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BLP – KEY INFORMATION DOCUMENT
Re Yeoville Glove 1965
KEY CASES Old money loaned and unsecured will be
deemed paid-off and replaced by new
money secured by new floating charge.
Browne v La Trinidad
Notice period for calling BM must be
Rule in Clayton's Case: in a sense of
reasonable - determined by what is usual
agreement otherwise, payments made
for the company
discharge earliest advances first.
Re Moorgate Mercantile
Royscott Trust v Rogerson 1991
Notice of GM must include the precise
Damages for negligent misrepresentation
wording of any Special Resolutions. No
are available on same basis as for fraud.
substantive amendment can be made
Smith New Court
Duomatic Principle
Claimant not restricted to damages for
If all members entitled to vote at GM agree
fraudulent misrepresentation based only
something should be done then this
in decreased value of asset but all
decision taken as if it had been voted on at
consequential loss from having entered
the GM
the transaction.
Dorchester Finance v Stebbing
Ebrahimi
No distinction in principle between duties
In small private companies, shareholders
owed by executive and non-executive
can have a legitimate expectation that it is
directors
a quasi-partnership so they can have a role
in management
Ultraframe Ltd v Fielding
Shadow director owes duties depending
Sovereign Life Assurance v Dodd 1892
on position and function
The class of creditors / members must
consist of rights that are not so dissimilar
Re D'Jan of London Limited
as to make it impossible to consult
objective and subjective standard for
together with a view to their common
directors with exercising reasonable care
interest.
and skill. Now codified in s174 duty
Pedley v Inland Waterways Association
Re British American Corp
Directors are not bound to place a s168
s177 duty to declare interest in proposed
resolution to remove a director on the
transaction can refer to a direct or indirect
agenda for a GM. Failure may have
interest. Director of Company A and
consequences - members can call GM
Company B will be indirectly interested in
themselves (s305). Better off cooperating
any contract that Companies A and B enter
so can hold GM off until day 50 rather than
together
day 38
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Bushell v Faith those in the disclosure letter, but doubt as
Clause in articles which gives weighted to whether this has legal effect e.g. actual
voting rights to a director who is also a knowledge of the buyer of facts not
shareholder when a s168 resolution is disclosed in disclosure letter still counts as
proposed knowledge
Foss v Harbottle New Hearts v Cosmopolitan Investments
Where a wrong is done to the company, Scottish case. Reference to complex source
the company is the proper claimant and of information where relevant info might
not a member (but exception to this from be found is not fair disclosure (but didn't
s260 derivative claims) rule out referring to source of info which
clearly identifies problem)
Thomas v York Trustees Limited
Shareholders can agree with each other MAN v Freightliner Limited
not to support a resolution to remove a Only strict contents of disclosure
director documents deemed disclosed unless clear
from contract or disclosure letter that 'all
Ebrahimi v Westbourne Galleries matters to be inferred' from the
Director can bring unfair prejudice claim documents are also treated as disclosed
under s994 if removed as director and still
a shareholder and no way of selling their Levison v Farin
shares. Can then petition for company's Disclosed information must be sufficiently
winding up on 'just and equitable grounds' precise, not just where buyer could draw a
conclusion
Thomas Witter v TBP Industries
4 elements to an entire agreement Daniel Reeds v EM Chemists
1- entire and only agreement Fair disclosure requires positive statement
2- haven't relied on there representations of true position and not just a fortuitous
other than those in the agreement omission from which the buyer expected
3- only remedy is for breach of contract to infer matters of significance
4- not attempting to exclude liability for
fraud (but if this not included then Infiniteland Ltd v Artisan Contracting
common law assumes fraud excluded - There is no universal standard of
estopped from claiming EAC not effective) disclosure. Adequacy of disclosure
measured against requirements of the SPA
and not requirements of a different
Blythe & Co v Richard Turpin agreement in another case
Force majeure clauses construed very
narrowly - must be specific obiter - if buyer has actual knowledge then
cannot bring warranty claim (NOT
R (Mercury Tax Group) v HMRC including imputed knowledge). However,
Signature and attestation of deed must constructive knowledge will NOT prevent a
form part of the same physical document buyer relying on a warranty
Eurocopy plc v Teeside
Most acquisition agreements provide that
the only matters deemed disclosed are
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Hadley v Baxendale It's a Wrap Ltd v Gula
Contract claim higher burden of proof than If no distributable profits but dividend paid
negligent misrep - must prove loss and anyway then those who receive the
damages not too remote dividend may be liable to pay it back
Leclerc v Pouliot O'Neill
Final dividends become a debt when Member will not be entitled to complain of
declared by the shareholders at the GM unfairness unless there has been a breach
(usually AGM) of the terms on which he agreed affairs
should be conducted
Re Yeovil Glove
Charge valid to extent 'old' money Russell v Northern Bank
replaced by 'new money' Company cannot be party to any provision
which restricts it from exercising its
Re Clayton's Case statutory powers under the CA 2006
