Setting up a business
Practical/administrative considerations before you take on a new client
The different business mediums – advantages and disadvantages of these
o Governing statute
o Liability of investors
o Number of persons needed to set up
o Expenses of setting up
o Publicity and disclosure
o On-going expenses
o Management structure
o Financing methods available
Differences between private and public companies
Provision Summary
(CA)
3 Defines limited and unlimited companies
7 Method of forming a company: 1+ persons subscribing to a memorandum and complying with the act’s
registration requirements
8 Memorandum requirements
9 The memorandum of association must be delivered to the registrar together with an application for
registration of the company, the documents required by this section and a statement of compliance
(name, office, private/public, shares)
10 The statement of capital and initial shareholdings required to be delivered in the case of a company
that is to have a share capital must comply with this section. Total number of shares, aggregate values,
amount to be paid up etc.
112 Members of a company are subscribers to the MoA
270 Private company not required to have a secretary
,Company decision making
Note: the dynamic between shareholders/directors in the passing of resolutions etc.
Group companies permit risky business
Persons of significant control
Regulatory issues particularly relevant to BLP
Importance of shareholder agreements, advantages of these, key provisions in a shareholder agreement –
Russell v Northern Bank Development Corpn Ltd
o Deed of adherence by new shareholders
Provision Summary
(CA)
29 The chapter applies to resolutions binding a company
30 (1) Copies of resolutions/agreements to be forwarded to the registrar within 15 days. All SR and some
OR. The offence for not doing so
77 (1) Change of company name by (a) special resolution or (b) method in articles
188 Members’ approval required for Directors’ long-term service contracts
281(3) Resolutions must be passed as written resolution or at a meeting of members
282 (1) Ordinary resolutions passed by a simple majority
S524 defines simple majority as over 50%
283(1) Special resolutions passed by majority of no less than 75%
283(2) A written resolution is passed by a majority of not less than 75% if it is passed by members
representing not less than 75% of the total voting rights of eligible members
284 Voting: general rules (written resolution, show of hands etc)
302 Directors’ power to call GM
318 Quorum at meetings > subject to articles
(1) – where only 1 member, 1 is sufficient
(2) – where more, 2 qualifying persons
321 Right to demand a poll. If the articles exclude this it will be void
323 Directors may represent corporations at meetings
(4) Where the corporation authorises more than one person and more than one of them purport to
exercise a power under subsection (3)—
(a) if they purport to exercise the power in the same way, the power is treated as exercised in that
way,
(b) if they do not purport to exercise the power in the same way, the power is treated as not
exercised.
360 Computation of periods of notice etc. (clear day rule)
168(1) A company may by ordinary resolution at a meeting remove a director before the expiration of his
period of office, notwithstanding anything in any agreement between it and him
168(2) Special notice is required to remove a director under this proviso
1158 Meaning of UK registered company – a company registered under this act
Provision Summary
(MA)
7 Directors to make decisions collectively
8 Unanimous decision – where all directors share a common view
9 Calling a directors’ meeting – gives flexibility (notice doesn’t need to be in writing (3), can be called by
directors or by company secretary (1)
11 Quorum for a directors’ meeting is 2 (2)
13 Casting vote by chairman (1)
17 Methods of appointing directors (1)(a) by OR
42 Voting: general – resolution of GM on show of hands unless poll is demanded
44 Poll votes - when to demand and demanded by whom
Company Incorporation
, Shelf company v new company – advantages and disadvantages
o Cost
o Time
o Formalities
When name change/company formation becomes effective etc.
Provision Summary
15 On registration, issue of certificate of incorporation will be given by the registrar. The certificate must
state:
(a) the name and registered number of the company,
(b) the date of its incorporation,
(c) whether it is a limited or unlimited company, and if it is limited whether it is limited by shares or
limited by guarantee,
(d) whether it is a private or a public company, and
(e) whether the company’s registered office is situated in England and Wales (or in Wales), in Scotland
or in Northern Ireland.
16 Effect of registration: become a body corporate, directors and secretary deemed to have been
appointed to that office
51(1) Personal liability where a contract has been entered into on behalf of a company at a time when the
company has not been formed has effect, subject to any agreement on the contrary
53 Prohibited names: use would constitute an offence/it is offensive
54 SoS have to approve names suggesting government/public/local authority connection
55 Other sensitive words or expressions need SoS approval
57 Permitted characters/signs/symbols (need SoS approval)
66 A company must not be registered under the act by a name that is the same as another name
appearing in the registrar’s index
67 Power of SoS to direct change of name if too similar to another name
77(1)(a) Company can change name by special resolution
78 Conditions for change of name by special resolution (notice given to registrar plus copy of resolution).
Plus deals with change of name upon a specific occurrence
79(1) Where there is a change of name by a way stipulated in the articles, notice must be given to the
registrar and it must be stated that the articles were relied upon
80 Change of name: to be registered by registrar and new certificate of incorporation
81(2) The change does not affect any rights or obligations of the company or render defective any legal
proceedings by or against it.
81(3) The change does not affect any rights or obligations of the company or render defective any legal
proceedings by or against it.
