Company Decision-making, the Company’s Officers and Shareholders

Flashcards covering company decision-making processes, director and shareholder resolutions, legal requirements for meetings, company officers, and minority shareholder protections based on the SQE1 syllabus.

Under MA 3, where is the authority for directors to run the company established?

The directors' authority to run the company is set out in MA $3$.

What are the two key examples of decisions that require a special resolution according to the transcript?

Changing the articles of association and changing the name of the company.

Under MA 11, what is the default quorum required for a board meeting to be valid?

A quorum of $2$ directors must be present at all times during a board meeting.

What is the standard for the notice period required for a board meeting according to Re Homer District Consolidated Gold Mines (1888)?

Notice must be reasonable, depending on the facts, such as company size and the location of directors.

What are the two restrictions placed on an interested director by MA 14 regarding a board decision?

A director may not count in the quorum or vote if the board decision is concerned with a transaction or arrangement with the company in which they are interested.

According to s 282 CA 2006, what is the required majority for an ordinary resolution to be passed at a general meeting?

Over half (> 50) of the votes cast at the meeting must be in favour.

According to s 283 CA 2006, what is the required majority for a special resolution to be passed at a general meeting?

$75\%$ or more of the votes cast at the meeting must be in favour.

What is the minimum notice period required for a general meeting under s 307 and s 360 CA 2006?

$14$ clear days.

In the context of calculating notice for a general meeting, what does 'clear days' mean?

The day notice is deemed received and the day of the general meeting itself are not counted; only the full days between them are counted.

What is the default quorum for a general meeting under s 318 CA 2006?

The quorum is $2$, unless the company has only one shareholder, in which case the quorum is $1$.

Under MA 44(2), who can demand a poll vote at a general meeting?

The chair, the directors, two or more persons having the right to vote, or persons representing not less than $1/10$ of the total voting rights.

What are the two requirements under s 307(5)–(6) for a private company to hold a general meeting on short notice?

A majority in number of shareholders must consent, and they must hold between them $90\%$ or more of the company's voting shares.

What is the difference in voting mechanics between a general meeting and a written resolution?

At a general meeting, voting is by show of hands ($1$ vote per person), whereas for a written resolution, each shareholder has $1$ vote for each share owned ($1$ vote per share).

Unless the articles state otherwise, what is the lapse date for a written resolution under s 297 CA 2006?

$28$ days từ circulation.

What percentage of voting rights is required for a shareholder to requisition the company to circulate a written resolution under s 292 CA 2006?

$5\%$ or more of the voting rights.

Under s 303 CA 2006, what percentage of shares is required for shareholders to demand that directors call a general meeting?

At least $5\%$ of the shares carrying the right to vote (provided all shares are paid up).

What is the time limit for a private company to file its annual accounts and reports at Companies House under s 442(2) CA 2006?

$9$ months from the end of the accounting reference period.

What are the criteria for a 'small company' exempt from statutory audit under s 382 CA 2006?

A balance sheet total of not more than $\pounds 7.5$ million, a turnover of not more than $\pounds 15$ million, and no more than $50$ employees.

What threshold of share ownership or voting rights control determines if a person must appear on the PSC register?

Anyone who owns more than $25\%$ of the shares or controls more than $25\%$ of the voting rights.

What objective test does the court apply to determine if a shareholder has been unfairly prejudiced under s 994 CA 2006?

The court asks whether a hypothetical bystander would believe the act or omission to be unfair.

Under s 260(3) CA 2006, what causes of action can a derivative claim be brought in relation to?

Causes of action arising from negligence, default, breach of duty, or breach of trust by a director.

What is the primary difference between cumulative and non-cumulative preference shares?

Cumulative preference shares require any missed dividends from previous years to be paid before current year dividends to ordinary shareholders, whereas non-cumulative shares lose the right to the dividend if not paid that year.