Untitled Quiz

Company Officers and Liabilities

• Directors are individuals holding director positions, regardless of title.
• Shareholders can remove directors through an ordinary resolution at a general meeting (GM), with 28 days' notice.
• Companies must maintain a register of directors and submit details to Companies House (CH).
• Directors have a legal duty to act in the company's best interest.
• Company articles can impose additional director duties beyond basic legal requirements.
• Third parties acting in good faith are protected if a director breaches their duty.
• A quorum is the minimum number of attendees for a board meeting, determined by the company's articles or a default.
• There are five types of directors: Executive, Non-Executive, De Facto, Alternate, and Shadow.
• Managing Directors have actual authority from the board; if not, they have implied authority.
• Other executive directors have authority related to their position but usually have no implied authority.
• Directors can act with apparent or ostensible authority, meaning actions without actual authority, which create the impression of authority.
• Companies can claim any secret profits made by directors and can void contracts where interests are undisclosed.

Business Organisations

• A Partnership is defined by the Partnership Act 1890.
• Partners act as agents for the firm, as stated in the act.
• Duties and rights of partners are outlined in the act (disclosure, not competing, etc).
• Partnerships may experience expulsion.
• Holding oneself out as a partner can bind the firm.
• Liabilities of partnerships in case of dissolution are outlined in relevant legislation.
• Companies are separate legal entities (Salomon v Salomon & Co).
• Lifting the corporate veil occurs in cases of fraud, sham transactions, or specific statutory exceptions.
• There are various key concepts and words: actual and apparent authority, novation, vicarious liability, veil of incorporation.

Formation and Finance

• Promoters are personally liable for pre-incorporation contracts.
• Company names cannot be identical to existing names and must not be offensive or related to criminal activities.
• Passing-off is a tort where a company deceives others about its products or services.
• The Memorandum of Association states initial details, while the Articles of Association outline rules for the company's business.
• Share capital and loan capital represent different funding sources.
• Security for loans can be in the form of fixed or floating charges, needing registration with Companies House within 21 business days.
• Companies can be set up "off-the shelf."
• Pre-incorporation contracts are those made on behalf of a company before its formal establishment.

Company Meetings

• Shareholders with more than 5% of voting shares can call a General Meeting.
• Auditors can force a general meeting if they intend to resign.
• Public companies must hold Annual General Meetings (AGMs) within six months of their financial year-end.
• Directors have the authority to hold an extraordinary general meeting (EGM) with valid notice.
• Courts may call a meeting if director relations breakdown.
• Meetings require valid notice and a quorum to be legally valid.
• Resolving important resolutions requires both valid notice and a sufficient quorum.
• Written resolutions are an alternative for private companies, potentially avoiding formal meetings.
• Derivative claims are when a minority shareholder sues on behalf of the company.
• Specific statutory exceptions allow for court decisions to wind up a company.

Criminal Behaviour and Winding Up

• Certain criminal behavior can be the basis for winding up a company if there are serious corporate illegalities.
• Insider dealings are considered market abuse, with specific defences and penalties.
• Insolvency occurs when a company cannot meet its financial obligations.
• A company can be wound up via compulsory liquidation (court petition) or voluntary liquidation (members' or creditors').
• Insolvency can be proven through various methods, like failing to pay debts or having insufficient assets to cover liabilities.
• Liquidation procedures have different steps for secured creditors, costs, preferential creditors, etc.
• Administrative procedures can help companies restructure during difficult financial periods.