First in first out; presumption that monies
withdrawn from an account are presumed
to be debits from the monies first GENERAL PROCEDURE PLAN STATUTES
deposited. Old debts satisfied first
Amendment of articles is by SR
Hill v Spread Trustee s21.1 CA
Granting of security can amount to a
transaction at an undervalue Any director can call a board meeting
MA 9.1
Zim Properties v Proctor
Indemnities must be given in favour of the Appointment of a new chairperson for the
buyer and not the target as HRMC has board
agreed to then treat them as warranties. MA 12.1
Successful warranty claim treated as
reduction to purchase price so tax liability Appointment of new directors: attach
refused. Right to bring an indemnity claim directors' consent to information given to
seen as a chargeable gain - subject to CGT registrar
s167.2 CA
Trevor v Whitworth
Share capital of a company seen as a Appointment of new directors: inform
permanent fund available to the creditors. registrar within 14 days
Creditors entitled to assume that an s167.1 CA
amount equal to the full nominal value of
the shares and any premium paid on the Appointment of new directors: update
shares will be available for use in the company's register of directors
ordinary course of the company's business s162.1 CA
- the 'creditors' cushion'
Authority to appoint new directors:
Potel v IRC existing directors or shareholders
Interim dividend - no debt until directors MA 17.1
actually pay it
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Availability of the written resolution s30.1 CA
procedure cannot be excluded by the
articles of the company Corporate representatives at GMs are
s300 CA 2006 authorised to vote for the corporation
s323.1 CA
A CA 1985 company's objects clause is
treated as a provision of its articles. Directors exercise all the powers of the
s28.1 CA 2006 company
MA 3
Certificates of registration of new
members must be made available to new Directors may call a GM
members within two months of receipt of s302 CA
the stock transfer form
s776.1 CA Directors may delegate their powers
MA 5
Chairman has the casting vote at a BM
MA 13 If a company has only one member, a
statement to this effect must be contained
Change of company name is effective from in the register of the company
the date of issue of the new certificate of s123.1 CA
incorporation
s81.1 CA If name of the company has changed it is
necessary to update the company seal (if it
Clear days rule has one)
s360.2 CA s45.2 CA
A company director may be removed from Majority decision-making in a vote at a BM
office by OR MA 7.1
s168.1 CA
Meaning of 'the requisite percentage' for
A company may only register a new GM short notice voting
member if a proper instrument of transfer s307.6 CA
has been delivered to it or an exemption
applies Meaning of "working day"
s770.1 CA s1173 CA
Company's auditors should receive same Members may require directors to call a
communications as company members GM
s502 CA s303.1 CA
Company to send registrar a copy of Members of a company are subscribers
amended articles not later than 15 days and everyone else on the register of
after the amendment takes effect members
s26.1 CA s112 CA
Copies of all SRs to be forwarded to the Minutes of BMs must be kept for 10 years
registrar within 15 days of being made s248.2 CA
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Notice period for a board meeting:
Minutes of BMs must be recorded reasonable
s248.1 CA Browne v La Trinidad
Minutes of BMs to be drawn up and kept in Ordinary resolution = simple majority
the company's minutes book s282.1 CA
s248.1 CA
Period for agreement with a written
Minutes of GMs and records of resolutions resolution is as specified in the company's
passed outside GMs to be kept articles or otherwise 28 days
s355.1 CA s297.1 CA
Minutes of GMs and records of resolutions Possible to appoint a proxy to vote at a GM
passed outside of GMs to be retained for s285 CA
10 years
s355.2 CA Power to change company name lies with
shareholders and anyone else given
New secretary appointed: must attach the authority by the articles
consent of the new secretary when you s77.1 CA
inform the registrar
s276.2 CA A private company is not required to have
a company secretary
New secretary appointed: update s270.1 CA
company's register of secretaries
s275.1 CA Procedure for indicating agreement to a
written resolution
New secretary appointed: within 14 days s296 CA
inform the registrar
s276.1 CA Quorum for a board meeting = 2
MA 11.2
Notice of change of accounting reference
date must be given to the registrar Quorum for a GM: more than one
s392.1 CA qualifying person
s318.2 CA
Notice of change of company name must
be given to the registrar Quorum for a GM: one member companies
s78.1 CA s318.1 CA
Notice of change of registered office must Requirement to companies to keep a
be given to the registrar register of members
s87.1 CA s113.1 CA
Notice of GM must contain a statement Requirement to have a company
that proxies can be appointed registered office
s325.1 CA s86 CA
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A resolution may be proposed as a written s307.5 CA
resolution by the directors or the members
of the company Short notice period for a GM is possible
s288.3 CA s307.4 CA
Resolutions passed at a GM only if Special resolution = majority of not less
conducted in accordance with CA and than 75%
company's articles s283.1 CA
s301 CA
Standard notice for a GM: 14 days
Rules for circulation of written resolutions s307.1 CA
proposed by directors
s290 CA Text of the proposed special resolution of
which notice is given cannot be amended
Rules for deemed delivery of documents after notice is given unless amendments
sent out by a company are only with regard to form of the
s1147 CA resolution.
