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December 26, 2015 at 3:28 pm
Sir, I couldn’t understand the difference between first independent board of directors and first board of directors. Could you explain it in brief?
Also, if there is an error in the trading certificate, should the certificate of incorporation be changed according to the trading certificate?
December 26, 2015 at 4:18 pm
I used to set up companies for my clients. They would ask me to set up a company. Easy. Put my name on the registration form as the first director and I wold take the first share issued so became the first subscriber to the memorandum.
Then, when I received the certificate of incorporation, I transferred my share to my client, resigned my directorship and appointed my client as the director.
Now, ask yourself this …….. who was the first board of directors?
December 26, 2015 at 4:28 pm
Since you resigned your directorship and transfer your shares to your client, they would be the first directors (if I’m not wrong).
But in this case who would be the first independent board of director?
December 26, 2015 at 7:18 pm
No, you are wrong. When I formed the company, I named myself as the first director (I said so half way into the first paragraph in my previous post)
Then, when I resigned and appointed my client, my client becomes the first independent director.
Ok, let’s put it into a bigger company scenario. Again, I can form the company and I’ll appoint me and my wife as first directors. So we are the first directors – we are the first board of directors. But for me to disclose a profit that I have made when I sell my property to the company …. well, that would be silly. Imagine me telling myself and my wife that I’ve just made a profit by selling property to the new company of which we are the only directors
And then I transfer the shares from me and my wife to the clients that have asked me to form the company. In addition we both resign from being directors and appoint a new independent board of directors
Is that better for you?
December 26, 2015 at 7:34 pm
Yes, I understood.
Thank you sir for clearing this for me.
December 26, 2015 at 8:52 pm
You’re welcome (In future please put this type of query on the Ask ACCA Tutor page, thanks)
December 3, 2013 at 4:22 pm
Sir in the case of purchase of Isaland (Disclosure to the first independent board of directors) assuming the first directors disclose the extra 55,000 pounds they have made from selling the company, is it right or lawful for the first Independent board of director to ask the directors to return back the profit they made with the fact that they have obey the law by disclosing the profit…. thank yu
December 3, 2013 at 4:27 pm
Yes, but think of a small person promoting / forming companies for clients – as I used to do! If I had ever sold my property to a company that I had recently formed, and sold that property at a substantial profit, is it acceptable that I notify only myself rather than be required to notify my clients who asked me to form a company for them?
November 20, 2013 at 6:01 am
In the case of formation of a company they have to file the memorandum with the registrar(if I m not wrong) doesn’t that document contain the proposed name,registered office address etc.then why submit it separately as the application for registration details?
December 3, 2013 at 4:24 pm
No, the contents and importance of the memorandum have changed – it’s now merely a document of record of the declared intention of the subscribers to form a limited company
October 20, 2013 at 4:18 pm
Sir if Jubilee cotton mill was a public company, and since it was incorporated in 1880, but hasn’t received the Trading Certificate by the Company Registrar, wouldn’t it be liquidated since the company hasn’t obtained the Trading certificate within 12 months of incorporation? I assume in the examination question the Company was a Private company.
October 20, 2013 at 10:17 pm
Oh! Very clever! That’s WAY beyond F4 and it’s over 100 years ago, so don’t worry about it!
May 20, 2013 at 8:35 pm
Thank for the reply Sir Mike, I understand that part of it.
Sorry for being unclear but what i wanted to know was, in a situation like that of the case what would the trading certificate date be ?(issuance of this must be within a year,if not the company would be dissolve)
May 19, 2013 at 8:11 am
Greeting Sir, in the case of Jubilee Cotton Mill,what would the date on the trading certificate be ?Would the year 1 day apply here and the company not dissolve? i understand that the date on the company birth certificate is the day the company was born but how did the aforementioned fit in for the said case.
May 19, 2013 at 8:45 am
“Would the year 1 day apply here and the company not dissolve?” I am really sorry but I have no idea what you mean by “the year 1 day apply here” The facts of the case are not important – it’s merely the illustration of the legal / statutory rule which states that the date on the certificate is conclusive proof that that is the date the company was created. The “facts” as I tell them are that over the new year 1889 / 1890, the “89” in 1889 was moved on to “80” to give 1880, but the “8” from “89” was not changed to make it 1890. Thus 1.1.1890 was in fact issued as 1.1.1880
Just how close to reality those facts are is totally irrelevant 🙂
October 24, 2012 at 7:33 pm
Court cases are quiet interesting.
October 25, 2012 at 10:46 am
@tauraiversatile, How right you are – they’re totally fascinating 🙂
May 9, 2012 at 4:43 am
Sir , in a private company can we change the face value of existing shares i.e we have already 100 shares of $1 each but now we want to issue further 100 shares with $100 each but we also want to change the value of existing 100 shares which are $1 each.
Yes, that’s perfectly acceptable – mind you, I have never ever seen that in an F4 exam question
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