FLK 1 SQE Key info

Board meetings

• Held on reasonable notice

• Minimum of 2 directors

• Voting passed by majority on show of hands

• Every director has 1 vote

General meetings

• 14 clear days notice

• Minimum of 2 shareholders required for quorum

Short notice general meeting requirements -

• Allowed if the number of shareholders who together hold shares with a nominal value of 90% of the total nominal value of shares

Written resolution expiry

• Lapse date is 28 days beginning with circulation date

Removal resolution of director

• Special notice of 28 clear days

Service contracts for directors

• Minimum of 15 days notice of GM to approve the contract will be given to the shareholders

Section 303 Companies Act 2006 notice -

• Directors must call the GM within 21 days of the date they were subject to the notice.

• GM is to be held no more than 28 days from the date of the notice calling the GM

• If shareholders call the meeting themselves they must call it no fewer than 14 clear days and held within 3 months of the s303 notice.

Payment for compensation for removing director from office

• Memorandum setting out the particulars of payment must be made available to shareholders for 15 days before ordinary resolution is passed.

Allotment of shares procedure

• Copies of resolution to be sent to companies house within 15 days (a. CA 1985 companies - file ordinary resolution removing cap on authorised share capital and any ordinary resolution allowing the comings to use s55 CA 2006 if passed; b. Any s551 ordinary resolution granting directors authority to allot if passed; c. All special resolutions regarding the dis application of preemption rights and/or amending articles if passed; d. Amended articles must be sent to companies house if new class of shares has been created and articles amended)

• Company forms to be sent to companies house (a. Return of allotment form SH01 and statement of capital within 1 month; b. If person of significant control has changed - relevant forms; share certificates prepared and sent to new shareholders within 2 months of allotment.)

Buy back of shares procedure

• Contract must be made available for inspection at the companies registered office for 15 days before the GM and at the GM

• if written resolution is used then a copy of the contract must be sent together with a copy of the written resolution

• Share purchase can take place no earlier than 5 weeks, no later than 7 weeks after date of special resolution.

Buyback of shares - payment out of capital procedure

• Within 7 days of passing a special resolution approving payment out of capital, the company must give notice to creditors by (a. Publishing notice in the gazette; b. Publishing notice in the same form as in the gazette in an appropriate national newspaper or giving notice in writing to each creditor; c. File copies of the directors statement and auditors reports to companies house.

• Within 28 days of the date on which the shares are bought back are delivered to the company, the company must send a return to companies house and a notice of cancellation with a statement of capital.

Service of the claim form - deadline

Claimant must complete the “relevant step” to serve the claim form on the Defendant before midnight on the calendar day 4 months from the date of issue of the claim form.

Service of the particulars of claim - when served separate to the claim form -deadline

• 14 days after service of the claim form and within validity of the claim form (4 months)

Deemed date of service- other than the claim form

• (DX or post)- second day after posting of a business day otherwise next business day

• (Instant methods) - before 4:30 on business day then same day otherwise next business day.

Defendant response to claim - timeframe

• D must respond within 14 days of deemed service of particulars of claim.

• Unless ack of service is served by the defence giving the Defendant is given an additional 14 days

• Defendant can request an extension from the claimant for a further 28 days up to a max of 56 days total

Interim application notice - with notice hearing - deadline

• Applicant serves on respondent the application notice; supporting evidence; draft order and notice of hearing ASAP or no less than 3 clear days before the hearing

Interim application with notice hearing - statement of costs - deadline

• Both parties file and exchange statement of costs not less than 24 hours before the hearing

Summary judgement hearing - with notice - deadlines

• Service of documents at least 14 days before hearing

• Respondent files any further evidence at court - 7 days before hearing

• Applicant files further information at court - 3 days before hearing

• Statement of costs - no less than 24 hours before hearing

Cost manage conference - deadlines

• Budget for costs - not later than 21 days before first CMC

• Disclosure report - not less than 14 days before first CMC

• Draft directions/ costs budget discussion report - no later or at least 7 days before first CMC

Disclosure order - small claims track - deadline

• 14 days before trial - file and serve documents relying on

Disclosure order - multi track - deadline

• Disclosure report filed and served not less than 14 days before CMC;