86 A company must have a registered office at all times
87 Change of registered office is effected by giving notice to the registrar – 14 days you can be validly
served at the old address
Company procedure
Practical/administrative considerations before you take on a new client
The different business mediums – advantages and disadvantages of these
o Governing statute
o Liability of investors
o Number of persons needed to set up
o Expenses of setting up
o Publicity and disclosure
o On-going expenses
o Management structure
o Financing methods available
Differences between private and public companies
Provision Summary
(CA)
3 Defines limited and unlimited companies
7 Method of forming a company: 1+ persons subscribing to a memorandum and complying with the act’s
registration requirements
8 Memorandum requirements
9 The memorandum of association must be delivered to the registrar together with an application for
registration of the company, the documents required by this section and a statement of compliance
(name, office, private/public, shares)
10 The statement of capital and initial shareholdings required to be delivered in the case of a company
that is to have a share capital must comply with this section. Total number of shares, aggregate values,
amount to be paid up etc.
112 Members of a company are subscribers to the MoA
270 Private company not required to have a secretary
,Company decision making
Note: the dynamic between shareholders/directors in the passing of resolutions etc.
Group companies permit risky business
Persons of significant control
Regulatory issues particularly relevant to BLP
Importance of shareholder agreements, advantages of these, key provisions in a shareholder agreement –
Russell v Northern Bank Development Corpn Ltd
o Deed of adherence by new shareholders
Provision Summary
(CA)
29 The chapter applies to resolutions binding a company
30 (1) Copies of resolutions/agreements to be forwarded to the registrar within 15 days. All SR and some
OR. The offence for not doing so
77 (1) Change of company name by (a) special resolution or (b) method in articles
188 Members’ approval required for Directors’ long-term service contracts
281(3) Resolutions must be passed as written resolution or at a meeting of members
282 (1) Ordinary resolutions passed by a simple majority
S524 defines simple majority as over 50%
283(1) Special resolutions passed by majority of no less than 75%
283(2) A written resolution is passed by a majority of not less than 75% if it is passed by members
representing not less than 75% of the total voting rights of eligible members
284 Voting: general rules (written resolution, show of hands etc)
302 Directors’ power to call GM
318 Quorum at meetings > subject to articles
(1) – where only 1 member, 1 is sufficient
(2) – where more, 2 qualifying persons
321 Right to demand a poll. If the articles exclude this it will be void
323 Directors may represent corporations at meetings
(4) Where the corporation authorises more than one person and more than one of them purport to
exercise a power under subsection (3)—
(a) if they purport to exercise the power in the same way, the power is treated as exercised in that
way,
(b) if they do not purport to exercise the power in the same way, the power is treated as not
exercised.
360 Computation of periods of notice etc. (clear day rule)
168(1) A company may by ordinary resolution at a meeting remove a director before the expiration of his
period of office, notwithstanding anything in any agreement between it and him
168(2) Special notice is required to remove a director under this proviso
1158 Meaning of UK registered company – a company registered under this act
Provision Summary
(MA)
7 Directors to make decisions collectively
8 Unanimous decision – where all directors share a common view
9 Calling a directors’ meeting – gives flexibility (notice doesn’t need to be in writing (3), can be called by
directors or by company secretary (1)
11 Quorum for a directors’ meeting is 2 (2)
13 Casting vote by chairman (1)
17 Methods of appointing directors (1)(a) by OR
42 Voting: general – resolution of GM on show of hands unless poll is demanded
44 Poll votes - when to demand and demanded by whom
Company Incorporation
, Shelf company v new company – advantages and disadvantages
o Cost
o Time
o Formalities
When name change/company formation becomes effective etc.
Provision Summary
15 On registration, issue of certificate of incorporation will be given by the registrar. The certificate must
state:
(a) the name and registered number of the company,
(b) the date of its incorporation,
(c) whether it is a limited or unlimited company, and if it is limited whether it is limited by shares or
limited by guarantee,
(d) whether it is a private or a public company, and
(e) whether the company’s registered office is situated in England and Wales (or in Wales), in Scotland
or in Northern Ireland.
16 Effect of registration: become a body corporate, directors and secretary deemed to have been
appointed to that office
51(1) Personal liability where a contract has been entered into on behalf of a company at a time when the
company has not been formed has effect, subject to any agreement on the contrary
53 Prohibited names: use would constitute an offence/it is offensive
54 SoS have to approve names suggesting government/public/local authority connection
55 Other sensitive words or expressions need SoS approval
57 Permitted characters/signs/symbols (need SoS approval)
66 A company must not be registered under the act by a name that is the same as another name
appearing in the registrar’s index
67 Power of SoS to direct change of name if too similar to another name
77(1)(a) Company can change name by special resolution
78 Conditions for change of name by special resolution (notice given to registrar plus copy of resolution).
Plus deals with change of name upon a specific occurrence
79(1) Where there is a change of name by a way stipulated in the articles, notice must be given to the
registrar and it must be stated that the articles were relied upon
80 Change of name: to be registered by registrar and new certificate of incorporation
81(2) The change does not affect any rights or obligations of the company or render defective any legal
proceedings by or against it.
81(3) The change does not affect any rights or obligations of the company or render defective any legal
proceedings by or against it.
86 A company must have a registered office at all times
87 Change of registered office is effected by giving notice to the registrar – 14 days you can be validly
served at the old address
Company procedure
