Directors decisions (Operating Decisions)- FS Flashcards
(16 cards)
What is the primary purpose of the first directors’ (board) meeting following company incorporation?
The first board meeting is held to make key post-incorporation decisions that will determine how the company operates, including matters like tax registration, banking, and appointments.
What government body must a newly incorporated company register with for tax purposes?
The company must register with HMRC (His Majesty’s Revenue and Customs) for VAT, corporation tax, PAYE, and national insurance if employing staff.
What kind of resolution is typically passed by directors at their first meeting to approve HMRC registration forms?
A board resolution is passed to approve and authorize the submission of required tax registration documents.
Is it legally required for a company to appoint a chairperson?
No, appointing a chairperson is not legally required, but it may be beneficial in case of director deadlock, as the chairperson may have a casting vote under Model Article 13.
Under which Model Article does the chairperson have the power to cast a deciding vote in case of a deadlock?
Model Article 13 grants the chairperson the power of a casting vote during director decision-making deadlocks.
Is a company legally required to have a bank account upon incorporation?
No, a company is not legally required to have a bank account, but it is advisable for operational purposes like receiving income and paying expenses
What can directors do to limit payment authority when opening a bank account?
Directors may place a monetary cap on payments made by authorized individuals, restricting them to transactions below a set threshold.
Is a company obligated to have a common seal under the Companies Act 2006?
No, under Section 45(1), a company may have a seal, but it is not required by law.
If a company chooses to use a common seal to execute documents, what additional step is required under the Model Articles?
: Under Model Article 49, an authorized person must sign the document in the presence of a witness who attests the signature.
Can a company modify the signing process for executing documents using a seal?
Yes, the company may disapply Model Article 49 by amending its Articles, thereby modifying the required execution process.
How can a company legally change its registered name under the Companies Act 2006?
Under Section 77, a company may change its name by special resolution or by a procedure expressly provided in its Articles.
What form must be submitted to Companies House to register a change in company name?
The company must file Form NM01 with Companies House along with a copy of the special resolution authorizing the name change.
What is the default accounting reference date for a newly incorporated company?
The default accounting reference date is the last day of the month in which the company was incorporated.
Under which section of the Companies Act can directors change the accounting reference date?
Under Section 392, directors may change the accounting reference date by notifying the registrar, provided the new period does not exceed 18 months
Under what condition must a company appoint an auditor after incorporation?
If the company is not classified as a small company under Section 382, it must appoint an auditor to review its financial accounts.
What requirement applies to directors’ service contracts with terms longer than two years?
If a service contract guarantees a term exceeding two years, it must be approved by shareholders via an ordinary resolution.