• Conversation between parties not less than 7 days before CMC

• Court makes an order

Appeal - civil litigation - deadline

• Apply for permission from Lower court at the time the decision is made - orally

• OR make an application to appeal to court later in writing within 21 days of date of lower court decision

Interim payments - deadline

• Claimant must serve the application notice and evidence in the defendant at least 14 days before the interim hearing

Hague convention - key date for consideration

• Must be considered where proceedings were issued on or after 1 January 2021

Serving a claim form outside of jurisdiction

• Period of service is 6 months

Dispute court jurisdiction - deadline

• Defendant must apply within 14 days of filing the ack of service, disputing jurisdiction.

• Must support application with evidence

Relevant date for considerations of conflicts of law - Contract Rome I

• Contracts entered into or after 17 December 2009

Conflict of law - tort ROME II - key date of application

• Events giving rise to damages after 10 January 2009

Judicial review - deadline

• Claim for JR must be brought promptly; in any event within 3 months after grounds to make claim arise.

JR planning decisions - deadline

• If taken after 1 July 2013 - 6 weeks

Definition - primary legislation

• Acts of parliament which are out before parliament as bulks and passed by both Houses of Parliament

Definition - secondary legislation

• Subordinate legislation

• Created by ministers under powers given to them from a parent Act of parliament

Definition - public acts

• Relate to matters of public concern. Debated by both Houses of Parliament and any outside body wishing its views be considered can only do so by persuading an MP or peer to put forward such views.

Definition - private act of parliament

• Relates to particular places or to particular people.

What is the order of the primary legislative process to pass laws

1. First reading - formality bills title read out

2. Second reading - main principles of bill debated by MP

3. Committee stage - detail of bill scrutinised

4. Report stage - proposed amendments debated and there is a vote in the committees report

5. Third reading - final debate and vote in bill - if passed goes to other house.

6. Royal assent

Definition - EU regulations

• Directly applicable in legal systems of the member states.

• Applies to members without those states having to enact any national legal measures to implement

Definition - EU decisions

• Legally binding only to the parties to whom it is addressed.

• May be enforced in national courts against the party to whom they are addressed.

Definitions- EU directives

• Binding as to the result to be achieved but leave to the national authorities the choice of form and methods.

• Member states must pass national legislation to implement them within their legal system.

Definition - literal rule - statutory interpretation

• Words used in a statute are to be given their ordinary, plain and natural meaning.

Definition - golden rule- statutory interpretation

• To avoid the unnatural and sometimes absurd outcome.

• Allows the court to assume that parliament intended that its legislative provision have a wider definition than its literal meaning.

Definition - purposive approach - statutory interpretation

• Considers the purpose of law or statute rather than just its words.

• Used when statute is unclear or ambiguous

Definition - expressio unius est exclusio alterius

• Express mention of one thing excludes its extension to others.

• Used where there is a list of items with no general words that follow.

• Presumed to be a closed list.

Definition - ejusdem generis

• Of the same kind - used where statute includes a generic but non-exhaustive list of items.

• Presumed that where general words follow a list of specific words, the general words are interpreted so as to restrict them to the same kind of objects as the specific words.

Definition - noscitur a sociis

• A word is known by the company it keeps.

• Words are understood in the context of the statute itself.

Definition - person of significant control

• Shareholder with over 25% of shares

• who have the power to appoint or remove the majority of board of directors or otherwise exercise significant control of the company.

Definition - total taxable profits

Includes

• Company income

• Capital gains

Definition - de jure director

• A director who has been validly appointed by law

Definition - de facto director

• Someone who assumes to act as a director but who has not been validly appointed

Definition - shadow director

• Person in accordance with whose directions or instructions the directors of the company are accustomed to act.

Definition - executive director

• Director who has been appointed to executive office.

• Such a director generally spend the majority of their working time on the business of the company and will be an officers and employee of the company

Definition - non-executive director

• Officer of the company but not an employee.

