SGS 19 Flashcards
Which transactions are only available to private companies?
Redemption using capital (s.687(1)).
Buyback using de minimise or capital (s.692(1)).
Post meeting matters for redemption of shares using capital?
Notification to CH within one month of redemption with statement of capital (s.689(1) and (2)).
Update register of members
Cancel / reissue share certificates (s.688)
what can a dividend be made out of?
distributable profits (s.830(1)).
Check retained earnings in most recent accounts (s.836).
How does an interim dividend differ from a final?
Interim can be declared without SH approval and cancelled at any time prior to payment as only becomes an enforceable debt once paid.
What is the process for paying out a final dividend?
Directors recommend the amount (MA 30(2)).
Shareholders approve by OR (can only approve the same or a lower amount).
Who would be paid if the identity of the SH had changed between declaration and payment of a final dividend?
Those who were in the register of members at the time of declaration would be paid. NB cannot pay a dividend to one SH without paying one to all SH' holding the same class of share.
What could a company consider as an alternative to paying out a dividend?
‘Scrip dividend’ = offer additional shares instead of cash BUT if some take it up and others don’t –> may dilute shareholdings.
FSMA Steps?
General prohibition: s.19
Definition of regulated activity = specified activity and specified investment (s.22(1)).
Is investment specified
Is activity specified
Is the activity excluded?
Does the activity fulfil the basic conditions in s.327 od FSMA and SRA Scope Rules?
Where are specified investments found in FSMA?
Arts 73-89 Part III RAO
e.g. 76: shares
Where are specified activities found in FSMA?
Arts 4-65 Part II RAO
e.g. Art 25: arranging deals
Art 53(1) advising on investments.
Is the activity excluded?
Art 67(1) Art 33
What does ‘incidental to overall work done by firm’ in s.327(1) mean?
Work must form a small part of overall work done by firm for clients as a whole.
What does ‘arise out of or be complementary to the provision of a particular professional service to a client’ in the SRA Scope Rule 4 mean?
The specified activity would have to arise naturally out of the work done.
If the work failed the FSMA tree, what are the firm’s options?
Only give advice if directly authorised by FCA. Refer client on to an FCA authorised person.
What is contained within SRA Scope Rule 4?
No commission
incidental
arise out of or be complementary to provision of a particular professional service to the client.
