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ruh oh > P5. Compliance > Flashcards

P5. Compliance Flashcards

1
Q

Minimum filing requirements

A

Confirmation statement & financial statements

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2
Q

Comparing company types acronym

A

FLAPS

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3
Q

Comparing company types considerations (5)

A

Financial info public?
Limited liability?
Assessed for tax as co?
Profit making?
Shares public?

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4
Q

Which type of company is not for profit?

A

Limited by Guarantee

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5
Q

Which type of company has unlimited liability?

A

Private unlimited company

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6
Q

Which type of company does not make financial info public?

A

Private unlimited company

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7
Q

4 main types of company

A

Public company limited by shares
Private company limited by shares
Private company limited by guarantee
Private unlimited company

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8
Q

3 specialised company variants

A

Charitable companies
Community Interest Companies (CICs)
Right to Manage Companies (RTMs)

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9
Q

3 methods of incorporating company

A

Electronic software
Paper filing
Web incorporation service (only for Ltd cos adopting model arts)

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10
Q

4 areas of word or phrase in company name which require consent of secretary of state

A

Imply pre-eminence or a particular status or function
Imply connection with government
Represent regulated activities
Use could be offensive

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11
Q

4.5 necessities for incorporating

A

Memorandum of association
Articles of association
Form IN01
Name approval (if required)
Registration fee

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12
Q

Additional requirement for registering public company

A

2 directors and a cosec

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13
Q

What must public co obtain in addition to cert of incorp before trading

A

A trading certificate

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14
Q

How does a public co obtain a trading certificate

A

Deliver an application for borrowing certificate using form SH50, confirming that minimum share capital has been subscribed (£50k), and paid up at a minimum of 25% nominal value

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15
Q

What is required to re-register a private company as a public company

A

Special resolution, and copy of resolution and form RR01 to be delivered to the registrar within 15 days. Articles reviewed and amended as necessary

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16
Q

What is required to re-register a public company as a private company

A

Special resolution, and copy of resolution and form RR02 to be delivered to the registrar within 15 days. Articles reviewed and amended as necessary

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17
Q

What % of members (or number of members) are required to apply to court to cancel re-registration as private company

A

5% or 50

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18
Q

5 advantages to online filing of forms

A

Quicker
Cheaper
Lower rejection rates due to inbuilt checks and pre-population
Automatic confirmation of filing
Environmentally friendly

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19
Q

Criminal offences as stipulated by act (5)

A

Failure to file accounts on time
Failure to enter or update directors details in RoM on time
failure to file copy of arts following amendment
Failure to respond to request for confirmation that details on central register are correct
Failure to show RO and CRN on emails

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20
Q

Range of penalties for breach of CA

A

Fines to imprisonment

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21
Q

4 examples of corp gov reports to improve best practice - acronym

A

HESATIGD

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22
Q

4 examples of corp gov reports to improve best practice

A

Higgs Report
Effectiveness and rols of NEDs
Smith Report
Audit committees
Turnbull Report
Internal control
Greenbury Report
Directors remuneration

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23
Q

Current code on corp gov name and year

A

UK Corporate Governance Code (2018)

