Legal Drafting (Business) Flashcards
How to start a meeting minute?
Minutes of a meeting of the board of directors of [ X Limited] (the ‘Company’)
held at [Address] on [date ] at [time].
What does ‘present’ mean and how does it differ to ‘in attendance’
‘Present’ means those in the meeting who can count as quorum
‘Attendance’ lists those at the meeting but cannot count as part of the quorum (for example, an interested director or some third party).
Under what heading do those who can form part of the quorum be listed?
Present
What do you explain under ‘background’ in the minutes?
Tthe purpose of the meeting
This doesn’t go into great factual detail, but states the reason and actions that are required
For example, the company wants to lend a director, £20,000. A loan to a director requires approval by an ordinary resolution of the
shareholders. Purpose of the board meeting is to obtain shareholder approval and approve
the loan.
If the board wish to agree on a written resolution to be passed by shareholders, what documents need to be agreed in the board meeting and what section would this go under?
The chair tables the draft memorandum and draft resolution
PRODUCTION OF DOCUMENTS
When dealing with a board meeting sandwich, what is required in the meeting minutes?
Adjournment section
State the board meeting was adjourned to pass the written reoslution on the shareholders, then reconvened. Report if it was passed
If in a board meeting there is an adjournment, what do you entitle the following section for any further board resolutions?
FURTHER RESOLUTIONS
If a director cannot count in quorum or voting (e.g. due to a conflict) do they appear in ‘present’ or ‘in attendance’ when recording those at the meeting?
In Attendance
How should you close a board minute?
CLOSE
There being no further business, the Chair declared the meeting closed.
Chair ……………………
Date ……………………………
If there are no interests to declare, how can you use the standard ‘each director present declared the nature’ paragraph in baord meeting minutes?
Even if there are no interests to declare, keep the paragraph and state ‘not applicable’ next to the name of each director
You are drafting board meeting minutes.
How should you draft a resolution for the resignation of a director?
“It was resolved, that the resignation of X, which was presented to the Directors for consideration, is hereby accepted with immediate effect.”
You are drafting board meeting minutes.
How should you draft a resolution for the appointment of a role? For example, as Chairman?
“It was resolved that X (who has indicated his willingness to act) be and is hereby appointed as Chairman of the Company with immediate effect.”
If you have appointed a new director, which two registers need updating?
- Register of directors
- Register of directors residential addresses.
A director is appointed
A director resigns
The office address changes
What are the filings to be mentioned in a board meeting minutes?
TM01 - Terminate director
AP01 - Appointing a director
AD01 - Change a company’s registered office address
You are asked to draft minutes of a general meeting.
Who is listed under present?
Who is listed under in attendance?
Those present are usually the shareholders voting.
Anyone else attending such as directors, company secretary, legal counsel, etc.
You are drafting a shareholders agreement
Must or can the company itself be a party to the agreement?
There is no obligation to make a company party to the shareholders’ agreement.
If the Company is a party, the Shareholders can impose direct obligations on the Company.
If they are a party, they should be included as a ‘party’ as follows:
(2) [FULL COMPANY NAME] incorporated and registered in England and Wales with company number [NUMBER] whose registered office is at [REGISTERED OFFICE ADDRESS]
You are drafting a shareholder agreement.
What is a non-compete clause and how could it be drafted
The non-compete restrictions stop parties competing if they leave. It is made by reference to the description of Business in the ‘business of the company’ clause.
For example:
2.1. The business of the Company is [NATURE OF BUSINESS], subject to variation from time to time in accordance with the provisions of this agreement (Business).
…
8.1. Except with the prior written consent of the Board OR Shareholder Consent, no Shareholder shall… carry on or be employed, engaged or interested in any business in which would be in competition with any part of the Business……
You are drafting a partnership agreement.
What must be included in relation to capital?
Include a ‘Capital’ section that states how much capital is involved and how it is owned.
For example:
“The initial capital of the Partnership at the Commencement Date shall be £[NUMBER] to be contributed by each of the Partners equally…. The capital of the Partnership at any time will belong to the Partners in the proportions [set out in Schedule 2]…”
You are drafting a partnership agreement.
What must be included in relation to property?
Include a section dealing with partnership property.
All property used by the Partnership for the purpose of the business will be Partnership Property. If it is intended that there will be property not
belongign to the Partnership, this must be made clear.
For example:
“Partnership Property shall belong to the Partners in the proportions in which they are entitled to share in capital.
