Smith And Keenans Company Law 15th Edition Charles Wild, Stuart Weinstein - Solutions

(a) What members’ meetings are held by registered companies?(b) Name and define the different kinds of resolution which may be passed by such companies in general meeting. In the case of each kind of resolution give one example of business for which such a resolution is necessary
(a) Explain how and in what circumstances a general meeting of a company will be called.AND(b) Explain what minimum period of notice must be given to call an extraordinary general meeting and whether and how such period may be shortened/lengthened.AND(c) Explain how many members must be present for
Joe has been found guilty of wrongful trading. What is the maximum period for which he can be disqualified?A Fifteen years B Five years C Ten years D Three years
Harry has been found guilty of persistent default in sending various documents and returns to the Registrar. What is the maximum period for which he may be disqualified?A Five years B Ten years C Three years D Fifteen years
Unless the articles of a company carry a contrary provision directors must retire from office:A Every five years but may be re-elected any number of times.B Every three years with re-election any number of times.C Every three years with re-election only three more times.D Every five years with
The court is about to disqualify the directors of Blue Ltd for unfitness. How long may the order last?A A maximum of 15 years with no minimum.B A minimum of two years with a maximum of 15 years.C A minimum of two years with a maximum of five years.D A minimum of five years with a maximum of 15
The following directors of Julius Ltd have been disqualified for two years following their misconduct while directors of the company – Jane, Harry, Mary and James. Jane is now working as a secretary with Julius Ltd; Harry has taken a management consultancy appointment with Archer Ltd; Mary has
A director can be removed at a general meeting of his company. What kind of resolution is required?A An ordinary resolution following special notice to the company.B An ordinary resolution.C A special resolution following special notice to the company.D A special resolution.
‘A modern company secretary is not a mere clerk but an officer of the company with extensive duties and responsibilities and he has ostensible authority to sign contracts in connection with the administration side of a company’s affairs.’Discuss this statement.
The following situations have arisen in the affairs of Harbottle Ltd:(a) The company’s managing director and founder member wishes to retire and move permanently to the south of France. For this purpose he needs capital. He owns 900,000 shares in the company which he needs to dispose of. Other
Harold was appointed managing director of Aire Ltd with a service contract for a term of four years. A group of shareholders is dissatisfied with Harold’s conduct of the company’s affairs and wishes to remove him from office.Advise the shareholders. (The Institute of Chartered Accountants in
Mini-mo Ltd is a registered company whose main activity is the production of animal feedstuffs.The company has a fully issued share capital of 10,000 £1 shares. The three directors, George, Sheila and Robert, each hold 1,000 shares and the remaining shareholders Emily and Maurice hold 5,200 and
D was appointed director and managing director of X Ltd. The terms of his service contract provided that he should hold office for eight years and this term was also stated in the articles of association of X Ltd. The other directors of the company decided that D should be removed from his
‘The combined effect of the Insolvency Act 1986 and the Company Directors Disqualification Act 1986 is to give a clear signal to directors that to allow their companies to continue trading and to incur debts at a time when the position is hopeless is both a costly and foolhardy thing to do. In
Melchester FC Ltd was incorporated by Albert Arkwright and Bertie Boozer in 1950. The company was set up to take over the running of Melchester FC, a Lancashire football club, who were founder members of the Football League. Arkwright, at the age of 70, is still a director and shareholder of the
Dee Ltd has net assets of £650,000. It intends to enter into a transaction with one of its directors involving a non-cash asset. At which of the following figures of non-cash asset value will it be necessary to attain member approval?A £100,000 B £2,000 C £65,000 D £6,500
The register of directors and secretaries must, so far as directors are concerned, give particulars in regard to each director of other directorships currently held and those which have been held in the previous:A Three years B Two years C Fifteen years D Five years
Mostyn, who is a director of Test Ltd, has caused the company loss by negligent mismanagement. The company wishes to sue Mostyn but the articles of Test exempt the directors from liability for negligence in the course of their duties. What is the legal position given that Mostyn has left the
Morgan is in breach of his fiduciary duty to the company. How may he be exempted from liability given that the breach is not a fraud on the minority?A By a written or an ordinary resolution of the members.B By a provision in the company’s articles.C By a provision in the company’s memorandum.D
Joe is a director of Slow Ltd and has just unsuccessfully defended an action brought against him by a third party in regard to the affairs of Slow Ltd. Can Joe be indemnified in respect of the legal and judgment costs he incurred from the assets of Slow Ltd?A The company cannot indemnify Joe
Mike has a service contract with Trent plc for a fixed term of 10 years which cannot be terminated by notice. The contract has not been considered in general meeting. What is the legal position?A The contract is valid.B The contract is void and the company can terminate it at any time by giving
