2.1 Companies: Intro to Companies Flashcards
(140 cards)
1
Q
What determined the internal management of a company
A
The AoA
2
Q
When is a company a subsidiary?
A
Other C holds majority of voting rights, or can appoint/remove majority of BoD, or controls voting rights
3
Q
Part of CA on PLC at end of name
A
s.58
4
Q
What must PLCs have at the end of their name
A
Public Limited Company or p.l.c
5
Q
What type of offence is it not to identify or notify of a PSC
A
Criminal offence
6
Q
When can PubC shares not be paid in cash
A
When there has been an independent valuation
7
Q
S.763 says what
A
PubC needs minimum share capital
8
Q
What is ‘floatation’
A
Process of obtaining a listing (usually accompanies by an IPO)
9
Q
How do shareholders get a financial return on their shares - three ways
A
Dividends, sale and winding up
10
Q
Who is the main regulator of financial services in the UK
A
FCA
11
Q
How can creditors get around a company being limited liability?
A
Require a personal guarantee from shareholders
12
Q
What is another name for shareholders
A
Members
13
Q
Part of MA on BM quorum
A
Article 11
14
Q
What kind of tax is paid on the sale of shares
A
CGT
15
Q
What must a public company be listed on to issue shares
A
LSE
16
Q
What companies are excluded from the PSC regime
A
PubCs listed on LSE, as subject to similar regulations
17
Q
Minimum director for PubC
A
2
18
Q
What does a company have to deliver to CH annually
A
Annual confirmation statements + annual accounts
19
Q
What MA gives shareholders powers to remove/appoint new Ds
A
Article 17(1)(a)
20
Q
Who must notify the company of the status of PSCs, and what time period
A
The PSC themselves, within 1 month
21
Q
Does a company have a separate legal personality?
A
Yes
22
Q
What type of company need not have an AGM
A
Private
23
Q
At what point in time can a poll vote be demanded
A
In advance of GM, or before/after SoH
24
Q
What are the time periods to give notice for changes to the PSC register (to change reg + to tell CH)
A
14 days to change the register, and a further 14 to tell CH
25
What happens if A tries to enter into C for company pre-incorporation
A is personally liable
26
Where are the statutory duties of a director in CA
171 - 177
27
What was an objects clause
Restricted the power of C to deal w/ 3rds
28
What part of CA demands Ds comply with AoA
S.171
29
How are BRs usually passed
Simple majority
30
Where are the conditions for PSC in CA
Part 1 Schedule 1A
31
Can C enter into contract pre-incorporation? CA provision
No 51(1)
32
Who must a company register with
CH
33
What are Ds statutory duties
Act within powers; avoid conflicts; independent judgment; promote success of C for benefit of M; not accept benefits from 3rd; declare interest in transactions
34
171 - 177 CA covers what
Statutory duties of directors
35
Why do 3rd make contracts with a company and not its directors?
Company has separate legal personality
36
What section governs how shares must be paid in Privc
s.582
37
What two certificates for a PubC require
Trading + certificate of incorporation
38
What company only requires a certificate of incorporation
Priv
39
What used to be contained in the memorandum of association
Objects clause + statement of authorised capital
40
s.755 covers what
PrivC cannot offer to public
41
Can the nominal value of share capital be discounted?
No
42
Who deals with the s-to-day management of a company
Directors
43
Who exercises ultimate control over a company
Shareholders
44
How must PubC shares be bought
In cash
45
For what two reasons can the sale of shares in a private company be difficult
AoA may restrict sale to non-Ms, and there is no public market
46
What is the contract of membership, essentially
The AoA
47
How many clear days notice to call AGM
21 for PubC
48
S.270 covers what
Privy need not have CS (but can)
49
Majority for SR
At least 75%
50
What kind of company must have CS
Pub
51
S.171 says what
Ds must company with AoA
52
What type of company must have an AGM and what section
Pub, s.336
53
51(1) on what
Company cannot enter into contracts pre-incorporation - instead, A is personally liable
54
Who do directors owe a duty to
The company
55
Example of criteria for LSE MM
3 years trading record
56
Two ways a director can be appointed
OR or by Directors
57
What is the principle of maintenance of share capital?
Share capital if a permanent fund for creditors, so must be maintained and only returned to shareholders in limited circumstances
58
Majority for OR
More than 50% (simple)
59
Article 42 MA applies to what
Poll demand
60
Minimum number of shareholders to form a company
1 or more
61
How are the objects clause and statement of authorised share capital now treated
Part of AoA
62
What can directors be liable for if they exceed their powers or breach their duty
Loss
63
Ds usually vote by collectively by simple majority - part of MA
Article 7(1) MA
64
Two ways shareholders exercise ultimate control over a company
Determining the company's constitution, and voting
65
Where must an 'objects clause' now be under CA '06
In AoA
66
How are NEDs paid
by directors' fees.
