Company Law Letterheads and Dividends Quiz

Individuals who invest in a company by purchasing shares and are entitled to a share of the company's profits.

Payments made to shareholders from the company's profits.

Shares that guarantee a fixed dividend payment before dividends are paid to common shareholders.

Dividends that accumulate if they are not paid in a particular year and must be paid in the future, even if there are no current profits.

A process where an independent auditor reviews a company's financial records to ensure their accuracy and compliance with legal requirements.

A legally registered company's formal stationery, essential for business communications. It must include the company's name, registered address, UK registration location, and registered number.

A partnership's letterhead must include the partnership name, the names of all partners, and the partnership's business address.

A sole trader's letterhead must display their business name, real name if different, and the business address.

A legal change involving a new name for a registered company. This requires a specific formal vote, showing a majority agreement from the company's shareholders.

Every director of a company must be listed on the company's letterhead if the company chooses to include directors.

The amount shareholders must pay per share when they are initially issued by the company.

The minimum value assigned to a share, which is recorded as part of the company's capital.

The amount paid for a share exceeding the nominal value, recorded separately as a surplus.

The right of existing shareholders to buy new shares proportionally to their existing holdings before they are offered to the public.

A loan where the lender relies only on the borrower's promise (contract) to repay the money.

A legal action brought by a shareholder on behalf of the company against its directors for breach of duty.

The court will only allow a derivative claim if the shareholder proves the action is in the best interest of the company.

Shareholders have the right to inspect company records relevant to their interests, like service contracts of directors or the register of members.

Public companies are legally required to hold an annual meeting for shareholders to discuss company matters.

Private companies are not required to hold annual meetings, but can hold general meetings as needed.

A type of secured loan taken over high-value assets (e.g., land, buildings, machinery). Title to the asset securing the loan is transferred to the lender (mortgagee), who is granted the right to take possession in case of default.

A loan secured by an interest in an asset the company will hold for a long time (e.g., machinery, shares). This allows the charge holder to sell the asset if the company defaults on the loan.

A loan secured by an interest in a group of assets that change regularly (e.g., inventory). The charge crystallizes on the assets on hand if the company defaults on the secured loan.

Charges and mortgages against company assets must be registered at Companies House within 21 days of their creation.

Fixed charges over the same asset take priority in date order of their creation. Floating charges over the same assets also take priority in date order of their creation. A registered floating charge will take priority over an unregistered fixed charge. A fixed charge will take priority over a floating charge even if the floating charge was created before the fixed charge.

A document evidencing a loan made to a company; conceptually, an IOU. It is not secured.

A company pays corporation tax on its profits.

A legal document that confirms the information about a company held by Companies House is up-to-date.

A record that must be kept by companies to provide details of individuals who have significant control over the company's operations.

A report that must be filed by companies with a turnover of £10 million or more detailing the company's performance and the directors' performance.

A shareholder resolution that needs at least a 75% majority vote to be approved. These resolutions are critical for major company decisions.

These are the people who agree to buy shares when the company forms, providing the initial capital. They become the company's first shareholders.

The funds raised from selling shares initially or during future issues. It's a core part of the company's financial structure and can't be returned to shareholders.

Shares issued to raise additional funds beyond the initial capital. Directors usually need shareholder approval to allot these shares.

The process of directors resolving to issue additional shares. This involves determining the price and quantity of shares to be allotted.

A resolution that has been approved by both the board of directors and the shareholders of a company.

A transaction involving significant assets of a company, requiring approval from shareholders if a director has a personal interest.

A type of shareholder resolution that requires a simple majority vote.

Directors can call a meeting on their own, or shareholders representing at least 5% of the voting shares can request one.

If shareholders request a meeting, directors must call it within 21 days, and the meeting must be held within 28 days.

Notices must be given to all shareholders, representatives of deceased shareholders, and trustees of bankrupt shareholders.

The notice must include the company name, time, date, place of the meeting, general business, proxy appointment rights, and full text of special resolutions.

Notice must be given at least 14 clear days before the meeting. This includes 2 extra days for deemed (not in-person) delivery: meeting date minus 15 for hand delivery, minus 17 for posted delivery.

A meeting of a company's shareholders where they vote on important matters, such as electing directors or approving changes to the company's articles.

The minimum number of shareholders required to be present at a meeting for it to be valid and for decisions to be made.

A voting method where each shareholder is entitled to one vote, regardless of the number of shares they hold.

A voting method where each share is entitled to one vote, allowing shareholders with more shares to have more influence.

A resolution that can be passed in writing, without the need for a formal shareholder meeting.

The percentage of votes needed to pass a written resolution is the same as required for a general meeting. It's based on all shareholders entitled to vote, not just those who are present.