Re Moorgate Mercantile Ltd
Rules for determining accounting
reference date of a company Unanimous decision-making by any other
s391 CA method at a BM
MA 8.1
Rules for members eligible to vote on
written resolutions Voting at a GM to be by show of hands
s289 CA unless a poll vote is demanded
MA 42
Rules for termination of a directors'
appointment When an STF is delivered to a company a
MA 18 company must either register a new
member of reject with reasons within 2
Rules on appointment of auditors months
s485 CA s771.1 CA
Shareholders' reserve power Where a resolution is passed at a meeting,
MA 4 it is only a special resolution if identified as
such on the notice for the meeting
Shares are transferable in accordance with s283.6 CA
a company's articles
s544 CA A written resolution is not passed as a
special resolution unless it states on its
Shares may be transferred by any face that it is a special resolution
instrument of transfer s283.2 CA
MA 26
A written resolution is passed when a
Shorter notice period for a GM must be majority of eligible members have
agreed by a majority of members who indicated their agreement to it
together hold the requisite percentage s296.4 CA
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MA 15 and s. 248
Directors -
Any director may call a BM may giving General Meetings -
notice MA 44(1) - a poll vote can be demanded...
MA 9 a) before the meeting, or
b) at the meeting either before or
Directors - immediately after a show of hands has
Any director may call a BM may giving taken place
notice; it must be reasonable
Browne v La Trinidad General Meetings -
MA 44(2) - a poll vote may be demanded
Directors - by...
Any director may call a BM may giving i. The Chairman of the meeting
notice; notice must specify (MA 9(2)) ii. The directors
i. date iii. Two or more people with the right to
ii. time vote
iii. venue iv. Any shareholder with at least 10% of the
iv. method of communication rights to vote
Directors - BM: General Meetings - notice:
To occur, BM must be quorate At least 14 clear days notice must given of
MA 11(1) a GM
s. 307(1)
Directors - BM:
To occur, BM must be quorate; quorum for General Meetings - notice:
a BM is two (unless Articles specify Clear days exclude the day on which notice
otherwise) is given and day of the GM
MA 11(2) s. 360(1) and (2)
Directors - BM: General Meetings - notice:
Votes are decided by simple majority on a Notice must include details of date, time,
show of hands; the chairman has the place and order of business to be
casting vote conducted at GM
MA 13 s. 311
Directors - General Meetings - notice:
Decisions can be made without meeting, as Notice must include exact draft of SR
long as they are unanimous s. 283(6)
MA 8
General Meetings - notice:
Directors - Notice must include proxy notice
May call a GM s. 325(1)
s. 302
General Meetings - notice:
Directors - Short notice can be agreed under s. 307(5)
Records of every decision made should be CA 2006 if shareholders agree who are
kept for at least ten years both...
