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Notes.docx
BPP University College
, BUSINES
S LAW
COMPANIES: DIFFERENCES OF
PRIVATE VS. PUBLIC
PRIVATE COMPANY PUBLIC COMPANY
Name Must end in Limited or Ltd Must end in Public Limited
(s.59(1)) Company or PLC (s.58(1))
Min. 1 shareholder (s.7(1) and 1 shareholder (s.7(1) and
shareholders s.8(1)) s.8(1))
Min. directors 1 director (s.154(1)) 2 directors (s.154(2))
Min. secretary No secretary required Secretary required (s.271)
(s.270(1))
Certificates Certificate of Incorporation Certificate of Incorporation
required prior issued by Companies House issued by Companies House
to (s.15(4)). (s.15(4)).
commencement Can commence trading as ALSO – needs a trading
of trading soon as incorporated. certificate issued by
Companies House showing that
the company’s allotted share
capital is not less than the
minimum (s.761(1)(2)).
Min. share Only one share (s.8(1)(b)) Min. of £50,000 (or the euro
capital equivalent) (s.763(1)(a)).
Can shares NO (S.755(1)). Permitted by the Companies
been offered to Act 2006 (FSMA imposes
the public? restrictions).
Method of No specified method of Payment in cash only.
payment and payment (s.582(1)(2)). Non-cash consideration (e.g.
minimum Shares can be issued without giving Property for shares)
amount payable need for immediate payment. must be valued by an
for share
MODEL ARTICLES (MA): The Model Articles are a set independent auditor
of pre-drafted (s.593(1)).
Articles that a
company can adopt on incorporation. They will not usually cover everything that a
company will need.
LEGALITIES OF BOARD
MEETINGS
Who can call a board MA 9(1): Any director.
meeting?
What notice needs to Reasonable notice of the board meeting must be given
be given? (CASE: Browne v La Trinidad).
Quorum (number of MA 11(2): May be fixed from time to time but must
directors that are never be less than two, and unless otherwise fixed, is
required to be two.
present at a board
meeting):
How are decisions MA 7(1): Board resolutions are passed on by a simple
decided? majority (more than 50% of directors in favour) at a
board meeting
Chairman:
SHAREHOLDERS The chairman will have a casting vote in the event of a
AND THEIR
DECISIONS deadlock (unless the articles have been amended).
An abstaining Where a director abstains from voting, he/she does not
What is a A shareholder owns the company (whereas the directors
director: count towards the number voting on that issue.
shareholder? just manage the company’s day to day business).
E.g. Where there are 5 directors, if one abstains, you
Quorum (number of S.318(2) Companies Act: two shareholders
would count them out of 4. To get a majority you would
shareholders that are S.318(1): Unless the company has only one
required to be shareholder (*shareholders are also called members), in
present at a which case, one shareholder is sufficient.
, BUSINES
S LAW
COMMON COMPANY
DECISIONS
What? Who needs to Statutory What type of What
authorise the authority resolution? meeting
change? needs to be
held?
Change of Shareholders S.77(1)(a) CA Special Shareholder
name OR S.77(1)(b) CA Resolution (not meeting
By following less than 75% OR
the procedure voting in As otherwise
set out in the favour) (if provided for in
Company’s passed by the Company’s
Articles (if shareholders) Articles.
provided for) OR
As provided in
the Company’s
Articles
Resignation Secretary N/A Usual to have a Board meeting
of secretary needs to send board
a resignation resolution
letter to the
Board
Appointment Directors MA 3 and MA 5 Usual to have a Board meeting
of secretary S.270(1) CA board
resolution
Appointment Directors or MA 17(1)(b) Board Board meeting
What? Who needs to Statutory What type of What
of directors shareholders MA 17(1)(a) Resolution OR
authorise the authority resolution? meeting
OR Shareholder
change? needs to be
Ordinary meeting (as
held?
Resolution applicable)
Transfer Directors S.112(2) CA Usual to have a Board meeting
(more than
shares AND S.544(1) CA board
Stock Transfer MA 26 resolution
Form required AND
to be signed by Share
transferor certificate to
be issued to
new
, BUSINES
S LAW
Convening a General Meeting to pass a shareholder resolution
What notice needs to S.307(1) CA: A general meeting must be called by
be given to call a giving notice of at least 14 days.
General Meeting? S.360(1), S.360(2): The notice period excludes the
day of the meeting and the day on which the notice
is given (clear day rule).
The postal service S.1147 CA: Any document sent by post is deemed
rule (where a general to have been received 48 hours after it was posted.
meeting notice is sent S.1173 CA: The period of 48 hours only includes
by post): working days.
How to hold a general S.307(4) CA: Allows a general meeting to be held
meeting on short on short notice if agreed by the members.
notice: S.307(5) CA: Provides that a general meeting may
be held by shorter notice if agreed by –
Majority in number of members who have the
right to vote and attend the general meeting; and
Passing a special resolution by writtennot
Together resolution
hold less than the requisite
How to pass a written S.291 CA: A copy
percentage of the value
in nominal written
ofresolution must be
the shares.
resolution: sent to every
S.307(6) eligible member
CA: Requisite (anyismember
percentage 90% for
entitled to vote).
private companies unless amended by the Articles.
S.291(3)(a) CA: A company may submit written
resolutions to its members in hard copy form, in
electronic form or by means of a website.
S.296(4) CA: The written resolution is passed when
the required majority of eligible members have
signified agreement.
S.283(2) CA: A special resolution is passed if it is
passed by members representing not less than
75% of the total noting rights of eligible members.
S.297 CA: The proposed written resolution will
lapse if it is not passed before the period specified
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