Company Incorporation and Legal Personality

<p>Section 7-16 (C)</p> Signup and view all the answers

<p>Their liability is limited to the amount unpaid on shares. (C)</p> Signup and view all the answers

<p>It must be authenticated by each subscriber and be in the prescribed format. (D)</p> Signup and view all the answers

<p>Memorandum of association (A)</p> Signup and view all the answers

<p>They provide a mechanism for shareholders to govern the company's management. (D)</p> Signup and view all the answers

<p>They can be changed as long as they do not contradict existing laws. (D)</p> Signup and view all the answers

<p>To govern the relations among a specific group of shareholders. (D)</p> Signup and view all the answers

<p>It binds the company and its members as if there were covenants for compliance. (B)</p> Signup and view all the answers

<p>Directors may delegate some powers as defined by the articles of association. (D)</p> Signup and view all the answers

<p>The breach must be personal to the member. (C)</p> Signup and view all the answers

<p>Provisions that make it more challenging to alter or remove certain clauses. (B)</p> Signup and view all the answers

<p>Evidence that the company has met all legal requirements prior to registration. (B)</p> Signup and view all the answers

<p>It has the power to remove directors by ordinary resolution with special notice. (B)</p> Signup and view all the answers

<p>Alter the articles by special resolution (D)</p> Signup and view all the answers

<p>Shareholders cannot ignore article limitations without formal amendments. (C)</p> Signup and view all the answers

<p>The directors could choose to ignore the resolution (B)</p> Signup and view all the answers

<p>The articles of association determine how power is distributed. (C)</p> Signup and view all the answers

<p>When the company's articles are amended to grant that power to shareholders (A)</p> Signup and view all the answers

<p>Only the company itself can pursue breaches against directors. (D)</p> Signup and view all the answers

<p>Directors possess independent management authority (A)</p> Signup and view all the answers

<p>Directors have general authority to manage the company as per the articles. (B)</p> Signup and view all the answers

<p>The minimum number of members needed to validate proceedings (C)</p> Signup and view all the answers

<p>A resolution that automatically takes effect unless opposed. (C)</p> Signup and view all the answers

<p>Shareholders do not have the authority to control management decisions (A)</p> Signup and view all the answers

<p>In cases of a decision-making deadlock (A)</p> Signup and view all the answers

<p>Request a general meeting for appointing new directors (B)</p> Signup and view all the answers

<p>These limitations must be amended for compliance (C)</p> Signup and view all the answers

<p>False (B)</p> Signup and view all the answers

<p>True (A)</p> Signup and view all the answers

<p>False (B)</p> Signup and view all the answers

<p>True (A)</p> Signup and view all the answers

<p>False (B)</p> Signup and view all the answers

<p>False (B)</p> Signup and view all the answers

<p>False (B)</p> Signup and view all the answers

<p>True (A)</p> Signup and view all the answers

<p>False (B)</p> Signup and view all the answers

<p>True (A)</p> Signup and view all the answers

<p>True (A)</p> Signup and view all the answers

<p>False (B)</p> Signup and view all the answers

<p>False (B)</p> Signup and view all the answers

<p>True (A)</p> Signup and view all the answers

<p>False (B)</p> Signup and view all the answers

<p>True (A)</p> Signup and view all the answers

<p>False (B)</p> Signup and view all the answers

<p>False (B)</p> Signup and view all the answers

<p>True (A)</p> Signup and view all the answers

<p>False (B)</p> Signup and view all the answers

<p>True (A)</p> Signup and view all the answers

<p>False (B)</p> Signup and view all the answers

<p>False (B)</p> Signup and view all the answers

<p>False (B)</p> Signup and view all the answers

<p>False (B)</p> Signup and view all the answers

<p>False (B)</p> Signup and view all the answers

<p>False (B)</p> Signup and view all the answers

<p>False (B)</p> Signup and view all the answers

<p>False (B)</p> Signup and view all the answers

<p>False (B)</p> Signup and view all the answers

The legal process of forming a company, creating a separate legal entity under the Companies Act 2006.

A company is a separate legal entity from its owners (shareholders), so that owners are not personally liable for company debts.

The legal concept that protects shareholders from personal liability for company debts.

An exception to the rule of limited liability; in certain circumstances, the court can hold shareholders personally liable for company debts.

Contracts made before a company is officially formed. Until incorporated, the company cannot legally enter contracts.

Companies are registered with Companies House, an executive agency of the UK government.

A crucial document before 2006, outlining a company's permitted activities (objects).

States the intent to form a company and outlines share agreements for companies with share capital.

The company's rulebook; outlining the company's operation, roles, and decision-making procedures.

Private contracts among shareholders, often supplementing the articles of association to address specific needs.

