I recently met up with Laura the managing director of Garden Outlets. Garden Outlet is a long-standing
Question:
I recently met up with Laura the managing director of Garden Outlets. Garden Outlet is a long-standing client and often instructs our team on matters relating to company procedure.
It originally operated as a partnership, however in 2019, due to the success and expansion of the business, we assisted Laura and her partner Katie with incorporating the business into a private limited company.
When I met up with Laura, she explained that because of this success, she and Katie wish to make a few changes to the company to make the day to day running of the company more manageable.
I have set out below the plans we discussed in the meeting:
1. Garden Outlet wishes to appoint a new director, Mike as the Projects Director. Rajesh has a lot of landscaping experience and both Laura and Katie think he is going to be a great asset to the team.
2. Garden Outlet will enter into a service contract with Mike for a fixed term length of 36 months.
3. Mike will be re-locating to Guildford to take up his role in the company. Katie and Libby have agreed that Garden Outlet will loan Mike £60,000 to facilitate this move. They have spoken with the accountant who has confirmed that Lawns can afford this, so we do not need to assess affordability.
Please note that Katie leaves the country in 6 days to go on holiday and they would like to have the changes listed at 1-3 above implemented before then. If any shareholder resolutions are necessary, they will therefore use the written resolution process. If possible, the client would like all changes to be dealt with at the same time.
What I would like you to do
Please could you explain:
The resolutions needed for the changes at 1-3 above, together with whether these resolutions are likely to pass and what internal administration / external filing is required in respect of them; and
Whether it will be possible to implement the changes at 1-3 above prior to Libby’s holiday or will the changes have to wait until her return.
Additional Information
Authorised share capital: 100,000 ordinary £1 shares
Directors and Shareholders Name:
Laura Holding 75,000 ordinary £1 shares
And Katie Holding 25,000 ordinary £1 shares
Financial Accounting and Reporting
ISBN: 978-0273744443
14th Edition
Authors: Barry Elliott, Jamie Elliott