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Business Law and Practice > Workshop 3 - Company formation > Flashcards

Workshop 3 - Company formation Flashcards

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1
Q

Forming a company - documents needed

A

To be prepared and delivered to the Registrar:

  1. an application for registration of a company. s 9(1) of CA 2006
  2. a memorandum of association for the company.
  3. possibly articles of association for the company.
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2
Q

Application for registration - what must include

A
  1. the type of the company - s 9(2) (c) and (d)
  2. the company’s proposed name
  3. the address of the registered office - ss 9(2)(b) and s 9 (5)(a)
  4. a statement of capital and initial shareholders - s 9(4)(a)
  5. a statement of the proposed officers s 9(4)(c)
  6. a statement of initial significant control.
  7. possibly a copy of company’s articles of association. s 9 (5)(b)
  8. a statement of compliance. - s 9(1)
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3
Q

Name of the company

A

The company cannot be registered with a name already appearing in the index of company names at Companies House - s 66(1)

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4
Q

What must be included in the name of the company

A

s 59 - ltd/limited for limited companies.

s53 - criminal offence for using offensive names.

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5
Q

Registered office

A 
- s 86 of CA - a company must have a registered office.
s 9(5)(a) - the address must be included in the application form.
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6
Q

Articles of association

A

every company must have articles of association.s18
they can be:
1. unamended model articles of association.
2. model articles of association with amendments.
3. bespoke articles of association.
Articles do not need to be attached with registration if company opts for unamended articles - ss18(2) and 20(1)(a)

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7
Q

Memorandum of association

A

-s9(1) submitted at registration.
It states the subscribers.
Simple document requiring signatures and date.

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8
Q

Disclosure of company details

A

Companies (Trading Disclosures) Regulations 2008 SI 2008/495 to ensure people know:
1 its name
2 people
3 where further information may be found.

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9
Q

Changes to be made when client buys a shelf company

A
  1. Ownership - shares.
  2. Officers.
  3. Name
  4. Articles
  5. Registered office
  6. ARD
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10
Q

The Company’s constitutiton

A
  • ss 17,29,32 of CA 2006. It includes:
    1. Articles of association.
    2. Certificate of incorporation.
    3. Current statement of capital.
    4. Copies of Court orders and enactment (legislation) altering the company’s constitution.
    5. Resolutions affecting the constitution.
    6. Shareholders’ agreements affecting the constitution.
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11
Q

Shareholders joining the company

A

s112 of CA 2006

a) the person must agree to become a shareholder.
b) his name must be entered in the register of members.

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12
Q

The subscribers of memorandum

A

First shareholders of the company when the register issues certificates of incorporation. s112(1) s 16(5)
Their agreement is deemed given and their names must be entered in the Register of Members. s 112(1)

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13
Q

Buying shares from the company

A

allotment of shares.
the allottee agrees to become a shareholder by formally applying to the company to buy the new shares and becomes a shareholder when his name is entered in the register. s 112(2)

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14
Q

Buying shares from existing shareholders

A

transfer of shares
the transferee agrees to become a shareholder by submitting the share certificate to the company and becomes a shareholder when his name is entered in the register of members -s 112(2)

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15
Q

The register of members

A
  • s113(1) every company must hold a register of the persons who own a share in it.
  • it must contain:
    1. S’s names and addresses
    2. the date of entry into the register of S.
    3. the number of shares owned by S
    4. the class of shares
    5. the amount paid on each share.
    6. the date a S leaves the company.
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16
Q

PSC Register

A
  • required by s790M.
    PSC is:
  • a person who owns or controls more than 25% of the voting rights, or
    -has the right to appoint or remove a majority of the board of directors, or
    -has the right to exercise significant influence.
17
Q

Forms to be filed at Companies House when PSC

A

PSC01 - when individual becomes PSC
PSC02- when a company becomes PSC
PSC04 - change in details
PSC07- when individual/company ceases to be a PSC.

18
Q

Shareholders’ rights

A
  • Contractual rights

- Statutory rights

19
Q

Shareholder’s contractual rights

A

2 sources

a) shareholders section 33 contract
b) shareholders agreement.

20
Q

Shareholders statutory rights

A 
Share certificate
Register of members
Key company documentation
Inspection of company information
Voting rights
Notice of general meetings
Written resolution
Written statement
Removal of director and auditor
Court proceedings
calling a GM
Court ordered GM
breach of constitution
Unfair prejudice.
Winding up the company.
21
Q

Officers of the company

A

Company secretary
Directors
Auditors

22
Q

What does a company secretary do?

A

not prescribed and can vary
the directors decide upon its role
Usually: writes minutes of BM and GM, keep up to date the Company’s itnernal registers, send necessary returns to Companies House.

23
Q

Is a company secretary required?

A

Not required for a private company - s770(1)

24
Q

First appointment of Company Secretary (upon company registration)

A
  • CS will be on form IN01 and automatically takes office when the certificate of incorporation is issued.
25
Q

Later appointment of Company Secretary

A
  • Through BR

- s276(1) notify the Registrar of COmpanies within 14 days of appointmnet on form AP03 for human and AP04 for company.

26
Q

Removal of a secretary

A

-any time by BR or resignation.

Form TM02.

27
Q

Types of directors

A 
-s250(1): anyone occupying the position of director by whatever name called.
It includes:
1. Executive directors.
2. Non-executive directors
3. Chairman
4. Shadow directors.
5. De facto directors
6. Alternate directors
7. Corporate directors
28
Q

First appointment of director (upon registration)

A

in the statement of the proposed officers s16(6)(a)

29
Q

Directors’ powers

A
  • responsible for the management of the company.
  • majority of decision at a board meeting.
  • unanimous decision without BM.
  • they might need S’s approval for certain decisions.
30
Q

Appointment of director (following registration)

A

Art 1 7 of MA.
BR or SR
AP01 or AP02 within 14 days and update the register of directors.

31
Q

Termination of directorship

A
  • resignation - art 18(f)
  • by BM - not specified in the articles
  • by shareholders - OR s 168(1)

Business Law and Practice (4 decks)

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