BLP (4)
Terms
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- Can a company enter into contracts before incorporation?
- s. 16(1) and (3) - from the date of incorporation you can exercise and benefit from all the functions of an incorporated company (limited liability).
- What proves that a legal entity has been registered in accordance with s. 16(1)?
- s. 15(1) - on the registration of a company, the registrar of companies shall give a certificate that the company is incorporated.
- Can a company act as a principal before incorporation?
- No, the company doesn't exist. Further, a Holding co may be considered to be the principal instead of the yet to be incorporated subsidiary if an agency relationship is purported.
- What are the consequences if a contract is purportedly entered into by an entity that is not yet incorporated?
-
(1) - The yet to be incorporated company has no liability (didn't exist)
(2) - The purported director of the yet to be incorporated company will be treated as the contracting party (s. 51(1)) - Is it possible to change the parties to a contract after the contract has been entered into?
- Possible to novate a contract - the current parties to Contract A and the new party need to sign a document stating that Contract A will transfer to the new party. Note: all parties must agree.
- What must companies be careful of in relation to representatives?
- Companies need to be careful not to be considered the principal in a agency relationship. As such, a claimant could pursue a claim against the principal, rather than the agent.
- What should you consider in relation to advising board members of companies?
- Whether you are advising the company or the board member and if the latter whether you have a conflict of interest.
- What form do you use when setting up a company?
- IN01
- What must a company's name end with? Auth
- Limited or Ltd (s. 59(1))
- What is the authority for procedures regarding disclosure of the company's name?
- s. 82 CA
- What Regulation governs the disclosure of a company's name, give details of 3 regs that apply
-
Companies Trading Disclosures Regulations 2008
Must display name on/at:
R. 6(1)(a) - business correspondence
r. 3 and 4- at registered office - What must you be careful of in relation to names suggesting connection with government or public authority?
- s. 54 CA 06 - 'give the impression that the company is connected with'
- Where can you find guidance on company names?
- Companies House's website contains guidance on sensitive words and expressions
- Discuss use of the word 'National' in a company's name
-
Cannot use as first word in name unless:
- show pre-eminent in field
- supporting evidence by ind. source - Why aren't there more comedy company names?
- s. 53 CA 06 - must not be registered if use of the name would constitute an offence or is offensive.
- What must you also think about when registering a company name?
- S. 66 CA 06 - Name not to be the same as another in the index
- When does the change of name become effective?
- s. 81 - takes effect from the date on which the new certificate of incorporation is issued.
- What other considerations related to other areas of law should you consider when registering a company name?
- IP and trademark law may prohibit you from using a company name. You should therefore also check what is registered with the Intellectual Property Office.
- What kind of businesses will use incorporation from scratch?
- More sophisticated types of companies because it allows you to really go into detail regarding the articles of association.
- Creating a company from scratch can be more expensive, why?
- Because of the time and formalities involved in create a brand new company
- What is the benefit of using shelf companies?
- Shelf companies have already been incorporated and therefore already benefit from limited liability from the moment you start to alter the company to suit your client's needs
- What is the main cost in using a shelf company for your client?
- Lawyers fees in turning the shelf company into something that your client wants, name, directors, secretary, shares, etc.
- What is the advantage of using a shelf company?
- Quicker - once you have completed the alterations to the company then its good to go.
- What is the halfway house when incorporating companies?
- Using an incorporation agent or incorporation service
- What does an incorporation agent or incorporation service do?
- Takes the sting out of the IN01 - good for creating lots of companies, can configure settings so the system remembers your preferences
- Why is use of a shelf company preferable in some instances (particular time critical activities)
- All of the documents are in your control. Only way to establish a company for a client outside of business hours.
- If time is not critical, which is the easiest way to set up a company?
- Incorporation from scratch using the form IN01
- What 10 points should you consider when customising a shelf company?
- (1) chance name, (2) new Co Sec, (3) resign Co Sec, (4) new directors, (5) resign directors, (6) new chairperson, (7) transfer of shares, (8) new reg office, (9) new accounting reference date and (10) appoint auditors.
- How does the concept of agency relate to the management of companies?
- Directors are the agents of the company.
- Which article in the MA gives the directors the power to run a company?
- MA 3 - gives directors the power to run a company
- What power in the MA gives the shareholders a say in the company's affairs?
- MA 4 - shareholders may director the directors to take or refrain from taking certain actions
- Who can change the name of the company?
- s. 77(1) (a) - members by SR or (b) directors if power explicit provision to that effect in the company's articles.
- Does a private company need to have a Co Sec?
- No (s. 270(1))
- How are directors empowered to appoint a Co Sec?
- MA 3 and 5 - general powers
- What type of resolution to appoint CoSec?
- BR so done at BM
- What is the authority for the appointment of new directors?
- MA 17(1) - choice: by OR or by decision of the directors
- How do the directors resign? Auth?
- MA 18(f) - notification received that the director is resigning from office - takes effect in accordance with the terms of the notificaiton
- What is the method for the transfer of shares?
- Current shareholders will each sign a stock transfer form to transfer the shares
- When do individuals become members of a company?
- When the proposed member's name is entered in the company's register of members (s. 112(2))
- How can a corporate shareholder practically exercise its rights?
- s. 323 allows for a corporate representative to be appointed by BR to represent a corporate shareholder.
- If there is no specific instruction as to who should do something, who should do it?
- No stipulation = directors
- What section of the CA should be considered when appointing a company's auditors?
- s. 485 (3) directors may appoint before first accounting period and (4) members by OR during a period for appointing auditors