SQE 1 crib sheet Flashcards
initial investment amount for PLC?
(i.e. authorised minimum allotted share capital)
£50,000
at what point is LLP formed?
when CH issues certificate of incorporation
filing charge at Companies House, how many days to file?
21 days from creation of charge
filing charge at Companies House, what to file?
statement of particulars
certified copy of instrument creating charge
fee
CVA/ IVA: who needs to approve and what %?
75% unsecured creditors by value must approve
rate of VAT?
20%
SBTs: threshold for substantial value?
under £5000 not substantial
£5000- £100K; if over 10% of net assets = substantial
over 100% always substantial
SBT: test for ‘interested person’ / person connected with a director
Interested person/ person connected with the director is someone with more than 20% of shares/ voting power
i.e. ‘person connected with director’
SBT: what family members count as person connected with director?
child, spouse, co-habiting partner, co-habiting partner/ co-habiting partner’s minor children, parents
Substantial property transaction: what are the four components?
1) a director, in their personal capacity, or someone connected with a director
2) buys from or sells to the company
3) a non-cash asset
4) of substantial value.
amending the articles: what must be filed at the Registrar of Companies following adoption of new articles(s) and what are relevant time limits
- Copy of the amended article(s) within 15 days
- Copy of the special resolution to amend the articles within 15 days of the resolution being passed.
corporation tax rates from 1 April 2023?
Taxable profits up to £50,000 is 19%
Taxable profits between 50%,000 and £250,000 is marginal rate
More than £250,000 is 25% on ALL taxable profits
Individual bankruptcy: what are the 3 tests?
- statutory demand for liquidated sum of £5000 plus wait 3 weeks to see if debtor pays or applies to court to set aside
- statutory demand for future liability of £5000 and wait three weeks to see if debtor shows reasonable prospect paying OR applies to court to set aside
- obtain court judgement for debt of £5000 or more, and attempt execution of judgement without success
Company insolvency: 4 tests?
- creditor served statutory demand for £750 and company has not paid within 21 days
- creditor obtains judgement against company, has tried to enforce but debt still not paid in full/part
- cash flow test
- balance sheet test
Criteria for calling a poll vote under the Model Articles?
(4 options)
Under MA 44(2), a poll vote may be demanded by:
1) the chair of the meeting;
2) the directors;
3) two or more persons having the right to vote on the resolution; or
4) person/persons representing not less than 10% of the total voting rights of all the shareholders having the right to vote on the resolution.
relief on replacement of business assets ‘rollover relief’– when does it apply?
asset owned by:
-a sole trader/partnership/individual partner if use the asset in their trade
OR
- individual shareholder AND asset used in the trade of the company AND company is ‘personal company’ i.e. 5% voting shares in the company.
rollover relief on incorporation of business: conditions for relief to apply?
1) The business must be transferred as a going concern
2) ALL shares issued by the company. E.g. if consideration only 25%, then only 25% of the gain could be rolled over.
3) business transferred with ALL its assets (except cash)
what you can NOT deduct to reduce the size of a capital gain?
Cannot deduct insurance costs, maintenance or repair costs
are shares a qualifying asset for rollover relief of business assets?
no
Patent Court jurisdiction to hear claim over what value?
£500,000
judicial review: when is the time limit six weeks?
Planning Act / planning permission
business asset disposal relief: three requirements
- over 5% shares
- currently officer/ employee
- 2 years prior to disposal
Young v Bristol Aeroplane rule– when can CoA (or High Court in its function as an appellate court) depart from its previous decision?
(3 ways)
- conflicts with another decision; or
- has been implicitly overruled by the Supreme Court; or
- was made per incuriam, ie through carelessness.
Takeover exclusion rules
1) shares are 50% of the voting shares in the body corporate AND
2) the acquisition or disposal is between parties each of whom is a body corporate, a partnership, a single individual or a group of connected individuals.
*for the 50% can add together shares already owned and the ones to be acquired
Now that we’ve left the EU, the European Union (Withdrawal) Act 2018 excludes what principle?
principle of state liability
rules for trustee exclusion?
cannot be remunerated in addition to the remuneration ordinarily received as a trustee
does NOT apply to contracts of insurance/ taking up or pursuing insurance distribution
have to be acting AS trustee, not FOR a trustee (but does still apply if a member of a firm is trustee but activity is carried out by other members of the firm)
For managing and safeguarding, the exclusion is also not available if the solicitor holds themselves out as providing a service comprising managing or safeguarding.
ECHR: Primary and secondary legislation must be interpreted in accordance with Convention rights in what way?
‘in so far as is possible to do so’
applies to legislation passed both before/ after coming into force of the HRA 1998
are UK counts bound by judgements of the ECtHR?
they must ‘take into account’ ECtHR judgements but are not bound by them.
what resolution is required to disapply pre-emption rights?
special resolution
what kind of contracts bind minors?
