U3 Flashcards
(90 cards)
1
Q
Ordinary resolution
A
MORE THAN 50% of votes in favour
2
Q
special resolution
A
AT LEAST 75% of votes in favour
3
Q
Amending articles
A
Special resolution
4
Q
changing company name
A
special resolution
5
Q
changing from private to public
A
special resolution
6
Q
Who can appoint a director (MA17)?
A
Either by the directors OR shareholder by ordinary resolution
7
Q
Removing a director
A
ordinary resolution
8
Q
Which companies can use the written resolution procedure?
A
Only private companies
9
Q
Can a written resolution be used to appoint a director?
A
Yes, by ordinary resolution
10
Q
Can a written resolution be used to remove a director?
A
No, only at a GM by ordinary resolution
11
Q
Can a written resolution be used to amend the articles?
A
Yes, by special resolution
12
Q
Who must the written resolution be sent to?
A
All eligible members (those entitled to vote on the resolution on the circulation date of the resolution) AND auditors
13
Q
What should a written resolution include when circulated?
A
- How to sign the agreement AND
- Deadline for returning written resolution (lapse date)
14
Q
What is required for written resolution to pass?
A
Requires the requisite percentage of eligible members to vote in favour before the lapse date expires (28 days) usually midnight
15
Q
When does a written resolution become effective?
A
As soon as the required majority signify their consent
16
Q
When is the lapse date for a written resolution?
A
28 days after the circulation date and timer begins on the circulation date
17
Q
What is the difference between a shareholder and eligible member?
A
In some circumstances, a shareholder is not eligible to vote
18
Q
How can shareholders requisition a GM?
A
Shareholders with at least 5% paid up capital (and can vote at GM)
Directors must call within 21 days of request
Minimum notice is 14 clear days (max 28 days)
19
Q
How can shareholders request to circulate a written reoslution?
A
Shareholders with 5% or more of voting rights
Directors must circulate with statement (if any up to 1000 words) within 21 days of request
20
Q
Who is notice of a GM sent to?
A
all shareholders, director, auditors
21
Q
What must the notice set out?
A
- Time, date, place
- General business of meeting
- Exact wording of any special resolution
- Shareholders right to appoint a proxy
22
Q
What is the notice period for a GM?
A
14 clear days (+48hrs for email and post)
23
Q
How can a GM be held on short notice?
A
Consent from:
* majority in number of shareholders AND
* holding at least 90% of voting shares (95% for public companies)
24
Q
Which shareholder decisions cannot be held on short notice?
A
Any that require a memorandum:
- Removing a director
- Loan to director
- Service contract (fixed term > 2 years)
25
when will a GM be quorate
at least 2 shareholders unless only one member
26
can shareholders vote and count in quorum where they have a personal interest
Generally - yes
EXCEPT -
* resolution to buyback their shares
* ordinary resolution to ratify directors breach where the director is a shareholder
27
Who can demand a poll vote?
* Chair
* Directors
* 2 or more persons with right to vote on resolution
* Person/persons holsing 10% or more of the total voting rights of all the shareholders having the right to vote on the resolution
28
When can a poll vote be demanded
* before or during GM
* before or after show of hands votes
POLL VOTES OVERRIDES SHOW OF HANDS
29
How long must minutes of GM be kept?
Minutes must be kept at the registered office for 10 years
30
What is the time limit for sending copies of special resolutions to Companies House?
Copies of special resolutions must be sent to Companies House within 15 days (s 29 & 30 CA).
31
Where can a company keep its registers, such as the register of members?
Registers can be kept at the registered office, a Single Alternative Inspection Location (SAIL), or the company may elect to keep them at Companies House.
32
What is the consequence of failing to maintain the necessary registers, such as the PSC register?
criminal offence.
33
What is an eligible member?
shareholders entitled to vote on the resolution as at the circulation date of the resolution
34
What powers does the ECCTA 2023 give to the Registrar?
Registrar can query, reject, or request additional evidence for filings and remove material more quickly than before.
35
What is the consequence of providing misleading, false, or deceptive information to Companies House?
It is a criminal offence. Under the ECCTA 2023, the offence also includes providing false information without a reasonable excuse.
36
What are the statutory books?
* Register of Members.
* Register of Directors.
* Register of Directors' Residential Addresses.
* Register of Company Secretaries.
* Register of People with significant control (PSC)
* Register of Charges
37
Where can statutory books be kept?
* The company’s registered address,
* A Single Alternative Inspection Location (SAIL), or
* On the central register at Companies House.
38
What forms are used to notify or move records to or from the SAIL?
* AD02 - notify CH of a SAIL address.
* AD03 - moving records to the SAIL.
* AD04 - moving records back to the registered office.
39
For how long must a company keep records, including minutes of board meetings and general meetings and record of written resolutions?
10 years
40
What happens if a company fails to keep adequate accounting records?
offence under s 387 CA 2006.
41
what must directors ensure each year
that accounts are produced each financial year giving a true and fair view of the company
42
What are the exceptions to the requirement for directors to prepare a directors' report accompanying annual accounts?
Exceptions include:
* Small companies (balance sheet £5.1m or less, turnover £10.2m or less, and 50 employees or less in a financial year (s 382)).
* Micro-entities (balance sheet £316,000 or less, turnover £632,000 or less, and ten employees or less (s 384A)).
43
Who should directors circulate accounts, directors report and auditors report to each year?
every shareholder and anyone else entitled to notice of GMs
44
What are the time limits for filing accounts and the directors' report at Companies House?
* 9 months - after the end of the accounting reference period for private companies.
* 6 months - for public companies.
* Option of 3 months for newly incorporated companies.
