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Business Law > Module 10: Company Formation and Promoters > Flashcards

Module 10: Company Formation and Promoters Flashcards

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1
Q

What is the documentation required for registration?

A 
Application for registration
Memorandum of association
Statement of share capital and initial shareholdings
Statement of proposed officers
Statement of initial significant control
Statement of compliance
Registration fee
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2
Q

Who are companies registered with in the UK?

A

Registrar of Companies
Scotland send to Edinburgh
England and Wales send to Cardiff
NI Belfast

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3
Q

What must the application for registration must state?

A 
Company's proposed name
Where registered office to be situated
Statement of intended address
Whether liability is to limited, shares/guarantee
Ltd or Plc
Intended principal business activity
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4
Q

What is the memorandum of associated?

A

Brief document
Evidence subscribers intend to form company and become members
Evidence prepared to take a share

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5
Q

What is included in the statement of share capital and initial shareholdings?

A 
Snapshot of share capital
No. shares to be taken 
Aggregate nominal value of them
Aggregate amount unpaid on them
Rights for each class
Where by guarantee- statement of guarantee (will contribute amount if wound up)
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6
Q

What is included in the statement of proposed officers?

A

Details of first directors
Company secretary (required for plc)
Service address for each director and residential address

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7
Q

What is included in the statement of initial significant control?

A

Statement whether any individual holds more than 25% shares

Info about those infos

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8
Q

What is the statement of compliance?

A

Requirements of CA 2006 met

Offence to make false statement

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9
Q

What is the registration fee?

A

Sent with documents

£12 for online application

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10
Q

When is a company required to submit Articles of Association?

A

If it does not want to adopt the model articles

If non submitted will be incorporated with model articles appropriate to type of company

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11
Q

What will the certificate of incorporation state?

A 
Name and registered number
Date of incorporation
Limited or unlimited
Plc of Ltd
If reg office is in E/W, S, NI
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12
Q

When does company come into existence?

A

Date of incorporation

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13
Q

What did the Small Business, Enterprise and Employment Act (SBEE) 2015 introduce?

A 
Royal Assent 26 March 2015
Changes to the CA 2006
Process of registering a company
'One click' registration
Same time provide HMRC with all info for tax, VAT and PAYE
'Electronic means only'
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14
Q

What is the Streamlined Company Registration Service? (SCRS)

A

Info required by Companies House and HMRC supplied through SCRS on a single occasion to a single recipient by electronic means

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15
Q

Where a company is applying to be registered as a public company what else do they have to apply for?

A

Trading certificate

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16
Q

What must the application for a trading certificate contain?

A

Nominal value of company’s allotted share capital is not less than £50,000
Amount of Preliminary expenses
Amount paid to promoter and consideration for payment
Statement of compliance (obtained 1/4 nom and premium)

17
Q

What is trading certificate conclusive evidence of?

A

Company is entitled to do business and exercise borrowing powers
Can’t do so before
Directors liable to penalties if do
If plc not obtained one after 1 year of incorp can be wound up under Insolvency Act 1986

18
Q

What is the certificate of incorporation conclusive evidence of?

A

Requirements of the Act have been met

19
Q

What company registers and other info must companies keep available for inspection?

A

Register of members
Register of directors and secretaries
Copies of charges

20
Q

How long must companies keep certain registers available for inspection?

A

10 years

21
Q

What are the details of members companies must keep?

A

Name and address of each
Number of shares of each
Date of becoming a member and ceasing to be

22
Q

What are the details of directors (and secretaries)companies must keep?

A

Names of present and former
Service address
Directors county of residence and nationality
Date of birth

23
Q

What are the details of copies of charges?

A

Copies of fixed and/or floating charges including any instruments amending charges and related docs

24
Q

Who can inspect the statutory registers and copies of charges?

A

Shareholders and creditors without charge

Public for nominal fee

25
Q

Register of People with Significant Control?

A

From 6 April 2016 all must keep a PSC
Individual who holds more than 25% of the shares
Calculated by reference to nom value
Info includes name, address, date of birth, nationality , country of residence, date become registrable and interest in company

26
Q

The Confirmation statement?

A

Every company at least every 12m required to deliver
Keep Registrar informed
No changes or the changes
e.g. PSC, directors, type of company, share capital

27
Q

What is the definition of a promoter?

A

Person who forms a company
‘Undertakes to form a company with reference to a given project and to set it going and takes necessary steps to accomplish’

28
Q

Promoter includes anyone who what?

A

Makes business preparations

not someone who acts in professional capacity e.g accountant

29
Q

What are the duties of a promoter?

A

Owed fiduciary duty to company setting up
Promoter often to be owner
Must disclose to other shareholders details of profit making
Plc via prospectus or listing particulars
May keep profit even if doesn’t disclose properly- full knowledge

30
Q

Remedies for breach of promoters fiduciary duty?

A

Primary remedy- rescind contract and recover money
Too late to rescind- sue for return of secret profit
Liquidation- restore company anything obtained in breach

31
Q

Payment for Promoters pre-incorporation services?

A

No automatic right

Usually arrange that the first directors will either pay expenses or refund

32
Q

What is a pre-incorporation contract?

A

Made on behalf of company before incorporated
Made by promoter acting like an agent for company
Can’t ratify as not in existence when made
May enter into a new contract on similar terms

33
Q

Liability for pre-incorporation contracts?

A

Promoter is personally liable

Protects 3rd parties

34
Q

Ways promoter can avoid liability?

A

Making draft contracts- complete on formation
Include clauses allowing promoters liability to come to an end if contract novated
Buying a company ‘off the shelf’

35
Q

What is buying a company ‘off the shelf’?

A

Admin requirements in relation to forming a company can be avoided
Shares transferred to buyer and existing directors resign
Name likely to be changed

Business Law (17 decks)

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