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shareholders - Coggle Diagram
shareholders
becoming a SH
first 2 people who sign memorandum of association as subscribers automatically become first shareholders of company. must be entered on companies register of members
once company running, 2 ways to become new SH
- new SH could obtain shares from existing shareholder by...
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transmission of shares when they die/bankrupt and electing to become SH rather than transferring them to 3rd party
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register of members
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- company must register transfer of shares within 2 months of being lodged with compant
- when allotting new shares, must enter new SH on register of members or reflect increase in number of their shares
if 1 member company, need statement highlighting this on reg
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PSC register
all private companies and non-traded public companies must keep reg of persons with signficant control (PSC register)
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forms to be completed and sent to CH:
- PSC01- individual first time
- PSC02- rel legal entity first time
- PSC04- DH on reg but details change
- PSC05- rel legal entity on reg but details change
- PSC07- anyone ceasing to be person with sig control
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shareholders rights
articles of association
SH have remedy for breach of contract if SH or company do not abide by terms of consittution (statutory contract between both)
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shareholders agreements
a private contract between the shareholders of a company that outlines the rights, responsibilities, and obligations of the shareholders . It supplements the company’s articles of association
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matters in them:
- restrictions on transferring shares
- Bushell v Faith clauses- give Sh weighted voting rights when resolution is to remove that SH from office as director
- non-compete clause- SH cannot be involved in business which competes with company
but cannot restrict SH from voting in part way in board meetings if also a director- breach directors duties
voting rights
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right to apply to court to call GM (where other SH refuse to attend and not possible to holdin quorate meeting)
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other rights
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right to inspect without charge
- GM and SH res minutes
- statutory registers
- directors service contracts and indemnities
- contracts relating to companys purchase of own shares
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types of shareholders
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groups of companies
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subsidary= where one company has shares in another company.
PARENT/HOLDING= Company A
SUBSIDARY= Company B & C
A owns majority of voting rights in B;
A is member of Company B, has right to appoint/remove maj or board of directors; or
A member of Company B and controls alone the maj of voting rights in it; or
B is subsidiary of company C which is itself a subsidiary of A
Company 'wholly-owned subsidary' of another company - if all of its shares are owned by another company (parent) or by that company's wholly-owned subsidiaries e.g. If Company A owns 100% of the shares in Company B, and Company B has no other members (shareholders), then Company B is a wholly-owned subsidiary of Company A. Similarly, if Company B owns 100% of the shares in Company C, and no other members exist, Company C is also a wholly-owned subsidiary of Company A (through Company B).
means if 1 company insolvent and wound up, other companies can still operate.
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