45
what is the confirmation statement
confirms info held at CH is correct and up to date
46
What is the deadline for filing a confirmation statement (CS01), and what are the consequences of late or failed filing?
must be filed within 14 days of the confirmation date (the anniversary of incorporation). Late or failed filing is a criminal offence.
47
Is a company secretary required for private companies?
No just public
48
How is a company secretary appointed?
* Usually named in IN01 on incorporation
* Appointment after is by **board resolution**
49
How can secretaries be removed?
* resign
* be removed by BR
50
apparent authority and secretaries
may have apparent authority to enter contracts of administrative nature NOT trading contracts
51
What are the requirements for notifying Companies House about changes in the company secretary's particulars?
* AP03/AP04 for the appointment of a company secretary within 14 days.
* TM02 for the resignation/removal of a company secretary.
* CH03/CH04 to notify Companies House of any changes in the particulars of the company secretary within 14 days.
52
What is the register of secretaries?
it is what is is....
has specified particulars
53
What is a company auditor
accountant who prepares report on annual accounts for shareholders
54
Who qualifies as an auditor for a company?
An auditor must be a certified or chartered accountant, independent of the company, and not connected to anyone involved in the company (ss 1215-1215 CA 2006).
55
Which companies must have an auditor?
private companies unless small companies who are exempt or dormant companie
56
What does the auditor do?
prepares report on annual accounts for shareholders to ensure SHs not defrauded/misled
57
How can an auditor be appointed and removed?
first auditor normally appointed by directors
58
Do shareholders have power to appoint auditors
yes by OR
59
Can auditors be removed?
Yes by SH at any time (by OR)
SH must give special notice to the company of the proposal to remove
60
Can an auditor resign?
at any time by written notice to company's registered office
must make a statement explaining circumstances
61
What statement must the auditor make when removed or resigns
statement to company explaining circs connected with ceasing to hold office
62
What are the criminal offences for an auditor under the Companies Act 2006 (s 507)?
An auditor can commit two criminal offences:
* Knowingly or recklessly including misleading, false, or deceptive material in the auditor's report.
* Omitting statements from the report as required under the Companies Act 2006.
63
what is a subscriber
the 2 people who sign memorandum and automatically become first sharehodlers
64
who is a PSC
MORE THAN 25% of shares or voting rights
65
What forms are used for changes to the PSC register, and what are they used for?
* PSC01: For adding a new individual PSC.
* PSC02: For adding a new relevant legal entity.
* PSC04: For changes to individual PSC details already on the register.
* PSC05: For changes to relevant legal entity details.
* PSC07: For those ceasing to be a PSC.
66
What is the deadline for filing changes to the PSC register?
14 days
67
who is a member
1. person who agrees to be a member AND
2. their name is registered on the register of members
68
What is the time limit for registering a member who has acquired shares by transfer or allotment?
The person must be registered as a member as soon as practicable and at least within two months of the transfer or allotment, according to s 771 & 554 CA 2006.
69
What must be included in the register of members if the company has only one member?
The register must state that the company has only one member as per s 123 CA 2006. If the number of members increases, a statement must indicate when the company ceased to have just one member.
70
What details must be recorded in the register if shares are held jointly by two or more people?
The register must record all names but only one address, according to s 113(5) CA 2006.
71
when must register be available for inspection by shareholders
free for shareholders and fee for others
criminal offence to refuse inspection
72
what happens if there is an incomplete or incorrect register
criminal offence
73
when must share certificates be issues after allotment or transfer
within 2 months of share allotment or transfer
74
what do the articles create between shareholders and company?
statutory contract between shareholders and company and among shareholders
75
what is a shareholder agreement
agreement between shareholders NOT the company
NOT part of constitution
76
What is a Bushell v Faith clause
weighted voting rights gives more votes when the resolution is about whether to remove that shareholder as a director
77
what is a shareholder agreement not allowed to do?
restrict shareholders from voting a particular way in board meetings if they are a director
78
what is an unfair prejudice petition?
Shareholders can petition the court if the company's actions are unfairly prejudicial.
e.g harm to one or more shareholders that is unfair e.g. diverting opportunities, excessive director pay
79
how will the courts determine an unfair prejudice petition
using an OBJECTIVE test - would a hypothetical bystander believe the act/omission was unfair
80
what remedies could the court award for unfair prejudice petitions
other shareholders to buy out the prejudiced shareholder or for company to repurchase shares
81
what is a derirative claim
Shareholders can bring claims on behalf of the company for wrongs done by directors, like negligence or breach of duty (breach of trust)
82
what is the process for derirative actions?
* shareholder applies to court and weed out baseless claims
* at full hearing stage - court considers
83
what is the notice period for BM?
reasonable notice
84
how can directors pass a resolution w/o a board meeting
By unanimous consence (in writing)
85
Who is a PSC
Shareholder with MORE THAN 25% of votinf rights or
have the right to appoint or remove a majority of the board or
have the right to exercise signficant influence or control over the company
86
when does a change in articles become effective?
Articles change when the company adopts them by SR. The SR and the new articles must be filed at Companies House within 15 days.
87
What can shareholders do if a company attempts to enter a contract that violates its constitution before the contract is binding?
They can seek an injunction to prevent the contract from being finalized.
88
What is the significance of Section 39 CA 2006 in terms of contracts with third parties?
It abolishes the ultra vires doctrine with regard to third parties, meaning the contract is likely valid if entered into, even if it exceeds company powers in the constitution.
89
When can shareholders not challenge a contract based on it exceeding the company's powers?
Once the contract has been legally entered into
90
What can directors be liable for if they authorize a contract that breaches the company’s internal restrictions?
Breach of duty to act in accordance with the company’s constitution under Section 171(a) CA 2006.
