Comments

  1. avatar says

    Hi Sir,

    I would like to have your opinion on below question:

    What is the latest date that a public company, incorporated on 1 May 2010, could hold its second annual general
    meeting?
    A 31 October, 2011
    B 31 January, 2013
    C 31 December, 2012
    D 30 April, 2012

    As per notes: 1st meeting not more than 18 month i.e OCT 11
    Second meeting will be not latest than 15 month. Which will be on JAN 2013, but answer is . Why so???

    Thank you for your usual quick response..

  2. avatar says

    Good Day Mike,
    I have one question to ask? Do I need to regurgitate the facts of the case like the past answers. Or for example, can I just write ” A company is a separate legal person from the members, the company has a special legal identity…. as noted in the Saloman case” without going int the facts of the Saloman case.
    Thanks in advance

    Great lectures

  3. avatar says

    There are lots of Royal Charters issued by our current queen. Many of our Universities gain there Royal Charter within the last 50 years. My university, Exeter, received its Royal Charter in 1955 from Queen Elizabeth 2.

    • Profile photo of MikeLittle says

      Define “lots”! If she has signed one each week since her coronation, that’s still only 3,172. I could equally say that the British Government has passed lots of statute law in the same period but I believe that you’ll find the number is way, way, way in excess of 3,172

      In the context of company formations, those formed by Royal Charter are a tiny minority

    • Profile photo of MikeLittle says

      @venkat768, The word “limited” in a company’s name ( as in ABC Limited ) tells us that the liability of the members of the company to contribute to a shortfall of assets in the event of an insolvent liquidation is limited. A liquidator will be appointed and may say to the members “Come on you guys, we need some extra money from you to settle the claims of the creditors”

      The members of a limited company will turn round and say “Er, sorry Mister Liquidator, but we are members of ABC Limited and, as such, the extent of our liability is limited. You can ask us for any amount of money but we have NO RESPONSIBILITY / LIABILITY / OBLIGATION to pay into the insolvent company any money beyond the limit of our liability”

      Now, what is the limit of a member’s liability? It is “limited to the amount, if any, as yet unpaid on shares held by them”. If the shares are already credited as fully paid, then the member has no further liability.

      Very occasionally, a private company is established where the liability is limited by guarantee. In situations like this, the limit of a member’s liability is limited to the amount which that member has guaranteed to contribute to the assets in the event of an insolvent liquidation. In practice, this amount is typically £1 ( in the UK )

      • Profile photo of ACCA Member says

        @MikeLittle, Thank you.
        I just wanted to confirm 1 more doubt.

        “Promoter and Members” are they same?. And which of those 2 could be classified between Shareholders and Directors.

      • Profile photo of MikeLittle says

        @venkat768, OH WOW!!!! NOOOOOOO!

        A promoter is someone who is engaged in the process of creating a company and, possibly, is never a member of the company. If you were to ask me to form a company for you, I could go ahead and do so. When it is formed, I’ll hand it over to you ( physically hand over all the books ), you will pay me and I’ll wait for the next person to ask me. In that hypothetical case, I never became a member of the company.

        In practice, when I lived in the UK and clients occasionally asked me to form a company on their behalf, it was convenient for me to appoint myself as the sole member and was thus able to sign documents as the subscriber. But, when the company was formed, again I would pass over the documentation and “sell” my share to the client who had asked for the company to be formed.

        So, in answer to your first question, “No, promoters and members are NOT the same people”

        Now, your second question! You really have not got to grips with this company law yet, have you!

        By definition, a person is a member of a company when their name appears in the register of members. In most cases, their name is registered in the register of members because they have bought shares in their own name and the persons responsible for maintaining the register up to date ( the company’s registrar ) will have been given the details of that share acquisition and are now recording it.

        However, it’s a common misconception that the words “shareholders” and “members” are synonymous ….. but they’re not! I’ve already defined “member” as a person whose name appears within the register of members. A person may be a member, but not a shareholder – for example if I own shares bought in the name of a nominee, I would be a shareholder, but the nominee would be the member. A promoter may, after the company has been created ( so, after incorporation ) go on to become a member of the company; or could go on to be a shareholder ( and own shares which are registered in the name of a nominee ); or go on and have no continuing interest in the company at all; or may be appointed as a director ( she could even nominate and appoint herself as a director whilst she was in the process of promoting the company )

        People who own shares are called shareholders

        People whose name appears in the register of members are called members and they may or may not also be shareholders

        People who are appointed to the position of director are called directors and may, or may not, also be members and / or shareholders

        People who take on the job of creating companies are called promoters and may, or may not, go on to be members and / or shareholders and / or directors

        OK?

    • Profile photo of MikeLittle says

      @college234, It’s ( literally ) a statement of solvency! It’s prepared by the directors of a comany which is about to go into voluntary liquidation. Choices are members’ voluntary liquidation or creditors’ volunary liquidation.

      For the directors / members to be able to choose the members’ voluntary liquidation route, the directors must show that the company will be able to pay its debts in full within the twelve months following the commencement f the liquidation.

      For them to be able to show that, the directors must prepare a statement of solvency – ie a statement showing that the company’s assets at their realisable value exceed the company’s liabilities.

  4. Profile photo of drmarcus says

    Furthermore, I have been thinking about why one would strategically incorporate a private unlimited company (with or without shares) and the best reason I can come up with is if you wish to uphold your secrecy so as to shield your financial affairs from public knowledge also maybe to make it easier to increase commercial advantage through disintermediation. But there are some famous private unlimited companies such as UK GlaxoSmithKline and C&A

  5. Profile photo of drmarcus says

    Great lecture, but contrary to what the lecturer said, there are much more than 1000 made by royalty alone and one we all know of is ACCA itself but they are loads everything from the Royal Navy to Kew Gardens.

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