Finance

Question 1

Ordinary share

Answer 1

vote at GM
unrestricted dividend

Different classes may have different voting rights

Question 2

Preference share

Answer 2

Enhanced right over and above ordinary shares (normally first right to dividend / capital)
- cumulative = right to missed dividends
- partipating = also rights of ordinary shareholder to dividend as well as normal right

Question 3

Allotment - Tabled Documents

Answer 3

• Amended articles
• applications by persons for allotment

Confrim that received payment of subscription monies in full

Question 4

Allotment - Board resolutions

Answer 4

• Call GM / WR
• Approve allotment
• Issue share certificates

Question 5

Allotment - SH resolutions

Answer 5

• OR to remove cap
• SR to amend articles
• OR to approve allotment
• SR to disapply pre-emption rights

Question 6

Allotment - filing requirements

Answer 6

• File copies of ORs and SRs
• File copy of amended articles
• Update Register of Members / PSC
• SH01
• PSC01
• Issue share certificates

Question 7

Share buy back

Answer 7

Co can buy back its own shares provided fully paid up and will have other shares than redeemabble or treasury shares in distribution.

Three ways to buy-back, distributable reserves, allot new shares or out of capital

Question 8

When can you buy back shares out of capital?

Answer 8

1. Private Company
2. No distributable reserves / issue of fresh proceeds
3. Company Accounts (les than 3 months old), Statement of Solvency (within week of GM) and Audit Report (within week of GM)

Question 9

Process for buy back (if DR or issue)
- Tabled docs
- Board resolutions
- Shareholder resolutions
- Filing

Answer 9

Tabled docs
- Copy of buy-back contract (15 days prior to GM)

Board resolutions
- call GM or WR
- Approve draft contract
- Authority to sign contract

Shareholder resolutions
- OR to approve buy-back contract

Filing
- Keep copy of contract for 10 years
- SH03
- Notice of Cancellation
- Statement of capital
- Register of Members / PSC
- PSC07

Question 10

Process of buyback (capital)
- tabled documents
- board resolutions
- shareholder resolutions
- Filing

Answer 10

Tabled Docs
- Company Accounts (within 3 months)
- Statement of Solvency
- Audit Report
- Notice for Gazette and national paper (for 1 week after GM)
- Contract for buyback

Board resolutions
- Call GM / WR
- Directors to sign statement of solvency within 1 week of GM and annex audit report
- Directors to approve buy back
- Approve tabled documents
- Directors to place notice in Gazette and national paper
- Directors to sign contract
- Directors to pruchase shares by making capital payment after 5 weeks but no later than 7 weeks after passing SR

SH resolutions
- OR to approve contract
- SR to approve buy-back from capital

Filing
- as before plus:
- Copy of Special Resolution
- Copy of DDS and AR with companies house by date of gazette notice

Question 11

Transfer of shares procedure

Answer 11

1. Complete STF
2. Pay SDLT if over £1k (at 0.5% rounded to nearest £5)
3. Send STF to company

Company will tehn register and send share certificate to new owner

Question 12

Financial assistance rules

Answer 12

Public co cannot give financial assistance
Private co can only give financial assistance to private subsidiaries (not public subsidiaries)

Question 13

Dividend

Answer 13

Distribution of profit to SHs

Question 14

Dividend procedure

Answer 14

1. Profits available
2. Directors recommend
3. SHs approve

If final: debt + must be paid
if interim: no SH approval but need not be paid