• Do not take part in the day to day running of the company

Definition - substantial non-cash asset

• An asset worth £5,000 or less is not a substantial asset

• An asset worth more than £100k is a substantial asset.

• An asset worth more than £5k but less than £100k is substantial if it is more than 10% of the company net asset value

Definition - quasi-loan

• Where a company agreed to pay off an outstanding account owed by a director to a third party on the understanding that the director would later reimburse the contact

Definition - credit transaction

• Any transaction entered into between the company and the director where the company provides goods or services on a credit basis which will be paid for at a later date.

• Only the company and the director will be parties to the engagement

Definition - derivative claim

• One initiated by a member of a company rather than by a company itself.

• In respect to a cause of action vested in the company

• Seek relief in behalf of the company

Definition - unfair prejudice claims

• Allows a member to bring an action on the grounds that the company is being run in such a way that they have suffered unfair prejudice.

Definition -preference shares

• Gives the holder a preference as to payment of dividend or to return of capital on a winding up of the company or both.

• This will rank higher priority than any equivalent payment to ordinary shareholders

Definition - company distributable profits

• Company’s accumulated realised profits less its accumulated realised losses.

Definition- equity securities

• Ordinary shares, or rights to subscribe for or convert securities into ordinary shares

• Special definition of ordinary shares meaning other than shares that as respects dividends and capital carry a right to participate only up to a specified amount for this purpose

Definition - net income

• Total income less available tax relief

Definition - taxable income

• Net income less personal allowance

BLP Resolutions - amending articles of association

Special resolution of shareholders

BLP Resolutions - Change of business name

• Special resolution

BLP RESOLUTIONS - amending model articles

• Special

BLP RESOLUTIONS - appointment of directors

• Ordinary resolution or decision of directors

BLP RESOLUTIONS - removal of director

Ordinary resolution of shareholders

BLP RESOLUTIONS - ratification of a breach of duty

• Ordinary resolution can ratify a breach if negligence, default, breach of duty or breach of trust

BLP RESOLUTIONS- director long service contract

• Ordinary resolution where term is in excess of 2 years

• No approval needed of members of a wholly owned subsidiary of another company

BLP RESOLUTIONS- substantial property transactions

• Ordinary resolution

BLP RESOLUTIONS - all companies - loans, guarantees, or security for directors

• Ordinary resolution

BLP RESOLUTIONS- Public companies and private companies associated with public companies

Ordinary resolution for

• Loan to person connected to a director of the company or a director of its holding company

• Quasi loan to or credit transaction with their director or persons connected with such directors

• Guarantees or security in respect of such loan, quasiloan, credit transaction with directors of holding company or persons connected with such directors

Exceptions - no shareholder approval needed

• Expenditure is on company business up to £50k

• Loans for defending proceedings brought against a director

• Loans for regulatory actions or investigations

• Minor and business transactions, loans/quasi loans up to £10k and credit transaction up to £15k

• Intra group transactions

• Money lending companies

BLP RESOLUTIONS - changes to the shareholder agreement

Unanimous consent of all parties

BLP RESOLUTIONS - compensation for loss of office

ordinary resolution unless

• Payment does not exceed £20l

• Payment made in good faith to discharge existing legal obligations by way of damages in respect to the obligation in settlement or compromise of claim in connection with termination of a persons office or employment or by way of pension in respect of past services

BLP RESOLUTIONS - removing cap on number of shares

Companies incorporated under 1985 CA -

• Ordinary resolution

Companies incorporated under 2006 CA

• Do not have authorised share capital unless inserted into articles, then special resolution needed

BLP RESOLUTIONS - allot shares

• Private companies with one class of shares - directors have automatic authority to allot new shares of the same class

• All other companies directors need to be granted authority to allow new shares by shareholders by ordinary resolution

BLP RESOLUTIONS- disapply pre-emotion rights

• Special resolution

BLP RESOLUTIONS - buyback of shares

• Contract to purchase shares is required and terms of contract approved by ordinary resolution.

• Buyback out of capital - check accounts were prepared no more than 3 months before directors statement; director statement of solvency must be prepared with an auditors report; special resolution needed to approve payment out of capital within 1 week after directors sign written statement of solvency.