Contracts for necessaries: this includes
necessary goods/services AND contracts of service for the minor’s benefit
another phrase for debt action?
action for an agreed sum
how to calculate net current assets?
(current assets) minus (current liabilities)
how to calculate net assets?
(fixed and current assets) minus (current and long-term liabilities)
short notice for general meeting? requirements
90% of voting rights for private company + majority of the no. of shareholders e.g. 3 out of 4
95% voting rights for public company (except for AGM which required unanimity) + majority of number of shareholders.
business asset disposal relief (different from business property relief that’s for IHT)
3 conditions
- 5% shares
- officer/ employee
- 2 years
what does limited liability mean?
Each shareholder’s liability for the company’s debts is limited to the amount (if any) unpaid on his shares.
what kind of resolution to remove director, and what kind of notice?
on receipt of a notice of an intended resolution to remove a director, what should happen?
ordinary resolution; special notice
copy of the notice be sent to the director forthwith
what does AIA apply to?
new, second-hand and refurbished plant and machinery, cap of 1 million; companies AND unincorporated businesses
what kind of businesses can full expensing apply to?
companies only
can you claim damages for innocent misrepresentation?
no
may be able to rescind contract if rescission not barred
how does a poll vote work?
one vote per share but out of the people who turn up at the general meeting
who can order poll vote
can be requested by:
chair of meeting
directors
person(s) having 10% or more of total voting rights
when can shareholder NOT vote at shareholders’ meeting?
only when they’re also a director and the vote is about ratification of a breach they did as director
otherwise, shareholder CAN vote in their own interest
can a director vote in board meeting re their own interest?
Unless MA14 is misapplied, no they cannot vote or count in the quorum.
inominate terms: when can contract be terminated?
if breach is VERY serious
how many days from receipt of special notice to call a general meeting?
28 clear days
does LLP need to publish accounts?
yes
classic example of practical benefit? consideration question
extra time
death of a partner in general partnership:
The death will automatically dissolve the partnership but the remaining partners can negotiate to buy out the deceased partner’s share which, if successful, is an alternative to ending the business.
what are the rates of capital gains tax?
what’s the surcharge on residential property that is NOT main residence
- Standard rate of 10% for basic rate taxpayers and 20% higher rate
- 8% surcharge for residential property that is not main residence.
When does the Late Payment of Commercial Debt (Interest) Act apply
commercial specified debts only
affect of the Late Payment of Commercial Debt (Interest) Act?
- interest rate of 8% per annum above the Bank of England’s base rate on the date the debt AND
- small, prescribed amount of statutory compensation for the inconvenience of having to recover the debt.
applicant has duty for what kind of disclosure?
‘full and frank’
promissory estoppel can only be used as what?
a defence
UCTA reasonableness applies to what kind of contracts?
and what does UCTA always exclude from an exemption clause?
business-business
death/PI
what is the effect business asset disposal relief?
flat rate of 10% tax on the gains.
HOWEVER subject to a lifetime cap of £1 million of qualifying gains.
floating charge: relevant time for non-connected and connected people
Relevant time: 12 months for non-connected persons; 2 years for connected persons ending with onset of insolvency
definition of duress?
illegitimate threat
that leaves the other party with NO PRACTICAL CHOICE
andthat was a factor inducing them to enter the contract or variation.
duress: what factors do the court consider when deciding whether there is an illegitimate threat?
- there has been an actual or a threatened breach of contract;
- the threat was made in good or bad faith; or
- the victim protested at the time.
What must be filed at Registrar of Companies when company changes its name?
A prescribed form, the shareholders’ special resolution to change the name and the prescribed fee.
what’s the general rule for contracts with minors?
binding on the other party (so they can be sued) but not on the minor
Under the Companies Act 2006, when will conduct still bind the company, even whilst an activity is ultra vires (i.e. outside the range of activities)
when the other party is acting in good faith.
when does an amendment to a company’s articles of association take effect?
when the special resolution is passed (though this must also be filed at not later than 15 days after amendment takes effect)
how can a new director be appointed?
ordinary resolution or board resolution
appointing a new director– what needs to be filed with Registrar of Companies and what is the relevant deadline?
relevant form (AP01or AP01 if corporate director) within 14 days of appointment
ALSO add director to register of directors and register of directors’ residential addresses
what effect does notice of general meeting being sent by email have?
means 48 hours is added onto the 14 clear days to allow for receipt
how to address High Court judge?
my lord/lady
available damages for misrep?
Damages (for both fraudulent and negligent misrep) but NOT for innocent misery
Recission (but right can be lost/ barred)
*damages awarded on tortious basis i.e. position A would have been in if the misrep never happened but they still entered into the contract
dividend allowance for 2023/2024?
