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Company Workshop 9 Preparatory Task
Procedure QUESTION ONE: Study the shelf company documents and make a list of the items that still need to be completed.-The name needs to be changed to Charlestone Mills Ltd (CM) The registered office needs to be changed to the same as CPL at Fountain Park The accounting reference date needs to be changed to 31 March Appointment of: o Tony Li as chair and managing director o Nick Berkley as the finance director o Gemma Jackson as a non-executive director Transfer Nicola Simms' shares accordingly (so that CM won't be wholly-owned subsid.): o One to CPL o One to Nick Allotment of shares to CPL (PS199,000 for 199,000 shares) and Nick (PS24,999 for 24,999 shares) Purchase the freehold warehouse from Yorkshire Mills for PS7million in cash. Remember that Nick owns 30% of the issued shares in Yorkshire Mills.
QUESTION TWO: Prepare an explanation about whether any shareholder resolutions are required to implement these remaining items. Decisions that do not require shareholder resolutions The board of Newco can resolve to deal with the following without shareholder approval: i) ii) iii) iv)
Appoint Tony as MD (MA3 and MA19(1)); Appoint Nick as a director (MA17(1)(b)) and finance director (MA3 and MA19(1)); Appoint Gemma as a director (MA17(1)(b)) Register CPL and Nick as members holding one share each (MA26)
Decisions that do require shareholder resolutions Change of Name Purchase Premises
Allotment of Shares
The members will need to pass a SR to change the name of the premises to Charlestone Mills Ltd (s.77) The members will need to pass an OR before the board can complete the purchase. The transaction is a substantial property transaction (SPT) under s.190(1)(b) because:
? The seller (YM) is connected to a director (Nick) of the purchaser (Newco) because he owns 30%
of the issued shares (s.252(1), s.252(2)(b), s.254(2));
? The property is a non-cash asset (s.1163); and
? The property is of substantial value because it is worth PS7,000,000 (thus exceeding the PS100,000 limit). The members must pass one SR to disapply the statutory pre-emption rights. This is because:
- The company was formed after October 2009,
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