…
Any Partnership Property which is vested in one or more of the individual Partners’ names shall be held by them for all of the Partners.
….”
You are drafting Board Meeting Minutes
What form does you include for the secretary to file if a director has resigned or been removed?
TM01
You are drafting Board Meeting Minutes
What form does you include for the secretary to file if a secretary has resigned or been removed?
TM02
You are drafting Board Meeting Minutes
What form does you include for the secretary to file if a director has been appointed?
AP01
You are drafting Board Meeting Minutes
What form does you include for the secretary to file if a new secretary has been appointed?
AP03
You are drafting Board Meeting Minutes
What form does you include for the secretary to file if the registered address has been changed?
AD01
You are drafting Board Meeting Minutes
There has been a transfer of shares.
What form do you file if an individual ceases to hold at least 25 % of the shares or control the company?
PSC07
When an individual or entity ceases to be a person with significant control (PSC), file a PSC07 form.
You are drafting Board Meeting Minutes
There has been a transfer of shares.
What form do you file if an individual starts to hold at least 25 % of the shares or control the company?
PSC01
When an individual becomes a person with significant control (PSC) holding more than 25% of the shares, rights, or control of a company, file a PSC01 form.
You are drafting Board Meeting Minutes
There has been a transfer of shares.
What form do you file if a company starts to hold at least 25 % of the shares or control the company?
PSC03
When a non-individual entity (e.g., another company, government body) becomes a person with significant control (PSC), file a PSC03 form.
You are drafting Board Meeting Minutes
What form do you file if the directors approved the allotment of shares?
SH01
When a company issues (allots) new shares, file an SH01 form.
You are drafting Board Meeting Minutes
What register do you need to specify will be updated if shares are issued, transferred, or transmitted?
Register of Members
You are drafting Board Meeting Minutes
What register do you need to specify will be updated if there are changes to member details, such as name or address?
Register of Members
You are drafting Board Meeting Minutes
What register do you need to specify will be updated if a director is appointed or resigns?
Register of Directors
and
Register of Directors’ Residential Addresses:
You are drafting Board Meeting Minutes
What register do you need to specify will be updated if a secretary is appointed or resigns?
Register of Secretaries
You are drafting Board Meeting Minutes
What register do you need to specify will be updated if shares are transfered to someone resulting in a 25% shareholding, or the loss of a 25% shareholding?
Register of People with Significant Control (PSC Register)
When someone becomes or ceases to be a PSC, or when there are changes to their details, the PSC Register must be updated.
You are drafting Board Meeting Minutes
What register do you need to specify will be updated if the company creates a charge?
Register of Charges
You are drafting a board meeting minutes
How do you draft appointment of a director?
IT WAS RESOLVED that [X], having consented to act, be and is hereby appointed to act as director of the Company with immediate effect.
You are drafting a board meeting minutes
A director declares a conflict of interest. The board are voting on that transaction.
How do you write that it was passed without that director counting for the quorum on that specific vote?
IT WAS RESOLVED to authorise….. It was noted that [ ] did not vote or count as part of a quorum on this resolution and that, nevertheless, there was a quorum for this item of business transacted by the meeting.”
You are drafting a board meeting minutes
A director stands down as chairperson and another chair is appointed.
How would you draft this?
[x ] agreed to stand down as Chairperson and IT WAS RESOLVED that [ x] be appointed Chairperson with immediate effect.
You are drafting a board meeting minutes
A company secretary is appointed in light of the former secretary resigning.
How would you draft this?
IT WAS RESOLVED that [ x], having consented to act, be and is hereby appointed to act as the new Company Secretary of the Company with effect from the resignation of [ ] from that role.
You are drafting a board meeting minutes
A director has resigned.
How would you draft this?
There was produced to the meeting a letter of resignation as directors signed by [x ] to take effect immediately and IT WAS RESOLVED to accept the same.
You are drafting a board meeting minutes
The board need to approve a transfer of shares.
How can this be drafted?
There were produced to the meeting duly executed transfers of the subscriber share[s] as follows:
Transferor: x
Transferee: x
No. of Shares: x
Payment in cash in full satisfaction of the nominal amount of each of these shares was received.
IT WAS RESOLVED that the transfers be and are hereby approved and that
the Company Secretary is hereby instructed to:
- Register such transfers in the Company’s register of members;
- Update the Company’s register of people with significant control
- cancel the current share certificates of the transferors; and
- Issue share certificates in the name of the transferees named above
You are drafting a board meeting minutes
How should you note that a general meeting was called?
