Podcast
Questions and Answers
The tort of passing off was established in the case of ______ v Buttercup Margarine Co Ltd.
The tort of passing off was established in the case of ______ v Buttercup Margarine Co Ltd.
Ewing
A company must hold an Annual General Meeting (AGM) within ______ months of their financial year-end.
A company must hold an Annual General Meeting (AGM) within ______ months of their financial year-end.
6
A ______ resolution is passed by more than 50% of shareholders.
A ______ resolution is passed by more than 50% of shareholders.
Ordinary
Under section $303, shareholders with ______% or more of voting shares can require directors to hold a General Meeting.
Under section $303, shareholders with ______% or more of voting shares can require directors to hold a General Meeting.
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For a Special resolution, at least ______% of shareholders must vote in favor, and it requires specific notice.
For a Special resolution, at least ______% of shareholders must vote in favor, and it requires specific notice.
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The ______ allows a minority shareholder to bring a claim in the name of the company.
The ______ allows a minority shareholder to bring a claim in the name of the company.
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A company’s constitution has binding power as established in the cases of Rayfield & Hands, and ______ v Kershaw Leese.
A company’s constitution has binding power as established in the cases of Rayfield & Hands, and ______ v Kershaw Leese.
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To be considered valid, meetings must have correct notice and a ______.
To be considered valid, meetings must have correct notice and a ______.
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Insider dealing is a form of market abuse where individuals trade based on confidential information that could affect a company's ______.
Insider dealing is a form of market abuse where individuals trade based on confidential information that could affect a company's ______.
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One of the penalties for insider dealing is an unlimited ______.
One of the penalties for insider dealing is an unlimited ______.
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Under CA 2006, a director is defined as 'any person occupying the position of directors, by whatever name called,' with a minimum of ______ director required for a private company.
Under CA 2006, a director is defined as 'any person occupying the position of directors, by whatever name called,' with a minimum of ______ director required for a private company.
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Insolvency occurs when a company is unable to pay its ______.
Insolvency occurs when a company is unable to pay its ______.
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In a compulsory liquidation, a petition must be made to the ______ to prove insolvency.
In a compulsory liquidation, a petition must be made to the ______ to prove insolvency.
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If shareholders wish to remove a director, they must do so through an ordinary resolution at a general meeting, with ______ days of special notice required.
If shareholders wish to remove a director, they must do so through an ordinary resolution at a general meeting, with ______ days of special notice required.
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Fraudulent trading involves dishonest actions beyond ordinary ______.
Fraudulent trading involves dishonest actions beyond ordinary ______.
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The CDDA 1986 grants courts the power to disqualify directors for up to ______ years.
The CDDA 1986 grants courts the power to disqualify directors for up to ______ years.
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Companies are required to maintain a register of ______ and submit their details to Companies House.
Companies are required to maintain a register of ______ and submit their details to Companies House.
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A director may be disqualified for up to ______ years due to wrongful trading.
A director may be disqualified for up to ______ years due to wrongful trading.
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The company may enter ______ during restructuring to protect itself from creditors.
The company may enter ______ during restructuring to protect itself from creditors.
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Under PA 1890, partners are considered as ______ of the firm.
Under PA 1890, partners are considered as ______ of the firm.
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Transactions at an undervalue can be reversed by a liquidator if they occurred within ______ years before insolvency.
Transactions at an undervalue can be reversed by a liquidator if they occurred within ______ years before insolvency.
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The concept of ______ refers to a company being liable for torts committed by its employees or agents.
The concept of ______ refers to a company being liable for torts committed by its employees or agents.
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Lifting the veil of incorporation may occur in cases of fraud or when there are statutory ______.
Lifting the veil of incorporation may occur in cases of fraud or when there are statutory ______.
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Apparent authority refers to a situation where a person acts without actual authority, but the company’s actions make it seem like they have ______ authority.
Apparent authority refers to a situation where a person acts without actual authority, but the company’s actions make it seem like they have ______ authority.
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Study Notes
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.
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