Limited companies: part 1 Flashcards
What are the two ways to provide a business client with a company?
- incorporating a new company
- acquiring a company that has already been incorporated, but which has not traded (off the peg/shelf company)
For a new company to be registered, what must be sent to Companies House?
- application to register a company (IN01)
- memorandum of association
- articles of association
- the requisite fee
When can a company name not be used/chosen?
- when it is the same as that of an existing registered company
- in the opinion of the Secretary of State offensive or constitutes a criminal offence
- includes words suggesting a connection with the Government or a local authority or particular ‘sensitive’ words
What are some examples of the ‘sensitive’ words that cannot be used as part of a company name unless authorised?
- anything medical/dentistry
- anything to do with money/banks/charity/fund/insurance/chartered
- social service/special school/institution
- tribunal/police/post office/government/council
- British/English/Welsh /Scotland/Ireland
- anything royal -King/Queen/Prince/Windsor
Can a company change its name?
Yes by special resolution and then sending a NM01 form to Companies House together with the special resolution and the required fee
Can companies adopt a separate trading/business name?
Yes and this does not need to be disclosed to Companies House
What are the articles of association?
They are the company’s internal rulebook dealing with directors, shareholders, meetings and key administrative requirements. They are a contract between a shareholder and the company and a shareholder and other shareholders
What are the model articles?
The standard sets of articles provided by the Companies Act. There are different ones for different types of companies
Do you have to use the model articles?
No, you can make your own, use the model articles with specific amendments or use the model articles in their entirety but the model articles apply automatically by default
Can the articles be changed?
Yes by special resolution (s21(1) CA)
Does the company need to inform anyone of the change to the articles?
Yes, a copy of the special resolution and the amended articles must be filed at Companies House within 15 days (ss26(1), 29 and 30 CA)
What does the statement of capital and initial shareholdings show?
- initial share capital - the number of shares of each type and their nominal value
- rights attaching to the different types/classes of share
3.initial shareholdings
Is there a minimum amount of shareholders required?
Yes, one shareholder
What makes someone a person with significant control?
One or more of the following:
- they hold more than 25% of the shares
- they have more than 25% of the voting rights
- they have the right to appoint or remove the majority of the board
What is the memorandum of association?
A statement of intention of the subscriber(s) to form a company and become shareholders, taking at least one share each.
The company cannot enter into contracts until what has been issued?
The certificate of incorporation
If an accounting reference date has not been fixed what day will it be?
The last day of the month of incorporation
What is a board meeting?
Meetings of the directors, who pass board resolutions to make decisions
What is a general meeting?
Meetings of the members/shareholders, who pass ordinary resolutions and special resolutions to make decisions
What does quorum mean?
The minimum amount of people required to be present in order for valid decisions to be made
Which model article prevents a director voting and counting towards the quorum on any decision in which they have a personal interest?
MA14
Can model article 14 be suspended?
Yes by an ordinary resolution (MA14(3))
Does a director have to disclose a personal interest in a proposed or existing transaction or arrangement?
Yes, s177 and 182 CA
What majority is required for an ordinary resolution?
A simple majority (more than 50%) of shareholders attending and voting at a general meeting
What majority is required for a special resolution?
A majority of 75% or more of shareholders attending and voting at a general meeting
How many days notice are required to call a general meeting?
14 clear days (so 16) and add an additional 2 days if serving notice by email or post
Do accounts need to be filed for a company?
Yes, each financial year with Companies House. It is a criminal offence not to however small companies are exempt
What makes a small company?
Two or more of the following:
- turnover of not more than £10.2m
- balance sheet of no more than £5.1m
- not more than 50 employees
What must be filed each year within 14 days of the anniversary of the company’s incorporation?
A confirmation statement
