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Business Law and Practice > Members > Flashcards

Members Flashcards

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1
Q

Who owns and who manages a company?

A

Shareholders own the company, and directors manage it.

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2
Q

What is the forum for directors’ decisions?

A

The board meeting.

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3
Q

What are common provisions for board meetings in a company’s articles?

A

Notice, quorum, majority or unanimous decisions, and declaration of directors’ interests.

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4
Q

What is the typical quorum for a board meeting?

A

Two directors.

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5
Q

How can board meetings be held apart from physical attendance?

A

Through tele-conferencing or video-conferencing.

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6
Q

When can the chairman of the board use a casting vote?

A

When there is a tied vote.

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7
Q

What is the obligation under Section 177 of the Companies Act?

A

Directors must declare their interest in a proposed transaction.

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8
Q

What does Section 182 of the Companies Act require from directors?

A

Declaration of interest in pre-existing transactions.

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9
Q

What common issues arise in the conduct of general meetings?

A

Quorum, shareholders’ representation, appointment of a chairman, and methods of voting.

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10
Q

What is the quorum requirement for general meetings under the Companies Act 2006?

A

Two qualifying persons, unless the company is a single-member company, then it is one.

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11
Q

Who can qualify to be part of the quorum at a general meeting?

A

Members of the company, proxies, and corporate shareholder representatives.

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12
Q

What is required by section 325 of the Companies Act in terms of shareholder rights?

A

Notice of a general meeting must state the shareholder’s right to appoint a proxy to attend, speak, and vote on their behalf.

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13
Q

How is a chairman appointed at a general meeting if the articles don’t specify?

A

The members can appoint a chairman by majority decision.

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14
Q

What is the default method of voting at a general meeting?

A

Each shareholder or proxy has one vote.

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15
Q

What is a poll vote in a general meeting?

A

A vote where each shareholder has one vote per voting share held.

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16
Q

Who can demand a poll vote at a general meeting?

A

The chairman, two or more shareholders, or shareholders holding at least 10% of voting share capital.

17
Q

What are the two types of shareholder resolutions?

A

Ordinary resolutions (simple majority) and special resolutions (75% majority).

18
Q

How do written resolutions differ from resolutions passed at a general meeting?

A

Written resolutions are valid with the consent of relevant shareholders, avoiding the need for a general meeting.

19
Q

What majority is required for ordinary and special written resolutions?

A

Ordinary resolutions: simple majority; Special resolutions: 75% of eligible shareholders.

20
Q

What is the circulation date in relation to written resolutions?

A

The date the resolution is sent to shareholders, determining the lapse date (usually 28 days).

21
Q

When does a written resolution become effective?

A

When the necessary consents are received from eligible shareholders.

22
Q

How can shareholders signify their consent to a written resolution?

A

Via an authenticated document, such as a signature or an electronic form of consent.

23
Q

What powers do shareholders holding at least 5% of voting share capital have regarding written resolutions?

A

They can require the board to circulate a written resolution.

24
Q

What decisions cannot be made by written resolution?

A

Removing a director or an auditor.

25
Q

What is the Duomatic Principle in shareholder decision-making?

A

Unanimous shareholder consent can be as valid as a formal resolution.

26
Q

What are the risks of relying on the Duomatic Principle?

A

It may lead to litigation or evidential difficulties in proving unanimous consent

27
Q

How long must minutes of general meetings and written resolutions be kept?

A

Minutes of general meetings and written resolutions must be kept for at least 10 years, as required by Section 248 (for directors’ meetings) and Section 355 (for general meetings and written resolutions) of the Companies Act 2006.

28
Q

Are board resolutions required to be filed with Companies House?

A

Generally, no, but special resolutions and certain decisions like allotment of shares must be filed.

29
Q

How do public companies typically conduct shareholder business?

A

Through annual general meetings (AGMs) with full notice, rarely using written resolutions.

30
Q

What is the preferred method for passing resolutions in private companies?

A

Private companies often use written resolutions, which allow for quicker decision-making.

Business Law and Practice (4 decks)

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