Landrut plc is a property company. Its principal activity is buying land, building private houses and selling those houses directly to the public.Six directors form the board. The three executive directors are Jack, a solicitor, in charge of the legal department; Jeremy, a quantity surveyor,
You have recently been appointed as company secretary to a large public company with a Stock Exchange listing for its securities. The board of directors has asked you for advice on certain matters relating to their duties as directors.You are required to advise the board of directors on the legal
(a) What controls are there on the provision by a public company of loans to its directors and on other financial dealings with them?(b) Eric, Frank and George are the directors of Happy Ltd. At a recent board meeting, Eric proposed that £50,000 be paid to Frank in recognition of his services in
A director is in a fiduciary relationship with his company. Explain the meaning and effect of this statement with reference to decided cases. (The Institute of Company Accountants)
A managing director is usually appointed by the other directors and his powers and duties will depend on his contract of service with the company.(a) Explain and illustrate whether a director who has not been appointed as a managing director can bind the company as if he were managing director
(a) Give an account of the extent to which the common law fiduciary duties of company directors have been added to by statutory provisions.(b) Henry is a non-executive director of Dreghorn plc. He also runs his own management consultancy business, Manpower & Co. Dreghorn is undergoing a process of
‘The rule of equity which insists on those who by use of fiduciary position make a profit, being liable to account for that profit, in no way depends on fraud . . . The profiteer, however honest and well-intentioned, cannot escape the risk of being called upon to account.’ Per Lord Russell of
Manfred is a director of Thames Bank plc. He has borrowed £40,000 under the bank’s directors’ and employees’ cheap loans scheme to carry out repairs to his main residence. His son, Adolf, who is aged 30 and is employed by the bank, has also got a loan under the scheme and his wife has
Coniston Ltd holds board meetings once a month, on the first day of the month. At the August meeting the board discussed a contract with Ullswater Ltd. On 15 August John, a director of Coniston, bought shares in Ullswater. The contract was eventually signed between Coniston and Ullswater on 12
Windermere Ltd has entered into a transaction with one of its directors to purchase from him freehold land exceeding £100,000 in value. Given that the transaction has not been approved by the members it is:A Void.B Valid.C Voidable at the instance of the company.D Voidable at the instance of the
Tees Ltd is engaged in the catering business. It has lent John, a director, £6,000 interest free, to buy a car. It has also lent Jane, another director, £10,000 at 8 per cent per annum interest to assist in the purchase of her place of residence. What is the legal status of the loans?A The loans
Test Ltd is reducing the size of the board and Fred is to leave it. Test Ltd wishes to pay Fred compensation for loss of office. This payment must be approved by:A The Inland Revenue.B The shareholders by ordinary or written resolution.C The board of directors.D The creditors.
In what circumstances may a shareholder bring a derivative action on behalf of his company? What procedure is available to deal with the procedural problems presented by such actions?
How does s 994 of the Companies Act 2006 provide an alternative remedy to a winding-up order for the minority shareholders in a company?(The Chartered Institute of Management Accountants)
The Companies Act 2006 contains provisions regulating ‘substantial property transactions’between a company and any of its directors. What are ‘substantial property transactions’ and what procedure is required to approve such transactions?(The Institute of Chartered Accountants in England
Dives is chairman and controlling shareholder of Cashloans plc. You are company secretary.Dives informs you he wishes to buy a seaside cottage for himself and his wife and that, to finance the transaction, he will propose to the next board meeting that the company lend him£60,000 for 10 years at 9
Madonna was employed as a hair stylist by Manecut Ltd. She entered into an agreement not to compete with Manecut for six months after leaving the company’s employment. That agreement is a reasonable restraint of trade. Madonna left and formed a company called Topcut Ltd and began to trade in hair
The managing director of a company has usual or ostensible authority to bind the company by transactions he enters into on its behalf. Which of the following statements represents the limit of this authority?A All commercial matters which relate to the running of the business.B All activities of
The register of directors and secretaries contains particulars of directors and secretaries. In the case of a director these must include his:A Usual residential or confidentiality service address.B Usual residential and business address.C Usual business address only.D Usual residential address
Fred is a director of Bray Ltd and holds 500 shares in that company. His wife is also a director and holds 400 shares. He has two children – John, aged 19 and Jane, aged 15 – who hold 50 shares each. What is the maximum number of shares which Fred must disclose as his shareholding?A 1,000
Jones is a director of Shannon Ltd which is a subsidiary of a public company. At what age will Jones have to vacate office and seek re-election at the next annual general meeting?A No age limit B 75 C 70 D 65
Detail the contents of the memorandum of association of a public limited company and state the importance of having a registered office.
