Podcast
Questions and Answers
What is the primary goal of most businesses?
What is the primary goal of most businesses?
- To minimize expenses
- To make a profit (correct)
- To gain a competitive advantage
- To expand their market presence
Which legal form of business involves only one owner?
Which legal form of business involves only one owner?
- Limited partnership
- Limited liability partnership
- Partnership
- Sole trader (correct)
Which of the following is NOT a characteristic of public companies?
Which of the following is NOT a characteristic of public companies?
- Subject to stringent regulatory requirements
- Can raise capital through public stock offerings
- Limited ownership (correct)
- Shares can be freely traded
What can a business do with its profits?
What can a business do with its profits?
Which act governs companies in England and Wales?
Which act governs companies in England and Wales?
How does a partnership differ from a sole trader?
How does a partnership differ from a sole trader?
What is one main characteristic of a limited liability partnership?
What is one main characteristic of a limited liability partnership?
What does retaining a portion of profits in the business allow?
What does retaining a portion of profits in the business allow?
What has replaced the requirement for private companies to hold Annual General Meetings?
What has replaced the requirement for private companies to hold Annual General Meetings?
What is one of the key characteristics of a private limited company?
What is one of the key characteristics of a private limited company?
What ability was introduced for private companies regarding shareholder resolutions?
What ability was introduced for private companies regarding shareholder resolutions?
Which statement accurately describes a public limited company?
Which statement accurately describes a public limited company?
Regarding company types, what key difference exists between private and public companies?
Regarding company types, what key difference exists between private and public companies?
What is true about the liability of members in unlimited companies?
What is true about the liability of members in unlimited companies?
What is a common feature of private companies in England and Wales?
What is a common feature of private companies in England and Wales?
How have directors' duties been modified for small private companies?
How have directors' duties been modified for small private companies?
What is the main constitutional document for a company incorporated after CA 2006 came into force?
What is the main constitutional document for a company incorporated after CA 2006 came into force?
Which document must always be interpreted alongside the Articles of a company?
Which document must always be interpreted alongside the Articles of a company?
What is a benefit of incorporating a company from scratch rather than using a shelf company?
What is a benefit of incorporating a company from scratch rather than using a shelf company?
What must be submitted to the Registrar of Companies to register a new company?
What must be submitted to the Registrar of Companies to register a new company?
How long can the registration process take for a new company application?
How long can the registration process take for a new company application?
What additional option is available for those wanting immediate company registration?
What additional option is available for those wanting immediate company registration?
Which of the following is NOT a requirement for registering a company under CA 2006?
Which of the following is NOT a requirement for registering a company under CA 2006?
What happens if a client opts for a standard registration instead of a shelf company?
What happens if a client opts for a standard registration instead of a shelf company?
What is the purpose of the first Board Meeting (BM) in the process of convening a General Meeting (GM)?
What is the purpose of the first Board Meeting (BM) in the process of convening a General Meeting (GM)?
Which of the following statements correctly describes the sequence of meetings required to implement a shareholder decision?
Which of the following statements correctly describes the sequence of meetings required to implement a shareholder decision?
How does the term 'notice' vary in its meaning when discussing a GM?
How does the term 'notice' vary in its meaning when discussing a GM?
What legal requirement must the company fulfill after a GM concludes?
What legal requirement must the company fulfill after a GM concludes?
What is the key responsibility of the board of directors after a GM has been held?
What is the key responsibility of the board of directors after a GM has been held?
In the context of a GM, what does the notice document typically include?
In the context of a GM, what does the notice document typically include?
Why must shareholders approve changes to the company's articles?
Why must shareholders approve changes to the company's articles?
What occurs during the second Board Meeting (BM) after a GM?
What occurs during the second Board Meeting (BM) after a GM?
What does the legislation regarding shadow directors aim to prevent?
What does the legislation regarding shadow directors aim to prevent?
Who can be appointed as an alternate director?
Who can be appointed as an alternate director?
What defines a de facto director?
What defines a de facto director?
What procedure is usually followed for appointing new directors according to the MA?
What procedure is usually followed for appointing new directors according to the MA?
Which of the following statements about service contracts for executive directors is true?
Which of the following statements about service contracts for executive directors is true?