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a) A majority in number of eligible voters
AND Written Resolutions -
b) represent at least 90% of eligible share Copy must be provided to every eligible
capital member
s. 291(2)
General Meetings -
Ordinary resolution requires a simple Written Resolutions -
majority to pass If at least 5% of shareholders request it,
s. 282(1) company is required to circulate a WR
ss. 292(1), (4) and (5)
General Meetings - proxies:
A corporate member or individual may Written Resolutions -
appoint a proxy May be proposed by directors or
ss. 323(1) and 324(1) shareholders
s. 288(3)
General Meetings -
Special resolution requires NOT LESS THAN Written Resolutions -
75% in order to pass May not be proposed by shareholders it it
s. 283(1) (s. 292(2))...
a) would be ineffective
General Meetings - b) is defamatory
The normal method for passing a c) is frivolous or vexatious
resolution is a show of hands (one member
= one vote) Written Resolutions -
MA 42 Members can be required to pay any costs
derived from circulating a WR
General Meetings - s. 294
Two shareholders must be present for a
GM to be quorate Written Resolutions -
s. 318(2) Must be accompanied by a statement
informing members
General Meetings - a) how to signify agreement, and
Where the type of resolution required is b) time frame for doing so
not specified by the CA, an ordinary s. 291(4)
resolution will suffice
s. 281(3) Written Resolutions -
The circulation date is the date copies are
Written Resolutions - abuse: sent to members
If any person believes the s. 292 WR s. 290
procedure is being abused, they can apply
to court to prevent a WR being circulated Written Resolutions - voting
s. 295 Each member has one vote per share
s. 284(1)(a)
Written Resolutions -
Can be made available online or by hard Written Resolutions - voting
copy circulated around all members If not passed after 28 days, the resolution
s. 291(3) will lapse
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s. 297(1) Does D need to declare an interest in the
transaction?
Written Resolutions - voting s177(1)
The resolution is passed as soon as the
required majority is reached, even if the Every member and every director must
time for voting has not expired receive the notice
s. 296(4) s310(1)
Written Resolutions - voting Minutes of BM
Thresholds are the same as for a a GM vote s248
s. 282(2) and s. 283(2)
Notice GM
Ds must notify shareholders s307
BM / GM / BM SANDWICH ↳ Private Company - 14 days
↳ Public Company - 14 days but for an
2. Notice BM? AGM, 21 days
Reasonable as is usual (Browne v La
Trinidad) Notice must state the date & time, and the
place of the meeting
2. Quorum GM? s311(1)
Two s318(2) or 1 if only one member
s318(1) - check articles poll demanded before or during meeting
Chairman, Ds, 2 or more SHs or SH not less
3. Quorum BM? than 10% of voting rights of those entitled
Two MA 11(2), but check articles to vote can demand one.
MA 44(1) and (2)
4. Voting BM?
Board Resolutions can be passed by a Send articles to companies house if
Simple Majority MA 7(1) or Unanimity MA amended
8(1) s26
Call a GM Send Minutes of GM to Companies House
s302 s355(1)(b)
Chairman may have the casting vote - Share Certificates sent to Companies
check AoA House where sold/ bought/ transferred
MA 13(1) s769 and s776
Clear Days Short Notice GM
not counting the day of notice or day of GM s307(4)(5)(6) Where agreed by members
s360(2) o Private: 90% (or <95% where specified in
AoA)
Directors have general power to carry out o Public: 95%
the business of the company
MA 3 Show of hands (1 vote per person) unless
poll (1 vote per share) is demanded
MA 42
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Some ORs sent to companies House e.g. s. 221
allotment of shares £200 exception
s551(9)
s. 303
Special Resolutions sent to Companies request to to call GM (5% threshold)
House
s30(1) s. 304
GM to be called by directors under s. 303
Where a shareholder is a company, it can
authorize reps for meetings s. 305
s323(1) shareholders can call if s. 304 is breached
Who calls BM? s. 312
Any director MA 9(1) special notice
s. 360
KEY STATUTES NEEDING S/H APPROVAL clear days rule applies to s. 312(1)(3)
MA 30 s. 658
OR needed to declare dividends; interim criminal offence to buyback in breach of
dividends only need a BR; must be paid procedure
relative to shareholding, subject to terms
of shares s. 684
power to issue redeemable shares, subject
MA 33 to articles
dividends unclaimed after 12 years → right
lost s. 687
financing methods; share premium
MA 36 account rule
power to issue bonus shares pro rata out
of all profits, share premium account or s. 688
CRR redeemed shares are cancelled
s. 33 s. 689
articles are a contract between company notice of redemption and SoC to CH within
and shareholders one month
s. 168 s. 690
removal of director by OR with special power to purchase own shares, subject to
notice articles
s. 217 s. 692
OR needed for ex gratia payments financing methods (inc de minimis
procedure); share premium account rule
s. 220
exceptions to s. 217 s. 694
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