The company's constitution, primarily its articles of association, legally binds the company and its members.

Default rules outlining company operations, in case of no specific articles are provided

A violation of the rules set out in a company's articles of association, impacting members' rights.

Making company rules harder to change, often to protect minority shareholders.

A type of shareholder vote requiring a higher threshold (e.g., 75%) to amend company rules.

Official document confirming a company's legal existence, proving registration compliance.

Formal processes for companies to make decisions legally recognized.

Allocation of decision-making authority within a company, often by articles of association.

Default rule allowing company Directors to manage the company's business (unless otherwise stated in articles).

Shareholders can request directors to NOT take an action, (through a special resolution) - but can't reverse previous actions.

A company's Articles of Association can restrict the powers of members, even if they have a majority vote. These restrictions cannot be ignored unless the Articles are formally amended.

Members cannot use ordinary resolutions to overrule the board's business decisions unless the company's Articles expressly allow it.

If members want to change the powers of the board or themselves, they must do it through a formal process of altering the Articles.

Directors are not agents of the members. They have their own responsibilities and powers.

In exceptional circumstances, like a board deadlock preventing the company from operating, members can exercise some of the board's powers.

The minimum number of qualified individuals required to be present at a meeting for decisions to be valid.

If a board deadlock prevents it from functioning, the members can appoint additional directors to resolve the situation.

This legislation allows directors to call a general meeting if the board cannot meet its required quorum (minimum number of attendees).

Nia Ltd's Articles state that the board has exclusive authority on strategic direction. Members cannot overrule the board's decision, even with a majority vote, without formally amending the Articles.

Replacing an old contract with a new one, transferring liability to the newly formed company.

One or more individuals (legal or natural persons) can establish a company. This can be done by a single person, creating a single-member company (e.g., Salomon v Salomon case).

To register a company, certain documents must be submitted to Companies House, including: * Memorandum of association * Articles of association (possibly using default 'Model Articles') * Application for registration * Statement of the type of company (e.g., private company) * Statement of compliance

The memorandum was central in defining the company's allowed activities. If a company went beyond its 'objects' listed in the memorandum, its actions were considered 'ultra vires' (beyond its powers), void, and directors could be held liable.

The memorandum still exists, but it's not the company's main constitution anymore. It confirms the formation intent and the agreement to be members of the company, especially for companies with shares. The articles of association now form the core constitution.

These articles outline the company's operating rules, like a company's constitution. They cover items not addressed in the Companies Act and can be amended by shareholders. These articles are publicly accessible at Companies House.

While the articles set the foundation, shareholders might create additional agreements to govern specific issues within a smaller group. These are private contracts that can include provisions about selling shares, voting strategies, or share transfer procedures.

When a member violates the rules set out in the company's Articles of Association, affecting other members' rights. This could involve actions like not following dividend requirements or pre-emption rights.

A breach of the Articles by one member against another should be pursued through the company itself, not directly between members. However, if the right is personal (like a member being offered shares before an outside investor), they can take a direct action.

The Articles of Association can be altered by a special resolution of the members (requiring a higher voting threshold, like 75%). This amendment cannot bind members to take up more shares than they had before or increase their liability unless they expressly agree.

Entrenchment makes certain provisions in the Articles of Association harder to amend or remove. This can be implemented to protect minority shareholders.

Entrenchment is implemented by including a provision in the Articles that makes it more difficult to change. This involves registering the provision with the Registrar of Companies, though it is rarely done today.

Unlike real people who make decisions using actions like signatures, companies operate through formal processes.

Companies delegate their decision-making power to specific organs, primarily the Board of Directors and shareholders in general meetings.

Model Articles provide default rules for power allocation, often giving general authority to directors and reserving some power for shareholders acting through special resolutions.

The Articles of Association can legally restrict the power of members, even if they have a majority vote. These limitations cannot be ignored unless the Articles are formally amended.

Members can't use ordinary resolutions to overrule board decisions unless the articles expressly allow it. To change board powers, the articles must be formally altered.

Directors are not simply agents of members; they have independent responsibilities and powers. Members cannot directly dictate decisions to directors.

The company's articles can limit the powers of members, even if they have a majority vote. These restrictions cannot be ignored unless the articles are formally amended.

In exceptional cases where the board is deadlocked and can't function, members can exercise some of the board's powers to keep the company operating.

Quorum refers to the minimum number of qualified individuals required to be present at a meeting for decisions to be valid. Without a quorum, meetings can't take place.

This case established that if a board is deadlocked and unable to function, members can appoint additional directors to resolve the issue and allow the company to operate.

This legislation allows directors to call a general meeting if the board cannot meet its required quorum (minimum number of attendees). It's a mechanism to ensure the company can make decisions, even if the board is incomplete.