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BUSINESS LAW AND PRACTICE (SKILLS)
Unit 4 Guide Board Meetings
Context
In Unit 3, you learnt about the kinds of day-to-day decisions which directors make. You also carried out exercises requiring you to analyse the Model Articles with amendments and the Companies Act 2006 and the rules they contain regarding company decision-making.
This unit requires you to plan a meeting of the directors of a company. Company procedures are set out in statutory provisions and the Company’s articles. Therefore, whilst planning a board meeting, it is essential that you analyse both the relevant statutory provisions and the Company’s articles to determine the procedure that applies to that particular company, and you will practise applying the statutory rules throughout the unit. You will also be required to draft board minutes and complete Companies House forms.
The unit is set in the context of a shelf company. This is a company, usually incorporated by a law firm, which a client can use in order to get a company up and running quickly without having to go through the process of incorporation itself.
Outcomes
By the end of this Unit you should be able to:
1. Navigate the Companies House website to locate various company forms. 2. Demonstrate a detailed and comprehensive knowledge and understanding of the principles and concepts of decision-making within a company. 3. Navigate, interpret and apply the Companies Act 2006 and the Model Articles to produce a comprehensive and accurate record of a board meeting, including the completion of registers and forms to file at Companies House.
Unit Workshop Activities
In this Unit Workshop you will complete exercises on:
1. Locating relevant company forms using Companies House website.
2. Using the standard procedure planning template to plan a board meeting. 3. Drafting minutes for a board meeting to be used as a guide for the holding of that meeting. 4. Completing all relevant forms and registers after a board meeting.
2. Watch the i-tutorial ‘Mechanics of Incorporation’. 3. Read or re-read the following sections in your Business and Company Legislation Book: Sections 43, 44, 46, 87, 113, 162, 163, 165, 167, 177, 188, 228, 248, 270, 275, 276 and 392 of the Companies Act 2006. Model Articles 3, 7, 9, 11, 14, 15, 17, 19 and 26(5). 4. Attempt Preparatory Tasks 1 and 2 and bring your answers to the workshop.
Materials required for the Unit Workshop:
1. Your Business Law and Practice Textbook and Business and Company Legislation Book. 2. The forms listed in Preparatory Task 1 and the letter you are asked to write in Preparatory Task 2.
Consolidation
1. View the recorded lecture ‘Business Law and Practice Lecture 3: Assessment Preparation’ via the Lecture Recordings page on Elite. 2. It is important that you consolidate your learning. In particular you should review the documents that you have drafted and completed in the unit workshop, making neat final copies of all documents for future reference.
Using the Companies House website, locate and bring with you to the session (in either paper or electronic form) the forms necessary for:
1. Changing the registered office of a private limited company.
2. Changing the accounting reference date of a private limited company. 3. Appointing a new director in a private limited company. You will see that it looks as if it is now only possible to complete this form online. However, below the online form, under the heading ‘Details’, there is a link to a paper form, which you can use. Please ignore the reference to it only being applicable for Societas Europaea (SE) and restoration cases.
BUSINESS LAW AND PRACTICE (SKILLS) Unit 4 Preparatory Task 2
Trainee solicitors often need to advise clients on company meetings. You are a trainee solicitor at ULaws LLP (“ULaws”), 3 Victoria Street, Manchester, M1 4DL. This Task will involve you using the procedure planning template which you first encountered in Workshop 3 to convert a shelf company into a company almost ready to start trading.
Your supervisor, Sheena Patel, has been instructed by Olivia Robinson, company secretary for the companies in the Enright group, which you first encountered in Workshop 2. The directors of Enright Holdings plc (“Holdings”) want to expand into the green energy sector and have been investigating the possibilities for several months. They are almost ready to start trading and would like to set up a new subsidiary to run this side of their business. Your firm has a shelf company, Newco327 Limited (“Newco”), which can be converted into this new company.
Your client wishes to get the new company up and running and Sheena asked another trainee to prepare some of the documents. She would now like you to take over as the other trainee is going on holiday. She has told you that Holdings has not yet decided what Newco’s new name will be, and is currently conducting market research on the options, so you should keep the name Newco327 Limited for the moment.