Name FOUR ways in which the facility to purchase its own shares may be useful to a company and briefly outline the safeguards provided by the legislature when using this facility.(Kingston University)
Write notes on TWO of the following:(a) the name clause of the memorandum;(b) the transfer of shares;(c) variation of class rights;(d) promoters. (The Institute of Chartered Secretaries and Administrators)
‘If powers of management are vested in the directors, they and they alone can exercise these powers . . .’ per Greer LJ in Shaw & Sons (Salford) Ltd v Shaw (1935).Discuss the above statement in relation to the powers of the shareholders in general meeting. (The Institute of Chartered
The articles of association of a public limited company provide as follows:A101 ‘the directors shall appoint a person to hold the office of company secretary at their discretion but subject to the provison that any such appointment must be made for a period of at least five years from the date of
John has just formed a limited company. Which of the following details can John exclude from its business stationery?A The names of all of the company’s directors.B The company’s registered number.C The full name of the company.D The address of the registered office.
A derivative action is one which is brought by:A The company.B A member of the company on behalf of all the other members.C A member of the company on his own account.D A member of the company on behalf of the company.
Which of the following can petition the court for relief under CA 2006, s 994?A The company.B Members holding not less than 10 per cent in number of the company’s issued shares.C A member of the company.D A creditor of the company.
Tom is the majority shareholder in Ribble Ltd and is also a director. Recently Tom sold freehold land belonging to the company to his wife who is also a director, and two months later his wife sold it to the local council at a profit of £30,000. The sale was ratified by an ordinary resolution.What
The directors of Ouse Ltd have been selling off certain of the company’s assets negligently at what the minority shareholders regard as too low a value. The directors have not made any gain themselves. What action can the minority shareholders bring on behalf of the company?A An action could be
Sven is a minority shareholder in the Finnish Company Ltd. Alf, Bob and Carl are the Chairman, Managing Director and Export Director respectively and together they control the company.Sven complains that:● The company has just sold a ten-acre site to someone (believed to be Alf’s father) for
I think that one useful cross-check in a case like this is to ask whether the exercise of the power in question would be contrary to what the parties, by word or conduct, have actually agreed. Would it conflict with the promises which they appear to have exchanged? . . . In a quasipartnership
Give an account of the legal procedure which must be followed in order to effect the registration of a new public limited company which is entitled to do business.(The Association of Chartered Certified Accountants)
The directors of Merchanting Ltd, a very successful business, have allocated most of the profits to themselves as remuneration and as donations to a charitable institution established by the founder of the company. Sheila, a shareholder, wishes to challenge the amount of the directors’
In certain areas the Companies Act 2006 and to a limited extent the Insolvency Act 1986 give special protection to minority shareholders with various holdings of shares. The most important of these statutory provisions seems to be s 994 of the Companies Act 2006 which gives any member the right to
At first sight, the statutory contract may be viewed as an effective method of enforcing a shareholder’s rights, especially when considered alongside s 630 and the application of General Equitable Principles. However, once other aspects of company law are examined and factored into this process,
Explain how the provisions of the Companies Act 1985 attempt to ensure that majority shareholders do not conduct the affairs of a company with complete disregard for the interests of minority shareholders. (The Chartered Institute of Management Accountants)
‘For a minority shareholder who has suffered a wrong at the hands of the majority to establish a case under the alternative remedy he must show both that he suffered “unfairly prejudicial conduct” and that this was suffered in his capacity as a member of the company.’Discuss. (The Institute
Explain the rule in Foss v Harbottle and describe the limits to this rule.(The Institute of Company Accountants)
Ben is a minority shareholder in App plc, whose directors are Charles, David and Edward.Though not the controlling shareholders the directors control the company in practice.(a) Last year one of the company’s employees was convicted of stealing property belonging to the company and was given a
The articles of private companies often provide that members wishing to sell their shares must offer them first to existing members. What is such a clause called?A An expropriation clause.B A compulsory purchase clause.C A pre-emption clause.D A statutory pre-emption clause
How is a share warrant validly transferred?A By any writing.B By writing and delivery.C By delivery.D By instrument of transfer.