There was produced to the meeting a notice convening a general meeting of the Company, proposing the following resolution[s] (the ‘Notice’):
…
Special resolution: [insert details]
Ordinary resolution: [insert details]
….
IT WAS RESOLVED that the Notice be and is hereby approved and that a copy of the Notice be delivered to the shareholders and the Company’s directors forthwith.
You are asked to draft a partnership agreement.
How should it be signed?
Each partner should sign it as a deed in the presence of a witness.
Use following template:
Signed as a Deed by
[X] [Signature]
on the date hereof in the presence of:
Witness signature:
Witness name:
Witness address:
You are drafting a partnership agreement.
How should you draft the commencment clause?
“The Partnership commences on the Commencement Date and continues on the terms of this agreement until it is terminated in accordance with the terms of clause X”
You are drafting a partnership agreement.
How should you draft the capital clause?
The initial capital of the Partnership at the Commencement Date shall be [X] to be contributed by each of the Partners as follows:
(a) Partner 1: £X
(b) Partner 2: £X
The Partnership’s capital at any given time shall be owned by the Partners in proportion to the balance in each of their respective Capital Accounts relative to the total Partnership capital.
Amend as required by the facts
You are drafting a partnership agreement.
How should you draft the profit and losses clause?
Imagine the ratio is 60:40
The Net Profits and Losses of the Partnership shall belong to and be borne by the Partners in accordance with the following ratio:
(a) Partner 1: 60%
(b) Partner 2: 40%
and shall be credited or debited to the Partners’ Current Accounts.
You are asked by a director to amend the articles of association to exclude the written resolution procedure and entrench their position to prevent them being removed by an OR.
Is this possible?
No
You cannot exclude the written resolution procedure and a director cannot entrench their position to prevent them being removed by an OR
However, explain to the director that articles may include a Bushell v Faith clause that provides enhanced voting rights to a director whose removal is being considered by shareholders.
You are drafting board meeting minutes.
A WR from the shareholders are needed to give pemrission to allot.
How do you incorporate this?
5. DOCUMENTS PRODUCED TO THE MEETING
5.1 A form of written resolution of the members of the Company to grant the directors a general and unconditional authority to allot shares in the Company….
…..
6. APPROVAL AND CIRCULATION OF WRITTEN RESOLUTION
6.1. After careful consideration of the Written Resolution, IT WAS RESOLVED:
(a) to approve the Written Resolution in the form produced to the meeting; and
(b) to send the Written Resolution to every eligible member of the Company
6.2. The meeting was adjourned so that the Written Resolution could be submitted to the members of the Company. The meeting reconvened at [TIME] whereupon the chairperson reported that the Written Resolution had been passed.
In a board meeting minutes document, how do you state that a WR was passed and the board reconvened?
The meeting reconvened at [TIME] whereupon the chairperson reported that the Written Resolution had been passed.
When is a deed of adherence used for shareholders in a company?
To bind a new party or shareholders in a company to the existing shareholder’s agreement
Draft a release clause to be included in a settlement agreement.
“This agreement is in full and final settlement of the Dispute.
Each party releases and forever
discharges all actions, claims, rights, demands and set-offs, whether or not presently known to the parties or to the law arising out of the Dispute.”
Think:
(1) Full and final Settlement
(2) Release Forever
(3) Lists the types of action
Draft a agreement not to sue clause to be included in a settlement agreement.
Each party agrees not to sue,
commence or prosecute any action, suit or other proceeding concerning the Released Claims.
Think:
(1) Each party agrees
(2) No suing, commencing, prosecuting
Draft a cost clause to be included in a settlement agreement.
The parties shall each bear their own legal costs in relation to the Dispute and this agreement.
Draft an indemnities clause to be included in a settlement agreement.
Each party hereby indemnifies, and shall keep indemnified, the other party against all costs and damages incurred in all future actions, claims and proceedings in respect of any of the released claims which it may bring against the other party.
Think:
(1) Indemnifies and Keep indemnified
(2) Against cost/damage incurref
(3) From action re released claim
Draft a no admission clause to be included in a settlement agreement.
This agreement is entered into in connection with the compromise of disputed matters.
It is not, and shall not be represented as an admission of liability or wrongdoing on the part of either party to this agreement
