Company Law Assignment

Share Issue

Allotment is amount of money allocated to the company where the person has acquired the unconditional right to be included in the company’s register of members. section 588CA 2006

By s755 C.A2006 it is an offence for Printwright Ltd which is private company to make an offer to public. This could be the sort of situation where there has been defined in subsection 5 of s756 a “person already connected with a company” including family, debenture holder and a trustee. As a friend of Derek, Marco can be listed as trustee to be given an offer.

However, Anne does not trust Marco, in this case, Marco might be considered able to join or not. According to the voting right of the company, Derek has higher percentage of share than the rest, he can vote to trust Marco as new shareholder.

In addition, director has the right to issue share for benefit of company (Percival v Wright [1902]2CH421). The reason for the issue need to be examine because if the primary purpose was not about raising capital the director abuse his power (Howard Smith Ltd v Ampol Petroleum Ltd [1974] AC821)

In that case, the company should hold ca committee meeting to clearly show the purpose of gaining capital and given the vote to agree with the decision of director in offering Marco’s share.

As the nominal value of share is @ 1 GBP, the 20,000 will be contributed to the capital of company. The remaining 10000 of Marco payment will be marked as share premium.

Director

Marco can be director as proposed as 61% of shareholder appointed him.

Marco has experience in both printing and hospitality business so it’s most suitable for the job.

Purchasing

Although there is no concept against trading between shareholder and the company, there are some doubts whether he deals with the company as a whole or with other directors. It is covered by s.40 (2) (a).

Another concern is the contract was sign by whom on behalf of the company and he is authorised by the board of directors. This point is covered by s40(1).

40,000 will be pay by instalment or pay in full. What is the term of purchasing?

On the other hand, whether the asset sold by Marco is sufficient to work or not and when the asset will be delivered.

Voting

The voting right is favourable to minority or to majority.

Anne does not trust Marco so there are several options such as buying his share and gain the voting right. Because >60% voting for Derek. So there is no point for her to vote against him every single time.

Any sort of company can pass a special resolution at a meeting whether on a show of hands s283(4) or a poll s283(5). A poll is when you count up all the shares each person owns and give them one vote per share[-assuming the articles say  they are entitled to a vote per share] . To be passes you need at least 75% of the votes of those present and voting to be in favour.

Only Ltd not plc may use written resolutions. These must again be passed by at least 75% but this time it must be passed by 75% of all those eligible to vote -not just those that bother to attend the meeting.

Retirement

Derek Doherty wishes to sell his shares in the company.

The share of Derek was bought back to the company by the company itself, therefore, the provisions regarding the capital reduction which is explained in ss.641(4) CA2006. The reduction of company capital and the return capital to a member is necessary when a company change hand on retirement of a person who was chiefly concerned in business work.