Sheena has also explained that the client will deal with other matters such as issuing more shares to Holdings once Holdings has sought further advice from its accountants.
The changes which need to be made are as follows:
1. Change of registered office to 5 Keswick Street, Manchester, M1 4HJ. 2. Change of accounting reference date from 31 July to 30 June. 3. Resignation of Chris Williams and Luca Berti as directors, to take effect from the end of the board meeting. 4. Appointment of Laura Ghosh and Isabel Smith as directors. 5. Appointment of Olivia Robinson as company secretary. 6. Award of two-year service contracts to Laura Ghosh and Isabel Smith. 7. Registration of Holdings as a member of Newco.
Firstly, please access and read form IN01, which is the form applicants must fill in if they wish to start a company. You will find this form at https://assets.publishing.service.gov.uk/government/uploads/system/uploads/ attachment_data/file/946155/IN01-V8.0.pdf. This is the form which your firm would have filled in to apply for the shelf company to be registered. You will be asked to complete an IN01 in unit workshop 16.
Then read the documents attached to this Task. You will see that your fellow trainee has already inserted the stock transfer form, showing the transfer of the subscriber shares to Holdings. Then, using the procedure planning template, draft a letter to Olivia Robinson, in Sheena Patel’s name, to advise on the procedure that will be followed in order for Newco to achieve the above changes to its business. Your letter should include the following:
Who should give notice of the board meeting and what period of notice is necessary. What the quorum is for the board meeting and whether this is likely to be met. Whether any directors will need to declare a personal interest in any matters to be resolved at the board meeting. Whether the resolutions are likely to be passed at the board meeting. What external filing and internal administration Newco will need to carry out after the board meeting. The board of Newco has not elected to keep its statutory books at Companies House.
The file reference is 100112/1.
Chris Williams and Luca Berti are paralegals in your firm’s shelf company unit and will be attending the board meeting, along with Sheena Patel, who will help to run the meeting. However, Olivia would still like a full explanation of the procedure for her file because she does not have time to attend the board meeting. Isabel Smith and Laura Ghosh will also be attending.
Assume that today is a Monday and that the board meeting will be held in 10 days’ time at ULaws’ Manchester offices.
You should ensure that your letter complies with the legal writing criteria which you first considered in your Introduction to Professional Practice Course.
CERTIFICATE OF INCORPORATION OF A PRIVATE LIMITED COMPANY
Company No: 5739261
The Registrar of Companies for England and Wales hereby certifies that
NEWCO327 LIMITED
is this day incorporated under the Companies Act 2006 as a private company with its registered office in England and Wales and that the Company is limited by shares.
Given at Companies House, Cardiff the 5th July 2023.
Official Seal of the Registrar of
Companies
SPECIMEN
Crown Copyright material is reproduced with the permission of the Controller of
HMSO and the Queen’s Printer for Scotland. That permission prohibits the reproduction of the Royal Seal on this specimen document
THE COMPANIES ACT 2006 PRIVATE COMPANY LIMITED BY SHARES ARTICLES OF ASSOCIATION OF NEWCO327 LTD
1. Preliminary
1.1 The regulations contained in the Companies Model Article Regulations
2008 for a private company limited by shares (the “Model Articles”) shall, except where they are modified or excluded by or are inconsistent with these Articles, apply to Newco327 Ltd (the “Company”) and, subject to any such modifications, exclusions and inconsistencies, shall together with these Articles constitute the articles of association of the Company to the exclusion of any other regulations set out in any statute or in any statutory instrument or in any other subordinate legislation.
1.2 Save as otherwise specifically provided in these Articles, words and
expressions which have particular meanings in the Model Articles shall have the same meanings in these Articles.
2. Proceedings of directors
2.1 Whenever the number of directors is one, a sole director shall have authority to exercise all the powers and discretions by the Model Articles and by these Articles expressed to be vested in the directors generally, and, in those circumstances, regulation 11 in the Model Articles shall be modified accordingly.
