Please enable JavaScript.
Coggle requires JavaScript to display documents.
Companies - Coggle Diagram
Companies
-
Types
Public company
(plc)
Limited by shares (plc)
Can offer shares to public
Minimum of 2 directors and company secretary needed
Minimum share capital requirements of 50k of which at lease one quarter must be paid up
S761 - requires a trading certificate before it can trade
Only public companies can be listed
This enables raising of greater funds
A private company's shareholder may decide to convert into a plc
-
-
Private company
Companies Act 2006 (1) removed requirement for private companies to hold annual general meetings or submit annual returns, (2) codified directors' duties and (3) allowed private companies to pass shareholder resolutions in writing (dispensing with req for meetings of shareholders
Private company limited by shares (ltd) - no minimum share capital requirements, prohibited from offering shares to the public and can be formed by one person
-
Private companies limited by guarantee - no share capital, liability of members limited to amount they agreed to contribute in event of winding up, membership not transferable
Stakeholders
Shareholders
S112(1) - membership begins when member's name is entered in the company's reg of members
S8 - first shareholders = subscribers
Shareholder need not be a human
By investing in share capital, they become part owner
Directors
Day-to-day management
Owe fiduciary duties to the company
At least one director must be a person
Minimum age of 16
Non-exec
An officer of the company but not an employee, does not take part in day-to-day running
Provides independent guidance and advice to the board and protects interests of shareholders
Shadow
A person in accordance with whose instructions the directors are accustomed to act
However, not deemed to be this just because the directors act on advice given to them in a professional capacity
-
-
Alternate
Attends board meetings, acts in director's place if actual director is unavailable. Usually a fellow/someone approved by a resolution of the board
-
Company's constitution
Memorandum
S17 - no longer forms part of the company's constitution, only required as part of registration
S31 - companies formed under CA 2006 have unrestricted objects
S28 - companies formed under CA 1985, any provisions in a memorandum must be treated as provisions of the Articles
Articles of association
S18 - all companies must have
Must comply with minimum provisions of CA 2006 - legality test
Regulates relationship between shareholders, directors and the company, a contract between the company and its members
Some CA provisions override anything in Articles
Some powers available to companies by default under CA unless Articles provide otherwise
S21(1) - able to alter articles by special resolution (decision of the shareholders)
S22 - permits entrenchment of specific provisions within articles
S22(3) - entrenched articles can be amended by agreement of all members or court order
Allen v Gold Reefs - any alteration must be made in the interests of the company as a whole to be valid
S33(1) - the provisions in articles bind the company and members to the same extent as if they were covenants on the part of the company and each member to observe those provisions
Form
Amended MA
Not all provisions contained in MA are suitable so some adopt the MA but elect to modify the effect of some provisions
-
Model articles
S20(1) - if a new company does not register articles at CH, relevant MA will constitute the company's articles in default
Incorporation
Incorporate from
scratch
S9 - must be delivered to CH:
- Copy of company's memorandum
- Articles if the company does not intend to use MA
- Fee
- Application for registration (form 1N01) containing statement of capital and initial shareholdings, statement of company proposed officers, details of guarantee statement of compliance
Once approved, company becomes
a legal entity from the date in the incorporation
cert
Shelf company
conversion
Likely that changes will be made:
- to name (can be changed by special resolution of the shareholders or by any other means provided by articles)
- to articles
- to reg office
- to members, directors (board resolution) and comp secretary (shares held by subscribers must be transferred (board resolution), purchaser's representatives are appointed as directors, company secretary and first directors resign. Company will not be controlled until it is entered on the register of members (board resolution))
Pre-incorporation contracts
Enforceable as personal contracts against the person purporting to act on behalf of the company
Company meetings
General meetings = called by the board
Private companies = 14 days notice (day of the meeting and day notice is given excluded. If notice is posted/emailed, deemed served 48 hours after sending)
Must inform shareholders of where/when it is taking place, directors must approve of the form of notice on the GM before calculation
Quorum = minimum of 2 shareholders, 1 shareholder for single member companies n
Where a shareholder vote is required for a transaction, a series of meetings are required:
- BM is first required to call the GM
- GM is then required for shareholders to vote on resolution
- BM is further required to affect the outcome of the shareholder vote
- Post meeting matters will need to be fulfilled
For a private company, GM may be called on short notice if agreed by (1) a majority in number of the members who (2) together hold shares with a nominal value of not less than 90% of total nominal value of the shares
Written resolutions
Passed when required majority of members signify their agreement to it
No sufficient number of members? Resolution will lapse
If MA, lapse date is 28 days beginning with circulation date
Resolutions to remove a director/auditor from office may not be passed this way
Board meetings = called by any director/secretary
Must be reasonable notice
Min of 2 directors required
Board resolutions passed by majority vote on a show of hands with each director having one vote
-
Show of hands = 1 vote per person
Poll = 1 vote per share held
Written ordinary resolution = (only priv companies) simple majority of total voting rights
Written special resolution = (only priv companies) majority representing not less than 75% of total voting rights