Ownership, Management of Companies & Constitution of a private company limited by shares Flashcards
When does membership begin for shareholders?
When the member’s name is entered in the company’s register of members - s122(2) CA 2006
What are the first shareholders of the company called and what do they subscribe to?
Subscribers
Company’s MoA
A share is often described as …
… a bundle of rights
What is the issued share capital?
The total amount in value (nominal and premium) of all shares in issue at any time
What is allotment?
When person acquires the unconditional right to be included in the company’s register of members in respect of those shares - s558 CA 2006
What is the amount paid on shares known as?
The paid -up share capital
What is an annual confirmation statement?
A form with up to date information about the info held by Companies House on the company. Filed at least once a year.
What does s18 CA 2006 say?
All companies must have AoA
What is the purpose of AoA?
Main constitutional document of a company
Regulates the relationship between the shareholders, directors and the company
What are the 3 choices a company has to form its articles?
1) MA (s19 CA 2006) / Table A (CA 1985)
2) Amended MA
3) Tailor-made articles
Can a company alter its AoA?
Yes, by special resolution - s21(1) CA 2006
What is the legal effect of the articles?
1) bind the company and its members to the same extent as if there were covenants - s33(1) CA 2006
2) Evidence a contract between company and its members and with respect to their rights and obligations as members (Hickman v Kent)
Can one member enforce the articles against another member directly?
Yes - Rayfield v Hands (if a member accepts a personal obligation)
No - Welton v Saffery