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24
Q

Which companies does UK CG Code apply to

A

Companies with a premium listing

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25
5 main sections of of UK CG Code
Board Leadership and Company Purpose Audit, Risk and Internal Control Remuneration Composition, Succession and Evaluation Division of Responsibilities
26
How many sections and principles of UK CG Code
5 sections, 18 principles
27
On what basis does compliance with UK CG Code work
Comply or explain
28
On what basis does compliance with UK Stewardship Code work
Comply or explain
29
What was the aim of the FRC in establishing UK Stewardship Code
‘To enhance the quality of engagement between institutional investors and investee companies to help improve long-term returns to shareholders and efficient exercise of governance responsibilities by setting out good practice on engagement with investee companies’
30
What is the FRC?
Financial Reporting Council
31
What is meant by 'comply or expain'
Companies departing from the Governance Code provisions must explain the reasons for non-compliance
32
What is a merger 'by absorption'?
A situation where the undertaking, property and liabilities of one or more public companies are to be transferred to another existing public company
33
What is a merger 'by formation'?
A situation where the undertakings, property and liabilities of two or more public companies are transferred to a newly incorporated company
34
What level of member approval is required for a merger/division
75% approval of each share class of each merging company
35
What is a division?
The undertaking, property and liabilities of the company are to be divided among and transferred to two or more companies each of which is either an existing public company or a newly incorporated company
36
Mergers and divisions - what must directors report to the members at convened meetings and the directors of other companies involved?
Any material changes to the property and liabilities of their company between the date the draft terms were approved and the date of the members’ meeting(s)
37
4 main types of takeover transaction
Share sale agreement Public purchase Takeover offer Scheme of arrangement or compromise
38
What is a share sale agreement?
Standard takeover transaction for private co's - Formal agreement made with shareholders (typically won't be so many shareholders). Pre-emption, drag along, tag along considerations
39
What is a public purchase?
Arrangement to purchase blocks of shares in target company, forming a basis on which to launch a bid for remaining shares
40
What is a scheme of arrangement or compromise?
Useful in instances where 100% takeover is desired, but difficult to reach 90% Meeting convened under authority of court must receive 75% approval by members (or creditors if liquidation)
41
Which code impacts takeovers and mergers for public co's
City Code on Takeovers and Mergers
42
What is a takeover offer?
Public offer to shareholders, making an offer to acquire shares on stated terms (cash or shares in offeror company)
43
When does a public takeover offer become unconditional (come into force)
When the minimum number of acceptances is reached (typically 75%, rarely less than 50%)
44
At what level of % voting rights does the City Code dictate that a takeover offer is compulsory?
30% - significance being that shareholders often stop at 29.9%
45
2 criteria for a takeover/merger being referred to CMA
Value of turnover in UK of enterprise being taken over exceeds £70 mil Merger would result in creation or enhancement of at least 25% share of market
46
What are the 'squeeze-out' provisions?
Provisions in Act for offeror company to acquire remaining shares when holding exceeds 90%
47
What are the 'sell-out' provisions?
Provisions in Act for minority shareholders of company where offeror company has obtained 90% to exercise their right to be bought out on share terms
48
When are 'sell-out' provisions applicable?
Only if 'squeeze-out' provisions not activated
49
2 examples of compulsory acquisition
'Squeeze-out' provisions, 'sell-out' provisions
50
When might takeovers be exempt from stamp duty?
If UBO does not change
51
What is covered by Environmental in ESG? (4)
Climate change Use of natural resources Pollution Sustainability
52
What is covered by Social in ESG? (4)
Corporate culture Diversity Stakeholder engagement Community
53
What is covered by Governance in ESG? (5)
Leadership Board composition Audits Shareholder rights Implementation and review of existing policies
54
What is whistleblowing?
When employees make a compliant, in the public interest, about the company they work for. If they lose their job as a result, they can go to the employment tribunal
55
What does the Governance Code say on remuneration?
Quoted companies should adopt a remuneration policy, and remuneration committees should set the remuneration of executive directors
56
When does a company become insolvent?
When it is unable to pay its debts as they fall due
57
When is a company considered unable to pay its debts? (4)
It fails to comply with a statutory demand for a debt in excess of £750; It fails to satisfy enforcement of a judgment debt; The court is satisfied that the company is unable to pay its debts as they fall due; or The court is satisfied that the liabilities of the company exceed its assets
58
When might an administrator be appointed?
When the directors realise that the company will become insolvent
59
When is a members' voluntary winding up appropriate?
When the company is solvent, and the directors have prepared a statutory declaration stating as much
60
When is a creditors' voluntary winding up appropriate?
When a declaration of solvency cannot be made
61
3 types of 'winding up' (liquidation)
Members' voluntary winding up Creditors' voluntary winding up Winding up by the court
62
When can a company be wound up by the court (4)
The company so resolves by special resolution; A judgment creditor or a creditor petitions the court where an amount in excess of £750 has not been paid following written demand for payment (IA1986 s. 123); It is just and equitable for the company to be wound up; or The company fails to comply with certain statutory requirements, e.g. the minimum number of members
63
When should a report on director conduct be made to the Secretary of State
When it appears the conduct of a director is such to render them unfit to be concerned in the management of a limited company
64
What is the punishment if secretary of state agrees with report on director conduct
Disqualified from being director for 15 years
65
What is a phoenix company?
A company with a name so similar to that of an insolvent company, that an association is made
66
When might the registrar strike off a company?
When they believe it is defunct - due to non-filing
67
What can a company not have done in last 3 months in order to voluntarily strike off?
Changed name Traded Disposed of property or rights for value Engaged in any activity other than to effect the dissolution
68
The assets of a company struck off pass to?
The Crown, Duchy of Lancaster or Duke of Cornwall
69
When can applications for administrative restoration be made?
Within 6 years At any time if the purpose is to bring proceedings against the company for personal injury
70
Define dormant company
One that has had no significant accounting transactions as defined in CA2006 s. 1169 since the end of its previous financial year or, in the case of a newly incorporated company, since its incorporation
71
3 transactions disregarded re. dormant companies
Payment for shares by subscribers Fees paid to Registrar Civil penalties imposed by Registrar
72
5 main sections of UK CG code - acronym
BARCD

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