£1000
can the prosecution appeal from the Crown Court to CoA against sentence?
no.
describe the Attorney-General reference procedure
where the Attorney-General considers that the trial judge in the Crown Court has imposed a sentence which is unduly lenient, he may refer the case to the CoA. CoA can then replace the sentence.
how many days to comply with an order/ judgement (incl. costs)?
14
Judicial review: what does a mandatory order do?
enforce the public body’s performance of the duties that they are by law required to carry out.
e.g. compel the body to consider an application
Judicial review: what does quashing order do?
‘quashes’ a decision that the court has found to be unlawful (ie it deprives the decision of legal effect)
how many years rights of audience to be a Recorder?
seven years
how many years’ rights of audience to be District Judge?
five years
floating charge: relevant time for non-connected and connected persons?
12 months for non-connected; 2 years for connected
insolvency: what counts as a ‘connected person’? (3 categories)
- Director/ shadow director of insolvent company
- Close relative/ business association of director/shadow director
- Associate of company (broadly means company in same group as the company or which is controlled by a director of the insolvent company).
consideration need not be…. but it must be….
need not be adequate, but it must be sufficient
contract law: breach of inominate term must be what in order for a party to discharge the contract
VERY serious breach
where do County Court money claims go to?
Civil National Business Centre
very large company: what counts as a very large company and how do they pay their tax?
20 mill, and in four instalments with first instalment being two months and 13 days after start of accounting period
large companies: what counts as large company and how do they pay tax?
1.5 mill; four instalments with first being six months and 13 days after start of accounting period
when is corporation tax due for (most) companies?
within 9 months and 1 day from end of relevant accounting period
process for declaring dividends:
where must the dividends come from?
who decides whether to recommend if dividend should be paid?
how are the dividends then ‘declared?’
available profits (i.e. ‘profit and loss account), can also use profits from previous years if in current financial year there isn’t any profit.
directors decide whether to recommend dividends be paid (re the amount)
shareholders then pass ordinary resolution
a service contract for a guaranteed term of more than how many years must be approved by what?
more than two years; ordinary resolution
1911 and 1949 Parliament Act procedure:
procedure for money bill
Money bills: money bill passed by Commons can be presented to Monarch for assent one month after being sent to the Lords and will become law even though it lacks consent of the Lords.
1911 and 1949 Parliament Act procedure:
procedure for other public bills
if passed by Commons and rejected by Lords in two successive session, bill can be sent to Monarch for assent. One year must elapse between second reading in the Commons in the first session, and the third reading there in the second session.
form for standard disclosure?
N265
shareholder rights re general meeting?
shareholders individually/ together hold 5% of paid up voting shares in the company may request the directors to call a general meeting.
what is the doctrine of Habeus corpus?
that no-one can be detained without lawful reason
criteria for when close company must take ‘tax’ on a loan?
- loan to participator or associate i.e. business partner or close relative
- loan is £15K or more
close company loaning: if ‘tax’ is payable, what’s the %, and what happens when the loan is repaid/ written off
33.75%, and the ‘tax’ is reimbursed to company when loan is repaid/ written off
what’s an aspect of codifying?
incorporating previous case law
if Act says cannot be amended for 10 years, is that true?
No, Parliament is always sovereign and supreme so can always amend its own laws
courts can imply terms into certain types of contract in what situations?
where they regard those terms as a necessary incident of that type of contract
removing a director:
what is the director entitled to re the removal process?
to speak at the general meeting, and also to require the company to send copies of any written representations the director wishes to make to the shareholders
what appears before the particulars of loss and damage in a particulars of claim?
the allegation of loss and damage
particulars of claim: what facts to include??
a concise statement of the facts the claimant relies on
appeal of a decision of a District Judge of the County Court goes to who/where
Circuit Judge; County Court
Civil permission for appeal?
real prospect of success
some other compelling reason
Civil grounds for appeal?
- error of law/fact
- unjust because of procedural irregularity.
leapfrog from CoA to Supreme Court needs what?
point of law of general public importance OR matter of national importance.
leapfrog to Court of Appeal:
permission?
grounds?
Ordinary permission process (real prospect or compelling reason) AND
Important point of principle/ practice OR compelling reason for CoA to hear it.
*This is the same process for second appeals to the CoA
appeal by way of case stated is based on what?
who can appeal by way of case stated?
point of law
prosecution OR defendant
strict liability offences are permitted under Article 6 provided that they are what?
reasonable
derivative claim: who can bring?
any shareholder
what level of insurance must firms have?
adequate and appropriate
difference between zero-rated and exempt VAT?
zero-rated suppliers CAN reclaim VAT paid to HMRC; suppliers who only make exempt cannot register for VAT and cannot reclaim any
