SGS 1: Setting up in business Flashcards
1. appreciate the process by which law firms engage new clients; 2. analyse the legal and commercial framework in which businesses operate; 3. appreciate the different legal forms that businesses may adopt and explain the main advantages and disadvantages; and identify some key constitutional differences between public and private companies through the analysis and interpretation of statutory provisions.
What are the 2x4 steps that need to be taken when taking on a new client?
- Conflict check
- MLR check
- Letter of engagement
- Costs
- Complaints
- Money on account
- Open file
- Meeting
What is the name of private vs public companies? Which statute says so?
- Private: LTD (s59(1))
- Public: PLC (s58(1))
What is the minimum number of shareholders for private vs public companies?
- Private: 1 - s7(1) and s8(1)
- Public - 1 - s7(1) and s8(1)
What is the minimum number of directors for private vs public companies?
- Private - 1: s154(1)
- Public - 2: s154(2)
Is a company secretary required for private / public companies?
- Private: NO - S270(1) - can do what they like
- Public - YES - s271
Which Certificates req. before commencement of trading for private / public companies?
- Private: Certificate of Incorporation-s15(4). Can commence business as soon as it is incorporated
- Public: cert. of incorporation also. But cannot start until a trading certificate is issued by Registrar showing that companys allotted share capital is not less than the min. - s761(1) and (2)
What is the minimum share capital that needs to be issued for a private / public company?
- Private: at least one share
- Public: minimum of £50k - s763(1)(a)/(b)
Does CA 2006 allow offer of shares to the public for private / public company?
- Private: this is prohibited - s755(1)
- Public: permitted - subject to FSMA restrictions
What is the method of payment + minimum amount payable for share capital for private and public companies?
- Private - there is no restriction on method of payment: shares can be issued without immediate payment - s582(1)
- Public: payments in cash only or where consideration has been independently valued - s593(1)
- Public: 25% of nominal value must be paid on allotment and whole of any premium - s586(1)
Which types of companies can pass written resolutions?
- Only private companies?
Which types of companies do restrictions on loans to directors apply to?
- Apply more strictly to public companies
Are private companies restricted from providing ‘financial assistance’ for the purchase of their own shares?
- They are NOT restricted
- Whereas public companies are prohibited
Which of public / private companies can purchase their own shares out of capital?
- Private companies can purchase their own shares out of capital
- But public companies cannot purchase their own shares out of capital
Which of public and private companies give more power to shareholders?
- Private companies give more power to shareholders
Which type of company shares are more attractive to an investor? Why?
- Public company shares are more attractive to an investor
- Because they are more readily resold
