.