A director is entitled to vote at any meeting of the directors or of a committee of
directors on any resolution, notwithstanding that it in any way concerns or relates to a matter in which he has, directly or indirectly, an interest or duty which is material and which conflicts or may conflict with the interests of the Company, and in relation to any such resolution (whether or not he votes on the same) he is to be taken into account in calculating the quorum present at the meeting.
Lawyers prepare draft minutes before company meetings. The company’s chairman may then use the draft minutes as a reminder about how to conduct the meeting and as a prompt for the resolutions to be passed. If necessary, the draft minutes will be updated after the meeting to reflect any changes to the original plan. The chairman will then sign them as an accurate record of what took place. To draft minutes, lawyers must first plan for the meetings. You have already done this when you drafted the letter in Preparatory Task 2. You now receive the email below from your supervisor, Sheena Patel. Please prepare the draft board minutes she requests.
From: Sheena Patel
To: A. Trainee Date: [date of workshop] ] Subject: Newco 327 – board meeting next Thursday
I would like you to prepare a first draft of the board minutes for the meeting that will be held at our offices in Victoria Street next Thursday. You have already planned the meeting, including a list of all the resolutions that need to be passed, and you should base your minutes on that plan.
On this occasion you do not need to use a blank precedent since we went through a similar exercise for Firenze Trading Limited a few months ago and you should instead use the minutes from the Firenze file (attached) as your precedent.
Some of Newco’s resolutions will be almost identical, but be careful since some are a little different. Assume for the purposes of this draft that all resolutions will be passed. We can make changes if necessary after the meeting is actually held. I will be attending the meeting to give advice if it is required. Laura Ghosh and Isabel Smith will also be attending, along with Chris Williams and Luca Berti.
Minutes of a meeting of the board of directors of the Company held at 33 Edgbaston
Court, B151 2XZ on 2 May 2023 at 2pm.
PRESENT: Tony Welch (Chair) Tim Adamson
IN ATTENDANCE: Sheena Patel
1. PRELIMINARY
The directors noted that the meeting had been duly convened and that a quorum of two directors was present in accordance with the articles of association and declared the meeting open.
2. BUSINESS OF THE MEETING
The directors reported that the business of the meeting was to report on the purchase of the shelf company and to complete some of the business required for the Company to start trading. There were produced to the meeting the following documents:
2.1. Certificate of incorporation of the Company dated 26 April 2023.
2.2. Copies of the memorandum and articles of association of the Company.
2.3. A copy of form IN01 (incorporation).
2.4. Statutory books of the Company.
2.5 Letters of resignation from Tony Welch and Tim Adamson.
2.6 Stock transfer forms transferring the subscriber shares to Firenze Trading Limited.
3. DIRECTORS
3.1. Tony Welch and Tim Adamson were confirmed as directors of the Company.
3.2. After due and careful consideration, having regard to the requirements of s172 of the Companies Act 2006, IT WAS RESOLVED to appoint Margaret Humphreys and Colin Henshaw as additional directors of the Company with immediate effect
3.3. It was noted that letters of resignation and completed forms TM01 had been received from the first directors of the Company. The resignations were approved and confirmed with immediate effect.
4. CHANGE OF REGISTERED OFFICE
The directors proposed that the registered office of the Company should be changed.
IT WAS RESOLVED that the registered office of the Company be changed to 5
Keswick Street, Manchester, M1 4HJ.
5. ACCOUNTING REFERENCE DATE
The directors reported that there would be benefits in changing the accounting year end of the Company to 31 December.
After due and careful consideration IT WAS RESOLVED that the accounting reference date of the Company be changed to 31 December.
6. TRANSFER OF SUBSCRIBER SHARES
There were produced to the meeting two stock transfer forms transferring the subscriber shares from Tony Welch and Tim Adamson to Firenze Trading Limited.
IT WAS RESOLVED that Firenze Trading Limited be registered as a member of the
Company.
7. POST-MEETING ADMINISTRATION
The directors instructed Sheena Patel, the Company’s solicitor, to:
7.1 Notify the Registrar of Companies of the change of registered office, the change of accounting reference date, and the resignations and appointments in the prescribed manner; and
7.2 Make all necessary and appropriate entries in the books and registers of the Company.
8. CLOSE
There being no further business, the directors declared the meeting closed.
