Syllabus 9 Business (corporate) structures Flashcards
(56 cards)
What is the primary rule to follow when deciding upon a company name?
It is important to avoid a name which is the same or similar to that of an existing company
What happens if you choose a company name that is identical to an existing company’s name?
The Registrar (Companies House) will not allow incorporation under the proposed name.
When determining if a name is identical, what words does the Registrar disregard according to Schedule 3 of the 2009 Regulations?
Certain words are disregarded, such as company, holdings, international, group, Great Britain, United Kingdom
Under Part 5 of the Companies Act 2006, why might a third party object to a company name?
They can object if the name is the same or similar to a name in which they have goodwill.
How is ‘goodwill’ often described in relation to a business name?
It is often described as “the attractive force which brings in custom”. Lord Macnaghten also described it as “the benefit and advantage of the good name, reputation and connection of a business” and “the one thing which distinguishes an old-established business from a new business at its first start”.
If an objection to a company name is upheld, what can the Company Names Adjudicator direct the company to do?
The Adjudicator will direct the company to change its name.
Besides an objection via the Company Names Adjudicator, what other legal actions can be brought if a company name is similar and may be confused with another business name?
An action in passing off and/or trade mark infringement remains available.
How can you reduce the chances of choosing an identical or too similar name to another business?
You can conduct a search of the index of company names held at Companies House. To reduce the risk of passing off and/or trade mark infringement, trade mark and common law searches should also be conducted.
What restriction does the Registrar place on the use of certain words in a company name?
The Registrar restricts the use of a large number of words, generally those with a connection to an official body, which must give its permission for their use
How must the name of any private company generally end?
It must generally end with the word “Limited” or “Ltd”.
Since 1 October 2008, does a company’s displayed name have to be exactly the same as its registered name?
No, permitted differences include uppercase or lowercase letters, punctuation, accents, and formatting, as long as the differences do not give rise to a risk of confusion.
Why is it important to accurately identify the legal person you are dealing with when interacting with a company, especially if you intend to sue?
It allows a person dealing with the company to exactly identify the legal person. If you intend to sue, you must sue the correct party. You generally cannot sue a parent company for the wrongs of a subsidiary, or vice versa.
Under what section of the Companies Act 2006 can a person object to a registered company name?
Under section 69 of the Companies Act 2006.
What are two grounds for objecting to a company’s registered name before the Company Names Tribunal under section 69 of the Companies Act 2006?
1) The name is the same as a name associated with the applicant in which the applicant has goodwill.
2) The name is sufficiently similar to a name associated with the applicant that use of the name would likely mislead by suggesting a connection between the company and the applicant.
What are some defences a company (the respondent) can raise against an objection to its name before the Company Names Tribunal?
Defences include: the name was registered before the applicant’s activities showing goodwill began; the company is operating under the name, or proposing to and has incurred substantial start-up costs; the name was registered in the ordinary course of a company formation business and is available for sale to the applicant on standard terms; the name was adopted in good faith; or the applicant’s interests are not adversely affected to a significant extent.
What is the easiest way to set up a company?
By buying a “ready-made” or “shelf” company.
What Act sets out the requirements for the formation of a company in the UK?
The Companies Act 2006.
Under the Companies Act 2006, what documents are required to form your own company?
A Memorandum of Association, Articles of Association, and a completed form IN01. These are sent to the Registrar of Companies with the registration fee.
What does the Memorandum of Association evidence and what must it state under the Companies Act 2006?
It evidences the intention of the subscribers to form a company. It must state that the subscribers wish to form a company under the Act, agree to become members, and if there’s share capital, that they will take at least one share each.
What do the Articles of Association set out for a company?
They set out the internal regulations of the company. This includes the powers of directors and shareholders, meeting rules, and share allotment/transfer.
What is the significance of the Articles of Association regarding shareholder and director decisions?
Shareholder decisions are only valid if reached in accordance with the rules laid down by the articles (and the Companies Act). Directors’ decisions are only valid if within the powers delegated to them as set out in the articles.
What is the primary function of Form IN01?
It sets out details of the company, including the name, first directors, and company secretary.
When does a company legally come into existence?
On the date of incorporation stated on the Certificate of Incorporation.
How is a company’s initial capital typically generated?
By the paid-up share capital, which is the amount paid by the members for their shares.