Which of the following is NOT a way to appoint a director under CA 2006?
Which of the following is NOT a way to appoint a director under CA 2006?
What is a potential characteristic of customized articles regarding director appointments?
What is a potential characteristic of customized articles regarding director appointments?
What is one role of the board of directors in the appointment of new directors under MA?
What is one role of the board of directors in the appointment of new directors under MA?
How many votes does each shareholder receive when voting on a show of hands at a General Meeting?
How many votes does each shareholder receive when voting on a show of hands at a General Meeting?
What is required for an ordinary resolution to pass when voting by poll?
What is required for an ordinary resolution to pass when voting by poll?
What is the main difference in voting requirements between an ordinary resolution and a special resolution during a poll?
What is the main difference in voting requirements between an ordinary resolution and a special resolution during a poll?
What rights does a member have when appointing a proxy at a General Meeting?
What rights does a member have when appointing a proxy at a General Meeting?
If Archie, Grace, Clare, and Saad are present at the General Meeting, how many total votes are there when voting on a poll?
If Archie, Grace, Clare, and Saad are present at the General Meeting, how many total votes are there when voting on a poll?
What is a significant disadvantage of incorporation for small private companies?
What is a significant disadvantage of incorporation for small private companies?
Which feature is not generally an advantage of incorporating a business?
Which feature is not generally an advantage of incorporating a business?
What is a key difference between private and public limited companies?
What is a key difference between private and public limited companies?
What is a common misconception about the separation of ownership and control in small private companies?
What is a common misconception about the separation of ownership and control in small private companies?
Which of the following is NOT required for a company operating under CA 2006?
Which of the following is NOT required for a company operating under CA 2006?
Which of the following best describes public limited companies compared to private limited companies?
Which of the following best describes public limited companies compared to private limited companies?
In the context of incorporation, what document outlines a company's operational regulations?
In the context of incorporation, what document outlines a company's operational regulations?
What is one regulatory requirement that applies specifically to public limited companies?
What is one regulatory requirement that applies specifically to public limited companies?
What is a key requirement for forming a limited partnership?
What is a key requirement for forming a limited partnership?
What is the primary risk associated with a general partner in a limited partnership?
What is the primary risk associated with a general partner in a limited partnership?
Which of the following accurately describes the role of limited partners in a limited partnership?
Which of the following accurately describes the role of limited partners in a limited partnership?
What is one recommended action for partners in a traditional partnership before starting their business?
What is one recommended action for partners in a traditional partnership before starting their business?
What distinguishes a Limited Liability Partnership (LLP) from a traditional partnership?
What distinguishes a Limited Liability Partnership (LLP) from a traditional partnership?
Which statement is true regarding the registration of Limited Partnerships (LP)?
Which statement is true regarding the registration of Limited Partnerships (LP)?
What happens to a limited partner who starts to participate in the management of the business?
What happens to a limited partner who starts to participate in the management of the business?
What is the legal framework that governs Limited Partnerships in the UK?
What is the legal framework that governs Limited Partnerships in the UK?
What was the purpose of the amendment allowing the shares of a minority shareholder to be compulsorily acquired?
What was the purpose of the amendment allowing the shares of a minority shareholder to be compulsorily acquired?
Under which section of the CA 2006 is the binding nature of a company's Articles discussed?
Under which section of the CA 2006 is the binding nature of a company's Articles discussed?
In the case of Re Charterhouse Capital Ltd, what was the Court of Appeal's stance regarding the proportionality of the amendment?
In the case of Re Charterhouse Capital Ltd, what was the Court of Appeal's stance regarding the proportionality of the amendment?
What common legal remedy can be pursued if a company infringes upon its members’ rights as stated in the Articles?
What common legal remedy can be pursued if a company infringes upon its members’ rights as stated in the Articles?
What does the common law case Hickman v Kent or Romney Marsh Sheep-Breeders’ Association establish regarding company Articles?
What does the common law case Hickman v Kent or Romney Marsh Sheep-Breeders’ Association establish regarding company Articles?
What is a key characteristic of amendments made to company Articles, as inferred from the discussion about Re Charterhouse Capital Ltd?
What is a key characteristic of amendments made to company Articles, as inferred from the discussion about Re Charterhouse Capital Ltd?
