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LPC Law Notes Business Law and Practice Notes

Procedure Table A Articles Notes

Updated Procedure Table A Articles Notes

Business Law and Practice Notes

Business Law and Practice

Approximately 649 pages

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Part of the corporate lawyer’s role is to identify the necessary decisions which a client’s proposal entails and to advise the client on the best way of achieving these. In turn the lawyer will likely draft all the documentation necessary to support the method chosen.

Board Meeting 1
Call

  • TA88: Any one director may call a BM or authorise a secretary to do so

  • Apply to the facts: who has called it?
Notice

  • TA88: must be given to all the Ds before the meeting (but not if he’s out of the UK)

  • Re Homer: it must be reasonable notice

  • Re Trinidad: Notice may be oral

  • Apply to the facts: has there been reasonable notice? If so, why?
Quorum

  • Only directors, alternatives and secretaries may attend

  • Only directors and alternatives form part of quorum

  • Minimum number is 2 (TA89) unless otherwise stated in special Articles

  • If inquorate, consider disapplying TA95 by TA96 by members’ OR to allow them to count

  • Chair has final say if it is unknown whether someone should count in quorum (TA98)

  • Can still attend even if can’t vote (Hayes v Bristol Plant Hire)

  • Apply to the facts: who has to turn up? If not, only proposal can be to call another BM.
Declaration of Interest

In a Proposed Transaction (s.177)

  • Direct or indirect (e.g. a spouse) interest, then it must be declared to the other directors (s.177(1))

  • There are some exceptions:

    • D is not aware of either the interest or transaction (s.177(5))

    • If interest cannot reasonably be regarded as likely to give rise to a conflict of interest (s.117(6)(a))

    • If other Ds are already aware (s.117(6)(b))

    • If it concerns the terms of his service contract (s.117(6)(c))

    • A sole D need not make a declaration

  • However, regardless of the above exceptions, it is always good practice to declare any interest

  • The nature and extent of his interest must be made:

    • Before the transaction is entered into (s.177(4))

    • At a BM or by notice in according with s.184 (in writing to other Ds) or s.185 (general notice)

    • If becomes inaccurate, a further declaration needed (s.177(2))

  • The effects of making the declaration are that:

    • The D can’t vote or count in the quorum (TA95)

    • Unless: TA94 exceptions:

      • The interest is a guarantee/indemnity that benefits the members

      • The interest is that shares are being subscribed to

    • Members can by OR suspend or relax the TA95 provision temporarily (TA96)

In an Existing Transaction (s.182)

  • Direct or indirect (e.g. a spouse) interest (s.182(1))

  • The same exceptions as above

  • The nature and extent of his interest must be made:

    • As soon as reasonably practicable (s.182(4))

    • At a BM (s.182(2)) or by notice as per s.184 (in writing) or s.185 (general notice)

    • Further declaration made if it becomes inaccurate (s.182(2))

  • The effects of making the declaration are the same as above

  • A D who fails to declare under s.183 commits a criminal offence

  • Apply to the facts: what is the interest? Has the declaration been made?
Voting

  • Only Ds ‘present’ may vote (TA88)

  • By simple majority show of hands

  • If there’s deadlock:

    • the negative view prevails (TA88)

    • if there’s a chair (who can be appointed under TA91, but not vital), they can use casting vote (TA88) unless excluded from quorum

  • Apply to the facts: how are the resolutions going to be validly passed? Explain who on the board are likely to vote in favour
Resolutions

  • After due and careful consideration, the Board resolves to:

  1. Call a GM or circulate a WR (s.302)

  2. [adopt new articles SR (s.21)]

  3. [appoint a new director, effected when resolution says]

  4. [approve and circulate the proposed buy-back contract]

  5. [approve the draft terms of the loan [subject to GM] – s.197]

  6. [call a GM for S’holders to pass OR for the proposed loan to D - s.197]

  7. [approve the terms of the contract [subject to GM]]

  8. [approve the wording of the signage and order it]

  9. [approve to change the name SR (s.77)]

  10. [authorise 2 Ds to sign – ss.43/44]

  11. [change accounting reference date – s.392]

  12. [change the address of the registered office – s.87]

  13. [change the stationary]

  • Apply to the facts: have these been passed? See TA95 on ability to vote. What combination of Ds are needed to pass?
Administration

  • Minutes are kept of all meetings – TA100

  • Administration resulting from resolutions passed

  • Minutes of BM in writing at the RO/SAIL for 10 years otherwise an offence is committed by every officer of the company who is in default (s.248)
General Meeting* [see WR below for alternative]
Short Notice

  • Permitted by s.307(4) for any period less than required amount of days (below)

  • Cannot have short notice if there is a proposition to remove a D under s.168.

  • The conditions to call a GM on Short Notice. Both conditions must be met (i and ii):

    1. Majority of members must agree to it (s.307(5))

    2. Those members must hold at least 90% of nominal value of shares (s.307(5)(a)) but this threshold is raised to 95% by Table A
Call

  • Director (s.302)

  • Shareholder (s.305(1)):

    • They must first request Ds to call one (s.303)

    • The members together must own 5% of voting rights

    • Ds then have 21 days to call a GM not to be held more than 28 days after notice calling the meeting

  • Court (s.306)

  • Auditor (s.518)
Notice

Length

  • The notice period + 48 hours for deemed service (s.1147):

    • 21 clear days (TA38)where: it is notice for an AGM or an SR is being proposed

    • 14 clear days (s.307(A1), (1) & s.360) where: an OR is being proposed

  • “Clear days” means not counting day notice was given and the day of the meeting and not counting weekends and bank holidays (TA1/s.360)

  • If notice is posted, allow 48 hours for deemed service (s.1147)

  • E.g.: notice given on 28 Oct by hand, date of meeting is 13 Nov (or 15 Nov if posted)

Contents

  • Time, date, and place of meeting (s.311(1))

  • General nature of business to be dealt with (s.311(2))

  • Statement of rights to appoint a proxy in members’ place (s.325(1))

  • Full text of any SRs being proposed (s.283(6)(a))

  • General words of any ORs being proposed

To Whom (TA38)

  • Every D (s.310),...

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