67
Minimum director for PrivC
1
68
What kinds of companies have continuing obligations
Listed public companies
69
Can shares be issued at a discount, or at a premium?
Premium
70
What is the aim of continuing obligations of listed companies
Full info disclosure, allowing shareholders to object to large/sensitive transactions
71
S.154 covers what
Minimum directors for pub and priv
72
What is a statement of authorised share capital
Places a cap on shares that could be issued
73
What parts of CA impose MA by default
s.9(5)(b) + s.20
74
s.8(1)(b) applies to what
Privy must have at least 1 share in issue
75
What are PSCs
Persons with significant control
76
What method of appointing directors is easier and why
Directors as quick
77
What is the minimum quorum for BM, and what is it presumed to be if not fixed
2 Ds
78
What type of company must have at least 1 share in issue
Private
79
Part of CA on calling GMs
307
80
What were MA previously called under CA '85
Table A
81
307 CA covers what
Notice for calling GMs
82
Can an unlimited C be created?
Yes
83
Two examples of when shareholder consent is required
Loans to director, long-term service Cs of D
84
What company need not have CS
Priv
85
Section of CA on PubC needing minimum share capital
s.763
86
Type of res to change C name
SR (or other means in AoA, or in CA '06 provisions)
87
How many clear days notice to call a GM
14 for Priv and Pub
88
s.1159 applies for what
Definition of subsidiary
89
s.582
shares in PrivC must be paid 'in money or money's worth'
90
MA on appointing directors (two ways)
Article 17(1)
91
What part of CA covers OR
282
92
What MA allows a poll to be demanded
Article 42 MA
93
Who has a casting vote in the BM
Chairman
94
What are shareholders liable for in a company
Only liable for their share subscription
95
s.271 covers what
PubC must have CS
96
Two kinds of lists at LSE
Main Market or AIM
97
Who can be appointed as a director
Anyone who is willing
98
Two ways to remove a statement of authorised share capital (For company incorporated under CA '85)
Altering AoA by SR (s.21(1)), or by OR under the transitional provisions
99
What sections govern payment for shares in PubC
586 & 593
100
Why is a breach of the AoA by a director not a BoC?
Directors are not privy to the contract
101
Part of CA on certificate of incorporation
S.15
102
7(1) and 8(1)
Two sections say one or more persons to form a company as minimum shareholders
103
What part of MA lets any D call BM
Article 9(1)
104
What must Private Limited Companies have at the end of their name
LTD or limited
105
How must shares be paid in a private company
'Money or money's worth'
106
Part of CA on Ltd at end of name
s.59
107
What two sections say one or more persons to form a company (minimum shareholders)
7(1) and 8(1)
108
Section on 'subsidiary' definition
s.1159
109
S.59 and 58 cover what
PLC and LTD at end of the name
110
What kind of company cannot pass SRs by WR
PubC
111
What is required to agree on form of notice for calling GM
Board Resolution
112
What is an IPO
Initial public offering
113
Who must take reasonable steps to identify PSCs
The company: 790D
114
What part of MA details who can demand a poll vote
Article 44 MA
115
What are the essential conditions to become a PSC
Holds more than 25% of either shares or voting rights, or has the power to appoint/remove majority of BoD, or exercises significant control
116
Part of CA on SRs
283
117
What liability is there for shareholders in a company
Limited
118
If D is also S, are they the same role?
No, analysed separately
119
S.336
PubC to have AGM
120
s.593 & 586 govern what
Payment for shares in PubC
121
What is the normal voting method at GMs
Show of hands
122
What does AIM stand for
Alternative Investment Market
123
How much of the value of PubC shares must be paid + premium
1/4 of NV + 100% of premium
124
What must a company be when winding up for a shareholder to get a financial return
Solvent
125
What is the effect of a PrivC being prohibited from offering to the public
Limits investor base + access to international debt capital markets
126
What section governs changing the name of CA
77
127
Why might a company list on AIM instead of MM
Smaller, can't fulfil MM criteria or for less regulations
128
How are EDs paid
By salary
129
What part of MA applies to BRs by unanimity
MA 8
130
What section of CA governs PSC (notification requirements etc.)
790
131
For what company's shares is there no restriction on the method of payment, and no need for immediate payment
PrivC
132
What must a PSC also be, if it is a C/LLP, beyond meeting the conditions in CA
A registrable entity
133
What kinds of companies cannot generally offer shares to the public
PrivC
134
What suggests PubCs can offer to the public
Not mentioned in prohibition against PrivC in s.755
135
Two kinds of shareholder resolution
Ordinary and special
136
What kind of tax is paid on dividends
Income
137
What section requires PubC shares to be in cash
593
138
When is a company wholly owned?
Only the parent company (+ its wholly owned subs) is a shareholder
139
Who, under Article 44 MA, can demand a poll vote
Chairman, 2 or more w/ right to vote, or person(s) w/ at least 10% of total voting rights
140
What is the minimum share capital for a public company
Share capital with nominal value of at least £50k or euro equivalent