Which requirement about good faith was upheld in the context of Re Charterhouse Capital Ltd?
Which requirement about good faith was upheld in the context of Re Charterhouse Capital Ltd?
What implication does Section 33(1) CA 2006 have for the Articles of a company and its members?
What implication does Section 33(1) CA 2006 have for the Articles of a company and its members?
What percentage of shareholders must support a resolution via a show of hands for it to be validly passed?
What percentage of shareholders must support a resolution via a show of hands for it to be validly passed?
In a situation where a poll is conducted, what is the minimum number of votes Archie needs to cast to ensure the resolution passes?
In a situation where a poll is conducted, what is the minimum number of votes Archie needs to cast to ensure the resolution passes?
What defines a valid vote during a show of hands at the general meeting?
What defines a valid vote during a show of hands at the general meeting?
Why might Archie prefer a poll over a show of hands for voting on the ordinary resolution?
Why might Archie prefer a poll over a show of hands for voting on the ordinary resolution?
What is the critical difference in voting outcomes between a show of hands and a poll?
What is the critical difference in voting outcomes between a show of hands and a poll?
What impact does Archie’s vote have on the ordinary resolution if he holds more than 50% of the shares?
What impact does Archie’s vote have on the ordinary resolution if he holds more than 50% of the shares?
What is required for shareholders to ensure that an ordinary resolution passes if Archie holds the majority?
What is required for shareholders to ensure that an ordinary resolution passes if Archie holds the majority?
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Study Notes
Partnerships
- A partnership is a business structure where two or more people agree to share profits and losses.
- Partners have unlimited personal liability for business debts.
- Partnerships are not separate legal entities, meaning the partners are personally liable for any debts incurred by the business.
- There are no legal formalities required to set up a partnership, but it is advisable for partners to agree on how the business will operate, including profit sharing and decision-making.
- It's recommended that partners consult a solicitor to draft a formal Partnership Agreement.
Limited Partnerships (LP)
- LPs involve two types of partners: limited partners and general partners.
- Limited partners have limited liability and typically do not participate in management, often called “sleeping partners.” If they become involved in management, they lose their limited status and become general partners.
- General partners run the business and have unlimited liability.
- There must be at least one limited partner and one general partner.
- LPs are governed by the Limited Partnership Act 1907 (as amended).
- LPs must be registered at Companies House but do not need to file accounts.
- LPs are often used as investment vehicles, allowing investors (limited partners) to contribute money to a business run by a general partner.
- A new sub-category of limited partnership, called a private fund limited partnership, was created in 2017, and is commonly used for investment vehicles.
Limited Liability Partnership (LLP)
- LLPs were introduced by the Limited Liability Partnership Act 2000 (LLPA 2000).
- LLPs provide limited liability to partners, meaning their personal assets are protected from business debts.
Companies
- Incorporation refers to the process of setting up a company as a separate legal entity.
- Companies offer limited liability for their owners, meaning they are not personally liable for business debts beyond their investment.
- Different types of companies exist, including private limited companies (Ltd), public limited companies (PLC), and listed companies.
- Private limited companies are the most common type of company in England and Wales.
- Public limited companies can offer shares to the public and seek a listing on a recognised stock exchange.
- Listed companies are a subset of public limited companies that have their shares listed on a recognised stock exchange.
Company Constitution
- Memorandum and Articles of Association are the constitutional documents of a company.
- Memorandum of Association outlines the company's fundamental details, including its name, registered office, and the company's objects.
- Articles of Association provide the rules governing the internal management of the company.
Company Articles and Contractual Obligations
- The Articles of Association create a contract between the company and its members.
- The Articles bind the company and its members to abide by their provisions.
- Courts can prevent a company from violating its members' rights under the Articles through an injunction.
Shareholders Meetings and Voting
- Shareholders can attend and vote at General Meetings (GM).
- Ordinary resolutions require a simple majority of votes.
- Special resolutions require a 75% majority of votes.
- Votes can be cast on a show of hands or by poll.
- In a show of hands vote, each shareholder present at the meeting receives one vote, regardless of the number of shares held.
- In a poll vote, each shareholder receives one vote for each share they hold.
- Proxies can be appointed to vote on behalf of absent shareholders.
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