The Companies Act 2006 requires that when equity shares are allotted for cash they must be offered first to existing shareholders in proportion to their holding in the company. Such an issue of shares is known as:A A rights issue.B A preference issue.C An issue of bonus shares.D An issue of
Tees plc has an issued share capital of £100,000 and recently issued another 100,000 £1 ordinary shares. Fred, his wife, his son (aged 18) and a private company in which Fred is the majority shareholder each acquired 10,000 shares. What is the interest which Fred must notify to the company under
A person who acquires an interest in the shares of a public company must notify the company of that interest when it equals or exceeds:A 20 per cent of the voting shares.B 10 per cent of the voting shares.C 5 per cent of the voting shares.D 3 per cent of the voting shares.
The Companies Act 2006 places upon public companies certain controls over the type and value of the consideration which such companies may receive for an issue of their shares. You are required to select any three of these controls and explain in each instance how the control restricts the company
Privatus Ltd was a private company which owed the sum of £4,000 to Alex for goods which he had sold to it. As the company was short of cash, its directors allotted to Alex 6,000 £1 shares in the company credited as fully paid. The share certificate issued to Alex stated that the shares were fully
Every public company is required to maintain a register of ‘substantial holdings and interests’in shares which it has issued.(a) What duties are imposed upon persons to notify such holdings and interests?(b) What is the purpose of the requirement?(The Institute of Chartered Accountants in
Describe an Annual Return and state the particulars which must be given in the Annual Return of a company which has a share capital. (The Institute of Company Accountants)
John is a director of Derwent plc, a listed company. The board of Derwent received at its last meeting a report by Joe, the finance director of Derwent, that Derwent’s profits would be up by 30. per cent and that this would appear in the press report of the annual results in two weeks’time.
Trent plc has issued convertible debentures to Bill at a discount. The legal position is:A the issue is valid but the right to convert to shares is void.B the issue is valid and so is the right to convert to shares.C the issue is void and so therefore is the right to convert to shares.D the issue
Which of the following is a permissible use of the share premium account under s 130 of the Companies Act 2006?A Writing off a premium on redemption of any ordinary shares.B Writing off goodwill.C Writing off a premium on the redemption of debentures.D Writing off a deficit on the profit and loss
Rich and Wealthy are partners in a firm which they wish to convert into a limited company, but they are undecided between incorporating with private status or public status. Advise them as to the advantages and restrictions of each type of company Boxo plc was formed five years ago. It now proposes
James agrees to pay £2m for a controlling interest in Sapphire plc providing the company transfers £3m deposited with its present bankers to Emerald Bank from which James has arranged to borrow £2m. After the transfer Emerald Bank honours the cheque drawn by James to pay for the shares in
Who is an ‘insider’ and what is ‘inside information’ for the purposes of the laws relating to insider dealing? What prohibitions are imposed on the activities of insiders? State the main exemptions to these prohibitions. (Author’s question)
(a) Explain what is meant by the term ‘capital maintenance’.(b) Discuss how the provisions of the Companies Act 2006 attempt to ensure capital maintenance by regulating:(i) the payment of dividends,(ii) the issue of shares at a premium.(The Chartered Institute of Management Accountants)
(a) Druid Ltd has recently issued an additional one thousand shares. Five hundred of these were issued to its former employee, Edwin, in return for his past services and his agreement not to set up a competing business in the same locality. The other 500 were issued to Francis in return for the use
‘A survey of price movements . . . showed clearly that there was a general tendency for the price of shares in bid-for companies to rise sharply before the announcement of takeover bids, which is in itself prima facie evidence of “inside buying”. And there has been a continuing series of
Give an account of the statutory restrictions which seek to ensure that when shares are issued by a company, they are paid for either in money or in money’s worth. (Napier University)
In which of the following circumstances is Fred not a member of a company?A Fred subscribed the memorandum but his name is not as yet on the register of members.B Fred has been allotted shares and entered on the register but has not received a letter of allotment.C Fred has lodged a transfer with
