incorporating companies (week 2)

Question 1

what were the constitutional documents required to incorporate a company under CA 1985? (OLD ACT)

Answer 1

articles of association and the memorandum

Question 2

what are the constitutional documents required to incorporate a company under CA 2006?

Answer 2

articles of association only

Question 3

what is an objects clause when creating a company?

Answer 3

a clause which sets out the purpose of the company which is being formed

Question 4

what is the purpose of the articles of association?

Answer 4

they regulate the relationship between the shareholders, the directors and the company

Question 5

what is the legality test (incorporating companies)

Answer 5

articles of association must comply with the minimum provisions of the CA 2006

Question 6

what are the three forms of articles of association?

Answer 6

model articles (MA)
amended MA
tailor-made articles

Question 7

what are model articles?

Answer 7

default articles which are provided by the CA 2006, there are prescribed MA for different types of companies

Question 8

what are amended MAs?

Answer 8

company chooses to adopt MA as their articles, but elect to exclude, or modify the effect of, some of its provisions insofar as the CA 2006 allows them to do so.

Question 9

what are tailor made articles?

Answer 9

where the solicitor of a company drafts articles which are tailor made for the particular company concerned.

Question 10

what are the legal effects of articles? (who do they contract)

Answer 10

they contract between the company and its members

Question 11

what is a shareholders agreement?

Answer 11

is a private agreement between the shareholders which is enforceable as a contract between members.

Question 12

what are the two key ways you can incorporate a company?

Answer 12

incorporating by scratch
a shelf company conversion

Question 13

what are the 4 things needed to incorporate by scratch? (what documents do you need)

Answer 13

memorandum
articles
fee
form IN01

Question 14

what info is included in a form IN01?

Answer 14

Company’s proposed name
if company is private or public
company’s registered appropriate email address
if the company is limited by shares
a statement of capital and initial shareholdings
statement of compliance
statement of lawful purpose

Question 15

what does a certificate of incorporation set out?

Answer 15

name of the company
company’s registered number
date of incorporation

Question 16

what is an ‘appropriate address’?

Answer 16

an address where a document addressed to the company and delivered by either hand or post would be expected to com to the attention of a person acting on behalf of the company and where the delivery of document is capable of being recorded by obtaining acknowledgement of delivery. (not possible to use a PO Box)

Question 17

what is a shelf company?

Answer 17

one that has been set out in advance by a company registration agent or law stationer. this means it is already incorporated, exists as a legal entity and is ready ti be used to trade and can enter into contracts.

Question 18

what should a private limited company name end with?

Answer 18

limited or ltd

Question 19

at what stage does a company become a separate legal entity?

Answer 19

company comes into existence at the time of the certificate of incorporation by the registrar of companies.

Question 20

who carries out the day to day decision making of a company?

Answer 20

the directors

Question 21

when is a matter referred to the shareholders? (there are 2)

Answer 21

a matter is outside the powers of the directors
matter is within the powers of the directors but requires the prior approval of the shareholders before the directors can be authorised to act

Question 22

how are board resolutions passed?

Answer 22

passed by a simple majority
(unless directors have agreed that a particular decision requires all of them to agree through unanimity)

Question 23

how are shareholder resolutions passed? (there are 2 ways)

Answer 23

at a meeting of shareholders (general meeting)
in writing (for private companies only) unless the resolution is to remove a director or an auditor

Question 24

what are the two different types of shareholder resolutions?

Answer 24

ordinary resolution: passed by simple majority (over 50%)
special resolution: passed by a majority of 75% or more

Question 25

what is a show of hands? (shareholders)

Answer 25

each shareholder present at the meeting has one vote

Question 26

what is a poll (shareholders)?

Answer 26

every shareholder has one vote in respect of each share held by them

Question 27

when can a poll be demanded by a shareholder?

Answer 27

poll on a resolution can be demanded either in advance of the GM when the vote will take place or at a GM either before a show of hands on that resolution or immediately after the result of the vote

Question 28

who can demand a poll (shareholders voting)? (there are 4)

Answer 28

chairperson of the meeting the directors two or more persons having the right to vote on the resolution a person or persons representing at least 10% of the total voting rights of all the shareholders entitled to vote on the resolution

Question 29

what type of company can pass written resolutions?

Answer 29

only private companies

Question 30

2 types of written resolutions - what are they?

Answer 30

written ordinary resolution (simple majority) written special resolution (be passed by members representing not less than 75% of the total voting rights of eligible members

Question 31

what are the two decisions that can not be passed by a written resolution?

Answer 31

the removal of a director the removal of an auditor

Question 32

what is quorum? (board meetings)

Answer 32

requires a minimum of two directors to be present for the meeting to be quorate.

Question 33

what notice is needed for board meetings?

Answer 33

reasonable notice

Question 34

what notice is needed for general meetings (shareholders)?

Answer 34

for private companies, a minimums of 14 clear days is required. therefore, realistically 16 days as the clear days don’t count into the day you issue the notice and the day of the meeting

Question 35

what is post meeting matters? (PMMs)

Answer 35

such as external filings of documents at companies house and internal filings in the company's records (such as minute books and registers)

Question 36

when can a GM be called at short notice?

Answer 36

if its agreed by the majority in number of the shareholders who, together, hold shares with a nominal value of to less than 90% of the total nominal value of the shares which give the right to attend and vote at the GM.

Question 37

what happens if there is not sufficient number of responses to pass a written resolution?

Answer 37

the time will lapse the lapse date is 28 days beginning with the circulation date

Question 38

What is the requirement for issuing a short notice?

Answer 38

It must be agreed by majority of number of shareholders who own 90% or more of the shares. Therefore, need a majority of shareholders + own shares 90% or more