Ownership of a company Flashcards
Name the 3 conditions of ‘people with significant control’ (PSC)
Any individual who:
- Owns more than 25% of the shares or voting rights in the company
- Has the power to appoint or remove a majority of its board of directors
- Exercises significant influence or control over the company
What rights does an ordinary share have?
An ordinary share will entitle its holder to vote at shareholder meetings and receive a share of the profits.
What is the nominal (or ‘par’) value of a share?
The minimum subscription price for that share
It represents a unit of ownership rather than the actual value of the share.
What is a company’s share capital made up of?
- Subscriber shares
2. Further shares issued after the company has been incorporated to new or existing shareholders
What is the ‘issued share capital’
The total amount in value (nominal and premium) of all shares in issue at any time
This is the amount of share capital that will be shown in the company’s accounts.
What is ‘subscriber shares’?
Shares purchased by the first members of the company
What does it mean when shares are to be allotted?
Defined in s.558 CA 2006
Shares are said to be allotted when a person acquires the unconditional right to be included in the company’s register of members in respect of those shares.
When is a share ‘issued’?
Shares are only issued, and only form part of a company’s issued share capital, once the shareholder has actually been registered as such in the company’s register of members, and his title has become complete.
What do preference shares do?
They entitle the holder to a preferential right, such as the first claim to a dividend or the return of capital (i.e. the return of money the shareholders had invested in their shares) on a winding up
How are class rights relevant?
They may be relevant when determining which shareholders can vote at general meetings and whether some shareholders have enhanced voting rights.
What is a RLE?
Where the owner or controller of a UK company is a legal entity such as a company or LLP, that legal entity will need to be put on the PSC register if it is a registrable relevant legal entity.
What are the two factors to register a company or LLP on the register?
- it would have met one of the conditions for being a PSC if it had been an individual and is itself an entity that is subject to the PSC regime or is a listed company; and
- it is the first relevant legal entity in the company’s ownership chain.
What does 790D impose a duty on?
790D imposes a duty on companies to take reasonable steps to identify their PSCs and RLEs.
What duty does 790G impose a duty on?
PSCs and RLEs also have a duty to notify the company of their status within one month of becoming a PSC or RLE.
What would the secretary do with regard to new PSC?
Update the PSC register within 14 days of any changes and notify Companies House within another 14 days.