Maurice has become bankrupt. What is the legal effect of his bankruptcy on his shareholding in Mersey Ltd?A Maurice retains his title and control of the shares but his trustee can file a stop notice.B Maurice retains his title but the control of the shares is transmitted to his trustee in
Botham dies and leaves all his shares in Thames Ltd to Gower. Under the articles the shares in Thames ‘can only be transferred by the directors’. What must Botham’s executor do to pass the shares to Gower?A Become a member and sign a transfer deed.B Sign a transfer in the form of a deed.C
Conwy Ltd has a provision in its articles which allows a transfer of shares to be made orally.This provision is:A invalid.B valid.C voidable.D valid if the transfer is to an existing member
What is the legal position of a person who buys shares on the faith of a share certificate issued by a company to a transferee on the basis of a forged transfer?A The person gets an equitable interest in the shares.B The transfer is valid and the person gets a good title if he has acted in good
When is it necessary to certify a transfer of shares?A Where there are pre-emption rights in the articles.B When a part holding of shares is being transferred to the transferee(s).C When shares are being transferred to an existing member.D On all transfers of unlisted shares.
Write notes on TWO of the following:(a) The name clause of the memorandum.(b) The transfer of shares.(c) Variation of class rights.(d) Promoters.
Sprouts Ltd wishes to change its name to Greenstuff Ltd and trade under the name of Brassica Wholefoods. What steps must be taken to achieve this result?(The Institute of Company Accountants)
(a) What is the procedure for varying the rights attached to a class of shares if the memorandum and articles are silent on the matter? What safeguards are there for a minority of that class?(b) Explain the liability of a person who presents a forged share transfer to the company for registration
Write explanatory notes on TWO of the following:(a) The doctrine of ultra vires.(b) Promoters.(c) Certification of transfer forms.(d) Ways in which shares may be mortgaged.
Edward owns a small number of shares in Severn Ltd, a private company. He wishes to transfer these shares to a charity but fears that the directors may object.For what reasons may the directors refuse to register such a transfer and for how long may they delay their decision? (The Institute of
What is the minimum percentage of shareholders required to make an application to the court to set aside an alteration of the objects clause of a company?A Not less than 15 per cent of the total number of shareholders.B Those holding not less than 15 per cent in nominal value of the issued share
Which of the following resolutions requires the directors of a private company to give a statutory declaration of solvency? A resolution to:A Commence a creditors’ voluntary winding-up.B Reduce the company’s share capital.C Approve the giving of financial assistance for the purchase of its own
Under the provisions of the Companies Act 2006, where there is to be an allotment of unissued share capital for cash the notice of the offer to existing shareholders must remain open for not less than:A 28 days B 21 days C 15 days D 14 days
The shareholders of Test Ltd are Ann who holds 600 shares, Barbara who has 100 shares, and Clare and Diana who have 250 shares each. The shares carry one vote each. A resolution to exclude the statutory pre-emption right of the shareholders of Test Ltd, given that all members attend the meeting and
The board of Mersey plc has authorised the allotment of shares to the public in contravention of the statutory pre-emption rights of Mersey’s shareholders. What is the legal position as regards the allotment?A It is invalid and the allottees have no right to compensation.B It is valid and the
The Companies Act 2006 gives shareholders a statutory right of pre-emption:A On the allotment of any shares.B Where shares are transferred from one member of a company to another.C On the transmission of shares on the death of a member of the same company.D On the allotment for cash of equity shares
Explain by reference to statutory and common law examples what is meant by the term ‘lifting the veil of incorporation’.
‘Although they may not be in the strict sense agents or trustees for the company, promoters stand in a fiduciary relation to it.’ – Northey and Leigh.Discuss by looking at the promoter’s relationship with the company he is forming and the remedies available for failure to discharge the

Showing 300 - 400 of 671

Smith And Keenans Company Law 15th Edition Charles Wild, Stuart Weinstein - Solutions

Step by Step Answers